3 Hidden Costs of Business Intelligence

3 Hidden Costs of Business Intelligence

At Data Clarity, we believe in a data-driven approach to running any organisation today. However, we often find that many business intelligence initiatives either fail outright or fail to produce the desired, easily identifiable return that organisations want to see on their investment.

One of the main reasons that BI solutions fail is that the buyer often does not fully appreciate the true costs of business intelligence. As Gartner notes, “BI leaders often focus solely on license metrics when comparing BI platform vendor and analytic tool costs, even though it makes up only a small portion of overall cost of ownership.”

The problem begins when focusing on initial price of a BI solution. This can lead to severe misconceptions: either underestimating the costs of the current situation, or those of the BI tool that is being considered.

Here we break down three of the most common hidden costs of business intelligence.


  1. The Hidden Cost of Integration

The first consideration when considering investing in business intelligence is how the software interacts with your existing ecosystem, and whether you need a standalone data analytics solution or whether it will need to be part of a network of additional systems in order to produce real value for your organisation.

The necessary thing to consider is that there are several parts in the analytical value chain: the first is connecting to the raw data sources (databases, files or cloud sources); the second is the ability to merge these data sources, cleanse and model the data in preparation for analysis; finally (and depending on the success of previous stages) visual analytics and ad-hoc queries.

Full BI tools are meant to be used as a platform to handle every stage of this chain; from data preparation and modelling to creating and sharing dashboards. Other tools may focus on delivering dashboard functionality while not delivering any data preparation features. This is important as data preparation can often be the costlier and more difficult process.

Many of the BI tools in the market focus on the last stage—with ever-flashier graphics and dashboards masking the fact that all the back-end “heavy lifting” has been delegated to a separate tool or to IT professionals. It is therefore important to understand exactly what functionality you will be receiving from any type of software you are considering and weigh this against the initial cost.

There’s nothing inherently wrong with using data visualization software along with proprietary ETL and database tools—but it is important to understand that this will affect the overall price you can expect to pay to achieve the analytic solution you’re looking for.


  1. Scaling Up your Solution

To demonstrate scalability, let us use an example. Company A are currently working with only two data sources (CRM software and web analytics) and currently generate weekly reports using a spreadsheet tool such as Excel. While this process is certainly doable, it is time-consuming and can be error-prone, business intelligence tools can have a dramatic impact in both accuracy and speed.

The temptation may be to purchase a low-end tool that can resolve the immediate pain. This makes sense initially, but can be problematic when it comes to data—because like it or not, your data is very likely to grow in a year or two. As the world becomes more digital and more measurable, the number of systems that create relevant data increases, so to does the amount of data.

Your thousand rows could easily become millions, especially as your company undergoes digital transformation. New technology, such as IoT devices will lead to significantly more potential data sources to capture customer data – but will also generate further complexity for your business.  This can be seen in a recent study conducted by Cisco, which estimates that by 2020, the total amount of data created by IoT devices will reach 600 Zettabytes per year. For reference, all the information sent over broadcast in 2007 was about two Zettabytes.

At this stage, the bargain-bin tool that you previously picked up to solve your Excel woes turns out to be a crutch: it can no longer answer your data needs (in terms of performance or complexity of analysis), but on the other hand it is already entrenched in your organisation. Licenses have been purchased, training hours spent, and employees are hesitant to learn how to use yet another software tool. You can find yourself stuck with the dilemma of spending additional resources to implement a full-fledged BI tool or sticking with a solution that does only half of what you need.

Therefore it makes sense to consider scalability at the start of the process.


  1. Manpower and Expertise

Lastly, you need to consider the price your organisation is paying when valuable employees are spending time generating reports, rather than attending to other mission-critical tasks. Obviously, this is true in the initial scenario, where everything is being handled through spreadsheets; but even when procuring a modern BI tool, you still need to make sure it can adhere to the standards of self-service for business users.

Traditional enterprise business intelligence was built with an IT professional or experienced data analyst in mind—one who would feel comfortable using scripting and coding to create a new query. Modern tools try to avoid this, but often their lack of back-end functionality will require this scripting and coding to take place in the preliminary data preparation stage.

The result: instead of business users struggling with endless spreadsheets, the burden has been shifted to the technical workers, who now need to operate IT-centric systems to generate the same reports.

To prevent this, you want to see that the business users in your organisation can actually use the tool that is being considered and that they are able to answer their own data questions without constantly required internal or external tech support.



Those are the top three hidden cost considerations to bear in mind for any organisation looking to implement a business intelligence solution in 2020.

Are you looking to improve your employees’ performance with business intelligence software? Talk to our data experts today and arrange a consultation on how best to implement BI and start your journey into digital transformation.

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