Business intelligence (BI) solutions are costly, and embedded business intelligence solutions even more so. Why? Because embedded solutions have to do everything standalone solutions do as well as integrate with a host application (front and backend), provide ultra-flexible administrative controls, and support full-stack multi-tenancy.
Quick sidenote: this is one of the key differences between “SaaS BI” and “BI for SaaS.” SaaS BI, like all other software-as-a-service solutions, is a turnkey application hosted by the provider and made available via a browser. BI for SaaS, more commonly known as embedded BI, is an enterprise business intelligence solution designed to integrate with SaaS applications, becoming part of their product offering to end users.
So SaaS companies should be prepared to pay more for an embedded BI solution than the $3,000 general BI solutions are estimated to cost on average each year. The question is, how much more?
You may have noticed that software providers almost never list the sticker price of an enterprise-tier application on their website. This is so you and the vendor can first discuss what the solution’s value and ROI would be for your company, as both should be factored into any budget projection.
This is the five-step process for estimating your embedded BI project costs, complete with tips to help you avoid common pitfalls.
Step 1: Collect Price Quotes
Experienced software buyers will know this seemingly simple task can be riddled with surprises, so come to those initial calls armed with lots of follow-up questions regarding price. Be sure to cover:
- Scaling costs. Will you be charged by the user, server, or something else?
- Add-ons. Try to get a complete list of what is included in the contract price and what will cost extra.
- One-time fees. Will there be costs associated with your onboarding or launch, for example?
- Contract terms. Take note of the contract’s fine print regarding duration and cancellation.
Try to get as complete a picture of your projected expenditure as possible, and keep an eye out for flat-rate pricing options.
Step 2: Factor in Any Ancillary Products or Services
Launching an embedded BI implementation can, depending on your company’s circumstances and the BI solution in question, require any number of additional tools or services. This is the time to factor in those costs, which might include:
- Data warehousing or migration. If this will be your first time offering data analytics as part of your product, there’s a good chance your data sources will need some preparation before they’re ready for prime time. If users are confused by field names, overwhelmed with data tables, or frustrated because data takes forever to retrieve, your BI project will backfire. Be sure to give this aspect of the project the budget it deserves, even if it means investing in an ETL tool or data cataloging software.
- A consultant to assist with implementation and/or maintenance. Some embedded business intelligence solutions are easier to implement than others, and not all providers offer onboarding and upgrading services. Some may include these services in the price of the software while others charge a hefty additional fee. You may get a better deal with a third-party consultant, so shop around and keep those rates handy as you build your projections.
- Help training staff and/or business users. Again, some providers offer free training while others charge extra for it. Consider what it will take to get your staff building out a library of canned reports and dashboards in time for launch. What will your technical support staff need to prepare for customer questions? If you want to offer users live training sessions, will you need outside help or additional staff?
- Help crafting documentation and training materials for your end users. Embedded business intelligence solutions, particularly white label ones, often give application administrators a great deal of control over the software’s look and feel. This is great for user experience, but it can make it difficult to repurpose the BI provider’s documentation. Your implementation may look and behave so unlike the default that you have no choice but to build your own documentation library. Consider what resources this will require and factor them into your cost projections.
- Assistance in building and/or migrating your report library. Depending on how aggressive your launch date is, you might need a hand getting all your canned reports built in time. This is especially true if you’re transitioning from a homegrown analytics solution or legacy provider. There are a number of ways to migrate an existing library to a new system, but they all take some amount of time and expertise.
Step 3: Assess the Solution’s Total Cost of Ownership (TCO)
This step is intended to root out any lingering ownership and maintenance costs that have yet to make it into your projections. Check out our guide outlining the factors to consider as you calculate the cost of owning an embedded business intelligence solution. Personnel are often the trickiest to estimate, as it can be difficult to forecast what roles will emerge as you scale, so keep your numbers on the conservative side.
Step 4: Pick a Target Launch Date
Again, be conservative. Humans are notoriously bad at estimating project times and especially prone to optimism bias, so take these steps to mitigate planning fallacy as you pick your target launch date.
Your launch date is a critical component of the budgeting process because it marks the point at which you will begin recuperating costs.
Step 5: Project Your Returns
Now for the fun part. Since you’re going to be using the embedded business intelligence solution to increase the value of your product, begin drafting a new pricing model that takes the additional features into account.
Once you have a sense of your new prices, use past growth metrics to estimate how many subscriptions you could reasonably sell at each tier over the course of the first several months or years, depending on how extensive a projection you want to build. Be sure to factor in subscription upgrades as well.
At this point, you should have all the information you need to begin finding key price-comparison metrics, like your break-even point, required budget, and return on investment after time t for each vendor. Building these projections can be time-consuming and arduous, but the results may surprise you. Perhaps the most expensive solution actually saves you the most money in the long run!
Completing this five-step process for each business intelligence solution you consider will not only make it easier for you to compare on price but also help persuade stakeholders that the solution you choose is best for their bottom line.