In the last decade, most large companies implemented business intelligence (BI) and data analytics strategies to modernize their operations and bring them closer to understanding their customers’ and clients’ needs and wants.
In recent years, many mid-sized and small companies have realized that they now need to leverage their data to remain competitive against the big firms and grow. As a result, many mid-sized and small companies feel pressured to improve their data analytics capabilities and invest in BI technology.
Along with the desire to propel your businesses forward comes concern over selecting the appropriate solution and understanding the overall costs of the technology.
Here, we'll discuss everything that you need to know about what to expect when budgeting for BI solutions.
I remember how happy I was when I purchased my first cell phone with a $250 per month contract. I also remember how shocked I was when my first bill was in excess of $700.
At that point in time, cell phone technology was young (and so was I) and I did not read the fine print; equipment lease fees, insurance fees, roaming fees, network fees, surcharges, per minute fees, and taxes.
As cell phone technology matured, so too did its commercial contracts and agreements, and now hidden cell phone fees are a thing of the past. Unfortunately, the commercial contracts for BI platforms are similar to early cell phone contracts and are wrought with hidden and escalating fees.
Many BI platforms may be powerful and complex and are also accompanied by the equally complex licensing schema.
Low up-front costs during development phases are attractive to development teams but often lead to un-capped and recurring per-user and/or data fees in the future which can devour an IT budget.
How can you successfully navigate complex licensing contracts and avoid getting sucked into a BI money pit? You will need to calculate your total cost of ownership (TCO).
TCO is a term used to describe how much it costs to acquire, operate, and maintain something over the course of its lifetime. Rather than just looking at the initial price, TCO includes other expenses that lurk beneath the surface.
My advice to anyone shopping for a BI platform is to first understand and summarize your needs before comparing BI platforms.
Below I have provided a summary of how to estimate TCO for BI platforms and allow for an “apples-to-apples” comparison of each.
I have also included our complete guide to understanding TCO.
1. Who within the organization will need access to BI and analytics?
The flow of data to EVERY member of an organization is key to a successful business intelligence (BI) strategy. It is widely accepted that organizations operate more effectively and efficiently when employees are able to analyze, visualize, and share data with peers as part of making critical business decisions.
Critical business decisions are not just made in the C-suite or among department heads. Customer service, fulfillment, production, accounting, human resources, and sales designations all need data to support their daily business decisions.
2. What are the roll-out plans?
Within your BI strategy, what are your implementation plans?
Since most BI and data analytics solutions are priced based on a “per-user” metric, it is helpful to have an estimate of what that will look like at various levels of scale and time.
Keep in mind that many BI platforms consider anyone who “views” a report or visualization to be a “user,” so be aware of that before estimating the number of users.
Define User Types
In my experience there are many different levels of users for BI and data analytics solutions; administrators, data-scientists, power-users, and business users and it is important to understand the needs of each.
Estimate Total Number of Users
It is important to estimate the total number of users at various levels of scale and time. In this situation, it is better to be hopeful and estimate more users than fewer.
I suggest using the following benchmarks for comparison:
Pre-launch development phase, launch day, launch + 6 months, launch + 1 year, launch + 2 years, and launch + 3 years.
Estimate Data Requirements
Many BI platforms will base their pricing on the amount of data, so it is also important to do some quick calculations and estimates on your data levels, at various benchmarks as well.
Estimate Cost of Implementation and Development
It is important to understand the cost of development work needed for a BI implementation. If your company has highly skilled IT and dev teams, they are a valuable resource that needs to be accounted for in the TCO equation.
An estimate of the number of manhours needed to implement the BI solution multiplied by the average hourly rate is a simple calculation. If your company outsources its development work to a systems integrator, you should ask for a written cost estimate to implement based on simple parameters.
Summarize User Training Requirements
If the new BI platform is complex, will your end-users be able to use it immediately or will they require training before going live? It is important to know what training packages are available and how much they cost.
In my experience, embedded BI roll-outs allow for seamless adoption and a much lower end-user learning curve which reduces the amount of training needed.
Quantify Opportunity Costs
It is important to understand how leadership at your organization views “speed to implement.”
If a prominent high-value customer is asking for BI now, and your competitors have already approached them, is waiting 9 months to implement your BI initiatives a luxury that you can afford?
In the example below, does saving $60k justify the loss of a high-value customer?
Once you have an estimate of your user profile and data needs at various levels of scale and time, you can use it to shop for preliminary price quotes.
If you create a simple user matrix, like the one below, you can use it to compare the TCO of the various BI and data analytics solutions.
You can simply ask the account rep to “fill in the blanks” to provide a cursory understanding of TCO for a 3-year period before diving further into technical discussions.
Ultimately, it is important to understand your needs and always calculate the TCO when it comes to BI and data analytics platforms.
Wyn Enterprise has a unique licensing model. From a single Wyn licensed server, an organization may embed Wyn Enterprise in an unlimited number of applications with an unlimited number of end-users, for a flat fee.
Server-based licensing allows you to scale your business and the user base -- with no additional cost.
Lower Your BI Costs
Learn how Wyn's unique licensing model allows you to scale your business without an increase in user fees.