To Build or Buy BI: That Is the Question! Evaluating Options for Embedding Reports and Dashboards into Applications By Wayne W. Eckerson August 2017
About the Author Wayne W. Eckerson has been a thought leader in the business intelligence and analytics field since the early 1990s. He is a sought-after consultant and noted speaker who thinks critically, writes clearly and presents persuasively about complex topics. About Eckerson Group Eckerson Group is a research and consulting firm that helps business and analytics leaders use data and technology to drive better insights and actions. The firm helps companies develop strategies and roadmaps that maximize their investment in data and analytics. Its consultants and researchers each have more than 20 years of experience in the field and are uniquely qualified to help business and technical leaders succeed with business intelligence, data governance, advanced analytics, data warehousing, performance management, and big data. Eckerson Group 2017 www.eckerson.com 2
Overview Why Business Intelligence. Data is the lifeblood of many applications. Your customers increasingly expect to view application data in robust, interactive reports and dashboards. They want deeper insight into the activities driving performance and outcomes. Today, many organizations use business intelligence (BI) software to build interactive reports and dashboards and support ad hoc analysis and visual discovery. BI software helps companies turn data into insights and action. Embedded BI. According to Eckerson Group research, more than three-quarters of independent software vendors (76%) incorporate reporting or analysis functionality into their applications and almost half (48%) of corporate developers do. 1 If you are a product manager or developer, you must decide how to allocate development time and resources. You can either build BI functionality to embed in your application or buy it, or a combination of both. Each option has benefits and disadvantages, and is appropriate for some customers, but not others. Online Assessment. To help you decide whether to build or buy BI software for your application, Eckerson Group has created a short online assessment that will generate a customized recommendation based on your answers to 24 questions. Upon completing the assessment, you receive a personalized report that recommends whether you should build or buy BI software and why. It also shows aggregate results of others who completed the assessment so you can benchmark your results against all respondents. This report outlines the rationale behind the assessment and scoring model and provides general advice on whether you should build or buy reporting and analysis functionality to embed in your application. 1 See Wayne Eckerson, Embedded BI: Putting Reporting and Analysis Everywhere, TechTarget, December, 2014. Eckerson Group 2017 www.eckerson.com 3
Build or Buy Rationale The decision to build or buy BI software to embed in your application is multi-faceted. There is no right or wrong answer, and every organization needs to weigh the pros and cons of each approach when making a decision. Why build? There are several reasons an organization might want to roll out its own BI functionality. (See figure 1.) Control is perhaps the biggest advantage: organizations get just what they want and nothing more or less. When they tightly integrate BI functionality into an application, they can deliver an exquisite experience for users. Users can flow seamlessly from one set of functionality to another without having to launch a separate application with its own look and feel. This degree of integration is critical if analytics is one of the primary features of the overall product. But there are other reasons as well: you have developers with the time and skills to build BI functionality; you can t find BI tools that support required functionality; it's quicker to build BI capabilities than integrate a commercial BI tool with your application; you can avoid licensing and royalty costs; and you can eliminate the complexity of handing support calls to a third party. Figure 1. Why do you build instead of buy BI functionality? From Wayne Eckerson, Embedded BI: Putting Reporting and Analysis Everywhere, TechTarget, December 2014. Based on 91 respondents who qualified as non-bi software vendors, who were allowed to make multiple selections. Eckerson Group 2017 www.eckerson.com 4
Why Buy? Nonetheless, more companies choose to embed third-party BI software into their products and applications than build it. (See figure 2.) The primary reason is that BI is not a core competency for many developers, and they don't want to divert precious time and resources to building, maintaining, and extending a BI tool. It's much simpler to outsource these capabilities to a trusted third party that lives and breathes BI and can keep up with all the latest developments. Embedding commercial BI tools into an application enables development teams to focus on building the features and functions of the core application. Moreover, embedding third-party software instantly enhances an application or product with best-of-breed BI capabilities, accelerating time to market for best-of-breed functionality that you don t have to build or maintain at great expense. Rather than building BI functionality from scratch, companies simply integrate a BI tool using a high-level API and reap the benefits of years of development invested by the BI software vendor. Figure 2. Why do you buy instead of build BI functionality? From Wayne Eckerson, Embedded BI: Putting Reporting and Analysis Everywhere, TechTarget, December 2014. Based on 55 respondents who qualified as non-bi software providers, who were allowed to make multiple selections. Eckerson Group 2017 www.eckerson.com 5
Why Build and Buy? The decision to build or buy BI software is rarely clear cut. Consequently, many organizations do both. (See figure 3.) Buy and Customize. One reason to pursue a hybrid strategy is that the BI software you purchase only meets 90% of your requirements. This forces you to customize the BI software usually working in conjunction with the vendor. Customization might entail writing new code or scripts, adding new visualizations or calculations, or building write-back functionality to your application. Some companies might also license open source software and then customize it. Or they might use commercial BI software for one part of their application and custom reports for another. For example, Eckerson Group uses a custom-developed report in its online assessments, but leverages commercial BI software to support ad hoc analysis of the aggregate data. Figure 3. Do you generally build or buy BI functionality? Based on 140 respondents who qualified as non-bi software providers Eckerson Group 2017 www.eckerson.com 6
Online Assessment Categories. Eckerson Group s online assessment incorporates drivers for building or buying BI software into 20 statements grouped into 10 categories of two questions each. The 10 categories are the following: Market. Examines market forces driving the build-versus-buy decision. Demand. Evaluates usage and application requirements. Development. Identifies development culture and availability. Simplicity. Evaluates reporting and analysis requirements. Functionality. Evaluates complexity of functional requirements. Integration. Evaluates the need for bidirectional communication between the host application...and BI functions. Budget. Examines funding and attitudes toward licensing. Software. Reviews available open source and commercial software. Complexity. Identifies advanced analytics features. Architecture. Identifies scalability and performance requirements. The assessment computes an average score for each category and then averages the category scores to generate an overall score. These scores are then displayed graphically. (See figure 4.) Figure 4. Score Graph Eckerson Group 2017 www.eckerson.com 7
Value Vectors. Note that this assessment helps with a buying decision. Higher scores do not indicate a better result and lower scores do not indicate a worse result. Rather, the scores reflect a recommendation. High scores indicate that an organization should buy a BI tool to embed in an application and low scores indicate they should build the BI capabilities. Personalized Report When you complete the assessment, the tool automatically generates a personalized report that indicates whether you should build or buy a BI tool. The report contains dynamically generated text with a recommendation and explanation, as well as top reasons to build or buy BI functionality, or pursue a hybrid strategy. You can share this report with others and come back to it at any time via the link the system automatically sends to you. (See figure 3.) Figure 5. Personalized Report Eckerson Group 2017 www.eckerson.com 8
Benchmark data. In addition, you can click filter to view an interactive dashboard that enables you to examine the aggregate data in more detail. For instance, you can filter the data by department, region, company size, and industry. In this way, you can turn the online assessment into a peer benchmarking tool. Summary There are valid reasons for either building or buying BI functionality to embed in your application. Market trends indicate, however, that a majority of organizations buy BI software to embed in applications and nearly half pursue a mixed strategy where they both build and buy BI capabilities. Nonetheless, the decision to build or buy is not easy, and the answer is different for each organization. Eckerson Group s online assessment is designed to take some of the guesswork out of the decision and, at least, raise issues that product managers and developers should consider before implementing BI functionality. Need help with your business analytics or data management and governance strategy? Want to learn about the latest business analytics and big data tools and trends? Check out Eckerson Group research and consulting services. Eckerson Group 2017 www.eckerson.com 9
Sponsor About the Research Sponsor Founded in 1989, MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider of enterprise software platforms. The Company's mission is to provide enterprise customers with a world-class software platform and expert services so they can deploy unique intelligence applications. To learn more, visit MicroStrategy online and follow us on Facebook and Twitter. Eckerson Group 2017 www.eckerson.com