The history of cloud computing and what's coming next: A CIO guide
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Jim Szatkowski can tell you why a Software as a Service (SaaS) business intelligence (BI) tool was the answer for his business, but he'd prefer to show you.
In 2004, Szatkowski, vice president of technical and data services at Schaumburg, Ill.-based Distribution Market Advantage Inc., a national food service distribution system, took the advice of CIOs at DMA's member companies and sought out a cloud-based BI application.
In the ensuing eight years, he has become highly dexterous with the SaaS offering from PivotLink Corp., which DMA's food service customers use to access supply chain data. In a remote session demonstration, he made a few mouse clicks and, in a matter of minutes, filtered thousands of lines of data. The resulting report showed information as detailed as how many cases of meatballs one national company purchased from which distributor, which warehouse those cases came from and how much they cost in the fourth quarter of 2011.
The challenges of SaaS business intelligence
True Textiles' Rick Cowan suggests ways to keep your SaaS BI implementation from running into trouble:
• Analyze where your data resides and what it will take to get it to the cloud (strategic placement of the data, for example, or the bandwidth to have it available at various locations).
• Know what your communication capacities are if you're pulling data from diffuse pockets (from vast spreadsheets, for example, or large databases at branch offices).
• Have a good, solid plan about what you want to be able to analyze.
• Take steps to ensure your data's integrity, such as cleaning up business rule processing on the back end.
• Account for the key security, privacy and compliance issues associated with the cloud if you're considering off-premises data storage or evaluating which business intelligence tools you should use and with which data.
Recently, Szatkowski demonstrated the BI tool for a chain of nursing homes with 40 locations. In 15 minutes he created a report comparing food costs by individual resident in two specific facilities. Without the application, it would have taken days, he said.
"For us it's about getting the right information in [members'] hands to help them get cost out of their systems and improve operations," Szatkowski said. "It's highly scalable from a cost perspective, I can have as many customers as I want interacting with this tool and it just works extremely well for us."
It's working for DMA, but do other large companies have an appetite for SaaS BI, and are the tools there to sate it? "We process an order every two minutes; and we're not small, we do $3.5 billion in sales," Szatkowski said. "Is it ready for prime time? In my view, absolutely."
A growing appetite for cloud-based BI tools
Szatkowski is not alone. National fabric manufacturer True Textiles Inc., based in Grand Rapids, Mich., was growing rapidly through acquisitions from the mid-1990s through the mid-2000s. When the economic downturn hit in 2008, CIO Rick Cowan looked for an inexpensive way to harness the data from disparate systems the company had acquired.
"It became increasingly important for us to start managing our data and see our company as a whole, rather than as individual units," Cowan said. "That's what led us to a SaaS-type offering of BI. We knew we could start smaller-scale and grow it at our own pace without having to make huge up-front investments or continue to have to add to in-house systems."
About a year ago, True Textiles replaced its on-premises analytics application with cloud software from San Francisco-based Birst Inc. to get quick data analysis around sales, operations and quality control, Cowan said.
"It's been very advantageous to be able to distribute reports to the masses on a daily, weekly and monthly basis, and it's been very cost-effective," Cowan said. "Our time to implement was very short; I think we had our first major sales components up and running in a couple of weeks and delivered out to the sales force in the field in very short order."
This ability to bring real-time data to customers has been a major plus, Cowan said. "If this were all internal, we would have to deal with a variety of different network connections, security, all the additional overhead," he said. "From a mobility standpoint, what's been really nice is that this information is available from anywhere, as long as the person can remember an ID and password."
SaaS BI taking hold at the departmental level
Businesses like DMA and True Textiles fit the profile of the growing number of companies seeking BI offerings in the cloud. Current SaaS BI products are mature in terms of features, scalability and support, said James Richardson, BI research director at Stamford, Conn.-based Gartner Inc. A recent Gartner survey of 1,364 IT managers and business users of BI platforms showed nearly 30% are using a SaaS BI product already or plan to in the next 12 months.
More about business intelligence strategies
In some cases, cloud-based BI tools are replacing on-premises BI, but businesses more commonly are using them to augment those systems -- often for urgent tactical needs.
"Business users are often frustrated with long deployment cycles, high costs, complicated upgrade processes and the IT infrastructures demanded by traditional BI solutions," Richardson said. "SaaS and cloud-based BI offer a quicker, potentially lower-cost and easier-to-deploy alternative." While cloud-based BI has proved particularly popular in small and medium-sized businesses, it also is taking hold in individual departments of large enterprises that lack or do not want to support internal BI resources, he said.
Let us know what you think about the story; email Karen Goulart, Features Writer.