Controlling BI Operational Costs

At many companies, Business Intelligence is an accepted and mature solution that’s used to solve a variety of business problems. Many of our BI systems have been running for years, which means we need to start thinking about controlling their long-term operational costs.

It’s a well-known fact that maintaining existing services (vs. developing new capabilities) consumes about 70% of the typical enterprise IT budget [1]. This means there are a lot of opportunities to reduce costs on legacy apps and free up some budget to take on new projects (including new BI projects!) which are frequently tied to revenue-generating expansion of the business into new areas.

Controlling BI Operational Costs

“The overall cost of ownership is not about the costs of purchasing the software. The real cost factors are the hidden or the soft ones that have to do with indirect and ongoing factors.”, David Hatch, Aberdeen Group, Managing the Total Cost of Ownership of BI: The Four Hidden Costs and How to Avoid Them

Here’s a look at some of the areas that consume the BI operational budget that you should consider attacking:

  • Software Maintenance. Typically 17-22% of the purchase price, these costs can be substantial for large enterprises. They also represent serious cash cows for software providers; maintenance fees account for roughly half of Oracle’s revenue. However, executives are starting to question the value they’re getting, and new models such as third-party maintenance and SaaS will continue to gain ground as practical alternatives.
  • Updates and Patches. Keeping your database and integration software up to date can be an incredibly labor-intensive process, requiring large numbers of DBAs with specialized skills. As the number of instances of these products goes up, so does the number of staff needed to keep them up to date and this introduces the possibility of inconsistencies as each expert performs his tasks differently. Many organizations are leveraging tools that automate updating and patching, reducing the labor needed and helping to maintain consistency in the deployments.
  • Change Management. As the business grows and strategies change, new requirements will arise that necessitate changes to the BI system. These can include new visualizations, support for new marketing initiatives, compliance with changing regulatory requirements, and integration of new data sources (possibly due to a partnerships or acquisitions). Since making changes to an existing system is always more difficult than identifying the requirements early in the design stage, retrofitting the BI system to address these needs will be expensive, and even worse, can take months to implement, impacting time to market for revenue generating services dependent on BI for support.
  • Training. As natural staff turnover occurs and people move around within the organization, new users will have to be trained to use the BI system. End-user training is a critical success factor for BI because it can reduce support costs and improve the accuracy and interpretation of analytic results, leading to better business decisions. Smart organizations will find ways to minimize training costs by leverage new models such as distance learning.
  • Underutilization. As your BI system grows and changes over time, it will accumulate “dormant data” that finds its way into the data warehouse and is never heard from again. This stuff will eat up disk space, and might even be loaded, transformed, backed-up, etc. every day without anyone knowing about it, consuming computing cycles that could better be used by data of more immediate interest.

 

GRT can help you get your operational costs under control and reduce TCO for your BI solutions. Areas where we can help include:

  • Evaluating your current processes and sources of BI operational cost to understand where the largest improvements can be made so that solutions can be prioritized.
  • Improving the Change Management process to reduce the time and cost associated with responding to new business requirements
  • Recommending and implementing tools that automate DBA software maintenance processes such as updating and patching
  • Examining your current software maintenance practices and investigating alternatives that deliver equivalent or better quality at reduced costs.
  • Evaluating hardware needs based on monitoring of key performance indicators and recommending cost-effective hardware solutions
  • Purging your database of unused data that consumes resources and saps performance, or moving rarely-used data to less-expensive storage or archives.
  • Reducing your data compliance costs by replacing manual compliance data gathering and analysis with automated solutions.

As IT budgets tighten and executives look for ways to save money, BI operational costs can fall squarely in the crosshairs of cost-cutting programs. IT managers need to take a proactive approach to bringing these costs under control.

 

To learn more about how GRT can help you meet your budget goals, contact us.



[1]   IT's New Holy Grail: Break out of the 70% Maintenance Loop, TechRepublic, May 11, 2010