For a company to remain competitive, there's nothing more important than knowing what your customers want, how efficient your processes are, where to focus your marketing dollars and which projects to spend R&D funds on. In most cases, that means implementing, running and maintaining a business intelligence system-a costly and complex endeavor that requires in-house expertise and constant diligence.
In some situations, it makes more sense to offload that responsibility. Short of having a third party host your BI solution or outsourcing the entire application and management-both costly endeavors-the on-demand approach to BI has merit. For smaller companies, which often don't have database administrators or BI specialists-and which have standard data sets, processes and applications-it can be an enticing choice.
Unlike packaged BI solutions, which are difficult to manage and maintain, on-demand BI is a subscription-based model that is accessed online. No IT is required by the customer, and there are usually no upfront costs. What's more, the vendor is responsible for upgrades and application and infrastructure management. Many vendors are offering this approach, including Business Objects, NetSuite, Inetsoft, BlinkLogic, LucidEra, Oco and CloudNine Analytics.
"Traditional BI systems are complex and often are bigger than smaller companies need," said John Hagerty, an analyst at AMR Research. "That's one of the nice things about on demand: It lets you have a standard package without having to have it customized to your situation."
On-demand BI works best in environments where most software and processes are standardized and where little customization is needed.
"When you go with BI on demand, you are relying on a third party to build a data model and provide a specific set of reports," explained Boris Evelson, an analyst at Forrester Research. "Some degree of customization is possible, but 90 percent of what you'll do will be according to what that BI on-demand vendor has created."