You knew John Smith was a great fit to energize your marketing organization. But can a few tools turn him into a data scientist? If you think so, you may be kidding yourself. Worse yet, without exploring new cloud business intelligence (CBI) tools you may be shortchanging your organization from obtaining rich insights to help with critical business decision-making. Sorting out your options and estimating your ROI is not as difficult as you may think.
CBI tools have become a basic requirement in nearly every vertical industry and across multiple departments including marketing, finance, sales and human resources to name a few. With data pouring in from dispersed sources, these tools play a vital role in simplifying complex operational activities such as tracking and monitoring sales activities, analyzing large volumes of transactions carried out by ordering management activities, and measuring marketing strategies through effective monitoring of key performance indicators (KPI). Both small and large enterprises are major adopters of cloud analytics services, and this trend is expected to continue for the next few years.
According to a 2013 study from MarketsandMarkets, more than 13 percent of companies already have cloud analytics and BI solutions, and adoption is expected to reach 50 percent by 2018 across the globe. Cloud analytics is offered through different delivery models such as private, public, hybrid and community clouds. So how do you decide which delivery model is right for your organization?
Why consider cloud analytics at all?
Promoters of cloud BI argue these solutions are much more flexible than traditional IT systems and considerably reduce the deployment time, with less storage space and high processing capacity. Additional benefits to consider include:
- Focus. Outsourcing part or all of your BI needs to cloud suppliers allows your internal resources to concentrate on core business demands or other projects rather than manage on-premise solutions.
- Availability. Support for mobile and remote users continues to grow and change constantly as businesses enter new markets or target new segments. Cloud BI gives today's workforce browser-based access to control when and what information they need.
- Total cost of ownership. Capital expenditures (capex) associated with on-premise solutions can be converted to operational expenses (opex) that come in cost effective pricing models such as pay as you go and pay by the drink.
Explore your options
Before you decide whether you should turn existing in-house staff into data scientists, hire a data scientist, which Harvard Business Review called the "sexiest position of the 21st century," or outsource—it's worthwhile to understand your options (Konkel, 2013). There are five main alternatives for deploying a cloud BI solution. These include:
- Public cloud based Infrastructure-as-a-Service (IaaS). This option is typified by a pay-as-you-go model where businesses use IaaS suppliers such as Savvis or Amazon and then buy their own software to deploy on top of it. Businesses may encounter limitations on what the supplier will maintain and also have to add their own skin in the game via software and in-house training and maintenance.
- BI Platform as a Service (PaaS). This option calls for deploying CBI on the public cloud or externally-hosted cloud allowing businesses to build their own system. This approach may be worth considering for short term BI projects and comes in two flavors. Multivendor approaches such as Jaspersoft PaaS on Amazon EC2 provide file-based data integration whereas single vendor PaaS solutions like SAP Business Objects on Demand provide pre-built integration with cloud-based data integration tools. With single vendor solutions, data integration can be done in-house before uploading data files.
- Analytics on a Cloud. This segment consists of many new suppliers as well as familiar ones such as IBM Cognos and offers pre-built solutions.
- Public cloud or externally hosted SaaS BI. This option uses a cloud-based reporting system on operational data from a cloud-based transaction processing system. If you're using Salesforce.com or other similar tools already, this may be a good option to consider.
- Internal Private CBI solution. This option includes cloud-in-a-box systems where suppliers offer everything a business needs including storage, integration tools and professional services.
Measuring the ROI
Successful assessment of cloud BI solutions requires that organizations consider both the financial and non-financial benefits. Before outsourcing to one of the options listed above, take time to evaluate all the benefits expected from the solution including conversion from existing BI systems.
Most companies are well versed at assessing the financial aspects where benefits are tied to costs and returns. Yet, in analyzing the costs you need to be diligent to be sure you're getting full disclosure on lifecycle costs including software licenses, upgrade fees and on-going maintenance and support costs. Additional costs should also be projected from training employees, counting the costs that may come from retraining when employees lose skills or change positions. And don't shortchange expected returns that can come from other areas then just savings on data consolidation and data fixes—include earnings from incremental revenue gained from more effective marketing and sales programs, for example
Intangible benefits should also be part of the assessment and on-going measurement process. Understanding the impact of CBI on key decision-making processes can translate into shorter time to market or increased executive confidence during quarterly results meetings or strategic planning sessions. Customer satisfaction indexes can be taken to new levels of insight with the right CBI solution leading to loyal customers, not just satisfied ones.
Time for action
With all of the new suppliers and business models hitting the CBI market, don't delay implementing a solution that fits. By paying for what you use, you lessen your risk if the supplier fails or gets acquired. Even the brightest analytical minds in-house can make better decisions with good clean data served up via the right outsourced CBI supplier.