In-Depth

Study Highlights How to Lower BI Costs, Complete Projects On-Time and On-Budget with Less Staff

Best-in-Class are 21 percent more likely to track BI implementation costs vs. budgets

• By James E. Powell
• 05/20/2009

IT and business management are increasingly worried about the rising costs of BI implementations, to the point that the over 30 percent of respondents in a recent Aberdeen Group study have not increased their BI spending in the past 24 months. Many BI adopters, the research firm reports, "have found that the costs related to on-going support and maintenance of an ever-changing set of analytical and reporting requirements inhibits user penetration and the ability to manage the total cost of ownership (TCO)."

Aberdeen's benchmark research report, Managing the TCO of Business Intelligence, says companies are examining their TCO management capabilities so they can improve the ease of use of BI for non-technical users. Readers can download a copy of the full report (short registration required) at http://www.aberdeen.com/link/sponsor.asp?spid=30410182&cid=5863.

How can companies do more with less? The report, based on a survey of over 190 professionals at 162 companies between March and April, identified enterprises with best-in-class performance (those achieving the top 20 percent of aggregate performance) based on year-over-year results for four specific metrics:

• A 5.8 percent improvement in on-budget completion of BI projects (this is more than 5 times the rate of Industry Average companies)
• A 4.3 percent decrease in the cost-per-user of BI applications (more than four times the rate of Industry Average companies)
• An average of 14 days to complete BI projects (almost three times less than Industry Average companies and over ten times less than Laggards)
• An average of .6 days (4.8 hours) to make a change or modification to an existing BI report or analytic view, versus 3.2 days among Industry Average, and 7.9 days among Laggards

What are the secrets to success these Best-in-Class companies enjoy? Aberdeen's research turned up two characteristics. Best-in-Class companies:

• Are 191 percent more likely to utilize data cleansing tools as part of their back-end BI data management enablement. Working with clean data helps to alleviate many common implementation problems. Many companies experience project failure due to "dirty data" and the resulting lack of trust in the information and inevitably, a lower-than-desired adoption among end users.
• Are 160 percent more likely to integrate BI tools with existing enterprise applications (i.e., ERP and CRM solutions). Aberdeen research has revealed that this is an important step towards making BI more pervasive within the organization. This is an important outcome for companies seeking to adopt a "BI culture" to promote the value of replacing gut-level decisions with data-driven actions.

David Hatch, vice president and group director at Aberdeen, and the author of the report, points out that "despite requiring fewer full-time equivalent employees (FTEs) to support BI deployments, the Best-in-Class are capable of completing BI projects, from start-to-finish, both on-budget and within expected timeframes. Additionally, they are delivering BI capabilities to more enterprise users than their counterparts. This report dives deep into the specific actions and capabilities that Best-in-Class companies are taking to achieve this result."

According to the report, "Until recently, BI was deployed mainly to mangers, business analysts, and C-level executives as a tool used to gain better visibility into company performance, trends, and standard reporting." Today's turbulent economy has changed that; "BI is now being viewed as having a potential impact on operational performance, especially in this economy. As companies continue to see lowering performance with new business initiatives, they need to improve their understanding and ability to serve the existing customer base in order to survive" Aberdeen used four metrics to measure BI performance: On-budget completion of BI projects, cost per user of BI applications, time to completion of BI projects, and change agility (the time required to make a change to an existing BI report or view).

How do Best-in-Class companies manage to achieve such dramatic results? "The strategic approaches that Best-in-Class companies are taking toward aligning their organizations and resources to deal with managing BI costs are numerous," Hatch notes, and communication is key. "At the top of the list is an initiative to understand end-user requirements. Best-in-Class companies are 28 percent more likely to formally poll end users regarding their specific needs for BI access and use. Gaining an understanding of end user needs is paramount when it comes to determining what level of access and capability to deploy throughout the organization." He notes that many times companies purchase a BI tool after an evaluation by IT and departmental power users and, with adoption rates low, find during post-implementation interviews that end users don't view the tool as being easy to use.

Getting a BI project off the ground is also tricky; the company's research over the last 18 months of over 6,000 companies shows that data integration issues are the heart of the trouble. Best-in-Class companies are far more likely to have data integration capabilities than their peers. Other key facts noted in the report that lead to success: end-user training, and investment in back-end tools and services (Best-in-Class companies are more than two and a half times as likely as Industry Average performers to use them and twice as likely as their peers to have enabled data cleansing capabilities).

Hatch cautions that "there are no shortcuts to finding true ROI from BI investments. Best-in-Class companies interviewed for this report stated emphatically that unless a thorough and formal approach to defining metrics, business rules and reporting/analytical requirements was taken, there would be very little chance of obtaining rapid, or even any full ROI." Interviewees also said that they were more likely to involve a temporary cross-functional team at the outset of BI projects that would then be disbanded when the project was completed and the deliverables deployed. "This also lends some insight into the reasons why Best-in-Class companies are capable of achieving higher implementation and deployment cost controls while staffing projects with fewer FTEs."

To obtain a complimentary copy of the report, visit http://www.aberdeen.com/link/sponsor.asp?spid=30410182&cid=5863. A short registration is required.