New research from Bloor, a European IT research, analysis and consultancy organisations, commissioned by analytical data management platform Zizo, a Dell and Intel partner, has shown ‘hidden costs’ in the market for pricing information with respect to business intelligence (BI) and analytics solutions.
The research examined the total cost of ownership (TCO) for small, medium and large businesses for such a solution over a three-year period and the different pricing models adopted by various vendors. It found that the TCO dwarfs the initial licence or subscription fees upon which most BI projects are costed.
Bloor’s full research is being released as part of a free webinar on the April 4 at 2pm at which Philip Howard, research director at Bloor, willshare his initial thoughts on the findings: “Our research has revealed that far too many companies are only looking at the initial licence costs of BI and analytics software, without taking other factors into account. Whilst, to an extent, this is understandable, because it is often easier to get authorisation for operational expenditure as opposed to capital expenditure, in the view of Bloor this is a false economy.
“By the time a company has actually factored in the database, data quality, ETL (Extract, Transform and Load) software and reporting tools, the typical cost for even a small 50-person solution is around £200,000 per year – and that doesn’t include salaries, any required training or hardware.”
Peter Ruffley, chairman at Zizo who sponsored the survey, commented: “The cost of the traditional BI investment remains a huge point of contention. Firstly, most companies simply do not understand the complexity of these types of data projects; secondly, they are embarking on them with technology that was never designed for the job.
“By failing to understand the complexity associated with data extraction, cleansing and storage up front, companies are finding it impossible to make a valid business case. Instead, far too many have invested in a pretty visualisation tool only to discover that it does perhaps 10% of the job and without extensive additional investment in data quality and ETL technology, the tool is useless. It’s at this point the realisation hits that the cost of people, time, money and systems work to address the rest of the BI project is untenable and the project is shelved. And it becomes another failed investment,” Ruffley added.
Bloor’s research demonstrates in detail, across three different business scenarios, how important it is for ogranisations to consider the lifetime – rather than just up-front – costs before embarking on a BI project.
“BI can deliver value – massive, business changing value; but it demands a different approach, especially in an era of cloud computing and Everything as a Service,” continues Peter Ruffley. “Does it really make sense to make the massive internal investment in hardware, tools and, critically, people required to achieve BI success?”
“By adopting a business-led service-based approach where the business need is defined and the problem entrusted to a third party that already has all the technology components and the skills required to turn the base data into business intelligence, organisations can experiment with data, change horizons and innovate as they need to – and at a predictable cost, with an acceptable level of risk.
This, however, is simply not possible with the old technologies and methodologies. And any business attempting to find value from BI with these outdated approaches is always going to be playing catch up at best or, at worst, throwing good money after bad.”
As part of Bloor’s webinar on the 4th April at 2pm, Philip Howard will not only be issuing the full research findings but discussing how, with the right approach, organisations can address the cost, time and risk issues associated with traditional BI projects, and evaluating the business value that can be achieved through BI and analytics.
For details of the free webinar go to: www.zizo.co.uk
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