How to Select Your BI Vendor

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Monday, 26 October 2009

By Info-Tech Research Group

Business Intelligence (BI) solutions are notoriously complex. IT managers need a means to distinguish necessary functionality from bells and whistles. The true value of a BI solution lies in the insight it provides on business operations and the opportunities it creates for better decision making. However, organizations will differ in terms of their decision support needs.

Understanding the business requirements for a BI project is crucial to selection strategy that aims to align with the overall business objectives while addressing end-user needs. Failure to integrate business requirements into the selection process can result in serious costs and project failure.

Key Considerations

Business Requirements

Business Intelligence (BI) solutions are costly both from a licensing perspective and in terms of the resources needed to implement them. Failing to choose an appropriate solution is a cost that IT managers cannot afford. The ultimate determinant of success of a BI solution is end user adoption and key stakeholder satisfaction. However, a solution that does not address business needs will not be adopted by users. Business requirements also have a valuable role to play in short-listing. A recent Info-Tech survey on Business Intelligence revealed that organizations that place greater emphasis on the vendor evaluation process tend to have more successful projects. These organizations also tended to place more importance on functionality. The upshot is that organizations need to select a product that has the requisite functionality to meet business requirements.

To aid IT managers in the identification of core business requirements, Info-Tech has identified three critical questions that IT managers need to answer (see Table 1). These questions are not to be used as a substitute for conducting a more formal requirements process. They identify high-level topics that IT managers ought to consider in order to obtain relevant requirements. For more information on BI, refer to the Info-Tech Impact Report "Enabling Decision Making Through Business Intelligence."

Table 1. Addressing Business Requirements

Questions to Consider	Explanation	Examples
What reporting and analysis are required to support current and ongoing business processes and will a proposed BI solution support them?	Any candidate BI solution must be able to support business critical processes that will remain unchanged with new BI solution. Some organizations will also want their BI solution to be able to replicate some of the specific reporting and analysis that is currently performed. There needs to be some rationalization of the existing reports/analysis first. Only those reports and analysis that are deemed necessary should be reproduced.	One of the main differentiators between BI solutions is their capacity to provide industry specific support for their product. Regulatory constraints, such as Sarbanes Oxley), are an example of industry specific business reporting/analysis requirements that a BI solution must be able to meet. Other examples include, unique budgeting and forecasting models (e.g. profitability analysis) or business specific customer retention analysis (e.g. financial services).
What are the current pain points with the existing reporting and analysis system(s)?	One of the dominant business motives for implementing BI is to alleviate headaches with existing reporting and analysis systems or to institute a solution where none existed before. Solutions that can address these pain points most effectively represent a genuine opportunity for business improvement. See the ITA Premium research brief, "BI Requirements: Reduce Risk with a Report Layout Prototype" for help with reporting requirements.	Many organizations suffer from the proliferation of "spreadmarts" – growing numbers of custom spreadsheets across business units. Oftentimes these spreadsheets communicate conflicting results due to reporting off of disparate data sources. A BI solution that can handle the required data integration to produce "one version of the truth."
What reporting and analysis is required to meet planned enhancements to existing or new processes?	Organizations will also purchase a BI solution as a means of introducing new business processes simply to improve operations rather than address pain points.	A growing number of industries are looking to introduce business performance management metrics (i.e. key performance indicators - KPIs) to tie operational performance with strategic corporate objectives. Performance is tracked and reported using balanced scorecards. Some BI solutions will have canned KPIs and balanced scorecards that can drastically simplify and speed up the initiation of a business performance metrics program.

Recommendations

The information gained from answering these questions should be used to create a list of requirements to identify the most suitable products for the enterprise. The aim is to produce a shortlist of candidates by weeding out vendors that do not meet the core business requirements. Info-Tech's other four factors can be used to further differentiate vendors to find the best-fit selection.

1. Don't aim for best-of-breed. The right BI solution must provide business decision makers with the information they need to attain operational and strategic business objectives. Many IT professionals will aim for a best-in-class solution assuming it will provide the optimal value. Best- in-class does not always mean it will be the best solution for a particular organization. However, it usually does mean higher licensing and support costs. Organizations should look for a solution that best suits the particular decision support needs of the business and no more.

2. Focus on differentiating features. Generally speaking, most vendors have comparable levels of functionality (common features) for standard BI activities (e.g. ad hoc querying and reporting, etc.). Business requirements should be used to identify differentiating features between vendors. A differentiating feature is simply a functionality that is not offered by all the solutions or offered in a more desirable way (e.g. predictive analytics for retail or relational OLAP for larger data volumes). Using business requirements in this way will reduce the number of candidates to a list that addresses business needs.

3. Have someone familiar with BI run the requirements gathering process. Getting quality requirements requires knowing which questions to ask stakeholders and end users. It is critical that the person running the process is familiar with BI solutions or has a BI specialist on the team. An understanding of BI will ensure that the information gathered during the business requirements process is relevant to the selection of a BI solution.

4. Remain open to change. Changing requirements are par for the course in any software project. Inevitably end users and stakeholders gain a better understanding of their needs as they proceed through the selection process (e.g. during vendor demos). The acquisition team needs to remain disciplined to avoid project chaos but flexible enough to accommodate changes as participants in the process develop more insight.

Bottom Line

Cutting through the vendor-speak to find a BI solution that fits the business needs and technology environment of the organization is not easy. Include enterprise business requirements as part of the selection strategy to simplify the process.

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