By Rick Batty
Why the Market is Now Ready for Business Intelligence as a Service
A rapidly growing business model, Software as a Service (SaaS) has many advantages over the typical enterprise software approach. Unlike applications which need to be installed and maintained internally in a company’s environment, SaaS applications are accessed by the company’s business users over the Internet through a browser.
The benefits of the SaaS model are plentiful — from no required purchase of hardware, to lower IT requirements both for installation and maintenance, to the significantly lower implementation, maintenance and entry costs.
The move toward BI as a service is being accelerated by the emergence of BI applications and their appeal to a broader range of users. A relational database could be thought of as a tool and a CRM software package (based on a database) as an application directed to particular business area. Similarly, differing from BI tools with their horizontal focus, BI applications are now emerging that target individual business challenges.
Consider the challenge for a manufacturing company making hundreds or thousands of products, selling these to perhaps hundreds of customers and producing them on multiple production lines in various plants. Many manufacturers have long known the importance of considering production speeds as well as margin per unit when analyzing the profitability of individual products. However, there has been no BI application to date capable of combining the margin and production run-rate data for such a complex combination of products, customers and production facilities. Furthermore, while existing BI tools might be able to perform some historical analysis after a significant investment in data organization and manipulation, certainly none could perform simple, rapid what-if analysis to model proposed changes in product, customer and asset mix.
The graphic below shows an example of a chart created in minutes by a business user, rather than a BI expert, showing the profitability measured in profit per minute for a selection of a company’s products. The rapidly produced, powerful chart quickly lets the business user, perhaps a marketing product manager or a financial analyst, see which products are truly the most profitable and which are poor from a profit-per-minute perspective. By plotting margin against production speed, such a topographical map enables the ability to view profit not must by margin alone but by combining it with the production run rate.
As companies have implemented more and more systems over the years to capture information such as sales and production data, they are now ready to use this data to address very specific business problems. This reality is now stimulating the move of BI from being a horizontal tool to a set of very targeted applications. As these applications provide enormous value to a wide variety of users across the company (who are thus quite likely geographically dispersed) and since SaaS applications provide very attractive benefits over traditional enterprise software delivery models in general, BI applications as a service will continue to grow strongly in the years to come.