How to Spend Less on Business Intelligence

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

Business Intelligence is a hot area of technology investment and, correspondingly, overspending is on the rise in this strategic spend category. As companies seek to "granularize" reams of data to map business and customer trends, high demand and low pricing visibility have put vendors in the driver's seat. Here are several ways you can prevent overspending on your next BI investment:

  • Position the purchase properly. Proper positioning will yield 15-20% savings right off the bat. Be clear on the business problem you're trying to solve and the metrics for success. Also, don't go with an incumbent vendor without an objective price evaluation and selection process with multiple vendors.
  • Decouple pricing from ROI. Don't let vendors tie price to ROI. Aside from the fact that it has nothing to do with pricing, vendor ROI claims tend to be inflated.
  • Beware of the bundle. Vendors will tease you with high discounts for bundled packages, but this isn't always a wise investment. Break down the services/products in the proposed bundle, see which offerings you actually need and compare costs.
  • Identify implementation risks up front and decide how you're going to mitigate them. The enemy of IT spending is scope creep. Understand potential issues ahead of time and discuss with your vendor how you will get rid of or lessen these risks.
  • Beware of fixed-fee implementation. Fixed fees are rarely "fixed." Ask your vendor to bid implementation costs on a time and materials basis to understand true cost-to-serve.
  • Consider third-party implementation providers. These providers are often a better deal, especially those that have experience in your particular industry.

-- Jeff Muscarella, EVP of IT, NPI

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