Cloud-based business intelligence software can help customers respond quickly to market changes and avoid costly capital expenses.
Some customers may hesitate to trust the cloud, but many companies are finding a good fit with services from vendors including SAP AG, Host Analytics and Salesforce.com. Solutions providers skeptical of selling SaaS can look at cloud BI as a success story and even as an indicator of the future of IT.
For a look into what financial services and wholesale distributors are doing with cloud BI systems, we talked to Alan Fang, chief operating officer of ERP Logic Inc., an enterprise resource planning reseller. While primarily an SAP reseller, ERP Logic has transitioned to focusing on selling software as a service (SaaS) because of market shifts. The company has identified other SaaS software such as the corporate performance management (CPM) tool from Host Analytics, sales database tools from Salesforce.com and manufacturing software from Arena Solutions to round out its offerings.
Fang said that medium-sized businesses with at least $50 million in sales are the best prospects for these products and that the technology is especially attractive to professional services, wholesale and logistics, and manufacturing verticals along with companies that need visibility into financial market data using multiple currencies. In these areas, the immediate view into real-time data presents a big shift in the way the businesses operate and how they are able to respond to market shifts and customer needs.
What role does cloud play in your business intelligence practice?
Alan Fang: All of our business intelligence (BI) capability is cloud-based. Embedded in SAP Business ByDesign is its in-memory computing analytics software, SAP HANA. Gone [are] traditional on-premises solutions where companies dump data into an ERP reporting tool. Host Analytics is a SaaS product, and when you run the report, the data is real-time. For businesses with a time-sensitive approach, it allows line managers and executives to respond really quickly. Previously, you would use old data and a staff of analysts. Today with the cloud, the real-time data allows executives to make fast decisions. That's what we see the advantage being.
When your customers are looking at SaaS, why do they find cloud to be attractive?
A.F.: An on-site solution requires people to maintain data, hardware and infrastructure. Those are all resources you have to hire. Plus, there's the infrastructure management and cost around security, storage, backup and recovery -- which often requires a secondary infrastructure. All of that Capex goes away in a cloud environment. Our SaaS products are hosted by a vendor in a multitenant environment, so the money the customer would have spent on infrastructure goes away. This is a shift in how you do business in the IT environment. Companies in an SMB market should not build an IT group and be doing this for themselves, that's why we see a tremendous move to cloud BI and SaaS.
Are you seeing more customer acceptance of cloud BI systems? What are the hang-ups that
A.F.: One of the questions that customers always ask about is the security of their data. They may have concern that competitors can get to proprietary data. All the products are certified cloud solutions and audited by reputable firms. …We provide [customers] with information and show them how, when reputable companies do the hosting, it might be safer than them doing it themselves. Primarily we speak to COOs or CEOs, and they may not be that IT-savvy, so we have to help them navigate through what it means to be in the cloud.
Do customers have a choice about where the data in the cloud BI systems will reside?
A.F.: These are all hosted by individual software providers. Some customers may ask for a private edition. They can request that through SAP. The capability to perform that if they need it is there.
Are customers asking for features that aren¹t included in any of the systems you
A.F.: If you're a wholesale distributor, your supply chain can range from simple to complex. One thing we saw when we looked at financial consolidation was that SAP didn't tack the enterprise version into the SMB product. We see niches like that to fill with products like Host Analytics or Arena and give the customer the same cloud BI product that is offered by an enterprise-grade software package without spending millions of dollars. If ultimately there is nothing on the SAP roadmap that will fulfill the customer's needs, we work with the customer to find a product to help them with that problem or we work with them to change their business process to meet the existing standardized software offerings.
What could be improved in cloud BI software that would make it easier to sell, implement,
manage or administer?
A.F.: We had a prospect that was looking at Host Analytics and SAP's consolidation product. The Host Analytics solution was about a fifth of [SAP's price]. The implementation time could be measured in weeks versus months or years. Anytime we sell to a customer, there's a consideration of cost versus value, deployment timing and functionality. Any product that creates that value and gets that path to ROI for the customer is going to be the decision driver.
As far as improvements for administration and management, the less administration needed, the better. Software that really puts the administration in the business individual's hands is good. If it's a CPM solution, the total ownership should be in the finance staff's hands, not with the IT staff. If it's an operational application, ownership should lie with the operational team.
What do you think the future holds?
A.F.: The simplicity of accessing a large chunk of data without spending a lot of time synchronizing the data is the way of the future. …I think ultimately on-premises solutions will continue to exist. Your core business will be on-premises. But large types of enterprises, when they acquire small companies may not need to integrate them into their central IT systems right away, and they can run these edge subsidiaries in the cloud. I think the hybrid model is where business is going.
This was first published in September 2012