by Karen McCandless
Published on 29 October 2015
Business intelligence has been hailed as a game-changing technology for decades, but only in recent years has it finally began to fulfill its promise of providing businesses with new and exciting ways of generating insights - and tangible value - from their ever-growing datasets. As of today, almost every modern company uses some kind of data analysis tool - from basic spreadsheet apps to multimillion dollar, organization-wide deployments of dedicated business analytics software and hardware.
The growing demand for business intelligence has naturally led to a torrent of new software providers, tools, and professionals offering their services to potential buyers. This guide is meant to give business intelligence buyers a bird's-eye of the current marketplace and the possibilities that stand before them when shopping for their shiny new BI tool.
The first question is of course the most basic one: does your business even need a business intelligence application? After all, BI software will often require an initial investment that could strain the budgets of smaller organizations, which might be hesitant to embark on such an adventure without a clear and well-defined picture of the expected ROI.
Indeed, for many such organizations, BI software might be 'overkill' - especially when they do not generate or rely on much data for their day-to-day operations. Business intelligence apps are meant to help organizations better understand and analyze data; if there is not much data in the first place, there will be little use for a BI tool. A bootstrapped startup working on its first commercial release might be better off focusing its resources on development efforts rather than BI.
However, for companies that already have regular business processes in place, which can be quantified and measured - e.g. digital marketing efforts, production cycles or sales data - and when that business feels it could be making more efficient and data-driven decisions, the time is ripe for considering implementing an analytics platform.
At this stage many buyers might be deterred by the price tag attached to some business intelligence applications and start considering an alternative solution - namely, developing their own analytics and reporting platform in-house, using their internal development resources.
While this option might sound tempting, particularly to companies who already have a team of software developers\data analysts on payroll, or a large IT department, it is often counter-productive in terms of total cost of ownership:
So unless your business has vast development resources, and a prior knowledge or affinity to business intelligence, it would usually be best to look for an external solution. If something is worth doing, it's worth doing right - and the best practice in this case is probably not to start building an entirely new product from scratch when there are plenty of available out-of-the-box alternatives.
The first thing to realize is that BI tools widely differ in functionality, capabilities, and use cases. If someone tries to sell you a 'one size fits all' solution before even understanding what you're looking for, run for the hills - you're most likely going to be sold an overpriced product that will not resolve the pains that led you to the purchase decision in the first place.
Before shopping for a solution, an obvious step to take would be to define the problem. What do you hope to do with your BI application? What was your original business pain? Typical answers could include:
And this list goes on. Buyers need to pinpoint their exact needs, as well as the types and amounts of data they will be working with, and then see which vendor or software package could best accommodate these needs.
An organization that is merely looking for a way to better visualize data stored across several spreadsheets might look to purchase one of the multitude of data visualization tools on offer; if the goal is to introduce customer-facing analytics, the buyer should focus on features such as data security and the ability to serve many concurrent users; while businesses who wish to generate insight from multiple, dispersed and diverse sources containing structured and unstructured data would be interested in a BI tool that is best suited for dealing with complex data.
Each of these use cases requires a different set of capabilities, so it is important to look for an application that can address your business's needs. Once you understand the list of features you're looking for, you can move on to create a shortlist of vendors who can provide them.
After creating your shortlist, it's time to start evaluating. Before entering into sales negotiations, be sure to look for recommendations from past or current users that of the tool you're considering - both from colleagues that have implemented BI solutions in the past, and software review websites where previous buyers describe their own experience with the product or vendor.
If the reviews and recommendations are favorable (considering your own specific needs), you can move on to the final buying stage - actively evaluating one or more products that you think could be a good fit.
The key here is to gain a clear understanding, during the evaluation period, of how this application will fit into your current business processes, how long will it take to deploy, and how much effort will be required on your end; and once deployed, whether the system can be maintained and operated mainly by business users and analysts, or require constant IT involvement. Some vendors might not be overly thrilled to answer these questions - so here are a few guidelines to follow:
The main idea is to see actual proof that the application can accommodate your needs within a reasonable time frame, before making the decision to purchase. This is a completely reasonable demand, and if the vendor refuses to accept it, this should raise a red flag.
The emergence of many new BI applications in recent years is great news for the business world, as it brings a wider range of choices to buyers, who can now find a solution tailored to their exact specifications. However, more choice often leads to more confusion, and with so many offerings available it is easy for companies to lose track of their goals and the value they intend to gain from business intelligence software.
Hence it is imperative to understand both your own needs, and which tools in the current marketplace are best suited to answer them, in order to reap the full benefits of a BI application: creating value from previously neglected data, increased operational efficiency, less burden on IT, more data-driven decision making, and a more complete view of the business as a whole.