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Why
Is It Difficult to Purchase and Sell BI Products?
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Sherman
Ruan , Managing Director of Sunnet Technology (Aug 08, 2008)
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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.
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¡¡¡¡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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