The decision to invest in business intelligence tools requires a close look at the many benefits and costs.
November 15, 2005 | There is no denying that business intelligence (BI) tools have been one of the most important and vital implemented systems in the pharmaceutical industry. In the BI space, the talk no longer centers simply around data warehousing and reporting, but around insight and analytics. As a result, executives are increasing BI budgets to provide employees with what they really want -- easy-to-use, dynamic, ad hoc reporting with drill-down capabilities.
Making the decision to invest in a BI tool is critical and can be costly. In the pharmaceutical industry, these tools are mainly used as complementary resources for clinical management and sales and marketing systems, most of which have excellent database repositories but lack robust reporting. Big pharmaceutical companies such as Pfizer Japan, Bayer UK, and AstraZeneca use these tools to supply key executives with the reporting capabilities they require for speed and analysis. In sales and marketing, these tools generate tens of thousands of reports within seconds in multiple languages. In the clinical space, it means drug to market more quickly. More companies will join the ranks in adopting this technology as a necessity for doing business.
Why are these companies purchasing systems instead of building proprietary solutions in-house? These days, most companies prefer partnering with an expert IT solutions provider. A major concern lies in support -- the average programmer/business analyst only stays a couple of years at one company. Once the original development team moves on, so does the knowledge, leaving behind an unsupported and eventually obsolete system.
The worst thing that can happen to a pharmaceutical company is unnecessarily delaying drug to market. With so many variables in a clinical trial, delays are nearly unavoidable. Eliminating the grunt work to speed up FDA approval justifies the expense. BI tools cost $1,000 to $1,500 per license. The average number of licenses can range from 50 to 200 users. Some personnel will have authoring licenses (ability to create reports), whereas others have user licenses for basic analysis. Support fees run 20 to 22 percent of total licensing costs per year, including help desk support and software upgrades. Lastly, a firm must hire experienced staff, at $50 to $65 per hour per resource, to write custom code and data mart the databases interacting with the BI tool. This can run to hundreds of thousands of dollars in implementation costs.
BI vendors marketing to larger clients include companies such as Cognos, MicroStrategy, and Business Objects. These tools have ample functionality, although most clients use only a small fraction of it. Midsize vendors include Spotfire, QlikTech International, and Indepth.
There are several key questions to consider before splurging on BI tools. For example, what business needs will the BI tool resolve? Some benefits include standard and dynamic reports, speed, long-term financial savings, analytical capabilities, and workflow automation. Companies can retrieve and analyze data better and improve communication. Larger companies experience lack of synergy between divisions. IT divisions have the ability to bridge this gap, cut across groups, and make informed decisions for the good of the company. Resolving multiple needs would also help to justify such a large investment.
Keys to evaluating BI tools include interviewing other firms familiar with the tool. Customer satisfaction is always critical. A vendor who can deliver a system to meet 80 percent of a customer’s needs is pay dirt. Some off-the-shelf products only have 10 percent of usable functionality, yet a firm is paying 100 percent of the bill. Dashboard technology is vital to meeting the needs of a business. And in the likely event that the BI vendor uses an offshore development team, customization will be relatively cheap.
Will the system grow with the company’s IT needs? A BI platform built on an open and extensible architecture will ensure that it scales with the organization’s needs. Open technologies from leading programming languages such as .NET and Java enable such BI frameworks, although the components on the Microsoft camp are far more available and advanced in their visualization capabilities than their Java counterparts.
Should a company simply stay with their current development team? The easy path is to proceed as usual, using SQL programmers to fit the bill. Query statements are coded and go through weeks of validation and quality assurance to create static reports. In some cases, this is enough. Here again, there is no ROI, no strategizing, and no reduction in time or cost. BI tools clearly have an advantage. They are visual display screens within a performance management system that helps organizations get the information they need. It allows companies to navigate through a single screen and explore data points as needed in an informative and easy-to-use format. It conforms to the way work is done, not the other way around. As a result, both companies and users benefit from its flexibility, customization, and performance. Bridging to existing systems is quite effortless and allows for quick reporting and navigation using real-time data. Whatever the final decision, all companies want the same results: the best solution that fits their budget, resources, and business needs.
Michelle Zubatch can be contacted at: mzubatch@comcast.net.