Benefits and Challenges in Seeking Cloud-based Business Intelligence

The business intelligence (BI) industry is experiencing the next step in its evolution, and cloud computing is and will play a major role.

As more data and applications migrate to the cloud, numerous new data sources are being created. In addition, the explosion of mobile devices are creating new data sources, as well as expanding the overall need for cloud-based solutions.

Companies of all sizes have become increasingly aware that the data inherently found and created in their businesses has great value. And the need for those organizations to understand that data and turn it into actionable information will only continue to grow.

BI providers are adapting their tools to this new reality, and successful companies must now evaluate and act upon this opportunity. There are some companies that are quick to respond to this trend and are willing to take on any potential risks.

However, despite the fact that most businesses know about cloud-based tools and understand their benefits, few companies are currently using them in day-to-day operations.

In 2012, expect that trend to change as cloud-based business intelligence will gain additional traction and clout, especially among small and medium size businesses (SMBs).

To effectively compete against larger companies, SMBs have to provide a level of service that meets or exceeds its competition. These organizations often lack the employee bandwidth to quickly turn their data into actionable information.

As they reach the point where true BI is needed, SMBs will turn more to business intelligence solutions that can be quickly implemented and produce rapid results. Cloud-based BI tools will be a driving factor in this trend, offering lower costs, decreased entry barriers, and quick deployment.

So what should companies expect as they evaluate their need for a cloud-based BI tool? As with any new technology form, both pros and cons exist. Below are a few cloud-computing benefits and challenges that companies may encounter.

Scalability -“ Cloud-based or software-as-a-service (SaaS) solutions can be easily fit to companies of all shapes and sizes. This allows even the smallest businesses the ability to tailor a BI system to fit their needs and improve their businesses.

Easy of Entry -“ Traditional site-licensed software included a lot of upfront IT costs to get the system up and running. But with a cloud-based BI solution, that upfront cost is reduced because all hardware and software systems are located and managed remotely by vendors and service providers.

Cost -“ Cloud-based systems also allow companies to “rent” the software as opposed to buying a full license. This subscription-based approach can ensure that companies only pay for their organization’s usage.

Security -“ For many businesses, a lot of questions and concern still remain about the physical, network and external security of cloud computing platforms.

Emerging Technology -“ Cloud computing is still a newer segment, and companies will have to expect and adjust to unforeseen and unexpected glitches as the web-based platform matures.

Data Movement -“ Companies will also have to rely on data movement outside of their “four walls.” In contrast to an in-house system where connection time and access is typically reliable, cloud-based products depend on multiple systems (i.e. a vendor’s servers, ISP uptime, etc.) to complete day-to-day BI tasks.

Despite looming economic concerns, cloud adoption will continue its growth in the BI industry next year as security improves and companies recognize the platform’s true value.

The dramatic expansion of new data sources will not slow down anytime soon, and companies of all sizes will need BI tools to effectively and efficiently analyze their information to remain competitive. More importantly, the companies that respond fastest to their data will put themselves a step ahead in this information age, thus ensuring their success.

Chris Hagans is vice president of operations for WCI Consulting, a Dallas-based business intelligence firm that turns a company’s data into meaningful, actionable business information. He can be reached at [email protected].

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Richard Blanchard
Rick is the Managing Editor of Corp! magazine. He has worked in reporting and editing roles at the Port Huron Times Herald, Lansing State Journal and The Detroit News, where he was most recently assistant business editor. A native of Michigan, Richard also worked in Washington state as a reporter, photographer and editor at the Anacortes American. He received a bachelor of arts from the University of Michigan and a master’s in accountancy from the University of Phoenix.