Why Is It Difficult to Purchase and Sell BI Products?

 

Sherman Ruan , Managing Director of Sunnet Technology (Aug 08, 2008)

Introduction: This article has approximately 8,000 words. You have to spend some time in reading it calmly if you would like to. Otherwise, you may ignore it for the time being and come back when you are in the mood.

¡¡¡¡For the IT software industry in China, the application of business intelligence (BI) is still at a primary and weak stage, which has also been proved by the result of an IDC survey that only approximately 10% of the anticipants of the domestic market know BI. Then, what on the earth hinders the application and development of BI? Many people of the industry, in my opinion, are eager to know the truth. However, who has actually thought over the problem? There has been no an in-depth and clear answer to it so far. Based on my experience in the industry for over twenty years, I summarize the following five key factors relating to the problem.

One. Human Problem

1. BI is rarely known.
(1) The IDC survey reveals that "only approximately 10% of the anticipants of the domestic market know BI", that is to say, few people know BI and fewer use BI products, not to mention those who succeed in applying it.

(2) In China, a really mature, comprehensive and perfect BI product seems to be extremely rare, even unavailable (Refer to What is the Most Comprehensive and Perfect BI Product?), which is due to the fact that few people know BI and still less succeed in its R&D, sell it as a product and promote its application. Even those who know BI do not have a real knowledge of the value of its application, resulting in rare successful cases.
You can well imagine the application and development of BI in such an environment.


2. The value of BI product has not been fully realized.
(1) For developers or engineering implementers, the value of BI product lies in:

(a) the decrease of the development and maintenance costs. A perfect BI product that satisfies the needs of BI businesses can reduce development and maintenance costs, such as human resource costs, development period and maintenance time, and second development costs; and
(b) the increase of added-value. If a developer has rich "industry experience" in making full use of the value of BI product and can provide end users with solutions of BI application, a BI product will yield immeasurable added-value. (See What's the Real Value of BI? )

(2) For end users, BI application can help extract and integrate data and transfer them into valuable information to provide instant and effective analysis for the decision-maker of an enterprise.
The above two points reveal that neither decision-makers nor program supervisors in enterprises seriously and thoroughly consider and assess the value that a BI product can create, and therefore they do not recognize its value and use it, not to mention to make full use of it. As such, the value of BI product has not been fully realized. Actually, BI has very abundant contents and meanings. A well and deep understanding of BI product will make it possible to tell which businesses intended to be implemented fall into the field of BI and can be realized by BI. Only in this way can people enjoy BI product's value. However, people currently do not have such qualifications and insight, which seriously influences and hinders the application and development of BI product.

3. Software talents have "common shortcomings"

(1) Self righteousness and lack of self-knowledge. It's generally accepted in the domestic IT software industry that most of IT software technicians have the common shortcoming of considering themselves to be most smart and omnipotent. They believe that they can do what others can and even better and it is impossible for other people to do what they can not. Furthermore, they are not willing at all to learn and apply the BI products that are not of foreign brands because they fancy foreign products and believe learning domestic ones will not help with their prospects. They can not accept unknown BI products due to the "common shortcoming" although such BI products better suit their needs.

(2) Improper or distorted attitude. As mentioned above, although some people know or recognize BI, they do not have a proper attitude to learn from and communicate with others, and can not calmly and reasonably seek for and analyze the BI products that can really meet their needs. They fuss over the shortcomings of a BI product by reference to the advantages of many other BI products. They keep comparison, competition and self-torment, wasting energy, money and time and failing to find the BI products that they actually need.
Given such shortcomings, it is, in my opinion, extremely difficult to get them to purchase and use BI products.

4. Users lack knowledge of BI products.
(1) Users do not know which businesses can be done with BI products.
(2) While they know which businesses can be processed with BI products, they fail to extract and summarize business modes and key indexes (e.g., KPI) based on the above businesses and do not know how to solve the performance problems during the course of BI application. Even when they may have a good BI product, they can not apply it and realize its functions.
(3) Some people possibly do not have the above two problems, but they do not have a clear idea of BI products. After all, comprehensive and perfect BI products are very complicated and the application process of each kind of BI product is extremely different from each other, which may take a very long period to understand. To use a certain kind of BI product does not mean really understand various contents of a comprehensive and perfect BI product. Even after repeated inquiries, comparisons and selections and even continuous and repeated purchases of BI products, users may eventually find that the selected products seem to be incomplete and can not even satisfy the needs of current businesses, not to mention future BI needs. Such a common situation will shatter users' confidence in selecting and using BI products.

Two. Product Problem
It has been proved by practice that both domestic and foreign BI products, when used, appear to be incomplete, namely, they can not satisfy the increasingly changing BI business needs. The common problem is detailed as below:

1. Foreign BI products can not satisfy the basic, massive and various needs of Chinese reports.
The applications of foreign BI products, though advanced, focus on OLAP (data analysis), data warehouse, data mining and dynamic reports (with the crystal report as the typical one). While such applications are comparatively frequently used by some of the key industries in China, such as finance, securities, insurance, etc, the application of inquiry report is still the basis and theme for the majority of other industries. Inquiry reports are essential reports with Chinese characteristics, including algol Excel statistical analysis reports, algol dynamic reports <crystal reports> and algol Excel mixed reports. As regards the preparation and realization of the reports with apparent Chinese characteristics, foreign BI products are unable to deal with it at all.

2. Domestic BI products are imperfect

(1) Current domestic BI products can be categorized into two different types: (a). imitations of foreign products focusing on OLAP (data analysis). They have most of the functions of OLAP but they are not as exquisite and thorough as foreign products; (b). imitations of crystal reports, algol Excel reports or mixed products of both algol Excel reports and crystal reports. However, they are still single report instruments only.
(2) Neither of the two kinds of BI products seems to be complete in respect of the field of BI application. With their limited functions focusing on either OLAP or reports only, such products lack breadth and depth, that is to say, their functions are not exquisite and thorough enough. For instance, a mature and prime model community will have supportive water, electricity, gas and communications infrastructure. A more perfect community will also include complete surrounding buildings, like supermarkets, hospitals, kindergartens and excellent property management, such as security and cleaning services. Beautiful high-grade buildings are not enough because a partially excellent community is not complete, comfortable, convenient and safe.
It is because the functions of both domestic and foreign products are limited in BI application in China that users give up such products, make programs to achieve the functions that such products do not have or purchase other products to make them up, which increases the difficulties and costs during the implementation of programs and lead to the failure of proposed plans. As a result, there are very few satisfying and successful cases of BI application of domestic and foreign products.

3 It's difficult to conduct R&D of BI products in China, which results in constant failure.
(1) Many enterprises once invested substantial resources in the R&D of BI products, including large groups, such as Neusoft, UFIDA and Kingdee, and other numerous small enterprises. However, there is basically no complete universal BI product that can meet the needs in China so far.
(2) The BI products developed by extremely few enterprises are just imitations of OLAP instrument or report instrument, and they can not meet the needs of domestic BI business application, not to mention to stand the test of market. They are unable to satisfy the needs once used in the target industry and many half-done programs have to be given up. As such, few customers will purchase such BI products again for future programs.
The above problems make developers swiftly lose their passion and also hinder the sales of BI products.

4. BI products have some problems themselves.

(1) Usability. Both domestic and foreign BI products are inconvenient to use. Many applications or specific applications can be realized only by programming, which increases the difficulty of application or implementation and the requirements for the qualification of users, further seriously affects the mood of users and reduces the popularity of the use of BI product. Even when some BI products do not involve programming during the course of implementation, they still depress users with their too complicated manufacturing and implementation process.

(2) Stability (product bug). If computer errors and crashes are constantly encountered by users during the application of BI product but the vendor of BI products can not timely solve such problems, it will depress users' confidence as time passes by, which is relatively common in China.

(3) Performance. Although users can use BI products to make various queries, reports and analysis, the operating efficiency is very low due to the following four problems: (a). Such BI products do not use the best ways to achieve the results, so the process is unreasonable; (b). The technology and performance of BI product data drive is not good enough. For example, their performance is not different from standardized and universal drive technologies, such as ODBC, OLEDB and JDBC; (c). They lack the key technology to process massive data, such as complicated report relationship technology and code form conversion processing technology; (d).The data to operate the results are too large. The data warehouse has not been well set up. Such products have at least one of the four problems and since their performance are too poor, users can not accept the results no matter whether they are realized easily or hard. In particular, many BI products do not have such functions as super high-speed data engine, massive data processing or data warehouse.

(4) Second development. Most of domestic and foreign products are very weak in second development except for crystal report and BlueQuery BI products, which have several hundreds of API functions and nearly two thousand API functions respectively. Domestic BI products are especially weak in this aspect and even do not have such functions at all. However, the second development function is critical. BI product users depend on them to meet some unexpected, urgent, specific and special BI business needs, that is to say, when BI products themselves do not have the capacity to meet or process such business needs, users can solve such particular issues through the second development interface <API function>, so the powerful second development interface is a critical ring for further use of BI products. You can imagine the satisfaction level of BI product users and the result of implementation during the course of program implementation without such a powerful second development interface.

(5) Integration. The application of BI products are often inseparable with their corresponding business systems, that is to say, the course and results that BI products realize and the business system are usually integrated into one system or platform. BI products must be able to be seamlessly integrated with other products or business systems, which is a common requirement for most of the domestic industry applications. The symbol of the strength of the integration capability of BI products is in a Web environment whether BI products can be sealed as a control for use. Most of domestic BI products have such a characteristic, while in a non-Web environment, it is hard and even impossible for most of the famous foreign BI products to be embedded into other products or systems to form an integrated system or platform and users or end customers have to face two systems or platforms, which is very inconvenient and can not be accepted by end customers of many domestic industries.

Three. Brand
1. Some key industries have an unwritten "common rule". When some domestic industries, such as finance, banking and telecommunications sectors, have some BI business needs, they will consider the brand of BI products, but not their actual business needs. Why? It is due do an unwritten "common rule" among such industries: To select branded foreign BI products will protect them from being unjustly blamed for unsuitable purchase since they have no other choice if even the renowned foreign products fail to satisfy their needs. Whether they worship foreign goods or not, it is undeniable that such branded products indeed enjoy considerable customer groups and high recognition in respect of BI application in a certain field of these industries. As such, even non-branded BI products can better satisfy their needs, in particular, BI needs with apparent Chinese characteristics and have a higher performance cost ratio, they won't be selected, because the purchaser have to assume the liability if the program fails due to problems arising whether from BI products themselves or not when the chose non-branded BI products are applied during the implementation of the program.

2. Foreign BI products do not offer OEM. Generally, foreign BI vendors will not sell their products through OEM, so it's impossible for the middlemen who select such products to sell them in their own brands and integrate them with other systems or products for sale and promote their own brands, which is detailed as below:

(1) Because foreign BI products do not offer OEM mode, the application (or BI application) solutions BI product middlemen provide customers with based on foreign BI products can not be turned into systems or products with the middlemen's brands no matter how well they do.

(2) BI product middlemen can not integrate their own application systems (insurance system, taxation system, etc.) or products (OA, ERP, etc.) and foreign BI products into a system or product of their own brand and thus end users have to use two systems or products, which is unacceptable for end users.

Although the brands of foreign BI products are very famous, BI product middlemen who select such products will have difficulty in building their own brands and launching their own systems due to the above restrictions.

Four. Price

Currently there is a wide range of domestic and foreign BI products. Many BI vendors claim that their products "can do everything". However, the products are quite different in their functions and their completeness, which results in a great variety of price. As such, when selecting BI products, users often ignore their functions (namely their completeness) and do not consider what they can do, what results they can achieve and what the efficiency of the results are and it is hard for users to correctly choose products that suit their own BI business needs, which may be categorized into the following three aspects:

1. The products' functions are really complete, but the price is beyond or even far beyond the value of BI products they perceive. The completeness of BI product lies in its capability to satisfy such BI needs as various reports, data analysis (OLAP), data warehouse, massive data processing and EIS, etc.. And the price of such a product ranging from ten thousands to over one million is often more expensive than they imagine. Users who do not have a clear idea of BI value are not very willing and likely to spend too much in purchasing such BI products with complete functions, whether famous or not. As such, they are unable to purchase suitable BI products in need at little expense.

2. The functions of products are incomplete, and the promotion materials are misleading. To put it bluntly, some BI vendors make a misleading promotion of their products. Both the information on their website or other promotion materials include only some outline descriptions and some explanations of common theories, which are stereotyped except for some slight differences. They do not provide some actual and typical cases of the functions presented. It's very difficult to know BI and such general introductions will further puzzle the persons who are choosing BI products. Supposing such products are packaged with "the emperor's new clothes" or are sheep in wolf's clothing, potential customers will become extremely confused. In such circumstances, they have to relieve themselves by asking for a trial version with doubt and reluctance as if that they can really get to know the products with a DEMO. However, what can a DEMO do? If no training regarding a product with a different realization method is conducted and the DEMO has not been tested with complete BI needs, customers are unlikely to know its quality and their satisfaction levels. Even if a test is actually conducted, it can, in my opinion, only test certain aspects of the product because it is not likely for users to spend much time to check all aspects systematically and less likely to check its performance and its capability to deal with specific needs in a short time (Please refer to "Two. Product" for details). As such, users have no choice but to select cheap BI products based on the incomplete and false information on the websites or the promotion materials at hand and most of them finally discover that the products are quite far away from their expectations when applied during the implementation of the program.

3. Particularities of domestic software engineering. For much present domestic engineering, the expense of BI product is often misted with the expense of the whole engineering, but not separately listed in the programs of engineering as that of database and operating system and the product is not purchased separately either. Under such a mode, domestic software developers will find it hard and painful to select BI products when they accepting engineering, which is detailed as below:

(1) Before accepting the engineering, when the quoted engineering expenses have covered the BI product price
Engineering developers do not necessarily purchase BI products although BI application is a must for engineering. They will consider the following options: ¢Ù How much is the cost if the relevant functions are realized by programming? ¢Ú How much is the cost of using BI products? Possibly they will not make an in-depth detailed comparison, but undoubtedly they expect that the price of BI product is not higher than that of programming or their estimated price. Therefore, they will make inquiries regarding the price to be included in the quotation of the engineering. It's unlikely for a BI product vendor to quote a "bottom price" for an engineering of little reality. A "bottom price" offered by others does not necessarily meet the requirement of the developer. For example, supposing a budget of a program engineering is RMB2 million and over ten branches will use comprehensive BI products, namely over ten sets of BI products will be purchased, the cost, based on the present quotation and discount mode, will amount to over one hundred thousand and, in case of foreign products, a much higher amount, which is unlikely to be acceptable for the customer. It's advisable to abandon such an ordinary quotation mode and tie the benefits of the BI product vendors with those of engineering developers by applying the principle of "sharing profits and losses" with the developers. The price can be determined at a fixed percentage of the engineering expense. For example, for an engineering of RMB2 million, the cost of BI product will be only RMB200,000. The price can also be determined by way of expense sharing and the proportion can be 1:9, 2:8, etc.. In this way, the developers will no longer hesitate. However, such a flexible sales mode is currently very rare, and therefore BI product price will still influence the developers in their determination as to whether they will use BI products when accepting engineering.

(2) After accepting the engineering (the engineering expense does not include the budget of BI product)
At the beginning, the engineering developer does not consider the use of BI products and therefore does not have a budget for the expense, and after accepting the engineering, he discovers that BI products can help achieve better results of the engineering. However, he will think about how many extra expenses are needed and what price he can accept, which is "seemingly" not related to the quality of the product and its capability to meet the needs. As such, the price of the product becomes a key to the willingness of the developer to purchase BI products and apply them in the engineering.
It's due to the particularities of domestic engineering that many BI product vendors, especially foreign ones, sell their products by the way of discounted quotation and the sales price is unrelated to engineering expense and income, which is not adaptable to the special situation of domestic software engineering. No wonder that, even when they know BI products can yield a better result, they are reluctant to accept and select BI products due to the price of BI product which is much higher than they imagine.


Five. Services
Service is of special importance today when goods become increasingly similar. How can users' in-depth requirements regarding services be efficiently satisfied? How can services no longer depend on products? The IT software industry has attached more importance to such "service" idea. However, the "services" of both domestic and foreign IT software industries do no help solve actual problems, so users often have no one to turn to once they encounter difficulties, which can be summarized as below:


(1) Issues relating to bug: Bug is inseparable to both domestic and foreign products, that is to say, both of them are unavoidably exposed to the problem of stability. Users have to give up the product if BI product vendor can not solve the bug issue encountered by users, In particular, for those vendors who are not very popular, failure to offer timely services will make users feel more disappointed with their products.

(2) Issues relating to new functions: Needs change constantly during the implementation of engineering. It is common in China that new functions are required to satisfy new needs. Neither of foreign or domestic BI products can satisfy such varying needs. As such, if a BI product vendor fails to satisfy market needs, more commonly, to duly update product version, users may give up BI products and seek other solutions, which may make users lose confidence.

(3) Issues relating to service system. A perfect customer service system is very critical. It can swiftly and efficiently record problems users raise and give a reply and provide the user with excellent 24-hour-a-day services at call and a feeling of prestige. As such, if a BI product vendor, especially a rarely known one, fails to offer it and timely and efficiently solve the problems encountered by users, users' confidence in BI products will be influenced. The quality of the solutions to the problems and the royalty of customers is dependent on the quality of after-sale service. The difficulties and even impossibility for the vendor and developer to keep the same pace in the program also has a material effect over the application and promotion of BI products.


In conclusion, the obstacle that hinders the application and promotion of BI is insufficient knowledge regarding the real value of comprehensive and perfect BI products and the benefits from BI application. If people know BI as they do gold and jewelry, BI will be very popular. However, a person with no recognition of BI will refuse the product, even a free one. It will be impossible for such a person to purchase it. No wonder it is difficult in China for vendors to sell and buyers to purchase BI products.

 


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