Lowering the total cost-of-ownership is top-of-mind when companies are comparing business intelligence solutions. However, after the purchase of a BI solution it’s difficult to lower TCO. Without careful planning, BI projects can grow and change in scope, which increases the investment in consulting services and maintenance fees. This often results in higher TCO than initially anticipated. While TCO is certainly a key concern at the time of purchase, it’s inconsequential if a company is not getting long-term value out of its BI solution. According to research published by the Aberdeen Group in July 2009, many adopters have found that the costs related to ongoing support and maintenance of an ever-changing set of analytical and reporting requirements inhibits user penetration and the ability to manage the TCO. The research reveals that top-performing companies are doing more with less when it comes to managing the costs associated with implementing, deploying and managing a BI solution. In fact, improved management of TCO results in 29 percent fewer full-time equivalents required to support BI deployments, while maintaining the ability to serve more users at a lower cost per user. Clearly, companies want to use BI to empower users with information but collecting, integrating and delivering information to end users isn’t easy.
The Problem with TCO
When companies rush to implement BI solutions to minimize TCO, they often find it difficult to achieve the desired business results. They may have moved from paper to electronic reporting and increased the timeliness of reports, but they find no noticeable increase in business value. Over time, companies become disappointed with their BI solution, struggle to maintain the implementation and question the costs related to resources and time that have been employed. The key concern moves from TCO to “Where’s the value?”
Generating BI Value
The answer to that question is complex, and in many cases, the perception is that it requires a further investment in software, hardware, human resources and time. To move forward effectively in this situation, companies must take a step back and rethink their BI strategy. Getting value out of a BI solution is not necessarily a technology problem; it can also be a business process problem; To achieve success, companies, must take a good look at how business requirements map to their internal processes. Prior to making a BI investment, companies should consider this checklist to maximize the generation of value:
- Examine corporate direction, strategy and tactics. To successfully implement a business intelligence project, companies must revisit the strategic goals of their corporation. Companies that understand how their data can help achieve strategic initiatives are better positioned to reap the benefits of a BI solution. Corporate decision-making processes and workflows must be thoroughly understood by project team members in order to identify inefficiencies that can be rectified and to capitalize on potential cost or time savings.
- Understand the culture of your business. Not all organizations are information-centric enterprises, which may necessitate a potentially radical shift in the corporate culture before the value of a BI project can be realized. For companies that are accustomed to top-down, consensus-based or other decision-making paradigms, switching to an information-based approach can meet considerable resistance when it is first introduced. This is especially true if information-based decision-making contradicts or invalidates decisions arrived at using the existing paradigm.
- Garner support from corporate sponsors. Whether the scope of a BI project is enterprise-wide, divisional or departmental, a critical success factor is corporate sponsorship. Identifying the right project champion shields team members from political in-fighting and ensures project survival when unforeseen obstacles threaten to derail on-time delivery of the project. It is not unusual for a CIO to take on this role. The broader the scope of a project, the higher up in the management chain the sponsor will need to be.
- Pursue collective development. Successful BI project delivery is truly a team effort involving end users, middle management and IT. End users and management define the project scope and requirements while IT iteratively works hand-in-hand with end users to refine and validate deliverables and project milestones. And, all team members must communicate frequently and candidly to circumvent looming roadblocks that threaten to derail successful delivery of the BI project.
- Take a focused and phased approach. Establishing the appropriate scope of a BI project is one of the most important tasks of the project team. Overambitious projects with aggressive timelines risk falling short of the promises made at the inception of the project, while too narrow of a scope will fail to exploit potential synergies that could have delivered significantly greater ROI. By using a proven “walk before you run” approach to project implementation, companies can achieve several relatively modest but quick success stories for their BI initiative. This allows project team members to show the value of an application incrementally and engages new departments and divisions within a company based on demonstrated, rather than promised, success.
- Assess data availability. In order to transform raw enterprise data into high-quality actionable and directional information, data must first be available and collectible. The data elements required by the project plan need to be gathered and accessible to support the creation of key performance indicators and other business-critical metrics. Projects that have identified historical comparisons such as yearoveryear or month over month will likewise necessitate that historical data has been collected in house for the required time span. Data granularity must also be examined to see if it supports the underlying project requirements. If only monthly raw data is available, then weekly data comparisons will not be supported.
- Determine the integrity of data. Data availability does not ensure that the data is usable. Integrity of internal data stores is a vexing problem for many corporations. Once raw data elements have been identified for incorporation into a reporting and analytics application, team members must examine these elements to determine how much data is missing, whether data elements conform to their prescribed definition and whether identical data elements stored in disparate data stores are truly identical. If data integrity is a significant issue, data cleansing and validation activities must be incorporated into the project timeline to ensure the ultimate success of the project.
- Deliver directional information. Simply transforming disparate raw data sources into an integrated view of corporate information is not enough to realize significant project ROI. Dashboards and reports must display information in a manner that provides immediate, unambiguous direction and guidance to the employee viewing the information. For example, if certain suppliers are chronically late in delivering raw material, what actions should a supply chain specialist engage in to rectify the situation? In addition to providing direction, information must be prioritized. If several suppliers are failing contractual obligations, the dashboard must present information to the supply chain specialist in the order that focuses effort on the most problematic vendors first.
- Create actionable information. Building on directional information, a successful BI must provide the end user with the appropriate resources to accomplish the prescribed action. An accounts receivable clerk must have immediate access to the contact information for past-due accounts. A logistics specialist should be able to access detailed maps at-a-glance in order to provide guidance to remote delivery personnel that are encountering obstacles to on-time delivery of merchandise. The resources required to support action must be seamlessly integrated with the BI application in order to provide timely and effective support to the end user. Building BI applications that provide timely access to business-critical metrics empower users to take action by sharing insight that speeds the decision-making process.
- Establish ROI metrics. The ability to stay on budget throughout the BI project delivery period is a testament to proper scoping and the accurate definition of the project requirement and timelines. Without attention to these critical details, the TCO can increase, potentially wiping out the promised benefits of a BI initiative. Once a project is successfully launched, a properly designed initiative to start delivering quantifiable ROI metrics should commence. Whether measured in time or cost-savings, ROI metrics should be agreed upon during the project scoping phase and implemented as an integral part of the application.
- Ensure project flexibility. A successful BI project continues to evolve with the needs of the end users in mind. Underpinning this evolution is a platform that is scalable and a licensing plan that is flexible enough to truly enable pervasive, enterprise-wide BI. Projects must be designed from inception with low maintenance requirements as an explicit goal. In-house competence and training resources should be established early in the project to make BI self-sustaining and independent of the vendor.
The End Goal: Pervasive, Cost-Effective BI
By understanding these key interrelated capability and enablement challenges before re-investing in or purchasing a BI solution, companies can manage TCO while providing access to BI capabilities throughout the organization – when, where and how people want it. The key is to ask the hard questions upfront around business strategy and requirements, workflow processes, data needs and availability. With advance planning and a strategic approach, companies can streamline the information delivery process from dashboard development to self-service reporting capabilities to get the most value out of their BI applications.
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