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Businesses today are demanding more and more out of the same amount of IT budget. As a result, many Business Intelligence (BI) buyers are seeking better ways to assess an initiative’s Return on Investment (ROI). Evaluating ROI requires two components: (1) the business value delivered and (2) the investment costs spent. The business value of a BI application is often difficult to measure, given that value will continue to evolve and grow over the application’s lifetime. On the other hand, the investment costs – also referred to as Total Cost of Ownership (TCO) – often represent a more objective and quantifiable estimate. This paper focuses on how organizations can measure and lower their TCO, thereby increasing their ROI.
Perhaps unexpectedly, TCO is dominated by recurring costs and not by one-time purchase costs. Gartner estimates that customers spend up to four times the initial cost of their software license during every year to own their BI applications. The vast majority of these recurring costs are personnel or staffing costs. An IDC research study concludes that staffing constitutes 60%-85% of the overall ownership costs over three years.
Staffing costs are driven by two main causes: the effort to manage and maintain a BI application, and the effort to deliver continually changing and expanding business requirements.
TCO is nearly always underestimated. Staffing needs, the majority of TCO, are difficult to forecast because BI applications continually evolve and grow. Successful BI applications quickly generate interest from other departments, growing in number of users, applications, data size, and complexity. The BI application may need to serve expanding business lines, new partner extranets or additional geographical regions. As every BI project aims to be successful, the IT manager should also expect that as the BI application matures, so will the variable staffing and ownership costs. As different BI platforms provide different levels of efficiency and scalability, the amount of IT staff required to deploy and maintain the BI application will depend greatly on the BI platform chosen. MicroStrategy’s platform delivers efficient and cost effective BI, producing the effect of economies of scale. MicroStrategy’s architecture has been designed specifically to minimize the number of personnel needed to maintain and grow BI applications. For example, MicroStrategy provides end user self-service and ease of administration to reduce IT staffing costs. Today’s demanding ROI-focused expectations require BI evaluators to carefully consider the differences in platform capabilities and the resulting impact on ownership costs.
Organizations have increasingly adopted the goal of pervasive Business Intelligence – improved access to information and analysis tools across the enterprise – yet, only a relatively small percent of today’s workforce benefits from direct access to business intelligence applications. Organizations too often fall short of the goal of pervasive enterprise BI due to both functional and economic limitations imposed by BI technology. Many BI tools do not have the functional capabilities to scale beyond small departmental deployments. In addition, many BI tools are limited in delivering expanding business requirements due to high ownership costs.
Today’s fast paced, competitive global environment means that business requirements constantly react to marketplace changes, and business applications must be nimble and flexible enough to keep pace. Organizations have increasingly adopted the goal of pervasive Business Intelligence – improved access to information and analysis tools across the enterprise – yet, only a relatively small percent of today’s workforce benefits from direct access to business intelligence applications. Organizations too often fall short of the goal of pervasive enterprise BI due to both functional and economic limitations imposed by BI technology. Many BI tools do not have the functional capabilities to scale beyond small departmental deployments. In addition, many BI tools are limited in delivering expanding business requirements due to high ownership costs.
Today’s fast paced, competitive global environment means that business requirements constantly react to marketplace changes, and business applications must be nimble and flexible enough to keep pace. Constantly changing business requirements may include the need to quickly roll out a new product, report off a new data source, or comply with increased security and regulatory requirements. BI applications must be able to accommodate such dynamic business requirements as well as end user functionality requirements.
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