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In today's environment, understanding the total cost of ownership (TCO) of a BI solution can play a key role in making sure the project succeeds. Not only does evaluating the cost from many angles allow you to make a smarter purchase, it allows you to implement the solution in a controlled fashion that keeps costs down.
It has been shown time and again that selecting a BI solution - or any software solution - based on price alone is a mistake. The cheapest price tag can often lead to the most expensive solution in the long run. There are hidden costs involved and these need to be taken into account from the start.
Apart from the upfront costs of hardware and software, you need to consider the costs associated with user training, the functionality and scalability of the solution, integration of existing data sources, time to implementation, support and maintenance and the additional licensing costs associated with scaling up, among others.
The first thing to understand about any BI solution is that they are cross-departmental, meaning they will impact many different departments and user types as well as alter processes on a company-wide level. Start by mapping out the where those potential impacts will be to help get a better picture on potential costs.
Because successful BI relies on good data, businesses need to know where their data is coming from, clean out the rubbish, get rid of data silos and increase data integration and automation.
Many BI projects suffer because of so-called 'dirty data' which leads to users not trusting the reports they are getting and a lower adoption rate of the BI solution throughout the company.
Solving data headaches
Aberdeen Group polled 6,000 companies over 18 months and found that data integration issues are the biggest headache. Data cleansing, integration and automation are cited as among the biggest costs in any BI project but, they are usually found in most successful BI implementations.
At this stage, it's not unusual for larger companies to discover that they already have many BI tools throughout the company - sometimes as many as 30 - with hardly any of them speaking to each other.
It's also vital to know what your users need. Aberdeen found that best-in-class companies implementing BI tools set out to discover end-user requirements at the beginning. This not only tells you what type of BI solutions will work best but it also tells you the level of user access and capability to deploy. This can save a lot of time and money by not rolling out expensive functionality to those that don't want it, nor need it.
Ease-of-use is vital in a BI solution. Too many projects have fallen flat on their face because the final solution is deemed too complex by many end-users. If they can't use it, it's useless and you end up paying for licenses that will hardly ever be used.
Training also leads to faster and broader deployment. Factor in the up-front costs of training existing users and the ongoing costs of training new users.
Scaling up a BI application from its pilot stage in one or more departments to a wider user base requires careful planning and businesses should challenge their vendors for a variety of deployment options that will help keep increased license and hardware costs to a reasonable level.
'Per seat' licensing may be the most common model in use but there are others starting to appear like 'server-based' and 'concurrent user licensing'.
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