BI: core to the enterprise

Schlegel recommended that when looking at BI vendors, companies should avoid the conventional wisdom of buying all technology from a single source. While that type of one-stop shopping works well for many hardware and software markets, it doesn’t work as well for business intelligence because vendors haven’t offered the same type of volume discounts.

Burton noted that different vendors have different strengths, so dealing with a single vendor would mean giving up some of the benefits of working with multiple vendors.

Schlegel emphasized that if a company does have a preferred BI vendor, the contract language should ensure that the vendor continues to serve the company’s needs, enabling the company to quickly change to another vendor if there’s a problem.

Bill Hostmann, research VP at Gartner, cautioned that many companies rush into offshore deals in an attempt to gain cost and productivity benefits, but are often disappointed because the expected benefits fail to materialize.

Another important element of the continued globalization of business, according to Beyer, will be to recognize that “visualization” or graphic elements such as maps will need to be used rather than written information, to avoid confusion in the translation of business intelligence.

The primary reasons for business intelligence project failures, according to Hostmann and Alex Soejarto, Gartner research director, are:

• loss of defined goals, often stemming from a disconnect between the identified goals of the BI project and the goals set when working with a service provider;
• difficulty filling resource gaps by the service provider;
• an ineffective process of selecting a service provider; and
• difficulty managing the relationship, including mismatches in communication styles and differing expectations from unclear contracts.

To prevent those failings, Hostmann recommended advanced planning of the company’s strategy, including responsibilities and processes, tactical implementation issues and operational requirements.

“If your company is not prepared to work with an external service provider, your project will not succeed,” Hostmann said. “Failure to recognize the differences of an external service provider engagement will stop your project before it starts.”

In their planning assumptions, some companies fail to include the internal costs and the burden on internal resources of using an outside BI provider, according to Hostmann. For every internal full-time employee needed for the BI project, estimate replacement hiring or temporary contract costs to fulfill existing obligations, he suggested.

In defining the objectives for BI implementations, companies should use metrics to proactively track return on investment, vendor adherence to service level agreements, reduced customer churn, higher customer satisfaction and any reduction in costs, Hostmann also recommended.

Many companies have yet to incorporate such planning, he said, adding, “There is a disconnect between payback and predefined goals when hiring a BI service provider.”

According to a Gartner survey, only 31 percent of companies think having predefined goals is important when engaging a BI service provider.

However, too much analysis can be costly as well. Actual implementation of a BI project will be the most expensive aspect of a BI initiative. Other variables may have very little impact. Hostmann cautioned, “Simply because you can measure [a variable] doesn’t mean that you should. Time lost on
low-value estimating can increase planning costs by 50 percent.”

At the Summit, all of the Gartner analysts recommended that companies keep a close eye on business intelligence as it continues to evolve so that their firms can plan appropriately to take advantage of the technology.