1 The Ultimate Guide to Buying Business Analytics How to Evaluate a BI Solution for Your Small or Medium Sized Business: What Questions to Ask and What to Look For Copyright 2012 Pentaho Corporation. Redistribution permitted. All trademarks are the property of their respective owners. For the latest information, please visit our web site at
2 2 Contents Contents Executive Summary What is Business Analytics and Why Do You Need it? Five Things to Consider When Evaluating a BI Solution Software Costs Length of the ROI Cycle Ability to Adjust to Business Changes Rapidly Plan for User Growth Ease of Integration with Other Applications Summary Are You Ready to Make a Purchase?
3 3 Executive Summary SMBs (Small and Medium Businesses) have less money, fewer technical resources and less time to spend on deploying a solution. Although there is a wide range of Business Intelligence (BI) solutions on the market, many don t fit the needs of SMB companies. This white paper discusses the specific needs of SMBs, the benefits and drawbacks of various BI solutions, and a checklist for evaluating these solutions. As your organization narrows down its choice of BI products, this document helps to highlight things that most BI vendors don t want you to know, showing you specific BI considerations you need to evaluate and questions you need to ask about your BI product of choice. What is Business Analytics and Why Do You Need It? Business analytics is an umbrella term that refers to a variety of software applications used to analyze an organization s raw data. These applications include data analysis, enterprise and operational reports, dashboards, and data mining analytics. Companies use BI to improve decision making and identify new business opportunities. Why do SMBs need Business Intelligence? For the same reason large companies do to learn more about their business performance and to better execute on their strategy. However, due to their high-growth and lean organizational structures, SMBs require a different approach to BI. It s important for these companies to approach their purchasing decision with a few critical questions in mind. Five Things to Consider When Evaluating a BI Solution 1. SOFTWARE ACQUISITION COSTS For SMB companies, price is, more often than not, a key factor in evaluating software solutions. SMBs can t afford the high initial prices associated with many BI solutions on the market today. When it comes to software license costs, there are typically two sets of charges to consider: Ö Up front perpetual license costs Ö Ongoing support and maintenance costs Most BI vendors charge for both, with the exception of Commercial Open Source and Software-as-a-Service (SaaS) BI companies that offer subscription-based pricing. The subscription-based pricing model does not require hefty upfront license costs.
4 4 In addition, the pricing metric varies among the different BI vendors. Depending on the vendor, you will typically see one of the following pricing models: Ö User-based pricing Ö Server-based pricing Ö A combination of server- and user-based pricing Under a user-based pricing model, companies are faced with additional charges every time they add new users to the BI user base. Since the success of a BI initiative is strongly dependent upon widespread adoption and use of dashboards, reports, and analysis views, granting access to as many employees aspossible is critical. BI tools that utilize a user-based pricing model can inhibit the success of implementation and adoption. Hence, selecting the right tool with the right price metric is essential. A server-based licensing model is a much better fit for BI, as it enables companies to grant access to more employees in a much more cost-effective manner. Using server-based pricing, companies are free to distribute BI to as many users as their servers can support, without incurring additional fees. To improve the usefulness of BI and its ROI, Pentaho offers affordable subscription, server-based pricing, without requiring any upfront license fees or any peruser fees. YOUR BUYING CHECKLIST: 1. Is there an upfront perpetual license cost? 2. How much are the annual maintenance and support costs? Does the maintenance cost go up from the 2nd year onwards? 3. What is the pricing metric: serveror user-based? A server-based licensing model is a much better fit for BI, as it enables companies to grant access to more employees in a much more cost-effective manner. 2. LENGTH OF THE ROI CYCLE SMBs typically need proof of investment quickly. This can be as short as a few weeks in some cases. Unfortunately plug-and-play in BI is a myth. Any BI solution you choose will require some level of preparation before the data becomes actionable for business analytics. This is just as true of on-demand solutions as it is of legacy solutions. However, there s a wide spectrum of time-to-value tradeoffs in BI. Some solutions require building from scratch, while others offer components that you can leverage for a faster time-to-value. For instance, although SaaS BI solutions claim instant productivity by providing necessary resources to host and manage the application internally, this option is equally or more resource-intensive than traditional BI from a data perspective. Prior to the initial upload, the data must be pre-processed and cleansed. This process requires significant in-house work by someone who is familiar with the data. Similarly, legacy BI solutions that are provided by mega vendors are built around complex data models and data warehousing practices that take months, even years to fully develop. To properly evaluate the length of the ROI cycle for a BI solution, there are a couple factors to consider: Ö Productivity tools - Rapid installation and deployment of BI is impossible without an agile design and
5 5 development approach. A waterfall approach of first building comprehensive data warehouse models, then writing custom code to extract, transform, and load data into the warehouse, and finally building BI applications to visualize and report against that data, is a timely practice. Where as legacy BI requires development of proprietary data models and large upfront investments in data warehousing practices, Pentaho approaches BI implementations differently. With Pentaho, you use an agile BI design environment, unique to Pentaho, to access data sources and visualize results rapidly, accelerating your BI project by several orders of magnitude. With Pentaho, you use an agile BI design environment, unique to Pentaho, to access data sources and visualize results rapidly, accelerating your BI project by several orders of magnitude. Ö Technical expertise required - While traditional vendors offer slimmed-down versions of their enterprise products at prices affordable to SMB customers, they have not specifically designed the product for the SMB market. In reality, it will take several months and a team of external resources to get a production system up and running. These same resources will need to be hired again for maintenance and upgrades. On a similar note, although many pure data discovery and visualization tools in the market claim quick and self-service BI, what they don t offer is a selfservice interface for getting to the data. For these solutions to truly empower business users with selfservice, IT still needs to work behind the scenes to prepare, integrate, consolidate and cleanse the data before its ready for BI. With Pentaho there is no need for special technical skills. Intuitive authoring environments and Webbased design can be simply configured and deployed without the need for custom coding, extensive data modeling, and data warehousing expertise. Using Pentaho s fully interactive visual interface, a business analyst can build powerful data discovery and analysis views in one day. For simpler use cases, Pentaho allows casual business users to get at the data and create interactive reports in a matter of minutes. YOUR BUYING CHECKLIST: 1. How long does it take to access, prepare and make data actionable for BI? 2. How many technical resources are needed to support your decision making processes? 3. What tools are available for business users? Besides the end user tools, is getting to the data sources an independent business user task also? 3. ABILITY TO ADJUST TO BUSINESS CHANGES RAPIDLY BI projects are not one-time, one-off projects. As business dynamics change and new requirements emerge, business users need the ability to add new key performance indicators (KPIs) and data sources, or change the dimensions by which they measure their metrics.
6 6 Ö Growing sources of data - As BI requirements change, for example because of mergers and acquisitions, or consolidations of different business units, so do the underlying data sources. A business analytics solution needs to remain open and agnostic to different sources of data in order to quickly adapt to change. Pentaho Business Analytics doesn t lock you into a proprietary data source. Pentaho BI doesn t lock you into a proprietary data source. With Pentaho, your data can be in any source, shape or format. With the ability to connect to anything, including all RDBMs, cubes, data warehouses, data marts, analytical databases, NoSQL sources, XML, web services, cloud services, CSV, flat files, and even applications such as SFDC and Google Analytics, Pentaho allows you to quickly adapt to business changes without extensive involvement from IT. Ö Change in data or metrics - Once data has been uploaded and built into analytics, reports, or dashboards, it will not remain static. BI solutions that don t have an integrated ETL and BI development environment require a cumbersome and time-consuming change management process to incorporate data changes. The same problem occurs when companies want to change data flows to accommodate new business metrics and KPIs. Imagine an analysis of customer purchasing patterns that needs to expand and incorporate views by geographies, products and campaigns. This will require re-working data integration flows to incorporate new data sets, writing a whole new set of SQL programs and even updating dimensional data models to provide more granular views of data. Pentaho s fully integrated business intelligence and data integration product is built from the ground up with the speed of deployment in mind. The integrated nature of Pentaho BI allows any changes to data integration flows, such as adding new data sources or updating the data transformation rules, to generate new reports and analysis views, automatically. Therefore, change management requires a lot less time and resources as compared to other disparate and un-integrated tools in the market. YOUR BUYING CHECKLIST: 1. Can you connect to existing data sources, or does the solution lock you into a specific databases or data warehouses? 2. How rapidly can you add a new data source? 3. How easily can you add new metrics and calculations? 4. PLAN FOR USER GROWTH The success of a BI implementation is strongly dependent upon its widespread access and use. Historically, corporate reporting and data analysis were performed by a small, technical group within a company. Today, this has changed. Successful BI environments expand to more and more people in the organization. For a successful widespread adoption, you need to consider a few things: Ö Incremental license costs A per-user pricing and
7 7 licensing model can inhibit user growth from a financial perspective. Unfortunately, majority of BI solutions are licensed per user, with fees as high as $1,000 to $2,000 per user. Because this is cost-prohibitive to many organizations, access to BI is often granted to only a small number of employees. The rest rely on canned reports that IT produces, which in turn creates an IT bottleneck and consequently forces users to make decisions irrespective of the data. Pentaho utilizes server-based licensing, so you can grant access to as many users as needed, and have the flexibility to increase this number, without extra charges, as your organization grows. YOUR BUYING CHECKLIST: 1. Who needs access to BI? Do you need to expand the access in the future? 2. Do you have to pay extra for every additional BI user? 3. How much training is required for the end users to become self-sufficient? 4. How rapidly can the users adopt the solution once built? While some of the data discovery and SaaS BI vendors offer userfriendly interfaces for business users, others, and in particular the legacy BI vendors, don t. Ö Ease of use for end users - A successful BI implementation is adopted by as many business decision makers as possible. Business people typically come from non-technical backgrounds. Pentaho offers a unified Web-based interface for creating, accessing, and sharing all forms of Business Intelligence, including reports, analysis views, and dashboards. The intuitive and Web-based access to data guarantees that your BI solution will be widely adopted by all of your users. Today, Pentaho is used by many casual business users including physicians, real estate agents, store managers, resort managers, supply chain managers, insurance knowledge workers, and underwriters, just to name a few. While some of the data discovery and SaaS BI vendors offer user-friendly interfaces for business users, others, and in particular the legacy BI vendors, don t. The approach that traditional BI vendors have taken is to offer the same complex tools, but at SMB prices. This approach simply does not work because the tools are not designed with the casual business user in mind.
8 8 5. EASE OF INTEGRATION WITH OTHER APPLICA- TIONS When assessing your BI options, it is important to ensure that the vendor you choose provides the means for enhancing and extending the solution. Proprietary tools will require a lot of money and highly specialized consultants to build product integrations. Having extensible APIs and a plug-in architecture ensures that your BI solution can be easily integrated with other software products to meet both current and future needs. For instance, BI that is built to report and analyze CRM data can be embedded into that application to provide a seamless user experience. An open and standards-based plug-in architecture ensures that this integration is easily done. Pentaho Busienss Analytics is an open and modern platform built upon 100% Java APIs. Because of this openness, Pentaho has been successfully embedded into all kinds of enterprise software applications. Ability to embed, ease of integration, and extendibility of Pentaho BI makes it an ideal choice for you as your business grows and requires integration with other enterprise software solutions and applications. YOUR BUYING CHECKLIST: 1. Do you need to integrate your business analytics with other business applications? 2. What APIs does your BI solution provide out of the box?
9 9 Summary SMBs have a wide variety of BI options to choose from. A closer look at the different BI solutions available in the marketplace shows the benefits and drawbacks of each. The right model depends on your organization s needs, skill levels and decision making processes. The BI vendor comparison table below highlights the major differences between the different BI vendor types. PENTAHO ENTERPRISE OPEN SOURCE TRADITIONAL DATA DISCOVERY SAAS SOFTWARE ACQUISITION COSTS $ $$* $$$$ $$$ $$ LENGTH OF THE ROI CYCLE r r r r r r r r r r r ABILITY TO ADJUST TO CHANGE Agile BI: instantly see updates to data and metrics in reports / analysis Open the hood and start coding Changes take 3-6 months Fast as long as you have data in 1 source, typically Excel Fast to start, painful to change USER GROWTH No additional cost per user High end user adoption Build your end user self-service tools from scratch; start a software development lab Costly per user price Low end user adoption Costly per user price High end user adoption Costly per user price Medium end user adoption EASE OF INTEGRA- TION WITH OTHER Easy Easy Hard; proprietary Hard; proprietary Hard; proprietary APPS * Includes development, test, managing releases, and other costs associated with open source.
10 GLOBAL HEADQUARTERS Citadel International, Suite Hazeltine National Dr. Orlando, FL 32822, USA TEL OPEN (6736) FAX US & WORLDWIDE SALES OFFICE 201 Mission St., Suite 2375 San Francisco, CA 94105, USA TEL TOLL FREE UNITED KINGDOM, REST OF EUROPE, MIDDLE EAST & AFRICA London, United Kingdom TEL TOLL FREE (UK) France Offices - Paris, France TOLL FREE (France) Germany, Austria, Switzerland Offices - Frankfurt, Germany TEL TOLL FREE (Germany) Belgium, Netherlands, and Luxembourg Offices - Antwerp, Belgium TEL To learn more about Pentaho s Business Analytics software and services, contact your Pentaho Sales Representative online at pentaho.com contact or call
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