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The Boomer Bulletin - 2013
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The Power of Cloud-Based BI and Analytics

Posted By Ravi Durairaj, Tuesday, July 09, 2013

Cloud-based business intelligence (BI) and analytics provides an affordable and scalable option previously out of reach for small and medium-sized businesses. The capability for firms to use the solution provider’s infrastructure and expertise for all their BI, analytics and reporting functions frees up the organization to focus on their key competency and client service.

Decision makers are constantly wrestling with the most effective ways to analyze real-time data quickly and effectively. These escalating data demands are just one of the reasons there’s growing market interest in cloud-based analytics. While Gartner forecasts the global BI market to grow 9.7% this year, business analytics software-as-a-service (SaaS) is expected to grow three times faster than the total business analytics software market, according to Brian McDonough, research manager for IDC’s Business Analytics Solutions research service.

Cloud-based BI and analytics offer companies and business users multiple benefits. Businesses of all sizes can leverage vast computing and storage resources in the cloud without having to invest in expanding their existing IT footprints or IT support staffs. In addition, cloud-based BI and analytics provide business leaders opportunities to quickly gather and act on granular insights from a mix of structured and unstructured data.

Growing demand for these types of capabilities is a key reason why BI cloud service providers increasingly feature a portfolio of on-demand capabilities that enables any business user with an Internet connection to quickly and easily create, publish, and share customized business intelligence dashboards and advanced analytics applications via the cloud. 

The collection of tier-based cloud services is designed to meet the needs of different types of users – from independent business owners to executives for mid-size and enterprise organizations.

Cloud-based BI and analytics tools also free business leaders from having to rely on IT staffers to generate reports or create dashboards for them, thus enabling decision-makers to act quickly on fast-changing market conditions. 

These types of on-the-fly capabilities place greater power in the hands of organizational leaders to analyze their sales, operations, marketing campaigns, or trends involving individual line-item expenses while freeing up IT resources to focus on other activities.

The accessibility of cloud-based BI and analytics also helps foster greater collaboration and teamwork among decision makers, including those who might be geographically separated. These types of capabilities enable business users to easily share ideas and insights either privately or publicly with one another, customers, prospects and other business partners.

The combination of these features provides line-of-business users the power to quickly and easily make informed business decisions across all levels of the organization. That’s absolutely critical given the pace of change in the current dynamic global market.

Why CIOs are quickly prioritizing analytics, cloud and mobile

According to Gartner Market Report Insights, Arcaris and Jeffrey (2012), when priorities are analyzed across eight key industries, patterns emerge showing how the communications, media and services (CMS) and manufacturing industries have the highest immediate growth potential for mobility (Next 2 years).  In particular Big Data/BI, Financial Services is projected to be the fastest-developing industry and in Cloud computing, CMS and Government.

In analyzing this and related data, a profile of early adopter enterprises emerges.  These are companies who are based on knowledge-intensive business models, have created and excel at running virtual organization structures, rely on mobility to connect with and build relationships with customers, and have deep analytics expertise.  In short, their business models take the best of what mobility, Big Data/BI and cloud computing has to offer and align it to their strategic plans and programs. 

Data discovery, SaaS lead BI market review

According to Kern (2013), in 2011 the BI market registered some of its largest gains, with a 17 percent boost in year-over-year spending based on improved economic conditions and the strength of emerging markets, like Brazil and India. Gartner Research VP Dan Sommer, in a release on the BI market findings, wrote that "data discovery became a mainstream architecture in 2012 and the vendors that built on this paradigm gained market share, while most semantically layered BI platforms grew in the single digits, at best,” Sommer wrote. "Cloud-based buying is also starting to make an imprint on the radar, showing substantial growth, although cloud still accounts for a smaller portion of the BI market compared with other application markets."

Finance directors see value of business intelligence

According to Twentyman (2013), almost three-quarters of financial professionals say they struggle to collect data from multiple sources and perform the analyses required to answer questions about corporate financial performance, according to a survey by data warehousing company Teradata. This, they say, limits their visibility into the business dynamics that affect financial results and delays actions that might improve corporate performance.

It is no surprise, then, that the finance function has been leading the adoption of business intelligence software.

Major drivers for the adoption of cloud/SaaS offerings for BI, analytics and performance management identified by Gartner

Eddy, N. (2012) reports that nearly one-third of organizations either already use or plan to use cloud or software-as-a-service (SaaS) offerings to augment their core BI functions, according to a report from IT research firm Gartner. According to a survey of 1,364 IT managers and business users of BI platforms in the fourth quarter of 2011, only 17 percent of organizations have replaced or plan to replace parts of their core BI functions with cloud or SaaS offerings. However, almost a third (27 percent) already use or plan to use cloud or SaaS options to augment their BI capabilities for specific lines of business or subject areas in the next 12 months.

"Business users are often frustrated by the deployment cycles, costs, complicated upgrade processes and IT infrastructures demanded by on-premises BI solutions," said James Richardson, research director at Gartner. "SaaS and cloud-based BI is perceived as offering a quicker, potentially lower-cost and easier-to-deploy alternative, though this has yet to be proven. It's evident that, despite growing interest, the market is confused about what cloud/SaaS BI and analytics are and what they can deliver."

Gartner has identified three major drivers for the adoption of cloud/SaaS offerings for BI, analytics and performance management: time to value, cost concerns and lack of available expertise. The report said the use of SaaS BI may lead to faster deployment, insight and value, particularly where IT is constrained by existing work and/or limited budget so that it cannot respond to demands for information and analysis as quickly as the business requires.

The company also noted the cost dynamic differs between on-premises and SaaS models. Software purchased as a service can usually be expensed, rather than capitalized, on the balance sheet. Buyers often think that SaaS is cheaper, but the reality is that this is unproven. Gartner's cost models show SaaS can be cheaper over the first five years, but not thereafter. The long-term benefits lie elsewhere-in terms of cash flow and reduced IT support costs. Meanwhile, SaaS analytic applications offer prebuilt intellectual property that can help firms work around a lack of the skills needed to build their own analytic solutions.

The report also projected that instead of disrupting the enterprise BI platform and corporate performance management suite market, a more likely scenario is that SaaS and cloud-based offerings will tap into new opportunities, such as with small to medium-size businesses (SMBs) that have yet to invest in BI, or by offering domain-specific analytics.

"If their operational business applications are in the cloud, organizations should consider pursuing cloud BI/analytics for those domains," Richardson said. "However, they must assess risks on an ongoing basis and ensure their chosen cloud provider has appropriate business skills to provide a viable outcome. They must also ensure their BI strategy outlines how data flows to and from these solutions in order not to become yet more silos of analysis.”

Sources

Arcaris, C. and Roster, J. 2012. "The Gartner Report Market Insight: Technology Opens Up Opportunities in SMB Vertical Markets” 

Eddy, N. 2012. "Cloud, SaaS Offerings Bolster Business Intelligence Market: Gartner” Available from: http://www.eweek.com/c/a/Cloud-Computing/Cloud-SaaS-Offerings-Bolster-Business-Intelligence-Market-Gartner-144133/.

Kern. J., 2013, Data Discovery, SaaS Lead BI Market Review. Available from : http://www.information-management.com/news/data-discovery-saas-lead-bi-market-review-10024484-1.html.

TIBCO Spotfire's Business Intelligence Blog. Trends and Outliers. 2011. "The Power of Cloud-based BI and Analytics”  Available from: http://spotfire.tibco.com/blog/?p=8323#more-8323

Twentyman, J. 2013. "Finance directors see value of business intelligence”. Available from: http://www.computerweekly.com/feature/Finance-directors-see-value-of-business-intelligence

Ravi Durairaj is Managing Director of Censof-North America. Censof (Century Software) is a leading provider of reporting and business analytics to the accounting industry. To learn more, please visit www.censofinc.com or send Censof a message.

Tags:  business intelligence  Cloud Computing 

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