Where is Your Money Going?

Saïd Business School measures BI based on total cost of ownership

What are the true costs of implementing and maintaining multivendor BI solutions? Consider these noteworthy conclusions from a preliminary research report by a team of students enrolled in the MBA program of Saïd Business School at the University of Oxford in England:

• The ongoing costs for maintaining a BI solution can be just as high as, or higher than, the actual deployment costs.
• Complete or end-to-end BI platforms show a far lower total cost of ownership than traditional query-and-reporting vendors or ERP-based products.
• Organizations that implement multivendor products to complement their existing solutions show even higher costs for their finished BI architectures.

The results are based on a vendor-neutral method that evaluates BI platforms based on total cost of ownership. According to this new evaluation method, an enterprise business intelligence platform (EBIP) includes a suite of data warehousing, business intelligence, analytics and performance management software supported by an integrated metadata capability.

"Many organizations today focus on the acquisition costs but neglect to consider major expenses for designing, developing, testing, maintaining and running BI applications," explains Chris Chapman, Ph.D., the supervising professor of the strategic consulting project at Saïd Business School. "This study on the total cost of ownership reflects exactly this: in their test sample, incomplete EBIPs have significantly higher total costs of ownership than true EBIPs."

Study recognizes importance of EBIPs
As organizations realize the need to make better strategic and operational decisions in a competitive and regulated environment -- and address the challenges of Sarbanes-Oxley and Basel II -- the need for standard BI systems increases. Performance, standardization pressures and costs continue to influence decisions in the BI vendor selection process. However, measuring costs and evaluating the success of IT investments has proven to be particularly challenging.

The Saïd project group addressed this issue with its recent study, providing a methodology for evaluating different levels of integration and comparing incomplete EBIPs with respect to functionality and total cost of ownership. The students contacted more than 140 companies in Europe that were deploying at least one BI solution from Business Objects, Cognos, SAP or SAS.

Results validate SAS® solutions
"The study validates that an end-to-end and fully integrated BI platform leads to a far lower total cost of ownership," says Tonny Dierckx, Director of Intelligence Architecture at SAS. "Our BI platform is holistic by design, not by acquisition, and this translates into much lower deployment and maintenance costs. For example, by integrating technical and business metadata, SAS eliminates significant costs that would otherwise incur when organizations are forced to integrate metadata across multiple product components. The new methodology helps organizations separate the facts from the hype."

SAS customers agree with the findings, too. "With SAS, we can use one technology for the entire project," says Luc Billion, ICT Manager in the Public Health, Safety of the Food Chain and Environment Division of the Federal Public Service, Belgium. "It precludes the need to insert other software packages. If we need new functions, SAS offers a solution, as part of a concept going beyond technology to support functionality.  That also contributes to cost efficiency, since we only have to master one technology."