The allure of the technical and professional services market has proved to be a powerful draw. Higher margins in the service market are attractive to a wide variety of technology vendors, particularly systems vendors that have watched hardware margins shrink to near nonexistent levels. For the past several years, data warehousing and business intelligence (BI) software vendors have sought to increase revenue by adding service offerings to their portfolios.
The types of services warehousing/BI solution customers look for are also quite varied. Developing, implementing and maintaining a warehousing/BI solution can be a complex and lengthy process, and the different skills and tools required are diverse and specialized. One issue customers face is what type of vendor to use: a large full-service consulting firm, a vertical- market expert or a specialized firm. At the same time, many users are reevaluating spending for outside services, particularly in light of recent economic conditions.
One dynamic that service providers deal with is the customer's propensity to do work in house. The debate about whether to use in- house staff, outside people or a mixture of both is common. As discussed in a past column, respondents to Survey.com's comprehensive study of the warehousing/BI market are currently allocating a larger portion of their budgets to work done by their own information technology (IT) staff rather than outside services a practice they plan to continue in the future.
Pure- play professional service pro-viders are just one type of contender for the dollars customers spend on warehousing/BI projects. An assortment of vendors from systems manufacturers, DBMS providers and systems integrators typically all vie to play a lucrative role in these projects. With all of the different vendors competing for the attention of customers and bidding on projects, to whom do customers turn?
When first undertaking a warehousing/BI project, more users seek a business consultant, although still not in large numbers (just 22 percent according to Survey.com's study). Next in line are systems integrators, followed closely by software application and tool vendors. Turning to a business consultant is a sensible move when initiating a project because a consultant can provide needed expertise in developing a solid business case.
Although business consultants are more often the first in line on customers' project lists, they are not considered the most crucial to success. Software vendors, be they DBMS vendors, developers, tool or application providers, are considered more important to a project's overall success, coming out ahead of both business consultants and systems integrators.
Just as there are many kinds of service providers, there is a range of services needed to develop and implement warehousing/BI solutions. However, not all services are of equal importance to customers. Considering the critical nature of software to a project's overall success, it is not surprising to find that the most important vendor-provided service is database design. Also deemed very important are systems architecture/design, and test and evaluation. End-user consulting and business consulting were among the least important vendor- provided services, although facilities management/outsourcing ranked last.
The debate over whether it is more prudent to use in-house resources or outside vendors has raged for years. Whether over issues of cost, timing or expertise, service providers find the competition for customers' dollars comes not just from other vendors, but also from the customers themselves. According to Survey.com's study, customers often want to limit the amount of work outsourced. The project categories where 40 percent or more of respondents are very or somewhat likely to use outside service providers are: installation, technical support and/or training; development; design and architecture; and user education and training.
When asked about specific vendors customers were using, the responses were legion providing further evidence for just how diverse the market is for technical and professional services. Nearly 50 different vendors are cited by respondents in the study, and no vendor is cited more than seven times in one project category. Perennial warehousing/BI industry heavyweights such as IBM, Oracle and NCR plus EDS are the most often cited. Other more specialized service providers are also mentioned including Knightsbridge Solutions, Fiserv and Braun Consulting.
If you are looking to fill missing skill sets, look for a vendor that is ready and willing to transfer knowledge to your in-house staff. Relevant experience can be critical to a project's success. Plenty of industry-specialist firms with warehousing/BI practices are available. Determine if you require a results- oriented consultant or a task-oriented contractor. Understanding whether your needs are for specific designated tasks or value-added results is key to finding the right vendor. For warehousing/BI customers, the good news is there are many excellent choices in the technical and professional services market. Customers are also in a position of strength considering the current uncertain economy pricing is likely to be very competitive. Conversely, customers should be careful when spending closely scrutinized and often shrinking budgets.
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