MSBI : BI # 65 : Business Intelligence – Tools & Theory # 57 : Business Intelligence Strategy & Roadmap #4 : Managing Total Cost of Ownership for Business Intelligence

Hi Folks,

This post is part of Series Business Intelligence – Tools & Theory

Currently running topic for this series is listed as below :

Series Business Intelligence – Tools & Theory

>>Chapter 1 : Business Intelligence an Introduction

>>Chapter 2 : Business Intelligence Essentials

>>Chapter 3 : Business Intelligence Types

>>Chapter 4 : Architecting the Data

>>Chapter 5 : Introduction of Data Mining

>>Chapter 6 : Data Mining Techniques

>>Chapter 7 : Introduction to Data Warehousing

>>Chapter 8 : Different Ways of Data Warehousing

>>Chapter 9 : Knowledge Management

>>Chapter 10 : Data Extraction

>>Chapter 11 : Business Intelligence Life Cycle

>>Chapter 12 : Business Intelligence User Model

>>Chapter 13 : Business Intelligence Issues and Challenges

>>Chapter 14 : Business Intelligence Strategy and Roadmap<You are here>

Continuing from my previous post on this series, If you have missed any link please visit link below

We are going to Cover the Following Points in this article

  • Managing Total Cost of Ownership for Business Intelligence

Managing Total Cost of Ownership for Business Intelligence

The economy has definitely seen better days. The budgets used to be larger during the bull market. The Fiscal optimism nurtured independence among the company departments, groups, and divisions seeking changes and encouraging technology purchases to encourage growth. Acquiring the best- of-breed and grow-at-any-cost attitudes persisted.

The present moderate business the climate and the renewed importance on the corporate accountability have encouraged an assessment of the overall purchases. Today, the businesses cannot pay for the independent expenditures that do not add the value in a coordinated fashion for the entire enterprise. Organizations realized, for example, that many of the business intelligence tools are present throughout the enterprise but produce little or nothing of value together, except for the information. The maintenance and licensing fees on each of the BI tool are important as well.

Total Cost of Ownership and Business Intelligence

The financial analysis of the enterprise costs, such as the technology investments and expenses have be done annually to evaluate the affect of any changes that might affect the business. It is important to compute the overall cost of ownership with business drivers, such as enterprise efficiencies, productivity enhancements, and customer satisfaction.

When an organization struggles to reduce its Total Cost of Ownership (TOC), it should first plan a cohesive enterprise strategy meeting discouraging the challenges such as business units with their own technology standards, applications, and tools; along with products that do not work successfully together or with the already existing data; too many server licenses; and the cost prohibitive support requirements.

While using the TOC specific to the Business Intelligence, all the costs and benefits should be valuated to make sure that the users are authorized properly to access, to transform, and to make better or faster decisions using the most important asset: which is information. Business intelligence potentially gives the highest ROI of any technical investment. As the size of the applications grows, it becomes even more important for the organizations to better manage the TCO in order to maximize the ROI. The business intelligence software with the lowest TCO will cost-effectively scale within the enterprise and beyond, and will not need moving the data and populating the data marts or cubes, or buying the unwanted hardware, which are all the very expensive.

Managing the TCO of the Business Intelligence

As the companies continue to priorities the Business Intelligence (BI) initiatives, they are becoming more concerned about the related costs and the impact that the costs can have on the final success or failure of the BI projects. Many executives become wary of the hidden costs based on the previous experiences with the data warehousing and other enterprise application initiatives, and are putting the BI vendors to the test to reveal as much information as possible about the expected costs related with the solutions. The report has to be written to give the end-user organizations with an understanding of all of the cost factors related with the BI initiatives, and how the Best-in-Class organizations – those which have attained the highest performance in managing the Total Cost of Ownership.

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