Complementary BI:

The New Approach to Business Intelligence

Executive Summary

The role of business intelligence (BI) to help organizations drive top-line revenue growth, profitabilityincreases, operational improvements, and customer satisfaction is well documented. Many businesses haveexisting business intelligence efforts that s

erve their business’ needs to some degree, while IT organizations

have plans or are in the process of building out a more comprehensive BI solution. Often some business usersare serviced well, while many others continue to struggle to get access to the critical data they need to beeffective in their jobs. Getting their new reports written or analytical tools deployed is simply not alwayspossible for an overburdened IT organization, that is focused on delivering longer term strategic objectives.Software-as-a-Service (SaaS) business intelligence can be used in a way that is complementary to in-house BIsystems to address targeted business needs more comprehensively.

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It is being used to rapidly address high-value, urgent business needs when the IT organization is consumedwith other strategic or urgent activities.

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It leverages existing investments and infrastructure, driving increased value to the business by creative ITorganizations.

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Solutions are delivered in as little as six to ten weeks and are very affordable.

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Places minimal demands on IT and business users.

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Delivers high user satisfaction, a compelling ROI and significant business benefits in a short period of time.

Complementary BI results in a win-win-win situation for all involved. It provides business users with access tothe critical information needed to run their businesses; it allows IT to focus on the strategic projects on theirroadmap; and it allows the business to improve its business performance and perform to its potential.

Complementary BI

Priority #1: Business Intelligence

Businesses no longer view business intelligence as simply an operational necessity, but instead as a strategicdifferentiator. Business intelligence (BI) is the enabling technology to compel new business insights to driverevenue increases, cost reduction, margin increases, operational improvements, and customer satisfaction.For the past three years, business intelligence has been one of the top three priorities for CIOs (source: CIOMagazine March 2008). A recent Aberdeen survey of 4,300 companies identified business intelligence andanalytics as the number one technology that could have the greatest impact on the business during the nexttwo to five years; SaaS products would have the second greatest impact.Business intelligence has provided many companies with visible benefits that can be quantitatively measuredand attributed. For example, Casual Male Retail Group has stated that through better visibility into productperformance, inventory, and demand, it has increased responsiveness via a SaaS business intelligencesolution, improving profit margins by 3.5%. Casual Male is also using a low-resource SaaS BI solution tomonitor its market entry strategy into six different European markets to identify high-performing and low-performing areas of the business.

The Challenge: Addressing Immediate Business Needs While Executing the BI Strategy

Many companies have a well-conceived, long-term business intelligence strategy that addresses many of thekey components required to put an enterprise BI system in place. Often this includes an enterprisearchitecture, data management strategy, data cleansing and integration, data warehousing, reporting tools,governance, and ongoing support. Larger companies have dedicated teams to drive, execute, and supporttheir BI strategy and have a multi-year program plan to get this capability in place. In addition to the BIstrategy, there are often many other critical IT programs that are in process to address key strategic needs.The challenge many IT organizations face is the pressing need from business users for solutions today (inmany cases, they needed them yesterday). In particular, these increasingly analytical business users aredemanding access to information and analytic tools to do their job. They have pressing business goals thatrequire IT to enable their execution---whether it is a customer service issue, profitability improvements or anoperational issue. The requests are growing rapidly and becoming more urgent, and IT is often under-resourced to keep up with the growing demand.Given the mix of strategic programs, tactical support, and immediate business needs, IT organizations are justifiably strained. In these pressing economic times, the business pressures will grow more intense andadditional IT resources will become even scarcer.

Complementary BI

New Approach: Complementary BIComplementary Business Intelligence is an approach to address specific, short-term, critical business needs,with a BI solution that will complement the existing BI infrastructure. It drives additional value from theinvestments, infrastructure, and capabilities in place today, and it complements the longer term BI strategythat is being rolled out. This new approach is deployed to address specific business opportunity areas thatcan drive high value and fast return on investment to the company. Complementary BI allows ITorganizations to continue to execute their strategic IT agenda yet extend their ability to be a valued partnerto the business user community.Many companies already have BI reporting tools, data stores, and analytical capabilities that may range fromspreadsheets and targeted data marts to sophisticated statistical analytical tools and enterprise datawarehouses. These capabilities address long-term, broad strategic requirements for the organization.Complementary BI is an approach that works with the existing BI strategy. Key characteristics of complementary BI include:

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Addresses a specific, critical business need

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Deploys in weeks to drive rapid time to value

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Limits IT resources required to deploy and manage

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Focuses business users’ scarce time through use of prebuilt analytics as a starting point

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Integrates multiple data sources including enterprise, departmental, and simple source systems

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Leverages existing BI infrastructure including data warehouses, marts, tools, and capabilities

Complementary BI is delivered via a Software-as-a-Service (also known as On-Demand) model to enable rapiddeployment, fast time to value, low price point, and minimal use of IT resources. It can be delivered in aslittle as six weeks. Many CIOs are turning away from the traditional do-it-yourself mindset toward SaaS asthe best way to support immediate, critical business issues. Accordin

g to CIO Magazine, “BI vendors are also

hearing a lot of pain from current and potential customers who need a quick fix: Inside companies of all sizes,the pressure to aggregate, synchronize, and deliver clean and actionable data to business users has never

been more intense.”

Traditionally, CIOs have had on-premise options to implement business intelligence. First-generation SaaSsolutions lacked the requisite security, richness, and comprehensiveness that business users required. Theywere data visualization tools that sat on top of single data sources, often spreadsheets or simple databases.

But today’s second

-generation SaaS solutions are a different story. They provide a focused solution toquickly drive business value that is as robust and secure as home-grown data warehouse projects, provide afull set of capabilities for many types of users, and can deliver a complete, customized solution in weeksrather than months.

Today’s SaaS model is about leveraging economies of scale, technology, and expe

rtise. The total cost of ownership for a SaaS solution is typically 30-40% that of an on-premise solution and a small fraction of resources to deploy and support. This is mainly driven by economies of scale in the hardware, software, andinfrastructure. SaaS providers have secure hosting facilities set up to leverage servers and storage, and SaaSsoftware development is lower cost as the software is designed, developed, and tested for one specificdeployment environment, not the multitude of operating systems. Finally, some leading SaaS providers havedomain experts on staff to provide vertical or function specific best practices. These experts can provideguidance to customers, assist in the customization of metrics, and develop a continual stream of new metrics,analytics and reports to be used, as needed.