Article written by Quentin Gallivan @ PivotLink
Software as a Service (SaaS) BI adoption is undergoing a sea-change. Industry-watchers expect implementations to grow steadily in the coming year, as businesses seek to deploy intuitive BI tools and applications cost-effectively to more users, reduce time to value and time to scale, and lower capital expenditures. In many respects, these are historic times for BI.
Amid the tumult and noise, it’s important to understand the context for SaaS BI adoption, and why it has rapidly become a viable solution for businesses in a variety of industries. Here are five developing trends that promise to fuel the growth of SaaS BI.
1. SaaS BI implementations will grow at a faster rate than on-premise BI.
The era of high-risk, complex, and time-consuming BI implementations may be finally coming to an end. It is rapidly being replaced by a new era that demands quick BI wins defined by specific business use-cases. Time to value is imperative in the new era of BI. Projects must be implemented in days, not months or years, and provide an immediate return to the business user.
SaaS BI is experiencing an uptick in investment, market visibility, and user adoption. Basic reporting and analysis have become a commodity, so there is little reason for any customer or business to invest in on-premise capabilities with the price/performance ratio that SaaS vendors offer.
We will see on-premise BI vendors’ revenue streams shrink as the SaaS BI value proposition goes mainstream. Successful SaaS BI vendors will be those whose offerings were designed to scale within cloud-computing architectures, and whose marginal cost per additional user approaches zero.
In addition, SaaS BI has developed into a superlative and affordable augmentation strategy for legacy BI implementations. By enabling IT to better support business with highly-secure, easy-to-use tools, and right-time data, SaaS BI will be viewed as the best tool for high value, quick BI wins at an affordable cost.
2. Line of business users will drive more SaaS BI purchases and demand pre-packaged, self-service analytics based on industry best practices, creating the new category of Insight as a Service (IaaS).
As more business users discover the power of BI tools, a growing well-spring of interest has developed around accessing packages of business insight through the SaaS model.
Business users seeking to accelerate informed decision-making will find that IaaS offerings provide them with pre-built analytics packages based on industry best practices, such as KPIs, reports, and dashboards. The best packages currently permit business users to create industry analytics for sales pipeline analysis, supply chain management, merchandising, product analysis, bookings, billings, and backlog analysis on their desktops.
IaaS offers a fast, easy-to-implement, and cost-effective way for business users to securely access relevant data and develop insight within the same application environment. IT will love these easy-to-implement and flexible solutions because they support IT’s goal of making powerful business analytic tools and consumable information available through-out the enterprise at reasonable costs.
In the months ahead, we’ll also see communities of interest develop among users from particular functional areas, sharing best practice KPIs and reports in a secure environment. Communities of developers and business users will continually enrich IaaS offerings, making these out-of-the box metrics key to realizing quick BI wins that move their businesses forward.
3. SaaS BI will provide unified business visibility and reporting by offering data mash-ups that integrate company data behind the firewall with company data in other SaaS applications.
Most businesses are challenged by integrating data from internal systems with data from their SaaS applications. In the year ahead, data mash-ups will be seen as the best way to link internal databases and business data in SaaS applications as it becomes abundantly clear that the cloud is the best place to integrate data for the purpose of business analysis.
A growing number of companies currently share business analytics with their supply chain and partner community to drive business efficiencies. Outdoor retailer REI, for example, provides key vendors access to timely sales and product analysis that allows the company to avoid stock-out situations and allows manufacturers to better serve a key customer. DMA, a food service supply-chain company, provides its entire ecosystem of manufacturers, logistics providers, and large restaurant chains with critical business insight and reporting, mashing-up data in the cloud.
Another example is the growing use of SaaS applications such as Salesforce.com, SuccessFactors, and Taleo for sales and human capital management with on-premise ERP for financial and other business applications. Sales and manufacturing executives gain meaningful insight into demand forecasting from the mash-up of the sales pipeline data available in salesforce.com with data from the on-premise ERP systems. Similarly, marketing leaders gain a 360-degree view of marketing campaign effectiveness across lead generation programs and cost per lead from the mash-up comprised of data from Salesforce.com, from Marketo, and from on-premise financial systems.
4. Social media use in the enterprise will drive the increased adoption of SaaS BI, as companies seek to use analytics to better impact and influence business results.
As users from more and more functional areas discover how BI can impact their businesses, it will inevitably change and expand how we’ve come to manage information. Web 2.0 technologies like blogs, wikis, Twitter, instant messaging, social networking, and Google gadgets will become part of the BI delivery mechanism and provide greater context for user experiences.
We will see Web 2.0 collaborative innovations embedded into SaaS BI solutions, with users learning how to respond to dynamically delivered information. As a result, we will see a resurgence in collaborative decision-centric business intelligence offerings, rather than solutions that merely analyze and report. Mash-ups in the cloud will provide users with relevant data to make decisions, while social capabilities will allow teams to discuss the data to quickly generate ‘crowd-sourced’ wisdom. Business users will be better able to make informed decisions and understand their impact throughout the company.
5. The highest security standards will be a non-negotiable requirement for SaaS BI customers, with SAS-70 Type II certification rapidly becoming the industry standard.
Organizations will shift from viewing information as a technology-mediated commodity managed by specialists, to treating information as an asset that provides competitive advantage. The highest available security standards will be crucial to this transformation.
Businesses will demand proof that SaaS vendors’ solutions have been audited end-to-end for security, and mature SaaS companies will rival, if not surpass, the level of security offered by on-premise BI solutions.
