Pros and cons of using a vendor provided analytical data model in your BI implementation

Boris Evelson

The following question comes from many of our clients: what are some of the advantages and risks of implementing a vendor provided analytical logical data model at the start of any Business Intelligence, Data Warehousing or other Information Management initiatives? Some quick thoughts on pros and cons:

Pros:

  • Leverage vendor knowledge from prior experience and other customers
  • May fill in the gaps in enterprise domain knowledge
  • Best if your IT dept does not have experienced data modelers 
  • May sometimes serve as a project, initiative, solution accelerator
  • May sometimes break through a stalemate between stakeholders failing to agree on metrics, definitions

Cons

 

  • May sometimes require more customization effort, than building a model from scratch
  • May create difference of opinion arguments and potential road blocks from your own experienced data modelers
  • May reduce competitive advantage of business intelligence and analytics (since competitors may be using the same model)
  • Goes against “agile” BI principles that call for small, quick, tangible deliverables
  • Goes against top down performance management design and modeling best practices, where one does not start with a logical data model but rather
    • Defines departmental, line of business strategies  
    • Links goals and objectives needed to fulfill these strategies  
    • Defines metrics needed to measure the progress against goals and objectives  
    • Defines strategic, tactical and operational decisions that need to be made based on metrics
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Forrester Databyte: SCM Tool Adoption

Jeffrey Hammond

Last week Dr. Dobb's published an article I penned in December on "What Developers Think". I won't rehash the thrust of that piece here other than to reaffirm the growing trend of technology populism in development shops - where tech-savvy workers make their own decisions about what technologies to use.

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BI In The Cloud? Yes, And On The Ground, Too

Boris Evelson

Slowly but surely, with lots of criticism and skepticism, the business intelligence (BI) software-as-a-service (SaaS) market is gaining ground. It's a road full of peril — at least two BI SaaS startups have failed this year — but what software market segment has not seen its share of failures? Although I do not see a stampede to replace traditional BI applications with SaaS alternatives in the near future, BI SaaS does have a few legitimate use cases even today, such as complementary BI, in coexistence with traditional BI, BI workspaces, and BI for small and some midsize businesses. 

In our latest BI SaaS research report we recommend the following structured approach to see if BI SaaS is right for you and if you are ready for BI SaaS:

  1. Map your BI requirements and IT culture to one of five BI SaaS use cases
  2. Evaluate and consider scenarios where BI SaaS may be a right or wrong fit for you
  3. Select the BI SaaS vendor that fits your business, technical, and operational requirements, including your tolerance for risk

First we identified 5 following BI SaaS use cases.

  1. Coexistence case: on-premises BI complemented with SaaS BI in enterprises
  2. SaaS-centric case in enterprises: main BI application in enterprises committed to SaaS
  3. SaaS-centric case in midmarket: main BI application in midsized businesses
  4. Elasticity case: BI for companies with strong variations in activity from season to season
  5. Power user flexibility case: BI workspaces are often considered necessary by power analysts
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Bottom Up And Top Down Approaches To Estimating Costs For A Single BI Report

Boris Evelson

How much does it cost to produce a single BI report? Just like typical answers to most other typical questions, the only real answer is “it depends”. But let’s build a few scenarios:

Scenario 1: Services only. Bottom up, ABC approach.

Assumptions.

 

  • Medium complexity report. Two data sources. 4 way join. 3 facts by 5 dimensions. Prompting, filtering, sorting ranking on most of the columns. Some conditional formatting. No data model changes.
  • Specifications and design – 2 person days. Development and testing - 1 person day. UAT – 1 person day.
  • Loaded salary for an FTE $120,000/yr or about ~$460/day.
  • Outside contractor $800/day.

Cost of 1 BI report: $1,840 if done by 2 FTEs or $2,520if done by 1 FTE (end user) and 1 outside contractor (developer). Sounds inexpensive? Wait.

 

Scenario 2. Top down. BI software and services:

Assumptions:

  • Average BI software deal per department (as per the latest BI Wave numbers) - $150,000
  • 50% of the software cost is attributable to canned reports, the rest is allocated to ad-hoc queries, and other forms of ad-hoc analysis and exploration.
  • Average cost of effort and services - $5 per every $1 spent on software (anecdotal evidence)
  • Average number of reports per small department - 100 (anecdotal evidence)
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Web Content Management and Portal: Together at Last?

Stephen Powers

Just got back from the Lotusphere conference in Orlando (which sure beats Boston these days in the weather department – thanks, IBM!). At one of the sessions, IBM execs gave their take on the Web content management (WCM) and portal markets. Or should that be market? IBM is betting that the WCM and portal markets will converge and cease to be separate markets, with vendors offering combined WCM/portals suites that have one administrative tool set, one presentation management structure, one repository, and so on. From a road map standpoint, IBM is also making it clear that they don’t have a “portal plan” or a “WCM plan”, but rather an “experience” plan that includes both portal and WCM.

Will it really happen? Certainly, many intranets and extranets rely on content/experience delivery via portals. Also, many companies utilize public-facing Web sites for customer self service – a good fit for portal delivery. Already, SharePoint has made some noise with WCM and portal functionality within a single product. And given many firms’ clunky customized WCM/portal integrations, IBM can look attractive with its combination of Websphere portal and Lotus WCM.

So what are the obstacles to total WCM / portal convergence?

  • A good chunk of customer experience sites that still don’t necessarily need the user-customization and application consumption capabilities of a portal.
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Forrester DataByte: Spending On Custom Software in 2010

Jeffrey Hammond

I fielded an inquiry from a client last week who asked what levels of investment Forrester is seeing in custom software development, and whether that investment remains significant compared to other activities in IT, especially given the downward pressure we've seen on budgets in 2009. The request was timely, as I've started to comb through the results of our annual Enterprise And SMB Software Survey.

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How You Can Come Out Smelling Like A Rose In 2010

Mike Gualtieri

Whew. Thankfully there are finally signs that the Great Recession is waning (knock on wood). The metrics used to judge the health of the economy such as unemployment are bad but not as bad. The stock market had a big bounce off lows, Avatar raked in a billion dollars, and Barbara Walters named Lady Gaga one of the 10 most fascinating people of 2009. This does not mean we are out of the woods yet.

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Apps Modernization - What are Your Top Priorities in 2010/11?

Phil Murphy

OK, so the holidays are over, you've either closed, or are in the process of closing out 2009 year-end processing. The 2010 decade has begun, and it promises momentous change before we see the end of it: Leading edge technologies will become commonplace; Still newer technologies will emerge; New business threats and opportunities will arise; And the impact of the Baby Boomer phenomenon will finally arrive.

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What’s The Price Of Software Tomorrow?

Holger Kisker

Traditional Software Licensing Comes To An End 

Cloud computing, on-demand solutions, subscription fees… software licensing is undergoing significant changes. Enforced by the current economic crises with tight IT budgets, companies don’t have the money to pay upfront licenses and are reluctant to take financial risks over many years when purchasing software. A key factor of the current growth of cloud computing is its financial benefits: no capital expenditures, no upfront financial risk, no depreciation and nothing on the balance sheet! But pay-by-use licensing models are not necessarily limited to cloud deployment models and can be applied to more traditional implementations as well.

Traditional software licensing with upfront payments has served vendors well over the last 40 years. However, over time vendors had to face significant disadvantages as well. The pressure to successfully close quarter by quarter and the fiscal year has led to a common practice by customers to push decisions until year end for a special deal. Discounts up to 80% became not uncommon in the software business. Another problem is the revenue volatility in difficult economic times. In 2009 many software companies had to face a decline in new license revenues of 10 to 25%. Without the constant stream of maintenance revenues many software companies would be facing severe financial problems today.

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SAP Is Skydiving Into The Clouds

Holger Kisker

A brief reflection from the SAP Influencer Summit on SAP’s On-Demand strategy

 

At the SAP Influencer Summit in Boston Dec 8/9, SAP put a lot of emphasis on its new roadmap into cloud computing and how serious the company is taking the topic for its future success. Well, to be true SAP actually avoided the term ‘cloud’ almost entirely and talked about ‘on-demand’ solutions instead. Maybe the company stayed away from the term ‘cloud’ because there is still a lot of confusion in the market (or inside SAP?) what cloud computing actually is, or to simply differentiate from the masses that currently go ‘crazy in the cloud’. Anyways, to offer pay-by-use software applications via self-service over the web indeed is pure cloud computing and SAP has declared it to be a future focus area for the company when Jim Snabe said “… significant [SAP] investment into on-demand will disrupt the market and SAP will regain leadership in this space”.

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