One of the major arguments in favor of SaaS-based business intelligence (BI) applications and other forms of BI that promote a self-service model is that they will lead to a democratization of BI.
Because traditional BI tools and infrastructure have been expensive to implement and, for the most part, difficult to configure and navigate, their use has typically been limited to analytical power users and top executives. (The executives, of course, require lots of IT hand-holding.) BI use hasn’t trickled down to the knowledge and line workers who make the day-to-day decisions at most companies.
SaaS-based BI, in particular, would seem to lend itself to the democratization of business intelligence software use. SaaS-based BI applications can be more easily scaled than on-premise applications. And, because SaaS-based BI can be purchased and paid for on a subscription basis, it can be easier and less expensive to roll out to a large user base.
And, at least in part because SaaS-based BI products must use browser-based interfaces, they tend to be simpler and easier to use than full-function, on-premise BI products. And that would be better for non-BI experts such as knowledge workers and line workers.
Other simplified approaches to BI would seem to have a similar potential to democratize this brand of software. Last week, for example, SAP rolled out a set of 10 intuitive, industry-specific analytics applications built on top of its BusinessObjects BI tools. The out-of-the-box approach, SAP officials said, will empower manufacturers and other companies to make analytics applications available to more knowledge workers and other employees.
Similarly, Oracle this week officially rolled out its next-generation Fusion Applications which include embedded, real-time BI, another approach that, the company says, will encourage non-BI experts to create and use dashboards and reports.
But there’s just one problem with the notion that SaaS and self-service approaches are enabling broader use of BI: It doesn’t seem to be happening, at least not yet. A recent survey of 400 organizations by Aberdeen Group showed that while SaaS-based BI is becoming more popular, its use is not yet leading to a higher percentage of BI users within these organizations.
The Aberdeen report found that 15% of surveyed companies are using SaaS-based BI today, up from 7% in 2008. But for companies using SaaS-based BI, the survey found, , the penetration of BI use hasn’t changed in that time. In both the 2008 and 2010 surveys, about 17% of employees were said to use BI. Moreover, SaaS BI and non-SaaS BI users had roughly the same percentage of power users.
So what does this mean? One thing is that the emergence of new technologies such as SaaS, in and of themselves, won’t change the way businesses use information. For the democratization of BI to really take hold, enterprises will need to change the way they think about who in the organization should have access to information and who is empowered to make decisions. This, of course, is a cultural change. And those take time.
What do you think? Will technologies such as SaaS alone lead to a broader use of BI?
4 Comments
Jeff,
Your post raises an interesting question: will the democratization of BI really take off with SaaS? My take is that SaaS is already tipping the scales even though most SaaS players currently deploy a “traditional” BI approach. SaaS BI fills the gap that legacy on-premise BI solutions have failed to address, streamlining access to metrics, simplifying deployments and reducing the overall cost of BI.
However, is it enough for vendors to simply move BI to the cloud? No. BI needs to take an immediate right turn and empower users to more easily add their own data sources, adapt queries and share access across the value chain. Thinking differently about how data can be used and moving beyond the traditional cube approach will spur organic growth (the topic of a recent post http://blog.pivotlink.com/2010/09/are-you-becoming-cube-less-or-clueless/). Lifting the burden from IT and putting practical tools in the hands of business users tips the scales. We find usage often starts in a single department and grows organically across organizations and their value chains, like we’ve seen at REI. Our more modern approach makes this much easier to execute than in a traditional cube model, regardless of SaaS or on-premise.
I do agree with your point that “enterprises will need to change the way they think about who in the organization should have access to information and who is empowered to make decisions.” Many of those knowledge workers are accessing data today and making those decisions – just based on hoards of spreadsheets. The key is to offer a viable solution for those employees to gain a single view of the data. Retailer Timbuk2.com (profiled in Aberdeen’s report), made this leap by replacing spreadsheets and ERP connections with our SaaS BI platform. With no IT staff, they untethered users from pivot tables and raw data extracts from ERP.
Is embracing SaaS a good first step? Absolutely. On-demand access via browser on a laptop, desktop or even mobile device is powerful start, but the real catalyst for the democratization of BI is self service – when business users answer questions regardless of the data source or structure.
Jenny Victor
Dir., Product Marketing, PivotLink
(PivotLink was one of the sponsors of the Aberdeen study)
We’re a BI software vendor, and we definitely believe in democratization of BI and self-service BI. We aim to help by providing a more reasonably priced, easier to deploy and easier to use BI application that you install on premise.
I think there are a few limitations for SaaS BI (which we have an option for, but it is not very popular). One is that most data resides inside the corporate network, and most companies feel very protective of that data and won’t feel comfortable letting it reside anywhere outside regardless of security guarantees offered.
Next is the concept of data mashup, another big feature for us, which means combining all kinds of data sources, even spreadsheets on the desktop. A SaaS-based solution is always going to be more rigid in terms of data sources it can connect to.
And last is a related point about agility. You just can’t customize or integrate a SaaS-based solution as much as one that is inside your network where you get all the developer tools and an API, and where you can embed dashboards or reports inside frames of a secure internal app, for instance.
Jeff,
Good question and I agree with your claim. SAAS by itself cannot help broader use of anything unless it is solving a business problem with very clear ROI. That said, specifically with BI, SAAS can be a great enabler of what I’d like to call ‘Operational BI’ that is focused on more real time analysis of business process execution data and proactive resolution of business exceptions. With the ‘who’ (as you have rightly pointed out), the ‘what kind of information’ is critical to really exploit the value of SAAS in the roll out of operational BI.
Nice article. SaaS BI certainly does represent the potential for broader BI use within a company.
A few things to point out –
Easy to use doesn’t necessarily mean lesser functionality. While some of the larger players like Business Objects have put limited functionality in their on-demand solution, other pure play SaaS solutions, like Birst (www.birst.com) have a full featured solution. It’s also easier to use, but for power users has all of the fundamantal features, like ETL, that you expect from a robust BI solution.
Also, SaaS BI has lead to broader use of BI, in terms of the number of organizations that can now afford and use BI that couldn’t before. Small and midsize organizations, as well as departments of enterprises, can now get a BI solution at a reasonable price, and without needing a large IT team. This is a tremendous expansion of use.
I do agree that your cultural point is probably limiting penetration within an organization. Companies have to be comfortable sharing information broadly. Solutions also need to be able to control who gets to see what, so that the right information gets to the right person for them to do their job better.
- Barbara Lewis
Birst
http://www.birst.com
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