What is the price of a Business intelligence software [Part 1]

Business Intelligence (BI) or business analysis tools are becoming an increasingly integral part of the arsenal of growing companies. In recent years, they have established themselves as a must-have management tool for making informed and timely decisions.

As a company with more than 420 successfully completed BI projects in Bulgaria and abroad, one of the most frequent questions we receive is: “What is the price of a BI software?”.

The answer is complex and directly related to the needs of the organization.

In the following lines, we will explain how the cost of a BI project is formed.

How is the pricing of a BI project formed?

Typically, the cost of a complete high-end BI system is formed from 3 main components.

I. Price of licenses for the selected BI tool

The price for licenses of different BI platforms and the components included in it are determined by the respective business intelligence vendor. It is formed of 3 sub-components which you should make sure are involved in the price quote you receive:

• ETL (extract, transform, loading) tool

This sub-element allows extracting data from source systems (databases), merging data from different sources, processing them, and loading them into the business analytics system.

The tool can be embedded in the BI solution and in this case, the user has no commitment to purchase and implement an additional ETL solution, as well as to integrate it with the business intelligence software.

With some BI platforms, this tool is not available and must be additionally purchased if the company does not have one secured. To make the two price quotes equivalent make sure the ETL tool is included in the chosen BI solution, you have it available or anticipate an additional cost to purchase it.

Read more: Business Intelligence software- what, for whom and why

• The place where data models or data warehouse will be loaded

Enquire about the cost of renting or acquiring the database itself – if there is one and what it is.

• Data visualisation options

This is the most recognizable element of the BI tools. Every BI solution has this element and it is always included in the price of its licenses. Many business intelligence vendors include ONLY this element in their pricing. Make sure that when you are negotiating the price of a BI tool, you are not only discussing a price for data visualization and business analytics.

Additional modules and features of business intelligence that can affect the price for BI solution licenses are the inclusion of self-service capabilities, predictive analytics (predictive analysis), machine learning (Machine Learning or so-called ML), redefined reports, modules, tools for facilitated collaboration type chats, event alerts and more.

AND MORE:

Keep in mind that if you have many disparate data sources (e.g. ERP system, CRM, social networks, website, etc.) a connection to the BI tool needs to be built for each of them. There are business intelligence vendors on the market that offer ready-made connectors with popular transactional systems and other data sources. Some of these are included in the price of the licenses.

II. On-premises or cloud BI tool from a globally recognized business intelligence vendor

Depending on the needs and preferences of the organization, companies can choose between an on-premise or cloud BI software. In either case, there are pricing specifics to consider.

In the case that the on-premises option is chosen, the customer purchases or leases licenses for use on their own infrastructure, data center, or public cloud. It uses its own infrastructure and has a commitment to manage it. It is necessary to take into account how much this will cost, i.e. it should be planned as a separate item in the BI project cost.

If the company opts for a cloud-based BI solution, it uses the vendor's cloud. In turn, it takes on the commitment of administering and maintaining the infrastructure.

In this case, it is a good idea to consider whether the resource constraints in terms of power, space, etc. in the chosen licenses are sufficient or whether additional capacity needs to be purchased.

III. BI tool implementation services

This is the most complex component in forming the pricing of a BI project.

It is important to note that the implementation of a software can be done by a team internal to the company, by external consultants with extensive experience, or by 2 teams - one from the implementer and one from the client.

From our years of experience in building BI systems, we can distinguish two extreme options for building business analytics solutions.

One is building individual reports through a BI platform that have no established relationship with each other, each report has a different SQL or model, and works independently. This option is used in some private cases where there is a need to automate a small number of short operational tasks. A BI tool of this kind has no common structure, and a change in data is reflected in only one report, which can distort the truth, especially when changes occur.

A second option, which our team typically recommends and practices, is building a comprehensive BI software that brings together data from all external and internal sources. The data is linked in a single model, brought together in one place, reports work together, and dashboards of information are linked. A single version of the truth is guaranteed, and employees are assured they are getting the same information.

Qlik Sense Dashboard

Only then we can talk about a properly built and effective business intelligence software.

In this case, the construction of the tool can happen in stages and gradually cover the different business processes. The focus of this type of BI software is that the data and processes are linked, and unified information is used for the analysis, providing a holistic view of the state of the business.

From the outset of researching a BI solution, it is good that the client understands the difference between the two types of systems and is clear on which one they want to go for. If you are comparing price quotes you need to be able to distinguish between the two business intelligence options, with the full understanding that the first option is the more budget-friendly.

A BI software should enable users to flexibly use and process their data, and all users to have a single version of the truth – now and in the future.

The services that affect the formation of a price for building a complete BI software are:

1. Conducting a business analysis that describes clear requirements for the system and what functionalities it should include. This service can be carried out by the customer if he has sufficient experience in business process analysis. The analysis can also be entrusted to external consultants with extensive experience in a variety of companies from different industries;
   
2. Data discovery – primary review and analysis of the data, its integrity, and condition.;
   
3. Data quality analysis – where the data is located and what is its condition, does it need cleaning and processing;
   
4. Data linkage and aggregation analysis – how and by what attributes can disparate data be linked (e.g. by time, items, customers, metrics, etc.)
   
5. Analysis of key performance indicators – what are the main KPIs in the company and how are they calculated, which of them should be included in the BI tool.
   Here it is very important to consider by which algorithm each metric is calculated separately, as well as to foresee and describe all possible exceptions. This is done in order to ensure that the relevant indicator has a correct value in all possible cross-sections set in the system.
   
6. Data cleansing and creation of data entry controls to quickly catch and prevent possible future technical errors;
   
7. Creating data model(s) to serve future reports, visualizations, and connections between them. These models are optimized for the volume of data so that the business intelligence tool works optimally.;
   
8. Build visualizations, and links, and apply best practices for analysis in order to discover unexpected connections between data. Here it is very important to build the system in such a way that it allows drilling down from the big picture of the business to the smallest detail.
   
9. ! NB: Make sure the consultancy is not just offering you this service by skipping the preliminary mandatory stages described above.!
   
10. Maintenance and development – It is important that the software is built in such a way that, during the maintenance period, innovations and improvements can be made easily, and are reflected in each report.

   • What additional costs should you look for when pricing a BI project?

    • How to compare 2 or more price proposals for building a BI software?

    • How to determine a budget for a BI project?

    • How to reduce the cost of a BI project?

    • What costs to anticipate after implementing the BI system?

Answers in part 2 of the article here >

At Balkan Services we have expert knowledge of business, technology, and legislation, and we speak all three languages. We will listen carefully and advise you on choosing the right business system for your needs.

Balkan Services has been implementing business software solutions since 2006 and has completed more than 690 projects, of which over 420 are in the area of BI software. We follow a proven implementation methodology with clear steps and know-how on best practices.