Calculating Total Cost of Ownership for Business Intelligence Tool: Beyond the Upfront Costs

The growing urge for data driven solutions has seen a obviously substantial surge in the demand for business intelligence tools. In one of our previous articles, we have addressed selection criteria for BI tools based on different aspects such as reporting, dashboard creation, smart analytics, deployment, embedded, etc.

Apart from the basic questionnaire pertaining to each factor, there is still a profusion of checklist to be considered before you make your final selection, as mentioned below:

  • Does the solution provide touch compatible user interface with complete range of interactions for mobile platforms?
  • Does the solution provide both online and offline support with full exploration and analytics capabilities?
  • Can users get scheduled or conditional alerts/notifications on reports/storyboards?
  • Does the platform support R/Python/Java/SQL engine integrations?
  • Does the solution contain event driven scalable architecture?
  • Is there a scope to create a virtual business environment to simulate data prototypes?
  • Does the platform provide domain based specific solutions for different industrial sectors and business functional areas?
  • Does the vendor provide timely and proactive technical support with good quality and reliability?
  • Has the vendor shared any explicitly blueprint for supporting upcoming features and innovations as per latest business trends?
  • Does the platform provide a dynamic pricing structure based on factors like deployments, subscriptions, etc.?
  • Does the platform provide simple and intuitive user experience across any industrial vertical?
  • Is the platform well balanced between being self service oriented and handling IT administration at times?
  • Does the vendor have a broad base of loyal and satisfied customers along with stable reputation in the market?
  • Is there any exclusive pricing options for OEM customers?

And most importantly….

  • What is the total cost of ownership of the product? Does it include factors like software and hardware costs, maintenance costs, internal IT support costs, user trainings, networking, computing, storage costs, etc.?

The last question actually triggers a hotbed of confusion and uncertainty in enterprises looking out to buy a BI solution with only the licensing price in mind. In reality, total cost of ownership goes beyond license structure, to additional infrastructure implementation, maintenance, resource cost and customer support cost. More surprisingly, cost of your BI solution is not the TCO per annum, but rather the cost of performing individual analysis.

Section given below provides you with a concrete solution to calculate the total cost of ownership of a business intelligence platform by calculating the total cost of analytics and the accuracy and speed in achieving time to value.

Calculating TOC for your BI Platform

What is Total Cost of Ownership?

Total cost of ownership of any conventional workable platform considers an enterprise’s expenses on additional technical infrastructure tools, manpower expense to provide necessary consulting and expertise, and the cost of upholding the tools. On the contrary, total cost of ownership of a BI solution is not measured by the above-mentioned external factors, but rather by assessing its full potential in achieving desired outcome.

As mentioned above, total cost of ownership of a prospective solution is not just the yearly upfront costs, but rather the value obtained by your investment in the BI tool or the cost of analytics. This is because every BI tool differs in the time and approach taken to provide data driven meaningful insights to end user. A BI tool with displaying higher sticker price might actually be cheaper than a tool with lower upfront costs in the longer run.

Steps in Calculating Total Cost of Analytics

To get the total cost of analytics, start by calculating total costs including license costs, staffing costs, maintenance, and support costs, hardware costs, ETL costs, and training costs. Divide the obtained number by the rate of analytics offered by the vendor. This gives you the cost of analytics for a BI tool

Step 1: Calculating overall costs of the solution

As mentioned above, there are some important aspects which an organization needs to factor in while calculating a BI solution cost, and these are the following:

  • License Costs: While some vendors offer a per user licensing fees, some offer a per session or database fees. However, it is advisable to not get tricked by initial cost offering, especially when you plan to spread the software usage across your business.
  • Staffing Costs: Even though the vendor will always provide their own technical support, you cannot ignore your own internal support. This includes IT and BI expertise who can deploy and manage the solution and employees assigned to get desired results from your BI solution. To calculate staffing costs, multiply total number of staff by time spent and annual salary of each.
  • Maintenance and Support Costs: This factor is mostly included along with the license costs, though one cannot overlook aspects like proactiveness and accuracy in resolving issues. Also check if the vendor is charging you extra for new upgrades and enhancements.
  • Hardware Costs: Unless you have opted for a cloud-based solution, you cannot overlook the server and database installation costs associated with your Business Intelligence tool. Also, in case you plan a transition from cloud hosting to in-house hosting, do not forget to consider the underlying costs.
  • ETL Costs: Even though many BI tools offer built in ETL capabilities, still you cannot ignore the possibility of costs incurred in transforming your data into a usable format for the BI tools to work upon.
  • Training Costs: Most of the BI vendors offer training services in one or other forms. This may be in-person training, interactive video session, or audio consultations. It is always advisable to not skip the trainings as this may result in longer time to resolve a issue, missed opportunities, and overhead consultation costs.

Step 2: Calculate rate of analytics for the BI solution

Though annual cost for one BI solution might be much more than the annual cost for another solution, the latter might outplay the former in terms of provided self service analytics capabilities.

A vendor offering self service BI analytics can help you attain rate of 3 analytics projects per week while the one offering traditional BI analytics might keep you waiting for 2 weeks to get an analytics project.

A time of 2 weeks for a single analytics project imply a rate of 26 analytics projects per year while a time of 3 days means a rate of 122 analytics projects per year.

Step 3: Divide the total cost by rate of analytics

Once you have successfully obtained above mentioned measurements, divide the total cost of upfronts by the rate of analytics to obtain your annual cost of analytics.

Surprisingly, many vendors with high overall costs have actually reasonable cost of analytics and vice versa.

As a bottom line, overall explicit costs should not be the only constraint in choosing your analytics platform, rather it is the speed and performance of the solution which should be also be considered in your evaluation

4 Reasons You Should Count on BIRD as Agile BI Tool

In my previous article, you must have seen various reasons for choosing BIRD over an existing plethora of BI tools in the market. We always vouch for the fact that an excellent BI tool is not assessed by only its cost and functionality, but its effectiveness in driving its users towards accurate revenue boosting decisions.

And, we do not just stop at insights and visualizations, rather we aim to make sure you get the most optimal ROI for maximum investment. Given below are 5 reasons why we claim to provide the most optimized TCO in the market:

  • Firstly, the license cost of implementing size of 50 power users and 1k explorer users is 1/3rd the price of other BI tools.
  • Secondly, BIRD requires only one server to impart high performance, implying an 80% reduction in hardware costs
  • Thirdly, our reduced server maintenance cost ensures a saving of about 45K USD per year.
  • Fourthly, Our simple UI and advanced features like metadata crawler, auto drill-down, NLG reports, etc. ensure minimum training costs.
  • Finally, Total reduction in costs using BIRD will be approximately 2.2 million USD over a period of 3 years.

Want to avail more of our low TCO benefits? Click here to learn more……