How To Differentiate Advanced Data Visualisation Solutions

By Boris Evelson

I get many inquiries from clients on how to select a data visualization vendor / solution. The criteria that my clients often site are

• Thick and thin client
• Dynamic visualizations, not just static charts 
• Ability to pull data from multiple sources
• OLAP-like functionality

All these criteria are pretty much a commodity these days. The real differentiation will come once you start looking at advanced (key word "advanced") visualization features such as

• If it’s a thin client does it have Web2.0 RIA (Rich Internet Application) functionality (Flash, Flex, Silverlight, etc)?
• In additon to standard bar, column, line, pie charts,etc how many other chart types does the vendor offer? Some advanced examples include heat maps, bubble charts, funnel graphs, histograms, pareto chats, spider / radar diagrams, financial market specific charts (candlesticks, etc), project management specific charts (gantt, etc), scatter plots, relationship diagrams, overlapping sets, cluster analysis, and others?
• Can the data be visualized via gadgets/widgets like temperature gauges, clocks, meters, street lights, etc?
• Can you mash up your data with geospatial data and perform analysis based on visualisation of maps, routes, architectural layouts, etc?
• Can you have multiple dynamically linked visualization panels? It’s close to impossible to analyze more than 3 dimensions (xyz) on a single panel. So when you need to analyze >3 dimensions you need multiple panels, each with 1-3 dimensions, all dynamically linked so that you can see how changing one affects another
• Animations. Clicking through 100s of time periods to perform time series analysis may be impractical. So can you animate/automate that time period journey / analysis?
• Multi dimensional charts. Can you have a 3rd, 4th, 5th, etc dimensions, such as a size of a bubble, color of a buble on an XY axis?
• Subsets ands supersets. Can you select a point, rectangle, or a "lasso" (irregular region) and drill down into the subset or roll up into a superset (if selecting across several charts)?
• Can you have microcharts (aka trellis or sparklines) – a two dimensional chart embedded in each row or cell on a grid?
• Can you do contextual or gestural (not instrumented, not pushing buttons, or clicking on tabs) manipulation of visualization objects, as in video games or iPhone like interface?
• Is the data that is being analyzed
  a) Pulled on demand from source applications?
  b) Stored in an intermediary DBMS
  c) Stored in memory? This last one has a distinct advantage of being much more flexible. For example, you can instantaneously reuse element as a fact or a dimension, or you can build aggregates or hierarchies on the fly.
• Is there a BAM-like operational monitoring functionality where data can be fed in into the visualization in real time?
• In addition to historical analysis, does visualization incorporate predictive analytics components?
• Portal integration. If you have to deliver these visualizations via a portal (SharePoint, etc) do these tools have out of the box portal integration or do you need to customize.
• Can you reuse metadata, such as KPIs, KPMs, that was already setup in your BI or ETL or DW models?

What did I miss?

Next Gen BI Is Here Today

By Boris Evelson

As I promised in my last year “BI Crystal Ball” blog, BI will look very different in the near future. Indeed most of the 20 next generation BI trends that I list in this blog are actually here today! And, as my colleague Alex Cullen wrote in his recent research document on 15 Technologies That Matter(where of course BI is front and center), these are the technologies that indeed matter. I picked these 20 trends not because the market labels them as trendy, but because I have tons of evidence that the buy side of the BI market can use these technologies today. These technologies can address the real pain points, gaps and challenges that most knowledge workers are faced with today.

 

So what has really changed? The “what-has-to-be-done” of BI has not changed, and will probably not change in the foreseeable future. One would still need to discover, ingest, persist, measure, analyze, report, deliver and act on information. The real trick is “how-it-will-be-done”. I categorize all major next gen BI trends under 4 categories: Automation, Unification, Pervasiveness and No Borders / No Limitations. Here’s my take on what they are:

 

Automation

• Automated Information Discovery. Automatically discover source data based on metadata, content and rules.
• Actionable and Collaborative. Automate actions on results gleaned from BI reports and analysis.
• Contextual (process, desktop, visual). 1) Process: BI is aware of process context; 2) Desktop: BI is aware of desktop (open documents, open emails) context; 3) Visual: gestural, not instrumented visualization manipulation (akin to video games).
• Built-in expertise. Sensing what the user is doing and providing proactive hints.
• End-to-end lifecycle management. Automatically changing and updating all interdependent BI components.
• Decision Management. Automatically documenting and automating all business decisions.
• Self learning and adaptive. Automatically modifying data model based on reporting and analysis usage.

Unification

 

• Logically unified sources. Logical views independent of physical data location and model
• Data and content. Seamless integration of structured data and unstructured content
• Disk and streaming. Seamless integration of data stored in disk based DBMS (historical, batch) and in streaming, in memory DBMS (real time)
• Historical, current and predictive.Seamless integration of historical, current, and predictive reporting and analysis
• Metadata. Unified ETL, data quality, BI, portal, content, process, rules metadata

Pervasiveness

•  Within processes.BI in processes, automatically comes up when a decision needs to be made by a human
• Within Information Workspace. Integration with all IW components: search, ECM, email
• Self Service.Casual user and power user self service, including, but not limited to BI SaaS.
• Offline, disconnected. Seamless operation in offline / disconnected mode
• Mobile. Delivery and analysis on mobile devices

No borders

 

• On-demand data models.Reporting and analysis without limitations of underlying data models, aka “post discovery”
• Unlimited dimensionality. Ability to visually analyze many dimensions at the same time
• Exploration + analysis.Seamless integration of search-like technology to find the data and BI-like technology to report and analyze the results of the search

Drop me a note if you’d like more details on each of these trends, including top vendors that even today have capabilities in these areas.

Ten Strong Hints Your Enterprise May Not Have A BI Strategy

By Boris Evelson

You know that you don't have an enterprise BI strategy if:

1. Your end users keep pointing to IT as the source of most BI problems
2. Your business executives view BI as another cost center
3. IT staff keep asking end users for report requirements
4. Your BI is supported by IT help desk
5. You can’t tell the difference between BI and Performance Management
6. You can’t measure your BI usage
7. You can’t measure your BI ROI
8. You think your BI strategy is the same as your DW strategy
9. You don’t have a plan to develop, hire, retain and grow BI staff
10. (My personal favorite) You actually don’t know if your enterprise has a BI strategy!

Want more hints and best practices? Take our BI maturity self assessment test. Then if you actually want to compare your BI strategy and BI maturity against other Forrester clients, take our BI maturity survey. Good luck!

BI Saas Vendors Are Not Created Equal

By Boris Evelson

As many of my readers know, for years I’ve been quite skeptical about non-mainstream BI solutions, such as BI SaaS. Security, control, operational risk, data, metadata and application integration are just some of the requirements for enterprise BI that are still on my watch list as potential reasons to be weary about BI SaaS. However, I am also a very pragmatic analyst and truly believe that nothing but supply and demand drive the markets.  And I am now, slowly but surely, beginning to believe there couldn’t be a better case for demand for BI SaaS especially after findings from one of the project that I am currently conducting.

I recently talked to a few dozen non-IT professionals (specifically in front office roles, such as sales and marketing) across multiple industries, regions and company sizes. Guess how many of them fully or partially relied on IT for their day to day operational and strategic information needs? BIG FAT ZERO!!! This finding was a huge surprise to me – yes, I did expect to find something like less then 50% reliance on IT, but I surely did not expect to find 0%.

It is truly amazing that after 30 or so years of BI software, services and solutions vendors and internal IT organizations making a strong push and a case for BI, they are still not even making a dent in the front offices. What are the reasons? Among many others, sales and marketing folks that I interviewed are citing being low on IT priority list (why???), IT not speaking their language, high cost, inflexibility of company standard BI solutions, lag times to roll something out – and the list goes on and on and on.

So what’s a sales or a marketing professional to do? Fortunately, they do have options. I am sure you all know what their option #1 is. Yes, you guessed it – Excel. But while Excel remains and will continue to remain for the foreseeable future #1 BI tool, it does have lots of limitations, and all of the business folks I talked to are looking for something that has more pre-built BI solutions, can handle gigabytes (and eventually terabytes) of data, and is more Web 2.0 and collaborative than Excel. Many BI SaaS vendors indeed provide just that.

Is BI SaaS a panacea to all these issues and challenges? Absolutely not. My concerns cited at the beginning of this blog still need to be addressed. Chief among them is the financial viability and long term survivability of BI SaaS vendors, since most of them are tiny, startup companies. So how do you short list a BI SaaS company and mitigate your risks?

First consider some soft differentiations. While these are hard to verify, and may or may not directly correlate and contribute to ultimate vendor success, these are a good starting point (or ending point, to put the final touches on your evaluation) to begin shortlisting your BI SaaS choices:

• VC backing. Is the firm backed by a VC with good track record in information management space?
• Profitability or loss run rate. Is the business profitable or is the loss rate manageable, predictable and adequately financed till the planned break even / profitability goal?
• Salesforce.com recommendation. Does Salesforce.com (or another major vendor on whose platform, data source, etc analytics are based) provide favorable or unfavorable recommendation?
• Management team. Does the management team have a good track record with successful startups and solid BI experience?

Next, proceed to evaluating hard facts. These have to be easily verifiable, and will most probably directly contributes to the ultimate success of a vendor:

Architecture and technology

• Multitentant architecture. Is the architecture truly multitentant or is SaaS offering really an ASP/MSP under the covers ? In other words, can a customer swipe a credit card and get provisioned instantly without a necessity for any manual intervention, setup, etc? This, by the way, is the main reason why I often exclude mainstream BI vendors from BI SaaS category – but I welcome their challenge to this point.
• In the cloud infrastructure. Is the vendor in the business of supporting servers and DBMS, or is all infrastructure hosted by in the cloud vendors like Amazon or Google? Can the vendor concentrate its efforts 100% on functionality and not infrastructure?
• Salesforce.com dependency. Is the software offering 100% dependent on a single data source? Does the vendor have anything else to fall back on should that one single dependency not work out? Some other typical sources include Netsuite, Quickbooks online, clickstream data from Google, payroll data from Paychex, and others.
• Fixed or flexible data model. Does the vendor provide a very industry or functionally specific data mode, vs. can you build your own data model or both?
• Metadata. Does the tool give you capability to import/export metadata so that business and technical metadata can be integrated and reused with other enterprise applications?
• Data integration. Does the vendor provide simple (flat file) import mechanism, SQL or MDX based import or a full blown ETL procedural/scripting language? Does the vendor automatically infer  and build a star scheema or requires you to do the target data modelling?
• APIs, Web Services. Can product functionality be modified, exposed and reused in other applications via APIs or Web Services?
• 11 styles of BI. Does the vendor provide BI functionality to support all 11 styles of BI (8, such as reporting, querying, OLAP, dashboards, etc are listed in my recent BI Wave)?
• Architectural secret sauce. Since any SaaS business is in danger of becoming commoditized does a vendor have a “secret sauce”, a protectable IP that truly differentiates them?

References

• Are customer references available? From customers in production (not POCs or prototypes)? What is the total number of verifiable customer logos in production? How diverse is this verifiable customer base by industry, enterprise size, function?

Support

• Set up services. Does the vendor offer software and application setup services?
• Integration services. Does the vendor offer broader data integration services?
• Management consulting services. Does the vendor offer strategic, management consulting-type advisory services?

Hopefully, this checklist is comprehensive and practical enough to help you shortlist a BI SaaS vendor that fits your business needs and is less then likely to fail in the near future. However! You still need to mitigate the risk by

• Backing up your own data
• Having a BI SaaS vendor Plan B.  Keep track of the other BI SaaS vendors - and be ready to have one of them pick up the business if your current BI SaaS vendor fails.
• Having a commitment from Salesforce.com (or the other appropriate ERP vendor) to support your SaaS analytics in case your BI SaaS vendor fails
• Having your internal IT resources stand by and have a plan and a periodic fire drill on how to take over and migrate your data into the enterprise BI solution

Now that I re-read my blog – I am thinking, why not actually poll all current BI SaaS vendors and have them fill out the above questionnaire and turn it into a research doc? I think I will do just that shortly. The current list that I have includes:

Adaptive Planning
Analytixondemand
Birst
BlinkLogic
Cloud9Analytics
Gooddata
HostAnalytics
LiteBI
Oco
PivotLink
RapidMetrix
SuccessMetrics
TelemeTree
Youcalc

Am I missing anyone?

SAP and TIBCO? Too Juicy Of A BI Rumor Not To Comment On

By Boris Evelson

I typically don’t like to comment on rumors, but this one is too juicy (from the BI point of view) to pass by. Even though TIBCO’s business is primarily in application and process integration, enterprise service bus, middleware, messaging, etc., Business Intelligence implications of the rumored SAP/TIBCO merger are huge! By acquiring TIBCO SAP will get:

• A leading position in the in-memory analytics. In-memory analytics, provided by TIBCO’s acquisition of Spotfire a couple of years ago, is a very different animal then traditional BI. First it enables ultimate flexibility and nearly instantaneous response. Also, while power analysts using their own copies of MOLAP cubes free to modify data models as they see fit, a data modeling step is still required before reporting and analysis can be performed. In-memory data models do not require that step, since all of the calculations and aggregations can be done at RAM speeds and therefore require little, if any, design and preparatory work. For example, there are times when analysts need to treat a continuously variable numerical value (like sales price) not as fact, but as a dimension. While conventional OLAP tools make this very difficult, in-memory models do not require a distinction between facts and dimensions — any element can be instantaneously used in either capacity.



• A leading position in business optimization. TIBCO/Spotfire provided a combination of at least 3 separate technologies that are necessary for the drive toward business optimization. BPM (Business Process Management) vendors address efficiency gains, BI vendors provide visibility into business results, and BRE (Business Rules Engines) optimize decision-making. Together, the three technologies foster business optimization, where an optimized enterprise is efficient, effective, and agile. Organizations need BI tools to understand the results of BPM processes; analytics to determine the context of processes and the conditions for rules; rules to determine which actions people or processes should take; and BPM to manage the flow of work and information.



• Contextual analytics.  BI/analytics must be context-aware to be useful. In the converged world of process, rules, and analytics, business people cannot be expected to start with a blank slate and select from a variety of KPIs, KPMs, facts, and dimensions as is required today. Since it is the process that brings up the dashboard automatically at the right place and the right time, the process is aware of the context and what decision needs to be made. The process can therefore prepopulate that dashboard with the right KPIs and KPMs, or the right intersection of facts and dimensions that the user needs to analyze the situation and make the appropriate decisions.



• Address a potential advanced analytics gap left by IBM/SPSS deal. Traditional BI tools do not foster predictive and prescriptive insight.  If architected and designed properly, traditional BI applications provide deep insights into past and present events, as well as help identify patterns in past sales, marketing, supply chain, and financial performance. But in this new age of future-facing business analytics, any BI user without strong advanced analytics capabilities is seriously deficient and at a competitive disadvantage. Traditional BI tools effectively answer past-facing questions such as “what happened?” and “why did it happen?” but do not offer much assistance with proactive concerns such as “what will happen?,” “what may happen next?,” and “what could possibly happen if I take action X vs. action Y?” For that kind of functionality, SAP Business Objects currently relies on the OEMd version of SPSS – a company that is now going through pre-merger integration process with IBM. Even though both IBM and SAP state that all SPSS current commitments and OEM relationships are alive and well, we know better. We know that SAP has to protect itself from IBM and needs to make a similar acquisition in the near future. Insightful, recently acquired by TIBCO will easily fill in that gap.

Still think it’s just a rumor?

News Analysis: Oracle Waives Fees On Extended Support Offerings

By R "Ray" Wang

Oracle President Charles Phillips pleasantly surprised Oracle Applications User Group (OAUG) Collaborate 09 attendees this morning during his keynote with the decision to waive Extended Support fees for a number of product lines through 2010 and 2011. As customers and prospects face one of the worst global economic crises, proactive relief on support and maintenance fees could not come at a better time. Summary details of the program can be found in Figure 1.

Figure 1. Oracle's Revised Support Policies

(Source: Oracle Corporation)

Proactive change in support offering creates a win-win

Oracle's move to address the support issue may stem from a variety of reasons but the main focus centers around improving the vendor-client relationship for a few reasons:

• Responding to the global economic crisis.  Oracle has taken the initiative in listening to customers, partners, and industry watchers about customer reactions to the escalating costs of software maintenance.  Oracle's Applications Unlimited and Lifetime Support Programs have been successful in retaining acquired customers and have shown customers that acquisitions need not be slash and burn with minimal reinvestment.
• Providing more time for customers to adopt Fusion Apps. With the slow down, Oracle may be anticipating slower upgrade rates.  While no clear date and product road map has been communicated to customers, removing the price pressure on extended support fees provides customers with some breathing room on upgrade timing.
• Mitigating attention on high profit margins and its M&A strategy. After touting record profit margins near 50% and continuing its M&A strategy with the announcement to acquire Sun, customers have become concerned about the impact of less choice in the market.   This move may appease regulators and industry watchers and show that Oracle has some self regulating policies.

The bottom line - user groups should now determine the minimum R&D percentage of investment from revenues

Oracle continues to gain economies of scale with each acquisition.  The good news - Oracle has the capacity to reinvest $2.6B per year into R&D and the real dollar amount has increased from 1.9B in 2006.  While this is a large figure, the bigger and more important issue - what percentage of the maintenance revenues have been reinvested?  Here's where we find a slight drop from 12.6% to about 11.6% in 2008.  Consequently, like SAP's users and user groups, OAUG and the other Oracle users and user groups should begin to track the ratio of R&D dollars that tie back to the amount of maintenance revenue.   In fact, they may want to take a look at the SUGEN KPI's and see if they are applicable to Oracle's environment.  R&D spend from maintenance and the need for Third Party Support options will be the key ownership issues for the next 5 to 10 years.  In any case, the need for preserving and strengthening independent user groups will be one effective check and balance in the consolidating world of enterprise software.

Your POV

Do you feel Oracle made the right move?  What have your experiences been like with Applications Unlimited and Lifetime Support?  Send me a private email to rwang@forrester.com.  Posts are preferred!   Thanks and looking forward to your POV!

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

News Analysis: SAP and SUGEN Make Progress on Enterprise Support

By R "Ray" Wang

Since SAP's announcement of its single tier Enterprise Support plan last July, customers have continued to express dissatisfaction.   In response to such complaints, the SAP User Group Executive Network (SUGEN) of 12 SAP user groups and SAP have been engaging in discussions around the value derived from this new offering.  This morning SAP and SUGEN announced an agreement on three key areas of the Enterprise Support offering:

• Defined list of key performance indicators to measure the results of SAP Enterprise Support (ES) services. As part of the agreement, the value of ES will be measured by through the jointly agreed SUGEN Key Performance Indicator Index (SUGEN KPI Index).
  Based on the press release and informal conversations, the four areas covered include business continuity, business process improvement, protection of investment, and total cost of operations.  No public details have yet been provided on the specific metrics but there is an expectation for customers to realize value within a four year time frame of the benchmarking program

  POV: The four areas measure how choice, value, and predictability of investment come together in the overall maintenance offering.  If successful, this represents a unique and transparent approach to demonstrating value in maintenance.  In the coming weeks, SAP users will want to seek details of the specific KPI's and determine how those KPI's will be measured on a consistent basis across different types of organizations.

• Joint benchmarking program to define and measure how SAP customers may derive value from ES. With agreement on the KPI's in place, a formal benchmarking program will be instituted to provide baselines to quantify value.   SAP and SUGEN have agreed on the parameters of the representative customer sample.  SUGEN will choose the customers.   Importantly, an independent party will validate results will conduct quality assurance and independent validation of the results.

  POV: Benchmarking remains the critical factor in this program.  SAP customers should pay close attention for balance in the representative customer sample.  Key variables include level of internal SAP competency, size of organization, complexity of environment, number of instances, industry, and geographic focus.   One can not overemphasize the importance of this program.  The results not only impact future maintenance fee increases, but also provide important benchmark data on SAP operations.

• Changes to the 2008 pricing program for current contracts that may will be migrated to ES. Based on the KPI program, SAP agrees to postpone subsequent price increases pending the realization of targeted improvements measured by the SUGEN KPI's.  These changes have been made to the 2008 pricing program for ES.  Instead of ongoing increases until 2012, the new program ends in 2015.  As stated in the press release "Starting in 2010, the price of SAP Enterprise Support for existing customers will continue to increase based on individual contract terms but will not be higher than a yearly fixed upper cap. This translates to an increase average of no more than 3.1 percent per year from 2010 onwards. The price of SAP Enterprise Support will be capped at 22 percent through 2015. "

  POV:  Two scenarios emerge.  Should the value of ES not be realized, then the price increase will not pass.  However, customers will more likely face a more gradual price increase to the 22%.   This may prove to provide some relief for recession strapped customers.

The bottom line - progress on Enterprise Support issue may result in a win - win for  SAP customers

Expect customers to take the news with cautious optimism.   Should the benchmarks succeed, customers may gain value.  Failure to meet targets meet a freeze on maintenance.  In any case, this is welcomed news and provides a hard fought win-win for the customer and the vendor-client relationship. Congratulations go out to SUGEN and SAP for coming to a common ground!  This shows the importance of preserving independent user groups and the role active users play in shaping the overall agenda.  The one thing left in the choice, value, predictability equation is choice - meaning a tiered maintenance program or access to third party maintenance.  With the less than positive Q1 earnings report announced today, let's wait to see how other chips will fall into place.

Your POV

Do you think SAP met its promise to SUGEN?  Will this help you with your commitment to SAP?  Do you feel SAP has now done the right thing?  Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV!

For more POV's:

Dennis Howlett - April 28, 2009 "SAP software revenues plummet, announces new deal on maintenance"

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

News Analysis: Oracle Acquires Sun, Enters Open Source and High End Computing Markets

By R "Ray" Wang

Oracle announces a $7.4B deal for SUN just a few weeks after the IBM deal fell through.  Oracle now controls a significant major open source alternative and a nice piece of the high end computing business.  These open source components have been viewed as the alternative to the dominance of the Big 4 or MISO (Microsoft, IBM, SAP, and Oracle).   Oracle also gains an innovation engine with the assets of Sun's Labs groups which pioneers a series of innovations that include potential enterprise solutions for the virtual world.  The deal puts Oracle on a continued path to acquiring deeper components of the enterprise computing stack.  Here's how the stack looks:

• Middleware - While Java and Solaris may appear to be the crown jewels in the deal, Oracle has managed to slowly buy out other stack competitors (i.e. BEA and now Sun) and integrate them into the Fusion Middleware suite of tools for custom development and its own Fusion Applications product lines.   Sun complements BEA.
• Database - Oracle takes out the low cost competitor to SQL server on the low end and gets a shot at converting them to Oracle DB instead of IBM.
• Hardware - Oracle gains another great recurring revenue (maintenance) base with Solaris.  This complements Oracle's large and profitable database installations on Solaris that would have fallen prey to the IBM DB2 team.

The bottom line- Oracle succeeds at post merger integration where others often fail

Despite skepticism, Oracle has made these acquisitions work from a financial perspective, with year-over-year quarterly profit growth that has generally been well above 20%. Some key success factors include:

• Acquiring companies for the recurring revenue. Oracle's first set of deals (i.e., PeopleSoft and Siebel) focused on installed base acquisitions that provided a strong foundation of support and maintenance customers. This base of recurring revenues provided Oracle with the room to continue strong R&D investment while reducing overall costs.  Oracle takes out another highly profitable maintenance base adding pressure to competitors.  In this acquisition it gains the profitable Solaris revenue stream while moving into a maintenance business for open source software.
• Eating its own dog food. In the late 1990s, Oracle made a major commitment to re-engineering its back-office processes using its own applications. As a result, Oracle has become highly efficient, with a ratio of general and administrative expenses to revenues of 3% to 4% - in most calendar quarters, one percentage point lower than SAP's and even lower than other large software vendors like Microsoft and Symantec.  Expect Oracle to put the Sun assets into its arsenal of tools for delivering software innovation.
• Mastering post-merger integration. With two former investment bankers at the helm, Oracle has one of the best post-merger integration teams in the business. Oracle's profit performance signals that it has been able to add new companies and their stream of revenues while keeping costs down.   Sun will provide considerable synergies in the short and long run.

Your POV

What do you think abou the acquisition of SUN?  Did you count on SUN as your open source stack alternative to the Big 4? Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV!

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

Healthcare Industry BI Groundhog Day

By Boris Evelson

I am writing this blog on my way back home from www.himss.org show in Chicago, while a tingly chill crawls down my back. It’s a creepy feeling of déjà vu. Even worse, it feels like the movie Groundhog Day where the main character keeps waking up on the same day, same date, never able to get to tomorrow. Everything he was able to achieve during the day is erased, and he has to do it over, and over, and over again. This was the feeling I got as I walked the show floor and kept asking myself questions such as:

• Where are the open technology standards?
• Where is the transparency?
• Where is the common sense that business requirements, not vendors, dictate the rules?

I thought we addressed all these basic truths decades ago? Ah, forgive me, I must’ve been thinking about the wrong industry. I was talking about the Financial Services vertical, where after the dark ages of 70’s and 80’s, we finally entered the renaissance age of enlightenment, standards, openness, and transparency. Well, while we may be past the King Arthur times in Healthcare IT, we are not too far from it, probably just approaching the days of Charlemagne trying to unify Western Europe.

As I explored the Healthcare IT show I found the state of industry BI where

• Errors abound! Information Management Systems and CPOE (Computerized Physicians Order Entry) applications account for a staggering 84% of 43,372 USP MEDMARX Computer Technology-Related Harmful Errors (2006)
• Proprietary, closed architectures still rule. Hospital information management applications are often based on hierarchical databases that do not speak common query languages like SQL or MDX — the basis for all modern BI tools (even though some BI tools are beginning to roll out XQuery language functionality capable of reporting from XML data structures). Even worse, most of these applications are not architected with separate data and application logic tiers. Sounds familiar?
• There is no data transparency. Applications with proprietary, hidden data models do not allow for a plug-and-play interface with ETL (Extract, Transform, Load), CDC (Change Data Capture), or other standard data integration technologies. Such an environment breeds a swarm of small consultancies founded by ex-developers of these proprietary, closed hospital information applications. They take advantage of the insider scoop on how the guts of these applications work, and make a living building custom interfaces for their clients.
• Standards are incomplete. Data exchange standards like HL7 only work for about 80% of the content (and that's for administrative, but even less so for clinical data) — the rest must be custom integrated every time.
• Huge chunks of MDM are missing. MDM (Master Data Management) — a key to effective BI applications — works mostly for patient information, and maybe billing codes, but not for anything else, like drugs (good luck trying to find a standard code for 200mg ibuprofen gel coated caplets), conditions, and treatments (there is no such thing as a “standard treatment” for a particular ailment — it is all subjective). For example, one senior Healthcare IT manager tells me that Glucose test is coded differently in every single lab system she looked at, so her team spent countless hours coding mapping tables.
• The world is very vendor-, not user-centric. True, most of the state-of-the-art (translation for those unfamiliar to the world of Healthcare IT: state-of-the-art = proprietary) healthcare IT applications are very powerful and function rich, but few of the vendors I talked to seemed to care about integrating with other vendor applications.

As a result, all of the healthcare IT execs I managed to pry away from listening to yet another pitch from a vendor that was all about “Me! Me! Me!” named three top challenges that they all face every day: integration, integration and integration. Another Healthcare IT executive tells me that it took them about 3 months to write database, application and GUI logic for their hospital EMR system, but it is taking them years and years (still going strong) to integrate pharmacy and lab data even within their own hospital network! She defines standards like HL7 purely as communication standards, not content standards, the lack of which is the real culprit. Until this status quo changes, I do not see a bright future for such noble and highly needed industry initiatives as:

• Nationwide integrated Electronic Medical Records (EMR)
• Translational Research — linking patient care and pharmaceutical research applications, processes and data
• Pay For Performance — Medicare and Medicaid driven mandates to link procedures and treatments to the actual improved health conditions of the patients

There’s no rocket science behind these initiatives and drivers, but they will not materialize until the ice of proprietary and closed architectures is broken. What will it take to change all that? Surely not the $19B of questionable spending that the Obama administration is throwing at the problem (which is really just an extension of http://www.hhs.gov/healthit/ initative started by the Bush administration back in 2004). Just look at the $22B that UK allocated in 2002 to similar initiatives to transform its National Health Service information infrastructure. Proving once again that federally managed projects seldom work, in January 2009 the British Committee of Public Accounts (similar to the US GAO) released a less than stellar progress report citing four to five year delays, major contractors bowing out of the projects, and, most importantly, eroding support from the key stakeholders — physicians, dissatisfied with “essential systems that are late or when deployed, do not meet the expectations of clinical staff”. Surely, we should learn from the mistakes of others, not our own.

No, nothing short of free market competition and an IT practitioners revolt will change that. And there’s hope and light at the end of the tunnel:

• Battle hardended industry veterans are entering the industry. I did see a lot of familiar faces at the show from IBM, Informatica, Information Builders, Microsoft, MicroStrategy, Oracle, SAP, and Sybase. I know that these vendors believe in open architectures and transparent design, so hopefully the rest of the industry will learn form them. I hope that IT managers will see the benefits of these open, interoperable technologies, where integration is a no-brainer, start migrating towards them, and leave the proprietary and closed solutions in the dark ages where they belong.
• There’s tons of competition. I counted at least several hundred vendors at the show! And competition breeds health and innovation, especially when independent research vendors, like www.KLASresearch.com are beginning to provide some transparency. They poll end users and IT staff for their opinion on usability, functionality, stability and other ratings of these proprietary systems — so such vendors cannot hide behind closed doors for long. Just wait till I do a Forrester Wave on these vendors!
• This is truly a life and death opportunity! Failure is not an option here. Various studies like the one published recently in the Archives of Internal Medicine continually show direct relationship between poor IT and patients' lives! This particular study found that even a 10% increase in automation of clinical notes and records resulted in 15% reduction in patient deaths (data from 41 Texas hospitals involving over 150,000 patients).

What can you, a Business Process and Application (BP&A) professional, do? While I could write a series of epic novels about everything you could do you improve the state of Healthcare IT, I have to get onto my flight in a few minutes, so I will be merciful and just share my point of view on a few BI specifics:

• BI is not a panacea, but it's a start. True, BI is useless until data is clean, integrated and aggregated. But you should not wait for that to happen before implementing your BI solutions. Just the opposite. Use BI as a perfect tool to start exposing your data problems, and demonstrate to key stakeholders what data issues you have and how you can start addressing them. Results from BI reports are a great supporting evidence for justifying data integration project budgets.

• Leverage our BI related Waves. Use and leverage Forrester's BI Wave, ETL Wave, and DW Wave when evaluating Healthcare BI solutions. If data integration, data cleansing, data warehouse, reporting, OLAP, and dashboard tools are not built on one of these standard and open technologies, that’s a huge red flag! At the very least, use the criteria in our Waves to evaluate, score, and rate the BI vendors you are shortlisting.

• If it’s not plug-and-play, it’s probably bad news. Use compatibility and out-of-the-box integration with these leading BI tools and platforms as a measuring stick to evaluate other Healthcare IT applications. If you see that you need to write “custom” scripts to extract data from the application so that one of these leading BI tools can be used to analyze the data — that's another big red flag. Remember, you are in the business of improving (and even saving!) patients’ lives, or analyzing the performance of your healthcare provider, and not in the business of developing custom scripts and extracts.

Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

By R "Ray" Wang

Maintenance costs represent a major part of the software budget and the largest growing source of revenue for software vendors. In fact, an aggregation of the past four quarters of software vendor financial results definitively demonstrates double digit declines in new license revenue, even more exacerbated by the evils of currency flux from the strong dollar for US based vendors. Not surprisingly, vendors are hard at work vigorously protecting their 70 to 80% margin in maintenance revenues just as clients and readers of this blog now zero in on this line item as the major concession target during contract negotiations.  Here are five steps (i.e. A,B,C's to software maintenance) you need to do now*:

1. Assemble all the relevant contract information. Aggregate all your contract information and vendor interaction history so that its centrally accessible.  Determine the value of your maintenance agreement. Examine how often you call for support, apply patches, conduct upgrades, and require technical assistance.  Then calculate the total support and maintenance spend.  Most customers will find that for $1M a year, 5 support calls can be pretty pricey at $200k a pop, especially when upgrades aren't in the picture for the next 24 months.   The vendor better show up the next day with white gloves and be there in person.
2. Breakdown the total cost of shelfware. Simply put, shelfware is the software licenses purchased, not deployed that is incurring support and maintenance fees.  That great deal 3 years ago you got on 1000 user licenses, when you only ended up using 800, now comes to bite you in the butt.  Calculate the maintenance fee you have for 200 user licenses at $1000/user which is $200,000 X 20% annual support and maintenance X 3 years.  At $120,000, you had better make up the "big" discount you got for buying 1000 user licenses by at least 12% this year and 15% the next year.
3. Craft your overall software adoption strategy. Consider the business drivers that impact software adoption.  Assemble the domain experts, vendor management and sourcing professionals, legal experts, business owners, and IT team.   Apply a long term apps/ recession proof apps strategy and determine when and how licenses will be used in the software ownership lifecycle.  What processes will be supported? What roles will use the software?  When will you upgrade?  Can you consider an alternative?
4. Determine all the alternatives. Depending on your adoption strategy, multiple paths exist.  If there are no intentions to upgrade or enhance the software, self support and third party maintenance (3PM) options from vendors such as Rimini Street and Spinnaker should be considered.  In some cases, an upgrade should be completed before switching over to 3PM or self support.  If the system can be replaced, begin vendor selection efforts so that you will have leverage during the negotiation.  If the system cannot be replaced, consider swapping out unused licenses for credit towards newer or more desirable modules.  Reduce your CPI for new maintenance.  Focus on reducing new license costs.
5. Engage account representative at least one quarter before the contract expires. Put preparation on your side and begin to let your sales rep know three to six months in advance that you are unhappy with the current agreement.  Based on steps one to rou, you now have the ammunition you need to negotiate from a position of strength.

The bottom line — align your contract negotiations strategy with your product adoption strategy.

Successful negotiations will require these five steps. However, more importantly, organizations should keep a current apps strategy and product adoption strategy. Without these two key documents, lack of visibility into the business case will lead to shortsighted negotiations that fail to meet the true requirements of the business. Sourcing, procurement, and vendor management professionals should partner with domain experts who can provide third party, independent and objective advice that will complement contract negotiations strategy. Click here for more contract negotiation strategy tips.

Got more enterprise software contract negotiations questions? Set up a call with the inquiry team and ask for R "Ray" Wang.

Your Turn

What's your best practice in reducing maintenance costs? Post your comments here or send me a private email to rwang@forrester.com

Contribute to the 2009 Enterprise Software Licensee's Bill of Rights

Take the new poll on what rights should be included in the 2009 Enterprise Software Licensee Bill of Rights. Posts are preferred! For every good idea or comment, whether or not we use your idea, we'll send you a copy of the final report. Let's put the collective wisdom of the Web to work and help our end user clients create a fair win-win playing field with the vendors. We'll be publishing the official update in Q2 2009. Thanks and look forward to your input!

*Caveats are as follows: 1) This does not constitute legal advice. Please consult your legal counsel for an official opinion and wording. 2) This does not consider any procurement or vendor management rules that must be applied to your enterprise. Please work with your vendor management teams for compliance. 3) Contract negotiation support provides insight into overall trends and price points. Benchmarks are not provided as each user scenario is unique.

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org