Business Intelligence (BI) and Analytics are two of the fastest growing segments in today's IT market, due to the need to manage vast amounts of business and customer data being gathered. If IDC's estimates are accurate, revenues for BI and analytics will reach over $50 billion by 2016.
With demand for BI solutions higher that ever before, CIOs must be vigilant about preventing overspending on these investments. Below are four ways that many businesses commonly overpay, often as much as 20% over fair market value:
1. Accepting annual cost increases.
Support, maintenance and subscription renewal costs are typically increased every year. Know your rates, as well as fair market rates, and challenge any increases that are not justified.
2. Overpaying for software.
Software licenses are frequently priced well above fair market value by most vendors. But, companies continue to pay these inflated prices because they are inexperienced in BI purchasing and sourcing. Always compare prices and know the market value of all IT purchases before you buy.
3. Investing in large implementations.
Implementing a new BI project is a huge undertaking that can be very complicated and expensive. While they are sometimes necessary, try to keep the big implementations to a minimum or reconfigure them on a smaller scale.
4. Paying too much for system enhancements.
As businesses change and grow, their BI and analytics functions will need to evolve as well to keep up. System upgrades and enhancements are crucial so you must be prepared to spend the money when necessary. Just make sure you avoid paying over market value by knowing what upgrades you need and when.
Now is the time to begin planning your BI and analytics strategy and to figure out how you will decide what fair pricing for these investments should be. You can avoid wasting valuable resources if you plan ahead and develop a clear strategy.
With demand for BI solutions higher that ever before, CIOs must be vigilant about preventing overspending on these investments. Below are four ways that many businesses commonly overpay, often as much as 20% over fair market value:
1. Accepting annual cost increases.
Support, maintenance and subscription renewal costs are typically increased every year. Know your rates, as well as fair market rates, and challenge any increases that are not justified.
2. Overpaying for software.
Software licenses are frequently priced well above fair market value by most vendors. But, companies continue to pay these inflated prices because they are inexperienced in BI purchasing and sourcing. Always compare prices and know the market value of all IT purchases before you buy.
3. Investing in large implementations.
Implementing a new BI project is a huge undertaking that can be very complicated and expensive. While they are sometimes necessary, try to keep the big implementations to a minimum or reconfigure them on a smaller scale.
4. Paying too much for system enhancements.
As businesses change and grow, their BI and analytics functions will need to evolve as well to keep up. System upgrades and enhancements are crucial so you must be prepared to spend the money when necessary. Just make sure you avoid paying over market value by knowing what upgrades you need and when.
Now is the time to begin planning your BI and analytics strategy and to figure out how you will decide what fair pricing for these investments should be. You can avoid wasting valuable resources if you plan ahead and develop a clear strategy.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT cost reduction service
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