Business intelligence applications are being marketed as fully functional, data warehouse applications that can provide immense business value to an organization. With out of the box applications, this can be done in a relatively short amount of time compared to the more traditional approach for custom-built business intelligence solutions. As companies standardize their enterprise resource planning systems across their organizations, out-of-the-box solutions for business intelligence become an option that organizations may want to pay attention to.BI applications enable an organization to add business value quickly, reduce the risk associated with custom-built solutions, and realize the value of packaged applications such as rapid deployment, built-in best practices and lower total cost of ownership.
Build Versus Buy
Many organizations must justify the decision to build versus buy as they try to align the functionalities of out-of-the-box solutions with their business and technology requirements. The failure for potential applications (BI and non BI) to align with the organization’s requirements is a primary reason why many custom applications exist across organizations today. A typical organization has both custom-built and packaged software solutions scattered across the enterprises. So what has changed to justify implementing packaged BI solutions, choosing to buy versus build, and when are BI applications a more favorable option custom-built solutions?Custom BI solutions are often subject to a high risk of failure either through poor execution and/or failure to add the expected business value. These solutions are highly complex (even when executed correctly), requiring technology and people to come together from across the organization. The organization often does not have the right structures in place to be successful, resource levels and especially time frames are under-estimated, experience across the required technologies is not sufficient, and most importantly the organization does not have a roadmap in place to drive their overall BI strategy. Initial projects take many months to complete, with enterprise initiatives sometimes taking years. Lengthy implementation times are costly, and there is often an inability to add business value quickly. Data and integration architecture, but are often highly underestimated. And consulting organizations often fail to address this adequately, focusing on reporting and analytic functions over the complexities of architecture and data integration.That’s where BI applications come in to play.BI applications are complete solutions that have been developed using best-of-breed technologies. Often,skilled technical resources and co-operation from industry and functional experts are able to deliver solutions that offer immediate business value and a robust technical framework that is supported by the application vendor. Much of the risk associated with building custom BI solutions has either been reduced or eliminated. The customer can purchase and deploy an out of the box BI application in a short time frame with fewer resources and less risk than if they had built the solutions themselves or in collaboration with third-party providers.
Why Now and Who Can Benefit?
The concept of BI applications is not new and there are several BI application vendors. But what has changed in the last five years to raise interest in these current of offerings?BI applications are good candidates for organizations that have standardized (or are planning to standardize) all or a majority of their operational systems on one of the many popular ERP software applications that support sales, marketing, human resources, supply chain, financials and customer service. A majority of Fortune 2000 companies have standardized on one form of ERP system or another, choosing to buy rather than build. When an organization chooses to standardize on these ERP systems (whether customized or not) an out-of-the-box BI application becomes a viable option, especially if the ERP system and the BI application are from the same vendor. Some vendors have made great progress in this area and have invested in their BI application strategy and alignment with their overall enterprise performance management vision. According to Gartner, vendors active in ERP and the core BI market have the greatest chance of succeeding in this space.
Key Benefits and Considerations when Deciding Whether to Buy or Build
There are many benefits to an organization for in implementing BI applications.
- The BI applications contain all the components (data models, extract, transform and load, Metadata and orchestration) that would typically have to be developed over many months and years if built in-house. Activities (including source and data analysis, business requirements analysis, architecture and design) have been developed by the vendor’s development teams in co-operation with business and functional experts with the goal of providing best-in-class technical solutions that provide immediate business value and robust technology frameworks.
- Applications provide many prebuilt reports and dashboards (often including hundreds of reports and thousands of metrics and key performance indicators) with functionalities such as guided analytics, real time data availability and capability to drill down into the underling ERP systems. Even without customization, the business benefit is evident.
- Reduced implementation time frames. Applications can be implemented quickly or using the technologies available within the BI applications. The organization can integrate new data sources and build custom BI solutions using the technology and infrastructure available if they choose to do so.
- Lower deployment times and reduced level of effort help to reduce risk and offer a quicker ROI. Business value is realized quickly.
- Many ERP systems are now supported with available applications across core ERP functions. The organization can expect to see new functionalities from the application vendor in the future and purchase an application with the comfort of knowing that the applications are completely supported.
So what are some of the key considerations an organization should address when deciding on the buy-versus-build approach?BI applications may not be a good fit for every organization, and the organization should evaluate these applications as they align with their current systems, technologies and methodologies. The organization should address the following considerations as part of their decision-making processes:
- Does the BI application being evaluated support the ERP packages and versions in the organization? If the organization has chosen to customize any features of its ERP implementations, then it should also understand the customization requirements for any associated BI Application components. Out-of-the-box BI application installs are typically built around out-of-the-box ERP system installs.
- Are a large percentage of the organization's requirements for BI built around the ERP systems? Robust BI applications provide flexibility for integrating new data sources into their application. But customization will likely be necessary if a majority of the BI requirements are not supported by ERP data sources.
- Has the organization adopted a formal BI/data warehouse strategy and (that includes data architecture, technologies and standards) with a requirement that all new applications conform to those same standards. This characteristic is an important one. When you acquire a BI application, you are buying the technologies (that may also contain third-party licensed components such as ETL tools) and a methodology. This methodology includes data architecture, metadata, data integration, assumptions around data quality and so on. The data architecture, for example, is typically built around the Kimball dimensional methodology. So if an organization has adopted a different framework, has standardized on other tools and technologies, or has stringent requirements around metadata and naming standards (business and technical metadata), then the organization will need to determine whether BI applications are a good fit.
Does the organization lack a formal BI strategy in place (or have one that is not living up to expectations)? Is it looking to implement high-value solutions quickly? BI applications may also provide the framework (methodology and technologies) that can be leveraged to build new BI applications without use of the content. However, on its own, this may be a difficult sell for the vendor when the true value of BI applications is for delivering quick Business value at a fraction of the cost of developing custom solutions and not just providing a development framework.Does the organization have the skills in place to develop BI solutions from the ground up? Because the BI applications do most of the work, the organization does not require the resource effort (both business and technical) as building the solutions in house.In summary, BI applications offer tremendous value to organization looking to get up and running with their BI strategy quickly and realize immediate business value that can help improve efficiencies and drive improvements across their organization. But as with any investment, organizations should do their due diligence and ensure that these applications are a good fit for their enterprise.
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