Here are the facts: 85% of analytics projects fail to move past preliminary stages and 87% of data science projects never make it into production (Gartner).
So, how do you end up being in the 13-15%? You make the right decision when it comes to building versus buying.
When it comes to building and maintaining an analytics solution, there are three options:
- 1. Build it yourself internally
- 2. Build it yourself with assistance from a third party, like a consulting firm
- 3. Buy a context-specific, pre-built, configurable platform like analytic.li
Each of these options has its pros and cons. But today we are going to dive into the benefits of buying a solution like analytic.li. We will break this down by the three key benefits of buying:
- 1. Known Product
- 2. Known Price
- 3. Known Timeline
What is the product?
Less than 15% of all analytics projects reach completion, which also does not guarantee they hit the initial goal, stay on budget, and meet the given deadline. To determine if building a solution internally makes sense, you first have to ask yourself, what are the key results I’m looking for? Do I have a team in place or the capability to build a team that can deliver those results? And if the answer to those questions is unknown, then building a solution that is effective will be almost impossible.
Let's say your company is a national pet supply distributor. And your procurement department has purchased 5 semi-trucks of dog food for your distribution center in Sarasota, Florida. But that location only has seven to ten people working on a daily basis. So, when this shipment arrives, those employees get inundated with the delivery, with little time to complete other necessary tasks. These ten people end up working countless days in a row and incur quite a bit of overtime, become burnt out and don’t hit their productivity goals for the month.
Imagine if procurement, distribution and HR seamlessly worked together to make sure that Sarasota had enough people when the shipment arrived, and they could avoid overtime expenses, burnout and decreased productivity.
When you buy a known product that has been built to solve a specific business problem, like analytic.li, you can set a known goal, and get a known result. In our pet supply distributor example, we are more effectively solving the business’s problem of having enough people that are properly staffed and trained to hit their productivity goals, and balancing demand to labor.
At analytic.li, we have built a platform which empowers employees to take the next-best action by enabling the right person to do the right task at the right time, which improves productivity and efficiency, therefore leading to increased profitability.
But, is it secure?
Data governance, data quality, industry data compliance, encryption at rest and in transit, and personally identifiable information (PII) are all terms that are important when talking about data security.
Now let’s talk about data security through our pet supply distributor example if a solution like analytic.li wasn’t in place. Suzy, the HR manager, pulls various reports from her source systems to get staffing, applicant and order data. She wants to use these reports to properly staff her distribution center in Sarasota to support the orders made by the procurement department. By exporting her reports to an Excel spreadsheet and saving them to her computer desktop, she is risking the security of sensitive data which could potentially be stolen or hacked from her computer.
Anytime data is pulled from a source system into analytic.li, it is encrypted and never exposed. If Suzy were to use a system like analytic.li, she would not have to worry about the security, and she would not have to aggregate the reports from various source systems into a pivot table by herself to then save it on her unsecure desktop.
With analytic.li, there’s never a time where we are pulling data that it's not cloaked with security.
What does implementation look like?
At analytic.li, we have a team of experts who implement our solution every day. We live, breath, eat and sleep analytic.li and work with our customers every step of the way to ensure a smooth delivery of our platform. And, along with implementing the product, we also provide updates, improvements, added features and best practices to make your experience gets better every day you use the platform.
But, say Derek is the VP of IT at our pet supply distributor. Derek would need to have a dedicated staff to implement the software across all source systems, train users on the system and ensure a smooth delivery of all the system. Regardless if Derek needed to hire internally or externally to fill this role, this would be the first ever (and possibly last) implementation of this kind of project. And, with new processes and implementations can be a lot of room for error, unexpected expenses and unexpected results along the way.
Implementation isn’t easy. And, implementing an in-house solution with a team who lacks expertise and repetitions is even harder. With a known product and proven implementation team, success is guaranteed.
What about product updates and innovation?
Ongoing innovation and product updates are so important. Our team is able to receive input from a variety of customers in various industries and sizes and take that feedback to make updates quickly, providing a better experience for not just one, but all of our customers.
Internally building a solution means taking on the responsibility of ensuring and managing innovation, enhancements, security, governance, compliance, performance, uptime and bugs. That can have significant implications and significant cost if not done correctly or effectively.
What does it take financially to build and support an analytics solution?
First, it takes a team and dedicated resources to support the effort. Building your own analytics team could cost your organization close to $1 million, annually. But we’ll touch more on that on a later post.
To look at it simply, break down the cost into two areas: your people and your assets. Building your team has a significant cost associated with it. And, depending on how many team members you need to hire, it can cost $600k-800k annually, just to hire and pay a team to develop, manage and maintain the project. Then, on top of that, you need various assets like integrations, a data warehouse, a visualization tool, training, storage, and more.
Building with a consultant likely will have a lessor cost associated with it, but you lose out on the best-practices and team of people constantly maintaining and monitoring the platform. Once the build is complete, it is on the internal team to maintain the platform, therefore you will still need to have at least one person internally to support the security, maintenance and issues that may arise.
Buying a known product at a known price will be a fraction of the cost of building your own internal team, building your own product, or using a consultant to build it for you.
How much will the ongoing investment be?
If you build it internally, it is reasonable to expect that you will need to reinvest a significant amount of time, money and resources every two to four years.
When you buy an already existing platform, there is a known price that comes with the expectation that there will be system updates, improvements and innovation that is ongoing and delivered to the customer over the lifespan of the partnership. It also ensures that there is a fixed expense that can be budgeted for each year, without the burden of additional resources being spent on maintenance and upkeep.
How long does it take to build a solution?
When you’re building and implementing a solution for the first time, there are a lot of unknowns as you begin this brand-new project. You can make as many guestimates as you want, but the timeline will really be unknown until the project is “production complete”. It could take as few as 12 months, to as long as 4 or 5 years.
Working with an already established partner who has built it and implemented it hundreds of times, removes the guestimate. They can provide a true project plan and timeline that has been boiled down to a science with real expectations and deliverables guaranteed along the way.
What’s the result?
Just imagine what your day-to-day operations could look Iike… Imagine a world of real-time alerts and reporting on productivity and efficiency by customer, product line or shift, enabling managers to make timely critical decisions that impact the overall health of the business.
With a product like this, Suzy can easily make real-time decisions and avoid ten people working countless days in a row and incurring quite a bit of overtime, becoming burnt out and not hitting productivity goals for the month.
And a few months down the road, because of the action Suzy was able to take today, profits are up, productivity has skyrocketed, and overall employee morale has improved.
Now just imagine what a difference this data can make - knowing exactly what action to take to ensure you are hitting your targets, staying on budget, and monitoring your expenses - in six months, one year, or even five years from now.
To Build… Or To Buy?
Questions to ask yourself before you start:
- What is our goal?
- How do we determine if it’s successful or not?
- What timeline do I want this project complete in?
- What is my ROI if I build it myself vs buy a pre-existing platform?
- What impact will it have on my business?
In this post we have discussed various aspects of both building an analytics solution yourself, building it with a consultant and buying an already existing platform. It all comes down to asking yourself, what’s your objective, and how do you measure and determine success? At the end of the day it’s a simple question.
Buying an existing solution, like analytic.li, gives you a known product, a known price and a known timeline. It takes the guesswork out of the project and ensures success, ROI and resources you would not have when building a solution internally or relying on a consulting firm.
When you buy a solution from analytic.li, it’s not just a solution. We see ourselves as a partner, a solution, and someone who is invested in your success. Because the success of our customers means success for our team.
So, it’s time for you to decide: To build… or to buy?