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Cloud BI projects: Partners finding BI work, but not profits

Channel partners report a double-edged sword in cloud-based BI: Consulting projects abound, but the elimination of hardware erodes profits.

Francis Poeta has noticed an uptick in the number of small and medium-sized businesses (SMBs) that are engaging his firm for help with business intelligence (BI) work, but that doesn't mean he's about to make a lot more money.

"My company has experienced a 30% increase in BI projects over the last two years," said Poeta, president of P & M Computers Inc., a systems integrator based in Cliffside Park, N.J. "It's steady work, but the difference now is that cloud and other technology takes away some of the profit. Ten years ago, a 30% jump in the number of BI projects would have translated into a fortune; now that's not the case."

Since opening its doors 23 years ago, P & M Computers Inc. has worked with SMB and enterprise customers that are between 250 and 3,000 employees. The company uses several technology partners for its BI projects, including Amazon Web Services and Microsoft Azure for cloud-based engagements, and business intelligence software and data warehouse technology from Oracle and IBM.

According to Poeta, there was a time when BI projects were only available to the largest enterprises with the budget and IT personnel to implement the expensive and complex on-premises technology. With these projects came a host of IT hardware and software upgrades that carried big price tags to implement. Today, cloud computing has shifted the technology model, giving customers on-demand computing services over the Internet, which include Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Platform as a Service (PaaS).

Ten years ago, a 30% jump in the number of BI projects would have translated into a fortune; now that's not the case.
Francis PoetaPresident, P & M Computers Inc.

"All of those things that were part of a BI project -- the antivirus software, the storage and backup technology, the servers -- are no longer part of a BI project in a cloud model," Poeta said. "Consulting dollars are consulting dollars, but there's also the added profit margin that comes from selling those other items."

Research shows that more companies are turning to cloud computing providers to outsource the management of their data, which helps them avoid complex technology deployments and capital investment that would go toward building, maintaining and operating systems to manage their information. Poeta, like many other systems integrators, is seeing what Dresner Advisory Services documented in its third annual study of BI trends. Dresner’s market study revealed that organizations using public cloud BI in 2014 increased by more than 17% compared with 2013, and grew by more than 53% since 2012.

Making cloud BI work for customers

Malcolm Smith, director of data and integration at Cloud Sherpas, a company that provides cloud advisory and technology services, said the momentum for BI work in midsize business is moving in the right direction, and the cloud-based approach is accelerating adoption.

"We see evidence of this with our customers every day. We think our focus on very short cycle projects (usually less than 6 weeks per phase) also greatly improves smaller companies' ability to embrace the new capabilities from BI tools and get benefits early," Smith said.

Smith also observed that there are many advantages to effectively execute BI projects at smaller businesses. He said these companies are more focused on the project, typically have a great understanding of their business drivers and key metrics, and there are fewer parties involved in getting alignment on business rules or resolving issues as the project progresses.

Carey Moretti, principal consultant in big data intelligence at Trace3 Inc., a data consulting firm said she's noticed that many executives want to take the software and do their own business intelligence analysis.

She said products like Qlik Sense, Tableau, Platfora and ThoughtSpot are tools that make it easier for users to access, sort and analyze data, and create reports quickly, often without the help of someone from the IT department.

"There's a huge demand for tools that just let you self-serve. It's all about getting these tools in the hands of the end-users and letting them do all the work because they know what they want to see," Moretti said. "End-users need to be able to get at a lot of different types of data on their own, as well as being able to access it, cleanse it and serve it up for reporting or analytics."

At P & M Computers Inc., consulting is a big part of BI work these days. Poeta said his initial discussions, usually with a line of business manager, centers around identifying what business intelligence a customer wants to gather, and what they are trying to accomplish.

Guiding customers through technical issues

There are also technical problems to hash out, such as making sure to capture all the data, getting a customer to tell you where the data is, and figuring out what technology to use to retrieve and normalize the data.

On many of these engagements, Poeta said, systems integrators need to have a frank discussion with their customers as they provide guidance, as well as recommend the best BI tools that will transform raw data into useful information for business analysis.

"When you have third-party applications and you don't have access to their schema, that's a problem, Poeta said. "Another challenge is people think that their data is saying one thing and you have to show them that it says something else. You have to be honest with them, you can't just let them think what they are saying is correct if it isn't. You have to try to help them learn."

Cloud Sherpas' Smith said for his company opportunities lie in helping midsize companies get the benefits from cloud-based solutions, like Salesforce, Google for Work and ServiceNow.

"We talk to thousands of businesses a year. Most of these businesses have operational reporting from their business operations system and they have spreadsheets they email around or paste into presentations. That's it." Smith said. "We find that we need to make the business case for BI being fundamentally better than this current state and also overcome some misconceptions about the cost, complexity and limitations of BI projects."

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