BI Standardization: No Gain Without the Pain

Competition in the business-intelligence (BI) market is intense, and the stakes are higher than ever. Several leading BI vendors, including Business Objects, Cognos and MicroStrategy, have all recently landed a number of key standardization deals, representing a significant long-term revenue commitment, a strategic customer relationship and, ultimately, competitive displacement.

The trend toward the standardization of BI tools is building momentum as companies realize the long-term gain will outweigh the short-term pain of rationalizing a portfolio of tools and technologies.

Indeed, AMR Research confirms a significant and growing trend toward standardization that will ultimately reduce the number of BI vendors at play within a single company. In a recent survey of more than 350 IT decision-makers, AMR found the largest percentage of companies (44 percent) in some stage of analysis or early development of a BI-standardization initiative (see "Mind Your BI Business," right).

So, what does this mean for VARs looking to profit from BI software? Today, it is not uncommon to find three, four or even five different BI tools used for discrete applications within different departments. But this year, more companies will decide on a single BI tool to be the corporate standard and will nix spending on comparable technologies from competitors.

The leading vendors in the BI market are pushing for that as well, vying to be the corporate standard of BI, particularly as Microsoft, SAP and Oracle set their sights on the market. Solution providers that win these strategic deals can expect special treatment--preferred pricing, top-tier service and even targeted training programs.

Standardization is also a sign of a maturing market with mature technologies. As the technology matured into more of a platform vs. a mere tool, it became feasible for a BI suite to meet the full range of reporting and analysis requirements and to be centrally managed. Vendor selection is increasingly focused on architectural excellence. VARs need to stick with the winners and only deliver products that will meet both current and emerging enterprise requirements for functionality, scalability and performance.

But standardizing on a single BI tool can present significant cultural, political and technical challenges from an end-user perspective. Migrating reporting applications from one technology to another can be tricky. That's where solution providers come in, offering training and services for application migration and design.

Bear in mind: The right BI choice for your customer may not be the one currently in use. In fact, in the majority of deals reviewed by AMR, the chosen standard vendor displaced a competitive, incumbent product. Without exception, all of the leading vendors have made significant product/strategy announcements in the past 12 months. The takeaway for VARs: Level the playing field before recommending a BI standard; the right choice for the customer could surprise the lines of business.

Of course, that doesn't mean companies will or should rip out systems that are meeting current requirements. Transitioning to an enterprise standard requires planning. With assistance from solution providers, many companies will audit their existing BI applications and develop action plans to improve their reporting strategies.

Still, the benefits make it worthwhile. Standardizing on a single BI vendor can streamline spending, simplify deployment and maintenance of reporting applications, and provide more timely, accurate and consistent information. Companies will consider standardizing on a BI platform when the costs of renegade spending, reporting backlog and incongruous reports become prohibitive.

However, as with all significant changes, there will be pain, and companies will need solution providers' help to develop a long-term plan with their suppliers that address the following points:

• A communication strategy to articulate the value of standardization to businesses that may be reluctant to change;

• An aggressive plan to retrain users to accelerate acceptance and adoption of new technology;

• A strategy for outsourcing or staffing to rewrite or migrate existing reporting applications; and

• A rational plan for maintaining or migrating existing applications.

VARs that can help companies to understand the viability, costs and benefits of standardizing on a single BI vendor can win larger deals, engage in critical initiatives and forge strategic partnerships with both vendors and clients.

Jacqueline Coolidge ([email protected]) is research director at AMR Research.