February 26, 2009
Analyst Reports, SaaS, on Demand BI
1 Comment
One of the main difficulties most businesses face when selecting software is separating the hype from the reality. This also applies to considering web-based on demand business intelligence analytics.
Gartner found that of the five commonly held assumptions – three are entirely false and the other two only partly true.
Businesses often don’t appreciate how quickly software can be improved after the initial launch. With such a competitive market, software development vendors are pressured to get products to market ASAP, and no longer wait for perfection in terms of either feature richness of functional performance. However, with feedback from early adopters, development continues vigorously and the applications can be almost transformed in the first 6-12 months. I think this is actually a really good process, as it helps to validate exactly what users do want, and not waste money developing performance or features that are not appreciated.
Of the five most commonly held assumptions about SaaS BI models:
1. SaaS is less expensive than on-premises software – TRUE
SaaS applications do not require large capital investment by businesses for licenses or support infrastructure. This can significantly reduce the total cost of ownership over the first two years. After this time, client site deployed applications can become more economical in terms of financial reporting [amortisation impact], however this is not necessarily true for an operational IT expense perspective.
2. SaaS is faster to implement than on-premises software – HALF TRUE
Speed of implementation for SaaS is faster for simple applications, however one must deliniate between initial implementation time and the additional time taken to deploy it to all users, which can take 2-3 times longer. As the complexity of processes and integration increase, the gap decreases. This is due to the larger percentage of the deployment time spent on customization, configuration and integration which can be equally difficult for both models.
3. SaaS is priced as a utility model, similar to electric companies – FALSE
Many vendors claim to charge on a usage basis, but in most cases they must commit to an agreed estimated usage independent of actual use.
4. SaaS does not integrate with on-premises applications and/or data sources – FALSE
Companies can integrate web based data using either batch synchronization, real-time integration using Web services or at the user-interface level through mashups.
5. SaaS is only for simple, basic requirements – FALSE
Whilst there are limits to customisation on SaaS models, the feature set of many applications rivals that of on-premise versions. SaaS vendors provide development platforms that enable high levels of configuration and the metadata level. The area of tightest constraint is in end-to-end processes requiring complexworkflow or business process management capabilities.
I hope this gives more confidence to those businesses considering SaaS models. For more on SaaS BI and vendor options available.
February 14, 2009
Analyst Reports, BI Strategy, CRM Solutions, Cloud Computing, IT Strategy, SaaS
No Comments
The latest Gartner 2009 CIO Agenda survey of 1500 CIO’s has revealed some surprising and not so surprising results.
Firstly, the not so surprising is that BI has been voted as the top technology for 2009, after all BI has held this spot since 2006. What is surprising is that the focus is not on analytics – the survey indicated that the top CIO business expectation was in improving business processes. This surprised me, as many companies have supposedly already been through this era – or maybe is just wasn’t done well enough. The other inference I have made is that BI is now focusing on the operational value it contributes – what we refer to as OBI.
The rankings of exectations and technologies are:
Expectations
- Reducing enterprise costs
- Improving enterprise workforce effectiveness
- Attracting and retaining new customers [#2 in 2008]
- Creating new products or services [#3 in 2008], however innovation is forecast to move up the ladder to top spot by 2012.
IT Strategies
- Tighter link between business and IT strategies
- Reducing the cost of IT [#10 in 2008]
- Delivering projects that enable growth
- Attracting, developing and retaining IT personnel
Technologies
- Business intelligence [BI] [ since 2006]
- Enterprise applications such as CRM or ERP
- Servers and storage technologies.
The survey results overall are not surprising. As the current market is hardly conducive to growth strategies for most businesses, it is an ideal time to refocus on core business and get better at the basics. BI is known for its ability to improve productivity whilst reducing costs. We can not overlook the past carnage of poorly implemented BI projects and tools that were too difficult for most business users to integrate into their daily operations. However, in the past two years this scenario has changed signficiantly, with tools much more business oriented and the knowledge base of implementation best practice taking learnings from the past and crafting far better BI program practices of today. The other missing link I will personally add is the level of education the business receives, not in using BI but in why they should be using it, and exactly how it improves a business from single user self performance management all the way up to the boardroom strategy.
Virtualisation, cloud computing and software-as-a-service [SaaS] are also acknowledged as cost reducing strategies but many IT managers are still cautious around availability, security, and a full functional fit. Such technologies are gaining favor with mid to small enterprises that may not have the full IT capabilities of larger corporates.
Overall, although BI is voted the top technology for 2009, the ‘killer app’ is ‘Leadership’. Companies don’t want consultants giving them a set of options – they want strong leadership paths to drive their businesses through the current downturn and still come out having advanced in some way. It may not be with customer growth and revenue growth, but I expect we will see leaner and meaner businesses forging ahead with renewed vigor and tighter focus.
Survey base: N=1500 CIOs worldwide, Duration= 3 months to Dec 15, 2008. Average company size = 400, average IT budget = $90 million.
