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Business Intelligence:
Which Application is Best for an Organization?

online columnist Jonathan Wu     Column published in DMReview.com
June 8, 2000
 
  By Jonathan Wu

Choosing which business intelligence application is best for an organization is not an easy task. By best BI application, I mean the software product(s) that provide the greatest user satisfaction with respect to functionality, technical architecture and cost. Understanding, assessing and reviewing which applications are available and appropriate for the needs of the organization can be time-consuming. DM Review magazine lists more than 550 companies that offer BI applications, and it's a good place to start. After narrowing the list of BI vendors and products, an organization must establish its functional requirements and define the cost associated with implementing a BI application. We have seen several approaches to selecting software applications and several different, corresponding results.

Informal Selection Process

We often encounter organizations that do not conduct a formal software selection process when choosing their BI application. Unfortunately, more often than not, this approach fails to produce the desired results. Many times an organization will simply assign this task to a business manager in addition to that person's regular duties. Other times, the IS department will manage the software selection process, and often the software selected is based upon a vendor demonstration. In this situation, the vendor with the best demonstration, or possibly the best sales person, typically wins the bid. An organization may find that it has purchased inappropriate software because it did not focus adequate resources such as time and money on the selection project.

Determining which BI application is best for your organization is not a decision that should be haphazardly approached. We have seen several organizations replace their BI application after only a year or two. The cost to the organization is more than the purchase price of the software and its implementation expenses. It also includes training users and establishing the knowledge level within the organization about the BI application being used. When an organization initially selects or replaces its BI application, several factors must be considered such as cost, functional requirements and technical architecture.

Cost

What is the total cost of implementing a BI application? The cost of such an undertaking can be divided into two categories: direct and indirect. Direct costs are tangible cash outlays that an organization can clearly identify with the initiative. These costs include the purchase price of the software, maintenance or support fees, implementation expenses such as internal and external labor costs, additional hardware and software needed to support the BI application and user training. The indirect costs are not as easy to identify or quantify. Because they usually occur after the BI application has been implemented, they are often not factored into the total cost of implementing a BI application. However, these indirect costs are a major component of the total cost. They include upgrades of client machines, upgrades of network communication, upgrades of supporting software, additional internal support for users and user training beyond the initial training provided. Understanding the total cost of implementation is imperative if the organization needs to stay within budget and can help determine the phases of implementing the BI application.

Functional Requirements

What are the information needs of the users of the organization? What applications do the users currently have at their disposal? What manual processes are currently being conducted to meet the users' information needs? Why is there a need? Assuming there is a need, which BI application(s) have the features and functionality that meet the requirements of the organization's users? Understanding the answers to these questions will define the functional requirements and aid in the selection of the BI application that is best for the organization.

Technical Architecture

What is the current information technology architecture of the organization? What is the future plan for the organization's information technology? The configuration of BI applications can have a significant impact on the information systems environment of an organization. Understanding how these applications work from a technical architecture perspective can help to identify potential problems and help to determine which configuration would best suit the users of an organization. Currently, most BI applications have two widely accepted versions of the software: full-client (non-Web) and thin-client (Web-enabled) applications. Can the organization's current technology support non-Web and Web-enabled BI applications? How should the BI application be deployed within the organization? Understanding the answers to these questions will define the technical architecture and aid in the selection of the BI application that is best for the organization.

Formal Selection Process

With a formal approach to selecting software, the likelihood of selecting the best BI application for the organization is substantially increased. Our approach to selecting software requires that this task be treated as a project. By treating the software selection process as a project, the proper resources are allocated to define and document the organization's requirements. The software selection project steps that we follow are outlined below:

1. Project initiation
  a. Scope and goals
b. Team
c. Kickoff
2. Business process analysis
  a. Understanding the current business processes
b. Identification of best practices to support the organization's business goals
c. Business process gap analysis
d. Development of future, or "to-be," business processes
3. Requirements definition
  a. Managerial requirements
    1. Budget/timing
2. Reporting requirements
  b. Functional requirements
    1. Stated business needs
  c. Technical requirements
    1. IS standards
2. Data flow diagrams
3. System interfaces
4. Decision point: build (Do you really want to do this with all of the available products?) versus buy
5. Vendor management
  a. Vendor demonstrations
b. Scorecard and request for proposal (RFP) analysis
c. Ranking of the vendor solutions
d. Negotiations - software and implementation
e. Contract development  
6. Implementation project management

Summary

Recommending a particular BI application for all organizations without defining the budget, functional requirements and technical architecture would be inappropriate. Each organization has its own unique characteristics and people. Understanding the needs of its users as well as the functionality of the BI applications that are available is the basis of a successful selection. Using a formal approach that is a business-based methodology can greatly improve the opportunity for selecting the best BI application for the organization. This process builds consensus and provides a means for documenting the decision that will be rendered. A careful selection process is involved and time-consuming. However, BI software selections that are approached in this manner have much higher success rates and are more likely to meet user expectations. By investing the time to plan and select against defined goals, an organization can minimize potential selection risks and maximize the opportunity for selecting the best BI application for the organization.

This article was developed with the assistance of Dana Mason. Mason is the director of the strategic technology consulting practice at BASE Consulting Group dmason@knightsbridge.com.

...............................................................................

For more information on related topics visit the following related portals...
Business Intelligence (BI).

Jonathan Wu is a senior principal with Knightsbridge Solutions. He has extensive experience designing, developing and implementing information solutions for reporting, analysis and decision-making purposes. Serving Fortune 500 organizations, Knightsbridge delivers actionable and measurable business results that inform decision making, optimize IT efficiency and improve business performance. Focusing exclusively on the information management disciplines of data warehousing, data integration, information quality and business intelligence, Knightsbridge delivers practical solutions that reduce time, reduce cost and reduce risk. Wu may be reached at jwu@knightsbridge.com.

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