BI-as-a-Service - Some Questions Worth Asking

For a couple of years now, there has been a substantial amount of hype in the business intelligence (BI) space regarding “cloud BI,” or business intelligence systems hosted by Internet “cloud computing” service providers. This “cloud BI”, which is actually SaaS (software-as-a-service) BI, has been riding the wave of cloud computing in general, with the lower startup costs, faster deployment and easier scalability that cloud-based software implementations promise business customers. Several new companies have emerged and are promoting a new golden age of BI which they say will be faster, easier and cheaper than conventional business intelligence.

While this sounds fantastic at first glance, it might be a good idea to look beyond the hype to determine if deploying a BI solution in the cloud offers the same types of advantages of other SaaS solutions, such as CRM, accounting and email.

To this end, consider the following questions:

Does SaaS BI reduce dependence on IT staff?
Does SaaS BI compromise your data security?
Is all your business data already in the cloud?
How much will hardware cost you in the cloud?
Is BI backbone technology becoming more 'cloud-aware'?

1. Does SaaS BI reduce dependence on IT staff?

One of the main claims of SaaS software solutions in general is the dramatic reduction in dependence on expensive (and overworked) information technology (IT) professionals. In many organizations, the limited availability of IT staff is a major bottleneck when considering implementing a new software system that will be used across the organization. The cloud offers an appealing solution: since there is no hardware to install, no software to upgrade, no storage to backup and no new security mechanisms to implement, adopting a cloud solution (mostly) circumvents the need for extensive IT services (whether from in-house personnel or consultants).

In the realm of conventional BI systems, dependence on IT is a common and frustrating bottleneck for business users. The IT department (or consulting firm) is required for every piece of the BI puzzle, from the data warehousing to creating OLAP cubes to creating and customizing individual reports. In most companies, business users quickly discover that getting what they want from their company’s BI system, including incorporating new data sources, adding reports, customizing dashboards and extending the system to more users/departments, requires IT resources which are often unavailable when needed. The result is a frustrating and compromised system which fails to deliver on its full strategic potential.

So, does moving to the cloud solve this central problem of conventional BI?

The truth is that hosted BI solutions are really just outsourced IT departments which happen to come along with a bag full of their own home-grown or third-party software systems. All the stages of the familiar BI system deployment – from requirements specification consulting through data warehouse creation through report customization – still require the involvement of IT staff.Since these IT professionals are experts in their software and environments, they will likely be more efficient than hiring or retraining your company’s own staff (although they will not likely be more effective than any other dedicated outsourced technical BI team). However, think carefully about how much you want to be dependent on outsourced IT services for the lifeblood of your company’s strategic decision-making platform.

If your BI needs are modest and don’t change often, then, in theory, you will probably end up saving money as compared with hiring your own IT staff for BI. However, as the system grows and extends (as it always does), you will be at the mercy of the schedules and price rates of a third-party IT team which you are locked in to. If you thought internal IT can be a bottleneck, imagine how difficult it will be to get good and timely service from an external IT department located far away and busy with numerous other customers as well.