The other end of the extreme is where larger organizations create a shared BI support organization. That has negative connotations as well, or negative implications. Large centralized organizations inherently are bureaucratic with multiple levels of signoffs, and different conflicting priorities.
Things start moving slower so as a result business users who can’t wait, remember in the age of the customer, customers rule, and customers don’t wait. So if customers don’t wait, your business users, your business analyst are going to go back to their home grown applications.
Very often unfortunately we see that when you are already centralizing your BI support organization, you actually become less agile, and you proliferate the silos. So we offer some kind of a middle of the road approach where you get the best from both worlds. Absolutely empower individual contributors with self service BI tools so that they can produce up to 80% of their own BI content.
You definitely need to co-locate business and technology staff. That’s why off shoring and outsourcing only works very for repeatable, commoditized tasks like software maintenance, maybe communication writing, maybe regression testing etc., but not for this agile development and deployment.
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We recommend that you do not have the same teams that support areas such as ETL and data warehouses co-locate with the same team that supports data usage such as creating reports and dashboards. Separate them. Centralize your data prep teams. Empower IT to own those layers of the stack. But decompose and then federate BI usage support, and empower Business Users allow them to be independent.
Do not try to instill the same rules and policies and principles for your customer facing and non-customer facing BI applications. These have completely different requirements and tolerances for risk and accuracy and latency. So if you are a large global business, definitely try to centralize your financial and HR analytics.
Those requirements are pretty similar in your head office, but try to decentralize and federate your customer facing BI support for your customer facing BI apps such as sales and marketing. So basically think in terms of this hub-and-spoke environment for BI support which really has to mimic your business organizational structure.
So if your finance and HR are centralized, by all means centralize BI support for these organizations, but if your marketing is completely federated between North America and Asia Pacific because you market and sell different products to different customer segments then trying to create centralized or shared BI support for those organizations will just produce impediments.
The third pillar of Agile BI is all about a monitoring and learning what business people do. And as I mentioned earlier in the discussion business people tend to say politically correct things at meetings but then they go back, and they follow that path of least resistance.
They do what they need to do today to get their job done so monitoring their environments and creating this three tiered BI environment is definitely one of the best practices that we more and more have noticed is really making enterprises very successful. Empower your business users with their own sandboxes and when you create sandboxes literally think in terms of spreadsheets.
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What Are the Disadvantages to Outsource Business Intelligence Support?
Outsourcing business intelligence (BI) support can offer several advantages, such as cost savings, access to specialized expertise, and the ability to focus on core business functions. However, it also comes with a number of potential disadvantages that businesses must consider before deciding to outsource. Here are some of the key drawbacks:
1. Loss of Control
When outsourcing BI support, a company may lose some control over the processes and outcomes. External vendors may not always align perfectly with the company's goals, culture, or business practices. This can lead to discrepancies in how data is managed, analyzed, and utilized.
2. Data Security and Privacy Concerns
Outsourcing BI often involves sharing sensitive business data with third-party vendors. This can raise significant concerns regarding data security and privacy. Ensuring that the vendor complies with all relevant data protection regulations and standards (such as GDPR, HIPAA, etc.) is crucial, but there is always a risk of data breaches or misuse.
3. Communication Barriers
Effective BI support requires clear and continuous communication. Outsourcing can introduce communication barriers due to time zone differences, language proficiency, and cultural misunderstandings. These barriers can slow down the decision-making process and lead to misunderstandings about project requirements or outcomes.
4. Quality and Reliability Issues
The quality of BI support provided by an external vendor can vary. There is a risk that the vendor may not meet the company's standards or expectations. Additionally, reliance on an external provider can lead to issues with reliability and consistency in service delivery, especially if the vendor faces internal challenges.
5. Hidden Costs
While outsourcing BI support is often perceived as a cost-saving measure, there can be hidden costs involved. These might include costs related to transitioning services, managing the outsourcing relationship, or dealing with unexpected issues that arise during the contract period. Over time, these costs can add up and erode the anticipated financial benefits.
6. Dependency on the Vendor
Relying heavily on an outsourced BI provider can create a dependency that may be difficult to break. If the vendor goes out of business, changes its strategic direction, or increases prices, the company might face significant disruption. Transitioning to a new provider or bringing the services back in-house can be complex and costly.
7. Integration Challenges
Integrating the outsourced BI services with existing systems and processes can be challenging. There may be compatibility issues with the company's existing technology stack, requiring additional investments in integration tools or services. Moreover, aligning the vendor's outputs with the company's workflows might require substantial effort and adaptation.
8. Limited Customization and Flexibility
Outsourced BI providers may offer standardized solutions that lack the customization needed to address specific business needs. This lack of flexibility can hinder the company's ability to derive actionable insights that are tailored to its unique requirements. Customization requests can also incur additional costs and delays.
9. Potential for Lower Employee Morale
In-house BI teams may feel demoralized if they perceive that their jobs are threatened by outsourcing. This can lead to decreased productivity and engagement among existing employees. Ensuring that the in-house team is valued and integrated into the outsourced model can be challenging but is necessary to maintain morale.
10. Regulatory and Compliance Issues
Different countries and regions have varying regulations regarding data handling, processing, and storage. Outsourcing BI support to a vendor in a different jurisdiction can complicate compliance with these regulations. Companies must ensure that the vendor adheres to all applicable laws, which can be a complex and ongoing task.