How to Select a Business Intelligence Vendor

How ® Select a Business Intelligence Vendor to SAS Headline - Cover A comprehensive framework for evaluating vendors’ technologies, Kicker® alignment with customer needs, and corporate strength and stability A SAS White Paper Table of Contents Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Working smarter with business intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Business intelligence as a strategic asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The stakes are high and so is the hype . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 BI Vendor Selection Criteria — Technology Category #1: Comprehensive Business Intelligence Platform . . . . . . . . . . . . . . . . . . . . . . 6 What is a comprehensive BI platform? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Streamline the IT portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Key questions you should ask the BI vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 How the competition fares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Don’t take our word for it: Comprehensive BI Platform. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 BI Vendor Selection Criteria — Technology Category #2: Advanced Analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 What is “advanced analytics?”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Key questions you should ask the vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 How the competition fares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Don’t take our word for it: Advanced Analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 BI Vendor Selection Criteria — Alignment with Customer Needs Category #3: Organizational Reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 What is meant by “organizational reach?”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Key questions you should ask the vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 How the competition fares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Don’t take our word for it: Organizational Reach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 BI Vendor Selection Criteria — Alignment with Customer Needs Category #4: Customer Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 What factors into customer commitment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Key questions you should ask the vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 How the competition fares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Don’t take our word for it: Customer Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 BI Vendor Selection Criteria — Corporate Stability and Scope Category #5: Global Reach, Local Presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 What is global reach with local presence?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Key questions you should ask the vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Don’t take our word for it: Global Reach, Local Presence . . . . . . . . . . . . . . . . . . . . . . . . . . 28 BI Vendor Selection Criteria — Corporate Stability and Scope Category #6: Corporate Strength and Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 What factors into corporate strength and stability? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Why you should care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Key questions you should ask the vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 How SAS rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 How the competition fares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Don’t take our word for it: Corporate Strength and Stability. . . . . . . . . . . . . . . . . . . . . . . . . 31 Is “best of breed” the best approach? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Streamline your IT portfolio with a comprehensive BI platformand solution . . . . . . . . . 34 Don’t take our word for it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 How to Select a BI Vendor Executive summary In an otherwise stagnant software market, the worldwide market for business analytics software grew to $13 billion in 2003 and is expected to continue to expand at an even faster rate over the next five years (Source: IDC, Doc# 31837 ). Not surprisingly, business intelligence (BI) software has attracted attention from a crowd of vendors, each clamoring for their share of the pie. 1 The penalties for choosing the wrong BI vendor are significant, so it doesn’t help that the BI market is littered with conflicting, misleading and overstated vendor claims. To help cut through the clutter, SAS has developed a comprehensive framework that you can use to evaluate any and all BI vendors using criteria that are crucial to the success of your implementation, including measures of: • Technology (comprehensive BI platform and advanced analytics). • Alignment with customer needs (organizational reach and customer commitment). • Corporate stability and geographic scope. Why should you believe what SAS has to say about selecting a BI vendor? We’re not expecting you to. We’re simply offering a buyer’s guide to help you separate the reality from the hype, clarify some key areas of myth and misinformation, and provide factual information and third-party validation about how SAS measures up. Why would SAS offer what is essentially a challenge for self-evaluation, dimension by dimension, against other vendors who would position themselves squarely in the same leadership spot? The answer is, we’re confident in how we’ll compare. SAS is unique in being the only software supplier that can provide packaged solutions by industry and line of business to meet business intelligence requirements across an entire organization and to leverage the enormous investment companies have made in operational and enterprise resource planning (ERP) systems. SAS goes beyond other vendors’ narrow definition of business intelligence, offering end-to-end data management and analytic capabilities that can tell an organization not only where it has been, but where it should go next. We are the only vendor that enables enterprises to break through to a higher level of understanding and intelligence. But don’t take our word for it. Compare for yourself. SAS has developed a comprehensive framework that you can use to evaluate any and all BI vendors using criteria that are crucial to the success of your implementation. 1 “Worldwide Business Analytics Software Forecast 2004-2008 and 2003 Vendor Shares” (IDC, DOC #31837) 1 How to Select a BI Vendor Working smarter with business intelligence Today’s marketplace realities have rendered old ways of doing business obsolete. What were once reliable sources of revenue growth and services now can be copied within days. Mergers and acquisitions are no longer sufficient methods of gaining market share or growing revenue. Advances in technology, such as the Web, wireless devices and broadband communications, are rewriting the rules of the game in increasingly rapid cycles. And, your customers hold more power than ever with more information, more choices and higher expectations. One thing that hasn’t changed is the pressure to return value to shareholders— to enter and win new markets, increase profitability and cut costs. In an environment where the “low-hanging fruit” has long since been picked clean, your organization has to continually find new ways to survive and grow. The only way to accomplish this goal is to scrutinize every facet of the enterprise and determine how each function can be optimized to work smarter, respond faster to new challenges and contribute to your organization’s most critical objectives. What does it mean to work smarter? It means: • Developing a thorough understanding of your suppliers — who they are and what you are purchasing from each one — to negotiate better contracts, streamline the supply chain and minimize risk. • Measuring IT service delivery levels to ensure that your scarce IT resources are deployed as effectively as possible to support business strategies. • Evaluating financial performance, regulatory compliance and exposure to financial risk to create future value for your organization rather than simply making sense of what happened in the past. • Understanding how your HR policies and decisions can ensure that human capital is aligned with your organization’s strategic objectives. • Predicting changes in process, product and equipment performance to better align monitoring, control and improvement actions. Perhaps most importantly for organizations in the private sector, working smarter means developing a deep understanding of your customers, so you can devise effective strategies to retain them, cross-sell to them and make the most effective use of all available marketing channels. In fact, the true differentiator for any company trying to separate itself from the competitive pack is its ability to construct a single view of each customer. Using puzzle pieces obtained at each point of customer contact, the intelligent enterprise can predict how customers will respond to offers and determine how to focus organizational resources to deliver greater customer value. Today it is only through practices like these — understanding the drivers of success in all facets of your organization, anticipating the impact of changes in key variables and measuring prog- 2 How to Select a BI Vendor ress toward both divisional and enterprise objectives — that you can consistently deliver the value that stakeholders demand. And it is only through intelligence that your organization can successfully incorporate those practices into the way you do business, achieving an overall strategic vision. Business intelligence as a strategic asset Unfortunately for many enterprises, software investments are not aligned with business objectives nor according to their potential for returning bottom-line value. SAS has found that a typical enterprise spends 90 percent of its software budget on operational and transactional software — and a mere 5 percent on software that actually helps them understand all that data. Effectively, this means the organization focuses inwardly on processing information, rather than on learning from the data to create competitive advantage in the market. Operational systems such as ERP and front-office CRM (customer relationship management) systems have been seen universally as “must haves,” but for companies seeking to secure a sustainable competitive advantage in today’s unforgiving marketplace, business intelligence now falls into that “must have” category as well. Pressured to show greater quantifiable and strategic value from IT investments, more companies than ever are turning to business intelligence to drive return on investment (ROI) from ERP and operational implementations by unlocking the wealth of information stored in these systems. Even in a down economy, companies have learned that it doesn’t make sense to withhold investment in areas that are going to show positive and rapid ROI. And, although overall IT spending has been flat, the worldwide business analytics software market continues to grow, reaching $13 billion in 2003, and is expected to expand at an even faster rate over the next five years (Source: IDC, Doc# 31837) . 2 For enterprises seeking to work smarter, there are, however, some hidden dangers in this growth trend. 2 “Worldwide Business Analytics Software Forecast 2004-2008 and 2003 Vendor Shares” (IDC, DOC #31837) 3 How to Select a BI Vendor The stakes are high and so is the hype As the business analytics market began to look lucrative, particularly relative to other more stagnant sectors of the IT market, many software vendors started to scramble for some of that revenue growth, whether or not they had the technology to back up their marketing hype. With practically every vendor claiming to be “The Market Leader,” it’s no wonder that decision makers question which vendors can actually deliver on the claims and promises they make. The stakes in choosing the right BI vendor are high. The cost of incomplete, inefficiently generated intelligence is astronomical — not only in missed revenue opportunities, but also in real cash outlays. Organizations have wasted great sums on niche software products and incompatible applications that: • Are hugely expensive to integrate and maintain. • Don’t provide one consistent version of the truth. • Leave decision makers doubtful of their output. So how can you separate hype from reality? You have every right to be cynical and every right to expect objective validation of vendor claims. You might even be asking, “Why should I believe what SAS has to say about selecting a BI vendor?” The answer is that SAS measures up on evaluation criteria where the competition will flinch. In a survey of 2,000 SAS users at the 2003 annual international SAS user conference, more than 95 percent of respondents said that return on their SAS software investment met or exceeded their expectations. So we have nothing to lose by offering you a clear framework that you can use to evaluate any BI vendor on criteria that are crucial to the success of your implementation. This evaluation framework addresses three categories, each with two dimensions: • Technology Does the vendor offer a truly comprehensive BI platform or just a point solution? Does the vendor offer true analytics or just query and reporting capabilities? • Alignment with customer needs Does the solution deliver intelligence across all functional areas and organizational levels? What is the vendor’s commitment to customer support? • Corporate stability and scope Does the vendor offer both global reach and local presence? What is the vendor’s track record of financial viability and longevity? In the pages that follow, we’ll define each of the six dimensions within these key categories, show why they’re important in selecting a BI vendor, deliver just the facts about how SAS measures up on that dimension, provide a snapshot of the competitive scene and offer third-party validation that we are what we say we are. 4 How to Select a BI Vendor Comprehensive BI Platform Organizational Reach Advanced Analytics Customer Commitment Corporate Strength & Stability Global Reach & Local Presence Figure 1: Six key dimensions to consider when selecting a BI vendor. Figure 1: Six key dimensions to consider when selecting a BI vendor. 5 How to Select a BI Vendor BI Vendor Selection Criteria — Technology Category #1: Comprehensive Business Intelligence Platform What is a comprehensive BI platform? As opposed to a point solution or packaged application, a comprehensive enterprise BI platform provides a complete, integrated, scalable framework for identifying and collecting organizational data, and for converting data into accurately, timely business intelligence. By definition, an endto-end BI platform includes elements for planning, ETL (extraction, transformation and loading), intelligent storage, query and reporting, and advanced analytics. Why you should care True business insight is about more than making smart investments in individual technologies. It’s about what happens when those individual technology areas come together into a synergistic system. BI success doesn’t just happen at the application layer. It depends on a chain of applications and technologies working together from a common data foundation to create a single, verifiable version of the truth. Deliver more than the sum of parts. A comprehensive BI platform integrates individual technology components into a single synergistic system. Information flow can then transcend functional silos, organizational boundaries, computing platforms and specialized tools. Decisions can be made rapidly, with full knowledge of underlying context and hidden interdependencies. Provide the foundation for reliable intelligence. In a 2003 survey of 2,000 active SAS users, 99 percent said accurate data was essential or important for delivering ROI from their BI applications (and 91 percent said SAS data access and integration capabilities were essential or important criteria in choosing SAS as their BI vendor). If a stand-alone product is the cornerstone of your BI framework, there’s always the danger of being unable to meet future needs because of shortcomings in essential data foundation elements and cross-platform data integration. Streamline the IT portfolio An April 2003 META Group METAspectrum vendor evaluation recommends that BI architectures be centered around vendors that can deliver comprehensive suites, making it easier for or3 ganizations to standardize on BI tools and meet future demands. With every vendor you add to the equation, you add an element of uncertainty and integration complexity — a potential “weakest link” that could break the chain, should that vendor change directions or disappear. SM 3 “Business Intelligence Tools and Platform Market METAspectrum Evaluation” (META Group, April 23, 2003) 6 How to Select a BI Vendor Key questions you should ask the BI vendor What exactly do you mean by “business intelligence?” Some vendors narrowly define “business intelligence” to focus on end user, ad hoc query and reporting tools, while others are simply referring to a data platform on which developers can build BI solutions. In fact, many BI platform vendors rank low on completeness of vision and typically offer packages that extend or complement ERP applications. The BI platform that these vendors offer should not be confused with the open BI infrastructure needed for custom data warehouses and more advanced, flexible BI applications. What exactly do you mean by “end to end?” BI is more than desktop query and reporting; it relies heavily on ETL, data quality, analytics and an open foundation of data sharing among platforms and applications. Some vendors claim “end-to-end” solutions but actually provide only a part of the picture or rely on partnerships or other relationships outside of their control to provide needed capabilities. How many vendors does it take to assemble a complete solution? Juggling vendor relationships can be the biggest liability to successful BI implementation. From integration to troubleshooting, multivendor implementations can be more costly and vulnerable than unified solutions — especially as mergers and acquisitions continue to reshape the vendor landscape. Will your solution simplify management of your IT portfolio? The solution should optimize the current IT budget in line with business objectives — while managing uncertainty and hedging against the risk of under-performing technology investments. What does your solution do for data quality? In a recent European survey commissioned by SAS, 66 percent of respondents said “dirty data” impacts profitability, and 74 percent were taking action to improve data quality. All major IT industry analyst houses recognize the importance of data quality to the return on BI investment, yet many vendors do not offer or integrate data quality into their BI tools and applications. How are components of your “end-to-end” solution integrated? A common, open architecture for managing metadata — the information about how data elements are obtained, derived, validated, updated and used — is essential for seamless interworking among platforms and applications. What is your market position, in real-world terms? Some vendors claim leadership in the overall BI market even though they have a presence only in one portion of the market, or they derive virtually all of their revenues from one segment (such as end-user query and reporting) while having little or no presence in another critical area (such data mining or ETL). Others include non-software revenues such as professional services and compare that figure with competitors’ software-only revenues. 7 How to Select a BI Vendor How SAS rates SAS has the most complete solution on the market for supporting the entire intelligence-creation process within all areas of a business — from corporate performance to HR to finance to sales and marketing. SAS provides an end-to-end framework for creating and sharing high-value enterprise intelligence, which we call the SAS Intelligence Value Chain. Our integrated, synergistic Intelligence Platform lets you focus on the weakest link of your intelligence value chain and make additional improvements over time – all while integrating with your existing infrastructures and processes. From data manipulation tools to business reporting interfaces and advanced analytic capabilities, SAS delivers reliable and easy-to-use technologies that leverage historical investments to drive immediate results across the organization. The Plan component of the Intelligence Value Chain provides proven, best-practice enterprise intelligence roadmaps, supported by integrated industry data models, project methodologies and consulting expertise to customize the solution. The integrated ETL platform aggregates data from currently incompatible data silos on any platform and any format. The Intelligent Storage platform efficiently stores and disseminates information for business intelligence and analytic requirements. The Business Intelligence component provides out-of-the-box, ad hoc query and reporting capabilities for different types of users across the organization — from statistical “power users” who need sophisticated behind-the-scenes control of underlying logic, to business users who need on-demand answers to real-world questions, to executives who need a high-level view of performance on key metrics. The Analytic Intelligence component is a dedicated, integrated framework for analysis and predictive modeling that leverages our award-winning data warehousing and business intelligence architecture to create and deliver accurate, strategic insights and differentiating business intelligence. Each component of the SAS Intelligence Value Chain adds incremental value to the IT organization. Synergies among modules make the total solution truly greater than the sum of the parts, as each module offers functionality that affects all other components in the integrated, end-toend intelligence architecture. Furthermore, SAS does not rely on external partnerships or other relationships that are not within our control to provide these capabilities. A comprehensive enterprise BI platform provides a complete, integrated, scalable framework for identifying and collecting organizational data and for converting data into accurate, timely business intelligence. Figure 2: The SAS Intelligence Value Chain represents SAS’ unique ability to convert data to intelligence through an integrated, end-to-end BI platform. 8 How to Select a BI Vendor No doubt your organization already has many elements of an intelligence infrastructure in place: data captured from businesses processes, data storage and manipulation capabilities, and various analysis and reporting tools, perhaps from multiple vendors. With SAS, you can optimize and extend the value of these existing systems while setting the stage for new levels of business intelligence not previously possible. The key is SAS’ unique ability to integrate multiple, disparate data sources and applications. An open metadata management facility provides common metadata services to SAS and other applications. The SAS Open Metadata Architecture delivers the power to integrate, share, centrally manage and leverage metadata (data sources, content, business rules and access authorizations) across the entire intelligence value chain. One metadata server supports applications across the enterprise, in an IT environment that supports multiple repositories and hundreds of concurrent users. Your programmers can quickly reuse metadata structures from your existing databases, eliminating the need to write and rewrite complex programs to consolidate metadata into one location. This common metadata environment provides for consistency and interoperability between applications while reducing complexity and potential for errors. Figure 3: One possible representation of a comprehensive BI platform incorporating data from numerous data sources into a data warehouse where it is prepared for use in analytics, reporting or other solutions. The entire process is supported by SAS’ Open Metadata Architecture. How the competition fares According to 2003 reports from key industry analyst groups, most BI vendors offer pieces of the enterprise intelligence puzzle but not a comprehensive BI platform. In all cases, you need to scrutinize vendor claims closely, because with so many “market leaders” around, there must be considerable latitude in their definition of “leadership” — and not every vendor defines business intelligence in the same way your organization needs it delivered. 9 How to Select a BI Vendor For instance: Several vendors tout their “complete” or “end-to-end” BI solutions, but in reality only offer small parts of the picture. One vendor calls itself “the leading provider of business analytics software,” yet actually focuses narrowly on ETL components. Another claims to be “the only vendor that delivers business intelligence, scorecarding and enterprise performance planning,” yet actually offers only limited ETL, query and reporting. Several vendors promote themselves on the basis of enterprise business intelligence suite (EBIS) capabilities, while at the same time are not even recognized as players in the business intelligence platform market. Some BI suites rely on non-exclusive arrangements with third-party vendors, some of which have limited track records and tenuous financial positions. One vendor claims the industry’s “most integrated BI suite” with “the industry’s best Web query, reporting and analysis,” yet is not recognized by the market or analysts as an extensible BI platform offering. A large ERP vendor claimed market leadership in April 2003 based on the rankings of a single analyst report, yet that same report cites their lack of advanced statistical features. Very few of that vendor’s installations are in neutral environments, and the company is not even acknowledged as a BI vendor in another recent analyst report. Don’t take our word for it: Comprehensive BI Platform “There is no other suite of products in the market that has the breadth of capability that SAS 9 can provide with the level of integration that underpins it. Put that together with the scalability and other features that the platform provides and we concur ... SAS has produced an enterprise-class business intelligence platform.” “SAS 9: The First Enterprise-Class Business Intelligence Platform?” (Philip Howard, Bloor Research, May 2004) ® ® “Regarding architecture, the interoperability through metadata with other best-of-breed SAS tools for extraction, transformation and loading (ETL), reporting and vertical applications gives SAS the edge over the competition.” “Vendor Scorecard: Selecting Software for Predictive Analytics” (Lou Agosta, Forrester Research, December 2003) “SAS has not only one of the broadest portfolios of business analytics software, but importantly holds market leadership positions in several segments of the market including data warehouse access.” “Worldwide Data Warehousing Tools Forecast and Analysis, 2003-2007” Based on 2002 market data (Dan Vesset, IDC, Doc# 29899, August 2003) 10 How to Select a BI Vendor “SAS is one of very few vendors that can accurately claim to have the necessary products to support an end-to-end solution capable of scaling to meet the functional and operational requirements of the whole business. ...SAS technology excels in complex business scenarios — areas that other BI vendors fear to tread.” “Integrated Business Intelligence: Delivering Intelligence Across the Enterprise” (Ian Charlesworth, Butler Group, April 2003) SAS earned the third-highest ranking in a Computer Business Review (CBR) special issue featuring “Top 10 Most Influential Business Intelligence Vendors, 2004” as evaluated by a team of journalists and sector analysts. “SAS, a name that’s synonymous with robust, high-end analytics, now offers a scalable business intelligence (BI) platform that delivers intelligence to a larger and broader constituency of business users.” Madan Sheina, consultant editor, BI technologies, Computer Business Review (CBR), July 2004 For the second year in a row, Intelligent Enterprise magazine named SAS to its “IT Dozen” — the editors’ list of the 12 most influential IT solutions providers in the development of emerging “intelligent” enterprises. Intelligent Enterprise magazine, IT Dozen Awards, December 2003 “Though each Dozen selection is made for different reasons, every company included excels in delivering solutions that bring higher value to customer relationships, enable greater visibility into enterprise business performance, and set the stage for affordable intelligent computing. SAS clearly excels in all categories and is very focused on enabling its customers to create ‘intelligent enterprises’ and give decision makers one version of the truth.” David Stodder, editorial director, Intelligent Enterprise magazine SAS and DataFlux (a wholly owned subsidiary) were named #1 in the Data Quality category and high in the categories of Business Intelligence, Analytics, Data Administration and Data Stores, and Data Integration — for product excellence, quality and overall value to the enterprise. DM Review independent poll of technology professionals, November 2003 SAS and its customer, Intellidyn, received Intelligent Enterprise magazine’s coveted 2003 RealWare Award for “Enterprise Data Integration for Customer Intelligence.” The 10th annual awards program honored IT vendors and their customers for outstanding, innovative achievements in using IT to deliver business value and real results. Intelligent Enterprise RealWare Awards, July 2003 “The RealWare winners are transforming business and enabling the intelligent enterprise. Together, SAS and Intellidyn have implemented a solution that harnesses the power of IT to deliver customer intelligence and to drive significant business benefits.” David Stodder, editorial director, Intelligent Enterprise magazine 11 How to Select a BI Vendor “Our customers rely on us for intelligence to make their marketing initiatives unique. And we rely on SAS to provide us with an end-to-end BI solution capable of quickly sorting and analyzing more than 200 million consumer records. SAS enables us to outperform our competition, which helps our customers to outperform theirs.” Peter Harvey, president and CEO, Intellidyn BI Vendor Selection Criteria — Technology Category #2: Advanced Analytics What is “advanced analytics?” Beyond historical query and reporting tools that merely tell an organization where it has been, advanced analytics are sophisticated technologies that incorporate predictive capabilities, including data mining, text mining, forecasting and optimization. Why you should care You need to know what will be, not just what was. In an uncertain economy, companies need to be able to predict and manage customer demand, not just react to it. They need to understand how, where and why costs are being incurred to be able to model the impact of cost savings and changes to business processes. Without predictive modeling, it is difficult or impossible to quantify the impact of business decisions. OLAP is not enough. Although OLAP (online analytical processing) tools deliver fast results in response to user queries, they operate from highly summarized data and therefore do not deliver the detail, accuracy and forward-looking insights that are achieved with more sophisticated analytic techniques. OLAP is a valuable part of the intelligence picture, but not your optimum source of competitive differentiation. Predictive insights deliver the greatest ROI. With advanced analytic intelligence — such as forecasting, scenario planning, optimization and risk analysis — uncertainty is reduced, variability is quantified, processes are refined and resources are optimally allocated. Ideally, the results of advanced analytics can be made available to users and applications throughout the organization, supporting better decisions to mitigate risks and maximize returns. Key questions you should ask the vendor What exactly do you mean by “analytics?” As mentioned earlier, in a generally flat software market, BI and analytics represent significant growth opportunities — so naturally, many vendors want to simplify the definition of “analytics” to match what they have to offer. Some vendors who claim to have analytics really just have descriptive statistics that summarize busi- 12 How to Select a BI Vendor ness data in reports — not the requisite ability to forecast, explore data relationships and model behavior. Does your solution provide predictive analytics? Predictive analytics deliver high value and ROI, yet most BI vendors either have no predictive analytics capability or lack the intellectual capital to apply predictive analytics into specific vertical and lines-of-business applications. Don’t be misled by simple query-and-reporting capabilities wrapped up in a flashy interface. Other vendors that claim to have predictive analytics actually offer only a single algorithm targeted to less sophisticated business analysts, with no options for tuning the model. Still others provide simplistic forecasting/time-series analysis but not robust predictive modeling, which should include various regressions, decision trees, neural networks and more. Is analytic power accessible to non-statisticians? Ideally, easy-to-use, wizard-driven, selfservice interfaces should enable users to do their own ad hoc query and reporting, guiding users through simple and complex analytical and reporting tasks without requiring assistance from IT. Do you have prebuilt models specific to my industry? Why reinvent the wheel if you don’t have to? Software that has already been optimized for your industry delivers higher ROI, sooner in the game. What are the options for manipulating information? BI tools typically only permit you to explore data based on predefined assumptions, using basic functionality such as drill, pivot, page, sort, filter and rank. Your quantitative analysts will require a broader range of sophisticated analytic techniques to produce quality intelligence. How much control does the solution offer for refining models? Some vendors claim to increase productivity and ROI by making it quick and easy to develop models. However, this black-box simplicity can cost the organization millions in lost opportunity, because it produces only fair models rather than highly customized ones that deliver more accurate intelligence. What are the options for presenting results? Huge data volumes make it difficult to glean insights from pages and pages of reports. Visualization techniques enable users to explore data visually to uncover complex relationships that might otherwise remain hidden, understand the results better, and share findings quickly throughout the organization. Does your solution allow me to obtain insights into my unstructured data? One of the biggest challenges to organizations today is converting unstructured data into meaningful information. Unstructured data is that which doesn’t fit neatly into information “containers” like tables and columns. Text is the most common form of unstructured data, but it also includes image, audio and video data. 3 “Worldwide Business Analytics Software Forecast 2004-2008 and 2003 Vendor Shares” (IDC, DOC #31837) 13 How to Select a BI Vendor How SAS rates For nearly three decades, SAS has been renowned for data analysis — and today SAS holds a 36 percent share in the data mining market. Our closest competitor only holds a 4.5 percent share (Source: IDC, Doc# 31472 ). SAS is the undisputed market leader in providing industrialstrength analytic toolsets for quantitative analysts, as well as packaged applications that make analytics accessible to non-statisticians. 3 Advanced analytics are sophisticated technologies that incorporate predictive capabilities, including data mining, text mining, forecasting and optimization. Going beyond other business intelligence vendors’ talk of drill, sort, filter and rank as “analytics,” SAS offers true analytical power that enables you to predict future outcomes of interest; to explore and understand complex relationships in data; and to model behavior, systems and processes. SAS offers horizontal analytic applications that support enterprise intelligence, customer intelligence, supplier intelligence, supply chain intelligence and organizational intelligence — as well as turnkey solutions for various vertical markets, such as financial services, pharmaceuticals, health care, retail, telecommunications, automotive and energy. Predictive modeling capabilities help you set the best pricing policies, optimize dealings with customers and suppliers, understand which initiatives are most effective and address numerous other organizational needs, such as fraud detection, failure analysis, predictive maintenance and risk management. Descriptive modeling helps you understand important relationships. For example, a retail organization could use descriptive modeling to reveal which customer segments are most similar to one another and how they respond to particular messages. You can also identify product affinities that distinguish which items sell well together and what the implications may be over time, over space and across new and existing outlets, consumers and markets. Forecasting capabilities let you accurately estimate future conditions and proactively prepare for them. You can use forecasting to identify optimal staffing levels, configure IT systems to more effectively meet existing and pending demand, and prepare ahead for trends in interest rates, stock prices, exchange rates, manufacturing costs and more. SAS provides the only forecasting software that can be integrated into existing systems, access all kinds of data sources and run on different platforms. Optimization capabilities can identify the most effective combinations of factors (such as customer/offer/channel) to produce peak results within known budgets and constraints. In a manufacturing or distribution environment, for example, optimization can determine which procurement strategies make the most economic sense, select the distribution routes with the lowest transportation costs, or juggle multiple resources to keep production projects on track and under budget. In short, organizations can optimally allocate all resources to achieve desired outcomes more profitably and on schedule, based on overall strategic objectives. Text mining allows you to use natural language processing to extract structure and meaning from unstructured textual data. With the integration of SAS Text Miner and SAS Enterprise Miner, SAS is the first software vendor to offer a complete data mining solution for analyzing both unstructured and structured data. By exploring and modeling large amounts of structured 14 How to Select a BI Vendor data as well as text-based data, organizations can uncover hidden relationships and patterns of information, enhancing their ability to make accurate, on-target predictions. Experimental design using SAS analytics enables you to understand the precise factors that influence outcomes. Accurately and efficiently quantify the effects of numerous different factors (such as color, message, image and component) on observed outcomes. Understand which factors are causing success or failure in marketing campaigns or manufacturing processes as well as other areas, rather than simply identifying which factors are correlated with the outcome. SAS Analytic Intelligence delivers the widest available portfolio of analytic algorithms, mathematical data manipulation and modeling capabilities, and can be applied to a large number of business problems, enabling you to choose the appropriate capability rather than compromising with a force-fit of lesser, poorly coordinated tools. SAS also provides a range of client interfaces and visualization techniques so that non-technical users, analysts and statisticians each have a workspace that is appropriate to their role so they can easily interact with their data, model business scenarios and send the output to hundreds of different devices. For more about user interfaces, refer to the next dimension in this evaluation framework, “Organizational Reach.” How the competition fares Other vendors have introduced solutions that resolve some of the challenges, but they leave holes. For example, most cannot run on mainframe platforms, which still hold vast data repositories for many corporations. Others rely on external applications for data cleansing, storage, and ETL capabilities—shortchanging their customers all the efficiencies and other merits of integration. Others provide limited analytic capabilities and no prebuilt models tailored for specific industries. One vendor offers nothing more than a robust regression predictive modeling algorithm targeted to less sophisticated business analysts, with no options for tuning the model. Most companies don’t want to be limited to a single predictive modeling algorithm. In contrast, SAS Enterprise Miner includes a range of highly flexible predictive modeling techniques such as neural networks, decision trees and memory-based reasoning, in addition to regression and numerous other predictive procedures in SAS/STAT. Several vendors’ products are solely OLAP-based. Trending and forecasting using OLAP cube data may not be very accurate, because the data is typically highly summarized. Analyzing summarized data on a single variable generates rapid responses to queries, but it is generally not as reliable as forecasts based on more detailed data, including multivariate forecasting (using multiple variables to predict future values). Another vendor has sought to expand into the BI market from its operational CRM roots by offering statistically-oriented data mining from a third-party analytics provider. However, the thirdparty offering is not as expansive as SAS, is notably complex for certain functions (such as realtime scoring), and its vertical-market templates are based on OLAP technology. The product doesn’t offer predictive modeling, preset data mining templates or behavior tracking. In the forecasting arena, many SCM (supply chain management) and ERP vendors provide simple forecasting methods for short-run tactical/operational planning, but none offer the more 15 How to Select a BI Vendor sophisticated econometric methods necessary to produce accurate forecasts many months or years into the future — a prerequisite for strategic planning. Some niche players may offer more forecasting methods than SCM and ERP vendors; however, they cannot scale to handle largescale forecasting problems, such as forecasting every product in every store in every location. SAS is the only large, commercial software vendor that can tackle forecasting at all levels of planning in large organizations. A June 2002 Seybold Group research report dealt a harsh report card on predictive capability for several analytical CRM vendors — giving one the equivalent of a “B” for “packaging a single predictive capability;” a “C” to another for its “rudimentary, arithmetic approach to prediction” with “predictive capabilities ... on the light side;” a “D” to another for not packaging predictive functionality (except the ability to integrate with partner products); and an “F” to a fourth for having no prediction functionality at all except promises to include it in a future release. If your organization has already invested in an enterprise system that is more operational than analytic in focus, you can use SAS to make up for its analytic deficiencies. For example, many customers produce forecasts in SAS and feed those forecasts back into their SCM and ERP systems, which are then primarily used for their tactical or operational management capabilities. Don’t take our word for it: Advanced Analytics “Based on vendor strategy, prospective buyers of software products for predictive analytics should pick SAS for its uncompromising dedication to data analysis.” “Vendor Scorecard: Selecting Software for Predictive Analytics” (Lou Agosta, Forrester Research, December 2003) “What separates SAS’ approach from the other leading business intelligence (BI) vendors is the capacity to understand, and manipulate, statistical processing, aka analytics.” In the report, Giga recognizes that very few vendors can provide the advanced analytic capabilities that SAS can, and has, for 28 years. “SAS Brings Something Novel to BI Analytic Applications: Analytics” (Keith Gile, Forrester Research, April 2003) In the annual Intelligent Enterprise reader poll, SAS was named winner in three categories: Best Data Mining, Best Text Analysis, and Best Predictive Modeling and Planning. Intelligent Enterprise magazine, September 2004 “SAS has always been known as a stellar provider when it comes to high-end analytic competencies. They have not only enhanced this feature set, they have also carefully tailored their deep analytics into the new SAS 9 platform to create a powerful new form of business intelligence...” David Stodder, editor-in-chief, Intelligent Enterprise ® 16 How to Select a BI Vendor “SAS Enterprise Miner is the only package among the five considered that can automatically perform all steps of the [predictive modeling] analysis... the only package where the full modeling analysis, from partitioning the data into training/validation files to building the model to drawing lift charts, was possible automatically, with lift charts from various models available on the same graph. ... Of all the packages, SAS Enterprise Miner is the most complete.” The American Statistician, “Review of Software Packages for Data Mining,” November 2003 SAS Text Miner took top honors in Datamation’s 2003 Product of the Year “Data Mining & Business Intelligence Category” with nearly half of the vote. SAS Marketing Automation also was recognized as the “Enterprise Application” Product of the Year. Datamation, May 2003 “Readers may have been impressed by Text Miner’s versatility, which is designed to help users locate and extract information from any number of unstructured text documents such as patents, warranty claims, client notes and customer e-mails… . Clearly our readers feel SAS software is delivering real value to their enterprises.” Chris Nerney, executive editor, Jupitermedia’s IT Management Channel (which includes Datamation) “We use SAS because it is a great analytical solution. With SAS, we gain knowledge that really tells us what drives our sales and what makes our forecasts work. SAS will continue to help Staples understand how our business is performing and where it’s going.” Alan Gordon, director of sales forecasting, Staples (a leading office supply retailer) “The longer we work with SAS, the more exactly we can predict demand.... Statistical applications and data analysis procedures are clearly one of SAS’ strengths.” Arne Ruban, product manager, Commerzbank (Germany) “We couldn’t be happier with the integrated SAS 9 analytics tools. We’re continually amazed by insights that were previously hidden, and we’re proving over and over that SAS is worth its weight in gold.” Patricia B. Cerrito, Department of Mathematics, University of Louisville ® 17 How to Select a BI Vendor BI Vendor Selection Criteria — Alignment with Customer Needs Category #3: Organizational Reach What is meant by “organizational reach?” Organizational reach refers to the depth and breadth of the solution’s applicability, where depth refers to serving users at all levels of the organization (providing appropriate interfaces and tools for quantitative analysts, business users and executives), and breadth refers to sharing business intelligence across functional areas and to a broad (and mobile) audience. Why you should care Today’s enterprises suffer from information overload. Transaction systems generate daily reports. Data warehouses and analytic tools let users slice and dice data in hundreds of ways. ERP tools collect data from all across the enterprise, and the deluge is compounded with information produced by desktop productivity tools and the Internet. How do you turn this data from multiple platforms and functional silos into cohesive, usable intelligence? How do you get the information to the right users, at the right time, to enable better decision making at all levels of the organization? Typically, a business process involves both analytical and business users — people whose backgrounds and needs are so different that IT has difficulty satisfying all their needs. Quantitative specialists need to explore and fine-tune the analytic foundations, but their colleagues might simply need to see or report on the results, without having to understand the underlying analytic processes. A BI solution should empower business users to create their own actionable, strategic intelligence, while quantitative users have the flexibility to fine-tune models and IT retains control over data integrity. The results of these analyses should be easily disseminated across all functional areas and organizational levels so everyone can promote the organization’s success. Key questions you should ask the vendor Can you integrate applications and data from functional areas? Truly integrated business intelligence encompasses data from every corner of the enterprise, from operational/transactional systems, multiple databases in different formats, and from all contact channels — from PCs to mainframes, interactive to batch. Is ‘intelligence’ available through all levels of the organization? You want to empower the largest user base — from workers on the shop floor to business users to quantitative specialists to executives — by giving them ready access to the insights they need to make better business decisions, in a format appropriate for their requirements. Through what channels can you deliver business intelligence to users? Most organizations will require Web-based reporting, interactive query environments, delivery of content via a Webbased portal or wireless devices, and publish-and-subscribe channel distribution of information through e-mail. A BI solution should provide all of these delivery options. 18 How to Select a BI Vendor Does your solution serve mobile users? With the latest wireless connectivity, business intelligence should be available when and where it is needed, thereby moving decision making closer to customer contact points and enabling users to make faster, more informed decisions with confidence. Can your system deliver real-time event monitoring and alerting? For some applications, it might be essential to have data captured from transactional systems matched against pre-existing rules and for appropriate users to be automatically notified of alert conditions in real time via their desktops or PDAs. Are you comparing your solution with current offerings from other vendors? If not, competitive claims might be misleading. For instance, while other vendors have had to give the nod to SAS for depth of analytics, some base their assessments of our reporting and end-user query capabilities on previous versions of the solution. With SAS 9, SAS has brought BI to the masses with highly user-friendly interfaces and capabilities. ® How SAS rates For nearly three decades, SAS has been accomplishing the hard tasks: developing a powerful, extensible, end-to-end business intelligence architecture and the industry’s most robust analytic suite. Now we’ve also done the easy part: making all that power and sophistication accessible to users who have little or no statistical background. Analytic tools and interfaces for a range of users. SAS creates a collaborative domain that links previously isolated specialists in statistics, finance, marketing and logistics, and provides the entire user community with access to company-standard analytic routines, cleansed data and user-appropriate presentation interfaces. Business intelligence clients can transparently reuse SAS analytical procedures without the users needing advanced skills in statistics or support from IT. Analysts and business managers can seamlessly integrate analyses of the past into accurate models and forecasts of the future. As information is collected and enriched into actionable intelligence, the content can be made readily available in the appropriate form for diverse audiences, in whatever manner is best suited to their roles and information requirements. SAS provides a full range of “out-of-the-box” client interfaces to suit all user types, enabling users to select the client tool that is most appropriate to their individual skills and analytic requirements. By supporting different users with one unified package, SAS business intelligence frees IT resources from the constant stream of ad hoc requests. Service quality improves too, because more people are empowered with relevant tools, able to get their own answers while IT retains control over the consistency and reliability of the data they use. With the new self-service interfaces available in SAS 9, SAS executives expect use of SAS at customer sites to grow to 80 percent of employees, opening SAS’ deep, rich analytic information to a much wider spectrum of users: ® 19 How to Select a BI Vendor • SAS Web Report Studio is a Web-based, wizard-driven report creation tool with step-bystep instructions and self-service interfaces. • SAS Add-In for Microsoft Office enables widespread use of SAS analytics within the comfort of Microsoft Office products such as Word and Excel. A BI solution should empower business users to create their own actionable, strategic intelligence, while quantitative users have the flexibility to fine-tune models and IT retains control over data integrity. These new query and reporting tools deliver the highest quality of information when and where it is needed to improve decision making for all employees. You can save, share, publish and distribute reports via multiple platforms and channels, including the Web, customized business portals, e-mail and wireless devices for better collaboration and shared intelligence. How the competition fares It is common among BI vendors today to find easy-to-use interfaces — Windows- or browser-based screens suitable for non-technical users, wizard-driven processes, ad hoc query and reporting capabilities, and such. It is equally common to find a diversity of report formats and outputs, customizable report templates and information delivery through Web portals, e-mail and handheld devices, e-mail and pager alerts. But the bottom line is, speed and convenience in getting information isn’t much help if the information isn’t as accurate as it could be, or if it isn’t presented in a way that immediately reveals content that is meaningful for your unique role. Unless the BI suite is based on a bulletproof foundation of effectively cleansed and consolidated data, open metadata for integration of diverse applications and data sources, and the broadest possible range of advanced analytics... you would just be getting speedy delivery of mediocre intelligence. Why not enjoy the advantages of a comprehensive BI platform — one that offers both the rapid, Web and wireless information-delivery model and the requisite data and analytics foundation for true business intelligence? A BI solution should empower business users to create their own actionable, strategic intelligence, while quantitative users have the flexibility to finetune models and IT retains control over data integrity. Don’t take our word for it: Organizational Reach “Whether an organization is looking to build or buy packaged analytic applications, SAS’ broad portfolio of business analytics software provides all the necessary components to address the needs of decision makers, analysts and information consumers at all levels of the organization. With the latest release, SAS — one of the leaders in the business analytics market — has added reporting tools to its already best-in-class data mining and data warehousing tools.” Dan Vesset, research director of analytics and data warehousing, IDC (quoted in sascom magazine 2Q 2004) 20 How to Select a BI Vendor “SAS is distinguished by the breadth and depth of their business analytics offerings. As a result, SAS technology and applications can reach across multiple levels of the organization, from senior executives to line of business managers to IT to knowledge workers in many diverse business functions.” Henry Morris, group vice president, Applications and Information Access, IDC “Through product development and acquisition, SAS has the breadth and depth to lead in delivering relevant solutions in key strategic IT areas, such as analytics, business intelligence and business performance management.” David Stodder, editorial director, Intelligent Enterprise magazine, December 2002 “It’s critical to provide business intelligence throughout the enterprise, not only to isolated groups. SAS enables all leaders to make more intelligent business decisions.” Tad Richard, vice president of Technology Development, Intellicisions Data Inc. “...implementing SAS 9 technology solutions end-to-end is proving beneficial for both business and IT users. Every employee at Ugine & ALZ could find a reporting interface that ideally matches both their strategic position and IT knowledge.” Kris Vranken, data warehouse program manager, Ugine & ALZ ® 21 How to Select a BI Vendor BI Vendor Selection Criteria — Alignment with Customer Needs Category #4: Customer Commitment What factors into customer commitment? SAS believes that customer commitment is shown through such activities as customer user groups, post-sale technical support and customer relationship development and recognition — and is marked by customer loyalty shown through customer annual renewals, repeat business and goodwill among customer IT staff. Why you should care Experts agree that customer service is just as important as the product itself in gauging a BI vendor. Enterprises make huge investments in business intelligence, and critical corporate objectives are dependent on BI success — objectives related to corporate productivity, profitability and viability. You need assurances that your BI vendor prioritizes customers’ needs (and in turn, the value of your BI investments) over their own short-term internal initiatives and financial targets. Appropriate levels of customer commitment result in quality software releases that have been shaped by user feedback, premium technical support and professional services, and, ideally, a direct relationship where the vendor accepts clear, one-to-one accountability for its solutions and the customer relationship as a whole. Key questions you should ask the vendor Will I be dealing with a vendor representative or a reseller? The scope of the vendor’s own internal sales force will tell you how much the company deals directly with customers and how much they outsource that critical relationship. What kind of support services do you offer? At minimum, you should expect graduated levels of technical support (including premium 24/7 support), customizable support packages and a rich set of educational and interaction opportunities. What are the organization’s capabilities and record for technical support? Any vendor can say they provide “excellent customer support” — while one may provide complacent or sluggish response and another offers enthusiastic, proactive engagement with customers. So you should look beyond subjective claims and get hard indicators of support quality, usually evidenced by customer satisfaction and loyalty metrics. What is the scope of your consulting arm, in both services and specialists? Successful BI implementations usually rely on expertise from the vendor’s professional services group to complement and extend the capabilities of your own IT staff. Determine what level of consulting resources will be available, with what expertise, on what timeline. What percentage of company revenue is reinvested into R&D? This figure is a good measure of the company’s commitment to customers. Publicly held companies are often forced to balance this customer-oriented reinvestment with its promise to maximize dividends to shareholders. 22 How to Select a BI Vendor Do you have active, formal user groups? Smart vendors actively support user groups and regular conferences of active users, knowing that these user communities provide high customer value, which in turn provides high value to a sincerely customer-centric organization. In what ways do your customers influence development and support activities? The best BI solutions are the ones shaped by customer needs in the real world. Look for a proven record of soliciting and incorporating customer input in development of new releases. Do you have customer references in my industry? You might not want to advertise to your competitors that you’re about to implement a BI solution that gives you a competitive edge, but you do want to know that your BI vendor has proven implementation experience in your vertical market. How SAS rates From the beginning, everything we’ve done at SAS has centered around developing and maintaining long-term customer relationships. So it’s no surprise that SAS enjoys a 98 percent renewal rate among customers, one of the highest customer-retention figures in the industry. A key factor behind this strong customer loyalty is that SAS has always reinvested a significant percentage of revenues in research and development to continue to improve our products. For example, in 2003 we reinvested 26 percent of revenues in R&D, twice the industry average. The result is continuous improvement in value and functionality for customers. Customer input into product directions. SAS has a long-term BI vision that has been formed with a great deal of input from users. Customer feedback is used to improve our support process, and we actively solicit user input for the software development process as well. The annual SASware Ballot gives SAS users ongoing opportunities to offer suggestions to be evaluated for inclusion in the next software release. Since starting this program, more than 85 percent of input received from the SASware Ballot has been implemented by our R&D team. SAS presents an annual User Feedback Award to users who provide exceptional assistance in perfecting SAS products. ® World-class support and services. We provide our customers with award-winning support services, such as 24/7 telephone technical support and a Web-based Customer Support Center. The online Customer Support Center provides always-on access to: technical support (search SAS notes, submit a problem, explore services, locate hot fixes), documentation, code samples, communities, software downloads (maintenance releases, upgrades), training (classroom and e-learning), news, tips, users groups, books, resellers, certification programs and materials, administrator services and other items of interest. A Datamation survey ranked SAS customer service near the top of all software companies rated. And, the Software Support Professionals Association (SSPA) twice has granted SAS its Software Technical Assistance Recognition (STAR) Award for Complex Support. You don’t have to read between the lines very hard to see that SAS is setting the bar for developing strong customer relationships, as evidenced by our 98 percent customer retention rate. 23 How to Select a BI Vendor You need assurances that your BI vendor prioritizes customer needs over their own short-term initiatives and financial targets. SAS provides ongoing knowledge sharing through training programs, seminars and user group events. We recognize our customers through published case studies and SAS-sponsored awards, such as our annual Enterprise Intelligence award. SAS users groups around the world are non-profit organizations open to all SAS software users, with no membership fee. These groups provide a forum for SAS software users to exchange ideas, explore ways of using SAS software and participate in activities of mutual interest. Annual international conferences bring together thousands of SAS users for professional development and networking. How the competition fares Turmoil in the software industry has made IT executives understandably uneasy about the implications for customer service. For example, ComputerWorld reported that when PeopleSoft acquired J.D. Edwards & Co. in August 2003, PeopleSoft promoted a pricey new licensing arrangement that offered unlimited user licenses — hardly a boon for customers that had only a few hundred users, for whom the proposed scheme was an expensive proposition for no gain. In contrast, SAS’ stability ensures customers of continuity and predictable value. SAS ranked 7th in CIO Insight magazine’s first Vendor Value Study. SAS was the only BI vendor in the Top 10, alongside such notables as Symantec, Adobe, Cisco Systems, Dell, Motorola and HewlettPackard. The study asked 1,300 CIOs whether vendors met their expectations for increasing revenues, lowering costs, solving business problems, meeting ROI expectations, meeting time/ budget commitments and providing quality and flexible, responsive service. Of the 41 vendors ranked, the closest BI competitors were SAP (No. 27), Oracle (No. 30) and PeopleSoft (No. 35). Don’t take our word for it: Customer Commitment SAS has won numerous awards from software publications for the quality and responsiveness of our technical support. More than 80 percent of respondents to our customer surveys have rated SAS technical support as “better” or “much better” than support from other software vendors. Another survey gave our technical support an overall rating of 4.23 on a 5-point scale. SAS was named 7th of 41 IT vendors rated by 1,300 CIOs — the only BI vendor in the Top Ten, with an overall score of 71.2 percent. The highest score in the survey was 83.1 percent, and the lowest score was 45.4 percent. The next-closest competitor, SAP scored 58.5 percent and the No. 27 spot. CIO Insight magazine, “Vendor Value Study,” January 2004 “One name that keeps popping up throughout the pages of the Leaderboard is SAS. 2002 was SAS’ debut on the Leaderboard and they’ve made the most significant strides of any of the vendors. SAS is highly regarded among the retail executives that we surveyed, and we expect that in 2004 they will be putting the industry stalwarts through their paces for the top spot.” (SAS was named No. 1 in the categories of Leaders in Overall Performance, Leaders in ROI, and Leaders in Quality of Support.) Joe Skorupa, group editor-in-chief, RIS News (retail information systems) 24 How to Select a BI Vendor “We believe SAS’ subscription-based business model is a valuable strategic asset that aligns the company’s interests with its customers. As a result, SAS’ staunchly loyal customer base has driven 27 years of sustained, profitable revenue growth.” Ed Maguire, assistant vice president, Merrill Lynch Global Securities, September 2003 “Other companies talk about being responsive to the customer. At SAS it isn’t an objective. It is a religion.” Peter Welbrock (who supervised a team of 200 SAS users during his tenure as business analyst at Purina Mills) “We chose SAS because of its proven track record in business intelligence, its top-notch support and its ability to deliver immediate value-add to our business strategies.” Jeffrey J. Aegerter, President and CEO, CAPITAL Card Services Inc. “SAS has an outstanding reputation for investing in their customers and they understand our strategic direction.” Douglas Berlon, group vice president and director of marketing, First Citizens Bank “Our close working relationship with SAS has generated real benefits for our company, helping us satisfy critical legal and regulatory requirements while positioning use for future success. It’s an honor to be recognized in this way.” John Nolan, vice president of Planning and Analysis for MCI — 2004 winner of SAS’ Enterprise Intelligence Award presented at the SAS Users Group International (SUGI) conference, May 2004 25 How to Select a BI Vendor BI Vendor Selection Criteria — Corporate Stability and Scope Category #5: Global Reach, Local Presence What is global reach with local presence? Global reach means the vendor has corporate offices in major markets and a global communications process for customer services and support across all your international locations. Local presence means the vendor’s products are localized and that the vendor has a high percentage of employees who are local citizens and speak the local language. Why you should care The BI vendor that offers global reach and local presence is able to consistently serve global markets and organizations while maintaining a high level of personalized, local customer service. With global reach, your organization receives consistent services and support across all locations, strengthened by the vendor’s access to global resources and global best practices, plus domain expertise based on many engagements worldwide. With local presence, the BI vendor can quickly mobilize to respond to local issues, and understands local market conditions, regulations, and compliance issues. And naturally, the company’s geographic scope is one indicator of its strength and stability. The established BI vendor with a significant global footprint is likely in more solid financial position than the start-up with limited geographic reach. Key questions you should ask the vendor What is the geographic reach of your organization? Some vendors will list the countries in which they have a customer or a reseller representative, rather than those in which they have a directly supported office. There is a difference between serving global markets and being committed to them. In what areas of the world do you have local presence? Ideally, you’ll want local offices that can mobilize for fast response, understand the local environment (especially regulatory compliance issues) and whose employees are fluent in the local language. 26 How to Select a BI Vendor How SAS rates Headquartered in the high-tech Research Triangle Park area of North Carolina, USA, SAS has more than 9,000 employees working in 283 offices in 51 countries to bring our business intelligence offerings closer to our customers’ locations. Nearly 50 percent of these employees are stationed outside of North America. In North America, SAS customers represent 97 of the top 100 companies in the 2004 Fortune 500 and 97 of the top 100 companies listed on the 2003 Forbes “Super 500.” Worldwide, more than 4 million users depend on SAS software at more than 40,000 sites in 109 countries. Our worldwide presence enables our local domain experts to better understand business scenarios and goals unique to your geographic location. For global organizations, you know that whether your offices are in Toronto, Mexico City, Heidelberg, Singapore, Sydney or Tokyo — all users can depend upon the same consistency of services and support. In 2003 — while most software vendors were slashing budgets and closing offices — SAS increased staff by 6 percent worldwide and experienced strong growth on all continents, with 48 percent of revenue coming from the Americas, 43 percent from Europe/Middle East/Africa and 9 percent from the Asia/Pacific region. The BI vendor that offers global reach and local presence is able to consistently serve global markets and organizations while maintaining a high level of personalized, local customer service. Figure 4: SAS maintains 283 offices in 51 countries throughout the world. 27 How to Select a BI Vendor Don’t take our word for it: Global Reach, Local Presence SAS is not just present in international locations, but committed to them with the same vigor that earned the company its reputation in North America. For example, SAS UK and SAS Japan have been named by local organizations as one of the best companies to work for in their respective markets. SAS is recognized among the Leaders in the 2004 METAspectrum evaluation of ETL tools. The report says, “Leaders also have demonstrated international aplomb by language-enabling products and establishing beachheads in numerous countries.” “ETL Tools METAspectrum Evaluation” (META Group, April 2004) SM SM “Despite the challenging economy over the last few years, SAS has worked hard to bolster R&D and customer-facing operations around the globe.” Vivek Gokarn, managing director, SAS India “We’re pleased to have SAS’ help and volunteerism ...we were impressed by their enthusiasm and coordination in driving and leading the program.” Justine Leung, Hong Kong Family Welfare Society on SAS Hong Kong’s organization of an outing for single-parent families 28 How to Select a BI Vendor BI Vendor Selection Criteria — Corporate Stability and Scope Category #6: Corporate Strength and Stability What factors into corporate strength and stability? Corporate strength means the vendor shows consistent revenue growth and profitability over time and operates on a strong and predictable revenue model. Corporate stability means that the vendor reinvests generously into R&D, retains key talent and is not plagued by layoffs/ downsizing. Why you should care Investing in BI solutions is a major commitment, and your BI vendor is a strategic supplier for the organization. The wrong choice entails major risks. What would you do if your BI vendor is forced to scale back product development during lean times, gets acquired by another company that has divergent directions, or worse, goes out of business? The recent flurry of mergers and acquisitions among BI vendors has sparked some well-deserved concern. The newly formed entities will claim the advantages of their converged resources, but often the merger actually does little to reduce the size and complexity of the customer’s IT portfolio; key talent has been lost in the process, and the vendor must devote significant time and resources to the inevitable problems of dovetailing two companies. A track record of corporate strength and stability is a good indicator that the vendor is not only big enough to serve your complex, multilocation organization, but that it will be there tomorrow. And when a company is consistently profitable, it can weather economic downturns and continue to focus on meeting customer needs and investing in technology innovation. Key questions you should ask the vendor How long has your organization been in business? The annals of software history are full of start-ups that offered technically inventive solutions and then disappeared almost as quickly as they appeared. With top executives looking more cynically than ever at ROI from IT investments, you can’t invest in uncertainty, no matter how convincing the technology might be. What is the ownership structure of your organization? Public companies are potential targets for hostile take-over. As seen in the early 1980s, anyone with deep enough pockets can acquire a public company and do whatever they want with the acquired assets. Does your company own all the components in its BI solution? BI vendors that rely on OEM arrangements with third parties for portions of their solution face tough economic and technical challenges if those collaborative arrangements dissolve for any reason. Are you considering, or are you a target for, merger or acquisition? Declining revenues in a weak economy have forced some companies to look for pairings to extend their BI offerings or market share. These mergers tend to cause integration issues for both companies and their customers. When a company is consistently profitable, it can weather economic downturns and continue to focus on meeting customer needs and investing in technology innovation. 29 How to Select a BI Vendor What revenues and growth rate have you experienced? Stability and proven record of customer success are key factors in reducing investment risk. A strong, stable vendor has the comprehensive infrastructure needed to serve the world’s largest businesses, as well as the financial and employee stability needed to be a strategic supplier to these organizations. What’s your company’s track record on layoffs? Employees who feel secure and appreciated can focus their energies outward, on fulfilling the corporation’s mission, rather than on self-preservation and morale. How SAS rates Founded in 1976, SAS is the world’s largest privately held software company. With 28 profitable years in a row and annual revenues of more than $1 billion and growing, SAS has the depth of resources to sustain excellence in product development and customer support — even as lean economic times have forced other vendors to compromise or consolidate. In 2003, while other software companies were announcing layoffs and depleted revenues, SAS signed on more than 1,200 new customers, grew software revenue by 13.5 percent, and hired 300 new employees. With this financial strength, SAS has been able to consistently reinvest a significant percent of revenues in research and development to continue to improve our products. Year after year, we have reinvested at least 25 percent of revenues in R&D, twice the industry average, to continue to align our products and services with customer needs. With approximately 17,000 customer brands and more than 40,000 customer sites, it’s no wonder that SAS is known as one of the most stable BI vendors in the market. In addition, for seven years in a row, SAS has held a strong position on FORTUNE magazine’s annual list of the “100 Best Companies to Work For.” SAS held the No. 8 spot in the January 2004 rankings; the company has placed among the top 20 companies all seven years the list has been published — and in the top three for five years in a row. Our continued presence on the FORTUNE list indicates that SAS has been successful in maintaining a corporate culture that attracts and retains top talent, enabling us to constantly evolve our products and better serve our customers. 30 How to Select a BI Vendor How the competition fares Even though business intelligence provides a bright revenue spot in an otherwise flat software market, some BI vendors are still feeling the pinch of a down economy. For example, following a costly acquisition, one major vendor has laid off several hundred employees. Another has trimmed 15 percent of its workforce, including members of the engineering team that developed the latest release of its flagship BI software. The flurry of mergers and acquisitions tells the rest of the story. Seeking to extend their BI offerings or market share, some vendors are embarking on acquisition strategies that may weaken their cash base and erode their talent pool as they merge staffs. A lot of activity has been taking place, with Oracle making a bid for PeopleSoft, PeopleSoft making a bid for J. D. Edwards, Hyperion acquiring Brio, Business Objects buying Crystal Decisions, and Acta, General Dynamics acquiring Veriden. Other players are also up for sale or rumored to be. Amid this turbulence, one analyst has predicted that half of the software vendors that were in business in 2000 will be gone by the end of 2004 — either submerged within other organizations, reinvented or shut down. It has also been noted that recent consolidations hurt the positioning of some vendors by creating distractions, internal and external confusion, complex integration challenges and uncertainty surrounding the acquisitions. This forces companies to focus internally as they integrate their newly merged organizations and combine staff and products to remove redundancies. That effort leaves little time, attention or resources to address emerging BI trends and customer needs. Don’t take our word for it: Corporate Strength and Stability “While its publicly held rivals remain distracted by shareholder pressure, SAS can focus all its energies into the further development of its BI platform and analytics solutions portfolio.” Madan Sheina, consultant editor, BI technologies for Computer Business Review (CBR), in naming SAS to its “Top 10 Most Influential BI Vendors, 2004” SAS CEO Jim Goodnight was honored with the 2004 American Business Award for Best Executive. Jim Goodnight, president and CEO of SAS for the last 28 years, was recognized as a visionary in the industry with an Influential Leaders Award from CRM Magazine. This award spotlights the “movers and shakers” in CRM who have left an indelible mark on either their industry or their company over the past year. “It is strong leadership that helps drive results and we feel that Dr. Goodnight epitomizes this quality. Under Goodnight’s leadership SAS is not only the industry’s Analytical CRM Market Leader, but is a successful practitioner of CRM itself, with a customer retention rate of 97 percent.” Ginger Conlon, editor-in-chief, CRM Magazine, August 2003 SAS was named a “CRM Market Leader” based on its rankings in five weighted categories, including revenue, revenue growth, market share, customer wins and reputation for customer service. CRM Magazine, August 2003 31 How to Select a BI Vendor SAS is named one of Start magazine’s Hottest Companies of 2003, recognized for longterm leadership in data transformation and business intelligence as well as the company’s successful evolution in analytics and performance management. Start magazine, July 16, 2003 “Because of the company’s incredibly bright future (or for that matter present), SAS clearly leads the way among the companies included in our annual ranking. Of the nearly 100 entries we received, SAS was one of two unanimous choices — making it truly one of the hottest of the hot technology providers for the manufacturing sector.” Peggy Smedley, editorial director, Start magazine SAS was named to Healthcare Informatics’ prestigious top 100 list, ranked number 37 overall in evaluation alongside 1,800 other companies based on account company size, information technology (IT) revenue for the 2003 fiscal year, number of employees and year of inception. Healthcare Informatics, July 2004 SAS was named as an “outperformer” — a company that has achieved a commanding market position and provides a best-of-breed product set — in a report of the competitive landscape, market issues and maturity of the BI sector. SAS was seen as an “outperformer” in the early adopter, market adoption and market maturity categories of integrated BI sector and was commended for continuing to grow and evolve product access and control. “Integrated Business Intelligence: Delivering Intelligence Across the Enterprise” (Butler Group, April 2003) SAS was named to the InformationWeek 500, a prestigious listing of the largest and most innovative users of information technology in the United States. InformationWeek, September 22, 2003 Is “best of breed” the best approach? A conventional strategy for attempting to convert data to quality business intelligence is to piece together technologies from different vendors. For example, an enterprise might cherry-pick products from the Intelligent Enterprise annual Readers’ Choice awards for favorite software packages, tools and platforms. With this type of approach, you could potentially end up with a dozen or more vendors to supply all the components of the total solution, including: • Intelligence: query and reporting; analysis tools, including clickstream analysis tools; data mining and predictive analysis tools; analytic servers; data visualization tools; packaged analytic application suites; and business performance management applications. • Integration: data movement and transformation tools, information retrieval and categorization, application servers, enterprise portal applications and platforms, enterprise integration middleware to glue it all together. 32 How to Select a BI Vendor • Infrastructure: database servers, operating servers, specialized data management, data storage, ERP application suites, systems integration/consulting, application development tools, design and modeling tools, and distributed systems management. • Collaborative commerce: customer intelligence, interaction management and relationship management applications, business integration middleware, and supply chain management solutions. Even though the individual components might each be prime choices, a highly diversified, multivendor strategy is a maintenance and integration nightmare. Integrating all those cherry-picked products is a time-consuming and non-value-adding activity. Furthermore, the whole platform is at the mercy of the weakest link. If one supplier scales back R&D, gets acquired or merges — or goes out of business — it affects the entire intelligence value chain, the organization’s competitiveness and of course, the bottom line. For that reason — and to control spiraling costs — many companies are seeking to consolidate their BI portfolio around one or two strategic vendors. Streamlining the IT portfolio makes sense for simpler integration, training and maintenance, but you should carefully assess the vendors you choose. Many companies are turning to their operational software vendors to meet their BI needs, even though those companies’ BI offerings may be immature and unable to deliver the expected ROI. Alternatively, it may make sense to consolidate query, reporting and analytical requirements around one vendor. In theory, consolidating on one analytic intelligence provider would avoid the problem of “information silos,” whereby different BI solutions interpret data differently and come up with different figures. However, true integration and dissemination of intelligence across organization areas requires a foundation of common metadata and data management, not just a common application layer. Consider also that packaged, “black box” analytic applications, while they might be up and running quickly, cannot be integrated to deliver a holistic view of corporate performance, which is a key value of a traditional BI toolset. And sadly, integration problems are not just appearing among packaged analytic applications acquired from different vendors. Given the current wave of consolidation in the BI space, integration woes can even crop up in single-vendor implementations. 33 How to Select a BI Vendor Streamline your IT portfolio with a comprehensive BI platform and solution SAS resolves these issues with an integrated, end-to-end business intelligence solution built on its own intelligence platform. In fact, SAS is the only vendor that can provide this type of endto-end business intelligence solution. Other vendors can satisfy special niches, vertical markets or user categories. SAS inter-works with those third-party and legacy solutions and binds them into a comprehensive whole that spans the needs of the organization, rather than specific users or functions. With SAS, there’s no need to piece together so-called ‘best-of-breed’ solutions from multiple software vendors — or grapple with the integration risks that can be the biggest liability of multivendor implementations. By focusing on IT projects and infrastructure that deliver a demonstrable return on that investment — rather than spending valuable resources on integration issues — CIOs can jumpstart the evolution of IT from a tactical cost center into a strategic value center. Don’t take our word for it “A key part of this [consolidating a BI environment] is understanding the business benefits of making the leap from a BI environment consisting of best of breed technologies to one based on a common BI platform from a single supplier.... The newly developed SAS Intelligence Platform provides an integrated framework for BI system development. Comprehensive support for industry standard metadata interchange, industry standard metadata storage, role-based BI toll clients and integration APIs make it a strong candidate for enterprise-wise BI deployment.” “Reaping the Benefits of Integrated Business Intelligence: Introducing the SAS 9 Intelligence Platform” (Mike Ferguson, Intelligent Business Strategies Ltd., May 2004) ® Regarding Cost of Ownership as single vendor: ”Nobody has as wide a range of business intelligence solutions as SAS.” “SAS 9: The First Enterprise-Class Business Intelligence Platform?” (Philip Howard, Bloor Research, May 2004) ® Regarding Cost of Ownership as improved manageability through a single metadata environment: ”Most other suppliers are trying to reach the same position as SAS. Many of them are years away from an integrated solution.” “SAS 9: The First Enterprise-Class Business Intelligence Platform?” (Philip Howard, Bloor Research, May 2004) ® “The breadth of tools and applications provided by SAS has the potential to enable organizations to decrease the complexity of software integration and ongoing maintenance costs.” “Worldwide Data Warehousing Tools Forecast and Analysis, 2003-2007” (Dan Vesset, IDC, Doc# 29899, August 2003) 34 How to Select a BI Vendor Summary Today’s challenging economic conditions make it difficult to gain and sustain competitive advantage. Clearly the question isn’t whether to implement a business intelligence solution, but rather how, and from whom. Unfortunately, making informed choices for “how” and “whom” is the hard part. With a multitude of vendors vying for a share of a lucrative new market space, it’s hard to separate fact from fiction. We hope this framework for selecting a BI vendor helps you cut through the marketing spin and vendor claims to identify the real issues and facts. Is it a “BI infrastructure” or is it really a point solution or extension of an ERP system? Is it “end-to-end” or is it a partial solution that must be integrated with other products that complete the chain? Is it really “analytics” or is it just query and reporting with a snappy interface? Is it a “predictive analytics suite” or just a single algorithm with no options for tuning the model? Is it truly “single-vendor” or does it rely on piecing together technologies from various third parties? If you adopt the evaluation framework set forth in this document, or something like it, you can’t be misled by overstated vendor claims. Built on nearly 30 years of SAS leadership and backed by unparalleled service and support, SAS 9, the latest release of our software, brings business and intelligence together in a whole new way. SAS has eliminated the complexity of sharing data and applications across your organization. Targeted interfaces align with individual business needs to provide intelligence in just the right business context. More than ever, SAS delivers strategic value throughout your organization by giving you The Power to Know . ® ® When you’re ready to take a closer look at what SAS business intelligence solutions can do for your organization, contact your local SAS representative or visit us on the Web at www.sas.com. 35 101667US_270299.0704