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Business Solutions

  • May 01 2007, 1:00am EDT

Many of us probably remember being a child at family holidays and having to sit at the kids' table. Our industry often makes the midsized organization feel like they are at the kids' table. The reality is that the midsized company, often an afterthought for many of the big software vendors, is a growing area for data management and business intelligence (BI). Faced with the same amount of data complexity, compliance needs and pressures for ROI as their larger counterparts, the midsized organization has often had to make due with less robust technology. With expanded tools now available to midsized organizations, an opportunity exists to go beyond the basic reporting and add true business value.

Business Challenge

Midsized organizations, loosely defined as having less than 1,000 employees and $100 million to $1 billion in annual revenue, have gotten the short end of the stick when it comes to technology and data management. These organizations are starved for BI. They may have access to some data, but the tools typically available to midsized organizations have been limited by both cost to implement and architecture needs. Midsized business leaders and managers are now aware of the benefits BI can bring, but are often frustrated by its unavailability.

A business leader at a midsized biotech company recently stated, "Many of us came from big pharmaceutical companies and are used to having BI integrated into our business process. I know that we have limitations due to the scale of our organization, but BI has become a necessity, even in an organization of our size."

Most of the major enterprise resource planning (ERP) and customer relationship management (CRM) companies now offer both reporting and analytics even in their midmarket offerings. In addition, the pure-play vendors (vendors who only sell BI-related software) are targeting the midsized organization. Their solutions range from a duplication of the versions sold to larger organizations to completely new offerings for the midsized organization. In evaluating these technologies, the midsized data managers have their own unique criteria in addition to the criteria common with the larger organizations. Two special criteria for midsized organizations are industry-specific solutions and cost of ETL.

Build, Buy or Both

The midsized organization does not have the funds or the time to build a BI solution from scratch. Both the ERP providers and pure-play BI providers offer some form of an industry offering, usually for financial services, manufacturing, life science, health providers, media/advertising and service organizations, among others.

There are two approaches the software vendors have taken. First is the application configuration approach, which provides prebuilt metrics, screens, dashboards and technical components, tailored for an industry. This solution should decrease implementation time and require fewer professional services and implementation support.

The second approach is to provide business templates in the form of data models and business rules. In this approach, the midsized organization gains the benefit of not having to build a data model but is still faced with having to build most of the other parts of the application from scratch.

As a trusted adviser to business, a data manager must weight the costs, benefits and architectural implications of taking one of these approaches versus choosing to build from scratch.

Cost-Effective Extract, Transform and Load (ETL)

ETL continues to be the largest cost item in most BI implementations. For many midsized organizations, the mere cost of an ETL tool may break the bank on their BI budget. A growing trend has been for the ERP and CRM vendors to bundle ETL products with the BI solution, offering license savings. Many data managers will be predisposed to their opinion of the "best" ETL tool. To become a trusted adviser, the data manager must weigh the cost with the overall benefit, along with the amount of the budget for ETL tools. Often this leads to choosing the "good enough" solution for ETL.

The trusted adviser cannot only focus on software cost, though, as the larger cost may actually end up being the labor associated with ETL. If staffed internally, the major cost is probably some form of training. Though if the project will be staffed by either professional services or a full-time employee, the costs of labor can vary greatly. Many times the built-in ETL tool will require help directly from the vendors, who typically have some of the highest rates.

The lesson here is to understand total cost (software, training, maintenance and labor) along with total benefit.

In implementing BI solutions in a midsized organization, the data manager needs to play more than a technical role. He or she must be a trusted adviser who guides the business through the land mines that can pop up from approach, software and labor decisions; negotiates the vendor hype; and invests in BI solutions that

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