Department of Computer and Systems Sciences

Rustam Aliyev

Business Intelligence for

Small Enterprises
An Open Source Approach

This thesis corresponds to 20 weeks of full-time work.

Abstract.
During the last decade, Business Intelligence (BI) became inevitable technological
advantage of the large enterprises which could afford to buy, implement and maintain BI
solutions. These days, small size enterprises which form 98% of all enterprises in the EU
have realised competitive and financial benefits of the BI. However, limited IT budgets of
small companies and BI’s high TCO (total cost of ownership) may cause power gap
between large and small enterprises persists to enlarge where latter will find it
increasingly difficult to compete. This paper explores open source (OS) approach to BI,
whether OS could be an alternative to the commercial solutions, and more important
whether OS BI provides cost saving. It defines and evaluates grounds that used for
comparison of OS and commercial BI solutions.

Keywords: business intelligence, open source, small enterprise, SME, cost-benefit

analysis

ii
Acknowledgements.
I would like to thank Ms. Maria Berghotlz for her tremendous support and
assistance in the preparation of this thesis. In addition, special thanks are due to
Mr. George Hodosi, whose comments were very important. I also thank Mr. Johan
Dahlin and Mr. Fatih Poyraz for their invaluable input.

iii
Table of Contents

1 INTRODUCTION ..............................................................................................................................1

1.1 BACKGROUND .............................................................................................................................1

1.2 BUSINESS INTELLIGENCE ...........................................................................................................1
1.3 NATURE OF SMALL ENTERPRISES ............................................................................................3
1.4 RESEARCH PROBLEM .................................................................................................................3
1.5 RESEARCH GOAL.........................................................................................................................4
1.6 RESEARCH METHOD ..................................................................................................................4
1.7 LIMITATIONS ...............................................................................................................................5

2 EXTENDED BACKGROUND .........................................................................................................6

2.1 OPEN SOURCE SOFTWARE .........................................................................................................6

2.2 INFORMATION SYSTEM EVALUATION .......................................................................................7

3 VALUING BI SYSTEMS ..................................................................................................................9

3.1 IDENTIFYING BI COSTS ..............................................................................................................9

3.2 IDENTIFYING BI BENEFITS THROUGH DECOMPOSITION ..................................................... 10
3.3 IDENTIFYING BI BENEFITS THROUGH ITS CHARACTERISTICS ............................................ 12
3.3.1 BI Functionalities .......................................................................................................... 13
3.3.2 BI Solution Maturity ..................................................................................................... 15

4 RESULTS AND FINDINGS ......................................................................................................... 16

4.1 COMMERCIAL BI SUITES ......................................................................................................... 16

4.2 OPEN SOURCE BI SUITES........................................................................................................ 17
4.3 INTERVIEW AND SURVEY OF BI CONSULTING COMPANIES ................................................. 19
4.4 EXPERIMENTAL SETUP ........................................................................................................... 21
4.4.1 System Overview ........................................................................................................... 22
4.4.2 Setup Results .................................................................................................................. 24

iv
5 ANALYSIS AND DISCUSSION................................................................................................... 25

5.1 COMPARISON OF BENEFITS .................................................................................................... 25

5.2 COMPARISON OF COSTS .......................................................................................................... 26

6 CONCLUSION ................................................................................................................................. 30

6.1 FUTURE RESEARCH ................................................................................................................. 32

7 BIBLIOGRAPHY ............................................................................................................................ 33

APPENDICES ......................................................................................................................................... 7-1

APPENDIX A. RAWAT’S CRITERIA FOR ASSESSING OS BI ........................................................... A-1

APPENDIX B. SURVEY QUESTIONS ................................................................................................ B-2
APPENDIX C. INTERVIEW AND SURVEY RESULTS ....................................................................... C-4
APPENDIX D. BUSINESS CASE DESCRIPTION ............................................................................... D-5

v
List of Figures

FIGURE ‎1.1. BUSINESS INTELLIGENCE DATA LIFECYCLE ....................................................................................... 2

FIGURE ‎3.1. CALCULATING NET BENEFITS, ADOPTED FROM PENG MODEL ..................................................... 9
FIGURE ‎3.2. TYPICAL COSTS FOR BI IMPLEMENTATION PROJECT..................................................................... 10
FIGURE ‎3.3. QUADRANT GRAPH FOR GENERIC BI BENEFITS CLASSIFICATION ................................................ 11
FIGURE ‎3.4. CRITERIA CATEGORIES FOR BI SUITE COMPARISON ...................................................................... 13
FIGURE ‎4.1. ENTERPRISE TYPES MAINLY TARGETED BY THE BI CONSULTING COMPANIES ......................... 19
FIGURE ‎4.2. CUSTOMERS OF THE BI CONSULTING COMPANIES ......................................................................... 19
FIGURE ‎4.3. COMPLETE BI SOLUTION FUNCTIONALITIES. ................................................................................. 20
FIGURE ‎4.4. AVERAGE COSTS OF THE COMMERCIAL BI SUITE IMPLEMENTATION ......................................... 21
FIGURE ‎4.5. DATA FLOW AND COMPONENTS OF THE EXPERIMENTAL SYSTEM .............................................. 22
FIGURE ‎4.6. SAMPLE TRANSFORMATION AND JOB IN PENTAHO DATA INTEGRATION ................................. 23
FIGURE ‎5.1. TCO OF THE COMMERCIAL AND OS BI OVER A FIVE-YEAR PERIOD ........................................... 28
FIGURE D.1. DOMAIN MODEL OF OPERATIONAL DATABASE .......................................................................... D-5

List of Tables

TABLE ‎2.1. COMPARING OPEN SOURCE SOFTWARE LICENSE TYPES.................................................................. 7

TABLE ‎2.2. COMPARISON BETWEEN EXISTING BENEFIT MEASUREMENT MODELS ........................................... 8
TABLE ‎3.1. BI FUNCTIONALITIES CRITERIA GROUP FOR BI EVALUATION ....................................................... 14
TABLE ‎3.2. SOLUTION MATURITY CRITERIA GROUP FOR BI EVALUATION ...................................................... 15
TABLE ‎4.1. COMPARISON RESULTS OF THE COMMERCIAL BI SUITES ............................................................... 17
TABLE ‎4.2. COMPARISON RESULTS OF OS BI SUITES.......................................................................................... 18
TABLE ‎4.3. ACQUISITION COSTS FOR EXPERIMENTAL SETUP ............................................................................ 24
TABLE ‎5.1. COMPARISON OF BENEFIT COMPONENTS FOR THE COMMERCIAL AND OS BI............................ 25
TABLE ‎5.2. COMPARISON OF COST COMPONENTS FOR THE COMMERCIAL AND OS BI .................................. 27

vi
1 Introduction
1.1 Background
Information is considered the most valuable asset of any organization regardless of
the size of that organization. Every operation that organizations perform generates
lots of raw data. For instance, a simple sale of any product could generate huge
amounts of data, like date of sale, price, discount, customer name, address, other
demographic details like age, gender, which sales representative sold the product,
when the product was manufactured, raw materials, supplier information, and so
on. This raw data has to be converted into useful information for the decision
makers in order to improve performance of the organization. Considering the fact
that there are numbers of different business processes within any organization,
there is a definite need of a sophisticated information system. Secondly, the
availability of the right information on the right time to the right person is another
most challenging goal for any organization.

Information systems researchers and technologists have built and investigated

different decision support systems (DSS) for approximately 40 years. History of
developments in this area began with data collection techniques in the late 1960s.
Later, in the 1970s, there were theory developments and the implementation of
financial planning systems followed by spreadsheet DSS in the early and mid
1980s. At that point what the system provided was simple data collection that
involved historical data referred to as information discovery. Ever-increasing
amounts of data resulted in the creation of Data Warehouses, Executive
Information Systems (EIS), OLAP (Online Analytical Processing) and Business
Intelligence (BI) in the late 1980s and early 1990s. Finally, the chronicle ends with
knowledge discovery techniques such as data mining, knowledge-driven DSS and
the implementation of Web-based DSS in the mid-1990s (Power 2007).

1.2 Business Intelligence

There exist many professional definitions of BI; however none of them is a
standard. Business Intelligence is rather an umbrella term for a broad category of
applications and technologies for gathering, storing, analyzing, and providing
access to the data (Turban, et al. 2006, 423). Definitions usually encompass
personal and group DSS, EIS, data warehousing, and knowledge management
systems.

1
 Data Sources Data Storage Data Analysis Results

Data
Internal Visualisation
Data OLAP,
Data
Queries,
Marts
EIS, DSS Decision
External Data Support
Data Warehouse
Data
Data Mining Knowledge
Personal Marts
Metadata and its
Data
Management

Figure 1.1. Business Intelligence data lifecycle, adopted from (Turban, et al. 2006, 410)

In Business Intelligence, transformation of data into information and knowledge is

generally accomplished through the process depicted on figure 1.1. It starts with
raw data extraction from sources. These data are transformed into new formats
(usually defined according to metadata) and loaded into data warehouses or data
marts. These first two steps are usually served by ETL (extraction, transformation,
load) software. Analysis tools access the warehouse and data marts to get pieces of
data they need. The analysis is done with data analysis and mining tools which
look for patterns, and with intelligent systems, which support data integration.
Finally, the result of these activities are presented to decision makers using
different visualisation techniques or stored in organization’s knowledge base
(Turban, et al. 2006, 410).

Throughout this thesis work we refer to the components mentioned above as a BI

components or BI functionalities. Software product which contains a number of the
BI components is referred as BI suite, BI system or BI solution. Finally, by BI
implementation project (sometimes simply BI project or BI implementation) we
consider complete BI implementation life-cycle from business case assessment to
production release and maintenance.

According to Gartner’s (2007) annual survey of 1400 CIOs worldwide business

intelligence became no.1 technology priority in 2007. It is important to mention
that BI is a multi billion dollar market dominated by giant vendors such as Oracle,
SAP, SAS and Microsoft.

Another recent trend in the BI area has been observed in the adoption of open
source software. In the past few years a number of open source players have
entered the BI market. With the success of open source business models, many
commercial organisations have elaborated strategies to capitalize on them (Lerner
and Tirole 2000). A very recent research conducted by Ventana (Ventana 2006)
shows that 83% of organizations are considering, are in the process of deploying,
or have already implemented an open source BI solution.

2
1.3 Nature of Small Enterprises
According to the European Commission (EC) definition (EC 2003) small business
are defined as an enterprises employing less than 50 people and having less than
€10M annual turnover or annual balance sheet total. At the same time, small
enterprises represent 98% of all enterprises in the EU and employ 40-65% of the
workers in the private sector of the Member States (EC 2007). Consequently, small
enterprises can be considered as economically and socially important players in
the EU countries.

Another EC report (EC 2006) states that only about 10% of small firms used
specific ICT (Information and Communications Technology) solutions for
marketing, sales and procurement compared with 20% of medium-sized and
almost 30% of large firms. The same report says: “SMEs (Small and Medium
Enterprises) still suffer from limited understanding of ICTs and their potential,
limited budget for ICT investments and difficulty in recruiting ICT professionals”.

Even though the majority of small businesses use ICT solutions daily, this usage
usually engage mainly internet and email access. Very few small enterprises use
computers in decision support roles (Gibson and Arnott 2003).

1.4 Research Problem

There are many considerations and risks that organizations have to evaluate
before the adoption of BI solutions and the most important factor is the cost. This
is due to the fact that BI solutions are very expensive, both to purchase and
maintain (Raden 2007). Although, there is no exact figure because the
implementation of BI depends upon number of factors like number of end users,
functionalities, and so on. In fact, mostly large organizations can afford BI
implementation where the investment cost could be millions of dollars and still fit
in budget. This huge amount of investment is certainly beyond the reach of
medium and especially small size organizations. According to Gibson and Arnott
(2003), small businesses are often faced with limited access of finances to support
the purchase of business intelligence.

Now, on one hand, we have a large number of small businesses who cannot afford
implementation of expensive BI solutions from industry leaders. On the other
hand, these BI industry giants cannot offer entry level solutions without changing
their business models.

The exploitation of BI technology is important in the development of the small

enterprise sector. In their research, Gibson and Arnott (2003) concluded that: “If
large organizations are going to continue to exploit the latest decision-supporting
technologies, and small businesses continue to tread wearily in terms of adopting

3
modern business intelligence, the power gap will only continue to widen. If the
power differential between large and small businesses persists to enlarge, small
businesses will find it increasingly difficult to compete in a modern economy with
resulting significant social and economic destabilization”.

This is to say that there is a strong need to develop an understanding of

opportunities which open source Business Intelligence can bring to small
businesses.

1.5 Research Goal

The purpose of this research is to find out whether an open source (OS) BI suites
can facilitate for small enterprises to remain competitive. We will consider that OS
BI can be an alternative for small enterprises if the questions below answered
positively:

1. Does an OS BI provide enough business value for small enterprises to be

considered as an alternative to the commercial BI suites?
2. Does an OS BI solution provide cost savings in comparison with commercial
BI suites?
3. Does an OS BI actually fit into small businesses’ ICT budget?

1.6 Research Method

A comparative analysis of open source and commercial BI suites has been chosen
as a primary method in order to reach the goal and answer the questions stated in
section 1.5. To answer first and second questions we used divisive ("top-down")
approach to find grounds for the comparison of a BI suites’ value. Thus, the top
business criterion – the business value of the BI solution is divided into smaller
clusters unless the level of measurable and comparable criteria is reached (for
instance, we cannot estimate total cost of the system as an atomic criterion while
one of its sub-criterion “license fee” can be easily evaluated). Based on a number of
investigated “bottom” level criteria the most comprehensive OS BI suite is chosen
for further business value evaluations and comparisons with the value of
commercial BI suites.

To gather background information for the comparison, extensive literature review

of the latest on-going trends related to BI and business value evaluation methods
were conducted; published information about the BI products and formal BI
system documentation were also consulted.

This research project also used the most common qualitative research method
employed in information systems research, the case study. An experimental setup

4
of a chosen OS BI within a real small enterprise was used to provide
complementary information to answer research questions 1, 2 and 3 of section 1.5.

Finally, a number of BI integrators and solution providers were interviewed in

order to capture an average business value of a commercial and an open source BI
suites. Interviewees were asked to answer generic questions regarding BI market
as well as provide cost estimation for the case study mentioned above. In order to
increase accuracy of the results, more companies have been approached through
the web-based survey form where case study cost estimations were not included.
Interview and survey results mainly address questions 1 and 2, as well as helping
to answer question 3.

1.7 Limitations
We already mentioned that a Business Intelligence implementation is a very time
consuming initiative and includes many steps of data analysis and design. Thus,
due to lack of time and resources the experimental setup provided in this paper
has been limited to only one business process of one small enterprise.

Medium and even large enterprises could also benefit from OS BI. However, we did
not include these types of enterprises in the scope of our research.

Yet another limitation is BI components. As it has been mentioned above, BI is an

umbrella term for a broad category of applications. In our case we identified
broadly accepted components and defined subjective BI scope.

5
2 Extended background
2.1 Open Source Software
Open Source Software (OSS) is primarily defined as software which is freely
redistributable and includes the source code (Varner 1999). This is vastly different
from the mainstream software industry where source code is highly guarded and
programs are only distributed in their binary, non-modifiable format. The
development process of OSS also differs as it involves large number of software
developers at many different locations and organizations sharing code to develop
and refine software programs.

While the attention of businesses to the phenomenon of OSS has been recent, the
basic behaviours are much older in their origins. According to Lerner and Tirole
(2000), the tradition of sharing and cooperation in software development began in
early 1960s mainly with cooperative development efforts of the UNIX operating
system where programmers in different organizations shared source code. The
General Public License (GPL) was a noticeable innovation introduced by the Free
Software Foundation (FSF) in response to intellectual property right enforcements
by commercial companies in 80s. Users had to agree to make the source code freely
available and not to impose licensing restrictions on others, in exchange for being able
to use and modify GPL software. The widespread diffusion of Internet access in the
early 1990s led to a dramatic acceleration of open source activity. As we will
mention below, interactions between commercial companies and the open source
community also became commonplace in the 1990s. These interactions created
demand to bundle the cooperatively developed software with proprietary code
and led to adoption of more flexible licenses. The licenses under which OSS is
released today vary greatly, but two points that we mentioned in the beginning
(freely redistributable and available source code) remain consistent. Some of these
licenses and their characteristics are shown in table 2.1.

In the past years growing interest has brought large market diffusion and capital
investment to open source software. A number of open source products, such as
the Apache web server, dominate in their product category, while major
corporations, including Hewlett Packard, IBM, Sun and Microsoft have lunched
own open source projects (Lerner and Tirole 2000).

Today, major enterprises are running mission-critical functions on open source,

big vendors have lined up to support it, and reliable applications have emerged. In
a survey of 375 information executives, 54 percent said that within five years open
source would be their dominant server platform. 59 percent of respondents said a
lower total-cost-of-ownership (TCO) is open source’s primary strength and those
who have implemented it confirm huge TCO reductions (Koch 2003).

6
 Code Can code be used Can project that Must Source Provides
License
protected by in Closed uses code, be Code be for
Type
copyright? Source Project? sold? released? patents?
Public Domain No Yes Yes No No
BSD/MIT Yes Yes Yes No No
GPL (v2) Yes No No Yes No
LGPL Yes Yes Yes Yes No
MPL/CDDL Yes Yes Yes Yes Yes
CPL/EPL Yes Yes Yes Yes Yes

Table 2.1. Comparing Open Source Software License Types (Corbett and Ward 2006)

However, OSS has its own disadvantages. The same survey of IT executives shows
that 52 percent mentioned a lack of vendor support as open source’s primary
weakness. To fill this gap, major vendors such as Dell, HP, IBM, Oracle and Sun
recently have announced in various ways that they would begin supporting open
source products (Koch 2003).

2.2 Information System Evaluation

Limited budgets of small enterprises led project sponsors to demand an estimate
of financial benefits before approving funding for any IT project. IT funding
approaches are designed to recover the cost of building and maintaining the
information system in an enterprise (Pearlson and Saunders 2006). The main goal
is to at least cover the cost of the information system.

The variety of IT investment areas from warehouse automation to decision

support systems has created demand for different investment evaluation methods.
IT capital investment decisions can be analyzed by traditional and IT specific
investment evaluation methods.

Organizations often use traditional (non-IT specific) methods like Net Present
Value (NPV), Return on Investment (ROI), and Activity Based Costing (ABC) for IT
investment evaluation (Turban, et al. 2006, 561-564). Nevertheless, some
researchers argue that traditional evaluation techniques are not suitable for
evaluating projects with significant strategic benefits such as BI projects (Irani and
Love 2001).

IT projects in many cases generate intangible benefits such as faster time to

market, employee and customer satisfaction, grater organizational agility, and
improved control (Turban, et al. 2006, 561-564). Ignoring value of intangible
benefits may lead the organization to reject IT investments. Therefore, financial
analyses need to consider tangible and intangible benefits.

7
The most straightforward method for evaluation of intangible benefits is to make
rough estimates of monetary values for all intangible benefits. However, putting
monetary value on the IT investment is not an easy task (Turban, et al. 2006, 561-
564).

Additionally, in the past years the focus of industries has shifted from cost
reduction alone to maximizing both: IT benefits and business benefits (Shields and
Bharucha 2003). Growing demand for benefit measurement tools and complexity
of calculation methods has resulted in a wide range of IT specific investment
evaluation frameworks. Some of these specific frameworks and their summaries
are shown in table 2.2.

Model Source Model Summary

Economic Added Value (EVA) Stern & Accurate measure of post-tax return. Uses
Stewart retrospective analysis which is not suitable for prior
estimation of returns in IT.
Total Value of Ownership (TVO) Gartner Comprehensive view of costs and benefits.
Total Economic Impact (TEI) Giga Comprehensive view of costs, benefits and risks.
Rapid Economic Justification Microsoft Cost-benefit analysis, multiple stakeholder view and
risk assessment.
Business Value Index Intel Cost-benefit analysis, multiple stakeholder view and
risk assessment.

Table 2.2. Comparison between existing benefit measurement models,

adopted from (Shields and Bharucha 2003)

8
3 Valuing BI Systems
In order to compare different BI suites, comparison grounds should be defined
first. In this chapter, criteria for comparison have been defined using a divisive
(“top-down”) approach. We start from the most important, top business criterion –
the value of the BI solution brought to the enterprise. Then we continue by
dividing business value into smaller criteria categories until we reach the level
where it is possible to compare BI systems. We will consider this level reached
when it is possible to measure criteria.

Executives are constantly evaluating the cost versus the benefit of different
business decisions. A typical question is: “Which initiative will yield the greatest
benefit to the organization?” Organisations often use cost-benefit analysis
approaches which compare the total value of the benefits with the associated costs
(Turban, et al. 2006, 561).

Net
Gross Benefit
Benefits

Costs Net Benefit = Gross Benefits - Costs

Figure 3.1. Calculating Net Benefits, adopted from PENG model (Dahlgren 1997)

The effect on profit (net benefit) consists of gross benefits minus costs of
Information System (Dahlgren 1997) (figure 3.1). Thus, in order to calculate net
benefits and prove its profitability we need first to calculate costs and gross
benefits of a BI system. In the next two sections we are choosing comparison
grounds for costs and total benefits.

3.1 Identifying BI Costs

The most basic method for calculating the cost is to add up the costs of all the
components. Many companies calculate initial and ongoing maintenance costs in
this way (Pearlson and Saunders 2006, 256).

In our case, summing up the initial and maintenance costs does not provide an
entirely accurate total cost for BI initiatives since it includes other costs such as
user trainings which span all over a BI lifecycle. Therefore, a method known as
Total Cost of Ownership (TCO) is used. This technique was introduced by the

9
Gartner Group in late 1980s and used to calculate more accurate IS costs. Besides
initial and maintenance costs, TCO includes costs associated with technical
support, administration, and training (Pearlson and Saunders 2006, 256).

Cost components of IT projects can be classified into three categories: acquisition

cost, operations cost, and control cost (Turban, et al. 2006, 567). Since we evaluate
integrated BI suites, control costs such as consolidation and standardisation are
not applicable in our case and excluded from further cost calculations. Based on
literature study (Turban, et al. 2006, 567) typical cost components of BI
implementation project are reflected in figure 3.2.

The TCO method described above aimed to calculate overall cost of BI system for a
defined period of exploitation as a part of overall benefit calculation. These costs
are used as grounds for further comparison of BI suites.

Software licenses

RDBMS or other backend system licenses

Acquisition Costs
Installation and configuration

Hardware and other infrastructure

BI Costs

Maintenance

Support
Operations Costs
Upgrades

User Trainings

Figure 3.2. Typical costs for BI implementation project

3.2 Identifying BI Benefits through Decomposition

While it is easy to quantify all BI costs, benefits are much more complex and
difficult to quantify and calculate. Soft benefits, such as the ability to make future
decisions, are making it difficult to measure the payback of the investment. The BI
initiative is a long term strategic information system investment where it is hard to
evaluate all benefits brought to the enterprise. Below we try to show most obvious,
well known and general benefits of BI. Nevertheless, and important, a detailed
analysis in relation to the specific industry might identify more benefits.

10
Better identification and understanding of BI benefits can be reached through
categorisation. Knightsbridge (2005) proposes to simplify the process of
identifying benefits by separately considering the two primary categories of
benefits: revenue enhancements and cost savings. Cost savings are defined as the
difference in the costs associated with the new BI initiative versus the costs
associated with maintaining the existing information environment. Revenue
enhancements are defined as the beneficial activities that result from decisions
individuals make by using information from the BI solution.

Steve and Nancy Williams (2003) identify two another dimensions of BI benefits in
their article: “the business value of BI lies in its use within management processes
that impact operational processes that drive revenue or reduce costs, and/or in its
use within those operational processes themselves.”

Intangible
Management Process Improvement Operating Process Improvement

Identification of new business

opportunities and markets
Revenue Enhancements

Improved opportunity recognition Enhanced speed of new product

development
Improved time to market
Increased ability to content with
Improved decision making competitors

Increased organisational agility Improved customer service/satisfaction

Identification of under-performing
product lines or products

Improved information dissemination Reduced operating costs

Cost Saving

Improved analysis (e.g. reduced Automation of manual processes

customised reporting requests)
Improved operating processes
Informed decision making

Intangible Tangible

Figure 3.3. Quadrant graph for generic BI benefits classification

These four dimensions of BI benefits (i.e. Revenue Enhancements, Cost Savings,

Management Process Improvement, and Operating Process Improvement) are
combined together in the quadrant graph on figure 3.3 in order to classify and find
the tangibility level of the common BI benefits as identified by Moss and Atre
(2003). The top-left (red) square on the picture identifies the BI solution’s impact
on revenue enhancement through management process improvement which is

11
difficult to evaluate because there is usually no direct attribution. For instance,
monetary value of the benefit “identification of new business opportunities and
markets” cannot be estimated at all since we don’t know in advance whether new
markets exist or not. The bottom-right (green) square contains benefits of
operational process improvement associated with cost savings. In contrast to “red”
benefits, these benefits are easy to identify because of the ability to compare the
new BI solution to the old operational environment. Finally, bottom-left and top-
right (yellow) boxes contain intangible benefits which could be estimated through
complicated evaluation methods (e.g. improved customer satisfaction).

It could be clearly seen from figure 3.3 that 12 of 15 benefits are either completely
intangible (red square) or could only be calculated through complex evaluation
methods (yellow squares). This classification method can be used for tangibility
level identification of more specific benefits by placing them in one of the four
squares in figure 3.3.

As already mentioned, BI is a strategic tool and its primary role is the support of
business strategy and business processes. As can be seen from figure 3.3, the BI
initiative does not contribute as much in terms of being used as a process
automation (operational) tool. The four dimensions of figure 3.3 could also be used
to claim that instead of evaluating BI separately, it should be analyzed together
with the business processes it is supposed to enhance. To additionally support that
claim we would like to refer to authors Luftman and Muller (2005), who also
conclude that the benefits come not from the latest and greatest IT solution, but
from how a business modifies its practices based on its new technology. In spite of
that, BI applications still provide some level of pure operational functionality like
KPI (Key Performance Indicators) monitoring, automatic reporting and invoicing.

A number of benefit measurement models has been discussed in this section as

well as in section 2.2. One observation regarding the various ways of assessing BI
benefits discussed so far is that reaching a precise valuation may take longer than
is reasonable to make an investment decision. This is due to the fact that most of
them are complicated and require assigning monetary value to the intangible
benefits. Therefore, in this thesis we try to avoid these comprehensive BI benefit
calculations based on assigning of monetary values. Instead, in the next section, we
explore an alternative approach where a number of criteria influencing benefits
brought by BI solution are defined, criteria that are not dependent on monetary
value assessment per se.

3.3 Identifying BI Benefits through its Characteristics

Yielded benefits are directly related to the characteristics of the BI suite. In this
section we describe alternative approach of BI benefits identification through the
influencing characteristics. This approach suits our research method (section 1.6)

12
since it allows comparing of different BI suites’ benefits without assigning
monetary values.

Rajeev Rawat’s (2007) criteria for assessing Open Source BI alternative has been
adopted to define the characteristics influencing gross value. In our research some
irrelevant criteria have been eliminated, since the original list contains criteria for
complete evaluation of BI project (including business needs, risk assessment, etc.)
while we only looking for BI suite comparison grounds. Rawat’s original list of
criteria for Open Source BI alternative assessment can be found in Appendix A.

Three key criteria categories shown below have been extracted from Rawat’s list of
criteria for further BI suite comparison:
1. BI Functionalities
2. Solution Maturity
3. Price

It could be clearly seen that first and second criteria categories address benefits of
BI system, while third category – price overlaps with the costs which has been
discussed in section 3.1. Identified criteria categories are hierarchically brought
together in figure 3.4.

Value (Net Benefit)

Gross Benefits Costs

BI Solution Acquisition Operation

Functionalities Maturity Costs Costs

Figure 3.4. Criteria categories for BI suite comparison

In section 3.1 acquisition costs and operation costs are already been decomposed
into the smaller criteria which could be defined and compared. BI functionalities
and solution maturity criteria categories will be decomposed in the next sections.

3.3.1 BI Functionalities
As it has been mentioned in chapter 1, BI is an umbrella term covering a set of
enterprise applications. Different commercial vendors have different
understanding of BI and what it should include. Nevertheless, there are some key
components which exist in all commercial distributions.

13
 BI Functionalities
Infrastructure Integration All tools in the platform should use the same security, metadata,
administration, portal integration, object model and query engine, and
should share the same look and feel.
Reporting Reporting provides the ability to create formatted reports in different
formats (e.g. PDF, Microsoft Excel, etc.)
Dashboard Dashboard includes the ability to publish formal, web-based reports with
intuitive displays of information, including dials, gauges and traffic lights.
These displays indicate the state of the performance metric, compared with
a goal or target value.
Ad Hoc Query and Also known as self-service reporting, this capability enables users to ask
Reporting their own questions of the data, without relying on IT to create a report.
These functions imply semantic layer which operates between business
users and data sources allowing users to navigate without understanding
underlying data structure.
Spreadsheet Services In some cases, BI platforms are used as a middle tier to manage and
execute BI tasks, but office tools (particularly Microsoft Office Excel) acts
as the BI client. In these cases, it is vital that the BI vendor provides
integration with office suites.
OLAP Server Enables end users to analyze data with extremely fast query and
calculation performance, enabling a style of analysis known as "slicing and
dicing".
OLAP UI Front-end tools for the analysis known as "slicing and dicing".

Data Mining This capability enables organizations to classify categorical variables and
to estimate continuous variables using advanced mathematical techniques.
ETL ETL stands for extract, transform, and load. ETL is a process that enables
businesses to consolidate their data from different sources and in different
formats.
Alerts Event based alerts sent by email, SMS, etc. Events usually triggered by
business rules.
Repository The repository defines the functions and services to store BI structured
data and metadata (e.g. report templates, business rules, and semantic
layer data).
Security This enables administrators to define different user roles and permissions
based on business needs.
Scheduling Ability to schedule report generation and other actions.

Table 3.1. BI Functionalities criteria group for BI evaluation, adopted from (Rawat 2007)

The list of functionalities, summarised in table 3.1, is adopted from Rajeev Rawat’s
(2007) “BI function requirements”. Some functionality such as data mining and
spreadsheet services have been added based on the literature study (Gartner,
Magic Quadrant for BI Platforms, 1Q07 2007). In section 4.1 we will provide an
analysis of major commercial BI vendors to support our claims about general
acceptability of these BI suite functionalities.

It is important to note that most of these functionalities could be decomposed

further. For instance, reporting may include a number of different output formats
and chart types. Since the number of these details is more than one hundred
(Howson 2007) we will remain at this level.

14
3.3.2 BI Solution Maturity
Maturity is another important criterion, especially from open source software
perspective. In order to make it definable and measurable it has been broken down
into sub-criteria (e.g. measurable criteria such as duration of the product
availability in the market and number of customers actively using product can
show how mature this product is).

In addition to the standard maturity criteria defined in Rawat’s (2007) list, we

have added open source related criteria such as OS community size and activity.
Community importance as a driving force of an open source projects described in
section 2.1. Another open source related attribute – number of downloads
indirectly shows popularity of the product. The resulting list of solution maturity
criteria is shown in table 3.2.

Solution Maturity

Availability duration Indicates duration of availability in the market.

Customer base
Standards compatibility
Ready-to-use out of the box
ISV-ready: embeddable & extensible
Indicates number of customers using complete or partial BI
solution
Defines whether BI suite follows standards or use proprietary
solutions.
Items, functionalities, or features provided do not require any
additional installations, plug-ins, expansion packs, or products.
Can be embedded, adopted or extended for specific needs.

Localised and internationalised Translations and localisations are available.

Training availability Customers can order trainings provided by vendor.

Open Source Community Size
Open Source Community Activity
Downloads (Open Source only)
Number of registered open source community members.
Number of forum and mailing list posts made by open source
community members.
Number of product downloads (indirectly shows popularity).

Table 3.2. Solution maturity criteria group for BI evaluation, adopted from (Rawat 2007)

15
4 Results and Findings
In the next two sections (4.1 and 4.2) benefits of commercial and open source BI
suites estimated and compared based on the criteria defined in sections 3.3.
Sections 4.3 and 4.4 mainly explore costs of BI implementation through the two
different research methods (survey and case study) in order to increase results’
accuracy. Further analysis of these findings will help us to answer research
question stated in section 1.5 (section 5).

4.1 Commercial BI Suites

According to the Gartner’s Magic Quadrant (2007), the leading BI software vendors
for 1Q 2007 were Business Objects, SAS, Cognos, Oracle, and Hyperion. With recent
acquisitions of Hyperion, Business Objects, and Cognos by Oracle, SAP and IBM
(respectively) the number of main software vendors has become even smaller.
Thus, in the analyses we have included the following commercial BI products:
1. Business Objects XI from SAP
2. Oracle BI Suite from Oracle (including Hyperion)
3. SAS BI from SAS Institute
4. Cognos BI from IBM

Published information about the leading commercial BI products and their formal
system documentation were consulted in order to support the claims of generality
of the accepted BI suite functionalities defined in table 3.1. We found that all
claimed functionalities are provided by reviewed commercial BI suites. The only
exception was the BusinessObjects XI which relies on 3rd party tools in data mining
and OLAP server. Summary of these analyses based on the criteria defined in
section 3.3 can be found in table 4.1.

It is important to note that the portfolio of these major vendors usually stretches
beyond BI and covers advanced business applications such as Business
Performance Solutions (BPS) which are not included in our list of functionalities.

16
 Business

Oracle BI

Cognos
Objects

SAS BI

BI
XI
BI Functionalities*
Infrastructure Integration Yes Yes Yes Yes
Reporting Yes Yes Yes Yes
Dashboard Yes Yes Yes Yes
Ad Hoc Query and Reporting Yes Yes Yes Yes
Spreadsheet Services Yes Yes Yes Yes
OLAP Server No Yes Yes Yes
OLAP UI Yes Yes Yes Yes
Data Mining No Yes Yes Yes
ETL Yes Yes Yes Yes
Alerts Yes Yes Yes Yes
Repository Yes Yes Yes Yes
Security Yes Yes Yes Yes
Scheduling Yes Yes Yes Yes
Solution Maturity
Availability duration (years) >10 >10 >10 >10
Customer base * 43.000 n/a 43.000 23.000
Standards compatibility ** 6 5 8 6
Ready-to-use out of the box Yes Yes Yes Yes
ISV-ready: embeddable & extensible Yes Yes Yes Yes
Localised and internationalised Yes Yes Yes Yes
Training availability Yes Yes Yes Yes
* Information is taken from the vendor’s official web site
** Scores based on a scale of 0 (weak) to 10 (strong) and adopted from (Datamonitor 2007)

Table 4.1. Comparison results of the commercial BI suites

4.2 Open Source BI Suites

Our study of the available OS BI suites on the market has identified four major
players based on their popularity (community size and activity):

1. JasperIntelligence from JasperSoft

2. Pentaho BI from Pentaho
3. OpenI from Loyalty Matrix
4. SpagoBI from Engineering Ingegneria Informatica

Comparison results of these four open source products based on the criteria
defined in section 3.3 is represented in table 4.2. In order to be considered as a
comprehensive alternative to a commercial BI, the OS BI suite should provide all
functionalities previously defined. We chose Pentaho for further comparison since

17
only Pentaho provides all defined functionalities as well as the most active
community and a high number of downloads. It should be noted that JasperSoft’s
high number of community members and downloads can be explained respectively
by mandatory registration (as community member) for all downloads and greater
number of downloadable items.

Intelligence

Pentaho BI

SpagoBI
Jasper

OpenI
BI Functionalities*
Infrastructure Integration Yes Yes Yes No
Reporting Yes Yes Yes Yes
Dashboard No Yes No Yes
Ad Hoc Query and Reporting Limited Yes No No
Spreadsheet Services No Yes No Yes
OLAP Server Yes Yes Yes Yes
OLAP UI Yes Yes Yes Yes
Data Mining No Yes Yes Yes
ETL Yes Yes Yes Yes
Alerts Yes Yes No No
Repository Yes Yes No Yes
Security Yes Yes Yes Yes
Scheduling Yes Yes No Yes
Solution Maturity*

Availability duration (months) 30 28 27 28

Customer base 6.000 n/a n/a n/a
Standards compatibility Partial Yes Yes Yes
Ready-to-use out of the box Yes Yes Yes Yes
ISV-ready: embeddable & extensible Yes Yes Yes Yes
Localized & internationalized Yes Yes No Yes
Training availability Yes Yes No Yes
Open Source Community Size 57.700 18.800 n/a n/a
Open Source Community Activity 32.300 53.800 1200 1200
Downloads 2.468.717 >2.000.000 19.926 n/a
* Information is taken from the vendor’s official web site

Table 4.2. Comparison results of OS BI suites

18
4.3 Interview and Survey of BI Consulting Companies
In order to provide an answer to the second research question (whether OS BI
solution provides cost saving) we have conducted a number of interviews and
web-based surveys. Interviews were conducted based on the questionnaire from
Appendix B in order to better understanding of the real situation in the market.
Unfortunately, very few companies accepted request for interview, mainly due to
lack of time of the potential interviewee. In order to increase accuracy of the
results, more companies have been approached through the simplified web-based
survey form where we included only questions 1–4 (questions aimed to
understand attitude of consulting companies regarding small enterprises) from the
same questionnaire (Appendix B). Overall, two consulting companies providing BI
services have been interviewed in person and four other companies responded to
the web survey. Complete results of interviews and surveys are given in Appendix
C.

Q1: What types of enterprises are your company’s main

target group? 100%
100%

80%

60% 50%

40%

20%
0%
0%
Small Medium Large
Enterprise Types

Figure 4.1. Enterprise types mainly targeted by the BI consulting companies

Q2 & Q3: What types of enterprises are your company’s

customers?

Medium
14,7%
Small
3,3%

Large
82,0%

Figure 4.2. Customers of the BI consulting companies

19
Web survey and interview results for the questions 1-3 (Appendix B) has been
summarised in figures 4.1 and 4.2. It can be clearly seen that none of the
respondents consider small enterprises as a main target group (figure 4.1), though
small enterprises constitute 3.3% of their customers (figure 4.2). According to the
interviewed consultants, the majority of the small and medium enterprises
implementing BI (figure 4.2) expect fast growth in the next 5-10 years and
consider BI investments as a part of their long-term vision.

Questions number five and six (Appendix B) was mainly aimed to support our list
of functionalities explored in section 3.3.1. It can be seen from figure 4.3, where
results for these questions depicted, that the major part of proposed functionalities
were considered as a part of BI while no additional functionalities were proposed
by interviewees. The only exception was alerts which track significant events (e.g.
profit target exceed). According to the one of the consultants, largely used nightly
data updates make alerting functionality ineffective; however alerts would be
much appreciated in the operational (real-time) BI systems.

Q5 & Q6: Which BI functionalities exist in your complete BI

solutions?

Reporting
100%
Dashboard Scheduling
75%

50%
OLAP Server Alerts
25%

0%

OLAP UI (Slicing &

Data Mining
Dicing)

Ad Hoc Query and

ETL
Reporting
Spreadsheet Services

Figure 4.3. Complete BI solution functionalities.

Finally, interviewees were asked (questions no. 7-8, Appendix B) to estimate the
cost components defined in section 3.1 for the experimental setup case which has
been described in Appendix CAppendix D. Gathered costs have been averaged and
reflected in figure 4.4. This is important to note that all interviewees offered
Microsoft’s BI products (PerformancePoint 2007 and SQL Server 2005) as most
suitable commercial products for this case (question no. 9, Appendix B).

20
Nevertheless, interviewees mentioned another important fact that other vendors
such as BusinessObjects or Oracle would have a notably more expensive solution.

Q7 & Q8: Avarage costs of the commercial BI suite implementation

over 1 year period

User Trainings 15 000 SEK

Upgrades 10 000 SEK

Maintenance and Support 300 000 SEK

Hardware and other infrastructure 125 000 SEK

Consulting, installation, and

550 000 SEK
configuration

BI software, RDBMS, and other

200 000 SEK
licenses

Cost SEK

Figure 4.4. Average costs of the commercial BI suite implementation

4.4 Experimental Setup

An experimental OS BI system has been set up in the company with the purpose of
increasing accuracy of the results and providing additional investigation for the
questions stated in section 1.5. In order to get authentic results we were looking
for a company producing a lot of raw operational data and demanding
transformation of these data into the information. Telecom is one of the industries
where every action of the customer produces noticeable amount of raw data. At
the same time chosen company should fall into the category of small enterprises.
All said above was the main reason for choosing a mobile content provider
company for an experimental setup. Another important reason was the telecom
background of the author. Further, we will refer to the selected company by
“MobileComet” pseudo name (according to agreement we cannot disclose
company’s real name).

MobileComet is a small enterprise with annual turnover of €500K and 10

employees. Company provides content (i.e. ringtones, pictures, games, etc.) for

21
mobile phone owners. In order to better understand customers' behaviour and
identify new markets company wants to be able to process operational data which
located in a number of different sources.

Based on the interview with the company representatives we defined following

key requirements for the experimental setup:

 Automatic generation of the recurring financial reports and invoices

 Ability to build ad-hoc reports and make ad-hoc analysis of the current sales
data and customer behaviour information.
 Provide easier, online and centralized access to all business data.
 Archive operational data (operational database should only keep data older
than 3 months).
Complete business case description can be found in Appendix D.

4.4.1 System Overview

Pentaho OS BI platform has been chosen for experimental setup based on the
results from section 4.2. Data flow and components of the implemented BI system
depicted on figure 4.5.

The hardware platform used to develop and run Pentaho BI was Intel Core2Duo
workstation with 2GB of RAM and running Linux operating system. Data
warehouse has been built on MySQL RDBMS. Note that both, Linux and MySQL are
open source products.
Data Sources Data Storage Data Analysis Data Visualisation

Operational DB OLAP
(Internal Data) (Pentaho Ad-hoc Query
Analysis)
ETL
Mobile Operators Data Warehouse
(Pentaho Data Dashboard
(External Data) (MySQL backend)
Integration)

Reporting and
Excel Sheets Charting
(Personal Data) Metadata
(Pentaho
Metadata Editor) Ad-hoc
Reporting

Figure 4.5. Data flow and components of the experimental system

As shown on figure 4.5, Pentaho Data Integration (DI) is the very first in the chain
of BI components performing extracting, transforming, and loading (ETL) from
different data sources into single data warehouse nightly. Sample Pentaho DI
transformation and job are shown on figure 4.6. Construction of this component
(ETL) consumed 75% of the total work amount.

22
Next step was description of data warehouse structure through Pentaho Metadata
Editor and publishing this metadata to the Pentaho BI server. As soon as metadata
information published, end users were able to run self-service (ad-hoc) reports.

Finally, Pentaho Report Designer was used to create a number of sample reports
and invoices with charts and tables. Some reports have been scheduled for
periodic generation and distribution by email.

Figure 4.6. Sample Transformation and Job in Pentaho Data Integration

Although we tried to utilise all major functionalities of the Pentaho BI platform

defined in table 4.2, there are still a number of the components (Dashboard, Data
Mining) which we were unable to test due to time constraints. However,
MobileComet found those major components satisfactory for their current needs.

23
4.4.2 Setup Results
Experimental setup results are discussed below in the form of answers to the
research questions stated in section 1.5.

RQ1: Does an OS BI provide enough business value for small enterprises to be

considered as an alternative to the commercial BI suites?

All business needs described in the mini case (Appendix D) have been met.
Customer found results and functionalities of the BI software completely
satisfactory.

RQ2: Does an OS BI solution provide cost savings in comparison with commercial BI

suites?

We will answer this question indirectly by providing costs for the experimental
setup. In the next sections these costs are compared to the commercial BI costs in
order to answer this research question. Based on the setup results, acquisition
costs have been estimated and reflected in table 4.3.

Acquisition Cost Type Estimated Cost

BI, RDBMS, and other software licenses 0 SEK

Consulting, installation, and configuration equivalent of 160 work hours

Hardware and other infrastructure 40.000 SEK

Table 4.3. Acquisition costs for experimental setup

Professional services (consulting, installation, and configuration) have been

provided for free, as a part of this research. Due to this reason monetary value of
these services could not be estimated directly. However, it can be calculated by
considering cost of the resources (internal staff member or outsource consultant).
For instance, monetary equivalent of 160 hours for MobileComet’s employee could
vary between 30.000-60.000 SEK.

RQ3: Does an OS BI actually fit into small businesses’ ICT budget?

According to the estimations above, acquisition cost of the experimental system

was less than 100.000 SEK. CEO of MobileComet found this figure very attractive
and mentioned that he would allocate this amount from the budget for the similar
basic BI solution.

24
5 Analysis and Discussion
5.1 Comparison of Benefits
In this section we compare commercial and OS BI suites based on the criteria
forming BI benefits which have been defined and explored in section 3.3. In case of
a very close match between these criteria we will consider that an enterprise will
gain similar gross benefits from different BI suites.

For comparison simplicity and due to very close criteria match between different
commercial BI suites we generalise them as a “Commercial BI”. Data for
Commercial BI and Pentaho OS BI have been taken from sections 4.1 and 4.2
respectively. Side by side comparison of the criteria has been provided in table 5.1.

BI Functionalities Commercial BI Pentaho OS BI

Infrastructure Integration Yes Yes

Reporting Yes Yes
Dashboard Yes Yes
Ad Hoc Query and Reporting Yes Yes
Spreadsheet Services Yes Yes
OLAP Server Yes Yes
OLAP UI Yes Yes
Data Mining Yes Yes
ETL Yes Yes
Alerts Yes Yes
Repository Yes Yes
Security Yes Yes
Scheduling Yes Yes
Solution Maturity
Availability duration (years) >10 2.3
Customer base >23.000 n/a
Standards compatibility Partial Yes
Ready-to-use out of the box Yes Yes
ISV-ready: embeddable & extensible Yes Yes
Localised and internationalised Yes Yes
Training availability Yes Yes

Table 5.1. Comparison of benefit components for the commercial and OS BI

It can be seen from table 5.1 that both solutions cover the whole range of
functionalities. It should be noted that functionalities of the commercial BI suites
are usually more advanced. Nevertheless, according to the experimental setup

25
results (section 4.4.2) OS BI functionalities are advanced enough to meet basic
needs of small companies.

Analysis of the solution maturity characteristics has shown overweight on the

Commercial BI’s side mainly because of the large number of customers and longer
period of solution availability. Nonetheless, OS BI has a single but very important
advantage over commercial solution – higher standard compatibility. OS BI
solutions, and particularly Pentaho, built upon open standards such as BPEL
(Business Process Execution Language) for process orchestration, and CWM
(Common Warehouse Metamodel) for data warehouse metadata. Thus, customers
can avoid "vendor lock-in" of proprietary BI software vendors.

It is necessary to mention that standards used by OS BI (e.g. CWM, BPEL, etc.) are
very new in comparison with the BI industry. This fact could be one of the major
reasons why commercial BI vendors poorly support them.

To sum up, benefit comparison analysis of the Commercial BI and Pentaho OS BI

has shown that OS suite provides complete set of basic BI functionalities while
commercial solutions are far more mature. From this we conclude that OS BI will
meet basic needs of the small enterprises and yield gross benefits nearly similar to
commercial BI. Thus, in accordance with the equation shown in figure 3.1 (net
benefit = gross benefits – costs), net benefit difference between commercial and OS
BI will depend only on the costs of the BI implementation.

5.2 Comparison of Costs

Costs for the commercial BI solution have been estimated in section 4.3 based on
the interview results. Unfortunately, we were unable to interview any consulting
company offering OS BI since there are very few such companies worldwide.

To estimate OS BI costs, we will consider the case where Pentaho BI

implementation would be done by the same consulting company. In that case,
hardware costs, total work amount, and fees for the professional services (i.e.
consulting, installation, etc.) will remain the same. Apparently, there will be no
license fees for the software since we would use open source RDBMS (e.g. MySQL)
and operating system (e.g. Linux). Costs for the both cases (commercial and OS)
have been put together in table 5.2.

In addition to the costs for outsourced solutions we can calculate costs of

insourced OS BI solution based on the experimental setup results from section
4.4.2. Moreover, in order to better understand costs we will calculate TCO of all BI
solutions for a five-year period.

26
 Estimated Cost Estimated Cost Estimated Cost
Cost Type of Outsourced of Outsourced of Insourced
Commercial BI Pentaho OS BI Pentaho OS BI
Acquisition Costs
BI software, RDBMS or other system licenses 200.000 SEK 0 SEK 0 SEK
Consulting, installation, and configuration 550.000 SEK 550.000 SEK 60.000 SEK
Hardware and other infrastructure 125.000 SEK 125.000 SEK 40.000 SEK
Operations Costs
Maintenance and Support 300.000 SEK/year 300.000 SEK/year 270.000 SEK/year
Upgrades 10.000 SEK/year 0 SEK/year 0 SEK/year
User Trainings 15.000 SEK/year 15.000 SEK/year 0 SEK/year
TCO, 1 year period 1.190.000 SEK 990.000 SEK 370.000 SEK
TCO, 5 year period 2.500.000 SEK 2.250.000 SEK 1.450.000 SEK

Table 5.2. Comparison of cost components for the commercial and OS BI

This is important to emphasise the great cost of the professional services (i.e.
consulting, installation, etc.) and support which together form 91.11% of the OS
BI’s TCO over a five-year period. Such a high costs for professional services could
be explained by results of the survey which have shown that none of the
responded BI consulting companies see small enterprises as their main customer
group (figure 4.1) and prices for their services mainly set for medium and large
enterprises.

Clearly, small enterprises will save grate amount of the investment only by
reducing cost of professional services. Experimental setup results suggest that
utilising internal resources can save up to 80% on the professional services
(consulting company estimated professional services for mini case 550.000 SEK
(table 5.2), while experimental setup has shown roughly 30.000–60.000 SEK
(section 4.4.2) cost for the same item). In that case, company’s IT department may
be hired for installation, configuration and support of the BI software while
business analysis and consulting services outsourced.

However, projecting costs based on experimental setup case for the longer time
period will unveil grater TCO of insourced OS BI. Experimental setup case
proposed (section 4.4.2) usage of internal resources in order to minimise initial
setup expenses. Based on that assumption we can calculate ongoing maintenance
and support costs. According to experimental setup results, average monthly
salary of internal staff member estimated at 45.000 SEK. BI solutions require daily
maintenance to ensure that nightly ELT processes successfully completed and
reports are prepared. Moreover, it requires regular updates of data sources, ETL
processes and design of new reports. All these tasks may require up to 50%
utilization of the single internal resource which will be equivalent to 270.000 SEK
annually (45.000 SEK × 0.5 × 12 months). Thus, in comparison to consulting
companies, utilization of internal resources will save roughly 10% on support and
maintenance (300.000 SEK vs. 270.000 SEK).

27
 TCO of BI suites over a five-year period
3000000
2 500 000
2500000
2 175 000

2000000 1 850 000 2 250 000

1 525 000 1 935 000
1500000
1 190 000 1 620 000
1 450 000
1000000 1 305 000
1 180 000
990 000 910 000
500000
640 000
370 000
0
Year 1 Year 2 Year 3 Year 4 Year 5

Commercial BI (outsourced) Open Source BI (outsourced) Open Source BI (insourced)

Figure 5.1. TCO of the commercial and OS BI over a five-year period

It can be seen from table 5.2 that cost saving brought by outsourced OS BI over the
first year will be 16.80% of the commercial BI’s TCO. If we project these expenses
over the 5 year period (figure 5.1), we will find that cost saving gets more and
more insignificant in the light of growing maintenance and support costs. Thus, as
it is shown in figure 5.1, cost saving for 5 year period will represent only 10% of
the commercial BI’s TCO.

Such insignificant difference between commercial and OS BI implementation costs

can be explained by the nature of the particular commercial solution. As it was
mentioned in section 4.3, all estimated commercial solutions are based on the BI
software from Microsoft. In turn, Microsoft recently announced (Microsoft 2006)
products which are aimed to bring “BI for the masses” and make it affordable for
small and medium enterprises. Nonetheless, according to the interview results
from section 4.3 figures for the commercial solution would be notably higher if it
was solution from BusinessObjects or Oracle.

Another factor influencing diversity between OS and commercial BI TCO is the

number of the end-users. In accordance with the mini case requirements
(Appendix CAppendix D) license fees estimated in table 5.2 allow up to 5 end-user
connections. As company grows, cost of commercial software licenses may

28
increase many-fold and drastically broaden the gap between OS and commercial BI
TCO.

Nevertheless, an open source solution has important advantages over commercial

BI listed below:
 Availability of complete source code
 Built upon open standards (reduce proprietary vendor lock-in risk)
 Access to latest updates and patches
 Active community (forums, mailing lists, etc.)

Finally, we would like to highlight difference of hardware costs between

experimental setup (40.000 SEK) and interviewees’ costs (125.000 SEK). While
only one server was used in experimental setup, all interviewees proposed
solution with two servers – production and development (consulting company
may require provisioning of two separate servers). In contrast to latter solution
which is typical for large enterprises, small enterprises can gain from virtualisation
techniques (running two separate operating systems on a single server).

29
6 Conclusion
In order to find out whether an open source BI suites can facilitate for small
enterprises to remain competitive, three research questions were stated in section
1.5:
1. Does an OS BI provide enough business value for small enterprises to be
considered as an alternative to the commercial BI suites?
2. Does an OS BI solution provide cost savings in comparison with commercial
BI suites?
3. Does an OS BI actually fit into small businesses’ ICT budget?

To answer these questions business value evaluation through cost-benefit analysis

approach were chosen in section 3. Using divisive ("top-down") approach we tried
to estimate monetary value for both – costs and benefits of different BI suites.
While costs have been easily decomposed, decomposition of the benefits wasn’t
successful. Using quadrant graph for BI benefit classification (figure 3.3) we found
that majority of BI benefits are either completely intangible or could be calculated
only through complex evaluation methods because of strategic nature of BI. Thus,
in section 3.3, we explored an alternative approach for benefit estimation where
criteria influencing benefits are defined. Four commercial and four OS BI suites
have been evaluated against defined criteria in sections 4.1 and 4.2 respectively.
Results have shown that Pentaho is the most comprehensive and mature BI among
OS suites. Therefore, Pentaho has been chosen for further comparison with
commercial products.

Two different approaches have been chosen in order to estimate the costs for the
same BI implementation case and gather supportive information:
1. Interviews and web-based surveys of consulting companies helped to
capture costs of outsourced solution and answer additional questions
stated in questionnaire (Appendix B).
2. Experimental integration was set up in order to measure functionality of OS
BI and capture the costs of insourced solution.
Results of the research summarised and grouped below according to the research
questions stated earlier.

Q1: Does an OS BI provide enough business value for small enterprises to be

considered as an alternative to the commercial BI suites?

Costs and benefits of the commercial and OS BI implementations have been

compared based on the interviewees’ (BI consulting companies) estimations and
experimental setup results. Experimental setup of OS BI and benefit comparison
between the commercial BI and OS BI have shown that OS BI meets basic needs of
the small businesses and yields gross benefits nearly similar to commercial BI.

30
Nevertheless, the greatest value of OS BI lays in minimizing risk of proprietary
vendor lock-in and maximizing flexibility of BI solution through the support of
open standards and source code availability.

Q2: Does an OS BI solution provide cost savings in comparison with commercial BI

suites?

Cost saving provided by OS BI solution formed only 10% of the commercial BI’s
TCO over a five-year period (2.500K SEK versus 2.250K SEK). Such insignificant
cost difference between commercial and OS BI solutions can be explained by the
number of factors:
a. Estimated commercial solutions are based on the BI software from the
Microsoft which recently announced products (PerformancePoint 2007)
which are aimed to bring “BI for the masses” and make it affordable for
SMEs. This explains low costs of the commercial solution.
b. Estimated license fees of the commercial solution allow only up to 5 end-
user connections. As company grows, cost of commercial software licenses
may increase many-fold and drastically broaden the gap between OS and
commercial BI TCO.

On the other hand, experimental setup suggests that insourced OS BI

implementation can provide 42% cost saving in comparison to outsourced
commercial BI over a five-year period. Huge variance between these two cases can
be explained by:
a. Survey results which have shown that none of the responded BI consulting
companies see small companies as their main target group (figure 4.1).
Consequently, quality and prices for their professional services mainly set
for medium and large enterprises.
b. Hardware costs. Consulting companies offered two different servers for
production and development systems while for experimental setup we
proposed virtualization (one server running two virtual operating systems).

Nevertheless, insourcing of BI implementation may reduce costs of the commercial

BI implementation as well. Based on the analysis of these results we concluded
that although OS BI does not provide significant cost saving by itself, small
companies may save up to 80% on acquisition costs and 10% on maintenance
costs by using OS BI advantages such as active community (forums, mailing lists,
etc.) and access to the latest updates.

Q3: Does an OS BI actually fit into small businesses’ ICT budget?

Experimental setup results (section ‎4.4.2) have shown that insourced OS BI

implementation has acquisition costs up to 100.000 SEK which entirely fitted in
the IT budget of the company. Despite the low acquisition costs, operational costs

31
almost as high as for commercial solution. Unfortunately, due to lack of time, we
were able to provide experimental setup only in one small enterprise which
reduces accuracy of this answer.

6.1 Future Research

Although small enterprises form 98% of all enterprises in Europe, not all of them
would benefit from the BI. For instance, small IT budgets, very low BI gross
benefits or simply raw data unavailability (lack of any ICT solution) makes BI
implementation worthless.

Therefore, in depth analysis of small enterprises based on the average figures and
costs from this research may expose small companies’ real demand for BI.

32
7 Bibliography
Corbett, Peter, and Dean Ward. Open Source Reporting Solutions for Institutional
Reporting: The BIRT Approach. 2006.
Dahlgren, Lars Erik. Make IT profitable! PENG - A practical tool for financial
evaluation of IT benefits. 1997.
Datamonitor. "Decision Matrix: Selecting a Business Intelligence Vendor." SAS.com.
April 2007. [On-line]
http://www.sas.com/news/analysts/datamonitor_bi_0407.pdf (accessed
November 2007).
EC. European Charter for Small Enterprises. European Commission, 2006.
EC. European Conference on Craft and Small Enterprises. European Commission,
2007.
EC. The new SME definition: User guide and model declaration. European
Commission, 2003.
Gartner. "Business Intelligence Market Will Grow 10 Percent in EMEA in 2007
According to Gartner." Gartner Corporation Web site. January 30, 2007. [On-
line] http://www.gartner.com/it/page.jsp?id=500680 (accessed October 1,
2007).
Gartner. "Magic Quadrant for BI Platforms, 1Q07." Gartner Group Web site. January
26, 2007. [On-line]
http://mediaproducts.gartner.com/reprints/oracle/145507.html (accessed
October 1, 2007).
Gibson, Marcus, and David Arnott. "BI for Small Business: Assessment, Framework
& Agenda." 7th Pacific Asia Conference on Information Systems. 2003. 743-
759.
Howson, Cindi. "Blank BIScorecard." BIScorecard.com. October 2007. [On-line]
http://www.biscorecard.com/evaluations.asp (accessed October 2007).
Irani, Z., and P. E. D. Love. "The Propagation of Technology Management
Taxonomies for Evaluating Investments in Information Systems." Journal of
Management Information Systems 17(3), 2001: 161-177.
Knightsbridge. Measuring the value of business intelligence and data warehousing
initiatives. Knightsbridge Solutions LLC, 2005.
Koch, Christopher. Open Source - Your Opensource Plan. March 2003. [On-line]
http://www.cio.com/article/31768/Open_Source_Your_Opensource_Plan
(accessed October 2007).
Lerner, Josh, and Jean Tirole. "The Simple Economics of Open Source." 2000.
Luftman, Jerry, and Hunter Muller. "Total Value Of Ownership: A New Model."
Optimize Magazine, Issue 22, 2005.
Moss, Larissa T., and Shaku Atre. Business Intelligence Roadmap: The Complete
Project Lifecycle for Decision-Support Applications. 2003.

33
Pearlson, Keri E., and Carol S. Saunders. Managing and Using Information System: A
Strategic Approach, 3rd edition. 2006.
Power, D. "DSSResources.COM." A Brief History of Decision Support Systems. March
10, 2007. [On-line] http://DSSResources.COM/history/dsshistory.html
(accessed October 1, 2007).
Raden, Neil. "Business Intelligence 2.0: Simpler, More Accessible, Inevitable."
IntelligentEnterprise.com. February 1, 2007. [On-line]
http://www.intelligententerprise.com/showArticle.jhtml?articleID=19700
2610 (accessed October 1, 2007).
Rawat, Rajeev. "The Ins and Outs of Open-Source Business Intelligence." The Data
Warehousing Institute (TDWI.org). October 24, 2007. [On-line]
http://www.tdwi.org/info.aspx?id=44190 (accessed October 24, 2007).
Shields, Joseph, and Jasmine Bharucha. "Measuring IT Returns: Are we counting
chickens from eggs?" CuttingEdge, Infosys, 2003.
Turban, Efraim, Dorothy Leidner, Ephraim McLean, and James Wetherbe.
"Information Technology for Management: Transforming Organizations in
the Digital Economy." In Information Technology for Management:
Transforming Organizations in the Digital Economy, by Efraim Turban. 2006.
Varner, Philip E. "The economics of open source software." 1999. [On-line]
http://www.cs.virginia.edu/~pev5b/writing/econ_oss/ (accessed October
1, 2007).
Ventana. Open Source BI Executive Summary. Ventana Research, 2006.
Williams, Steve, and Nancy Williams. "The Business Value of Business Intelligence."
Business Intelligence Journal, 2003, 32-43.

34
Appendices

Appendix A. Rawat’s criteria for assessing OS BI

Original list of the criteria for OS BI assessment proposed by Rajeev Rawat (2007):

1. Business Need 5. Systems environment

1.1. Urgency 5.1. Server and storage connectivity
1.2. Sponsor 5.2. Data integration and interchange
1.3. Users 5.3. Application compatibility
1.4. Bottlenecks
1.5. Data sources 6. Pricing
1.6. Data quality 6.1. Licenses
1.7. Data owners 6.2. Maintenance
1.8. Business needs 6.3. Support
6.4. Transition costs
6.5. Upgrades
2. BI Functionality Requirement 6.6. Renewals
2.1. Computations
2.2. Integration
2.3. Reporting 7. Vendor maturity
2.4. Time 7.1. Customer satisfaction
2.5. Embed-ability/SOA 7.2. Install base
2.6. Repository 7.3. Requirements gathering process
2.7. Dashboard/portal 7.4. Reference account
2.8. OLAP UI
2.9. OLAP Server 8. Solution Maturity
2.10. ETL 8.1. Availability duration
2.11. End-User Ad Hoc 8.2. Install base
2.12. Alerts 8.3. Tools compatibility
2.13. Semantic Layer 8.4. Standards compatibility
2.14. Security 8.5. Mature, world-class reporting products
2.15. Scheduling 8.6. Ready-to-use out of the box
2.16. OSS Community connection 8.7. ISV-ready: embeddable & extensible
8.8. Professionally localized & internationalized
3. Risk Profile 8.9. Meets complete continuum of BI needs
3.1. Financial 8.10. Reporting, Analysis, Data Integration
3.2. Operational
3.3. Performance
3.4. Skills gap

4. Skills match
4.1. Business Users
4.2. Systems Users
4.3. Current vendor teams
4.4. New vendor team

A-1
Appendix B. Survey Questions

PART A. GENERAL QUESTIONS

1. What types of enterprises are your company’s main target group (check all
applicable)?
Small Medium Large

2. What percentage of your customers are Small Enterprises?

%

3. What percentage of your customers are Medium Enterprises?

%

4. Does your company specialize only in BI solutions?

Yes, we provide only BI consulting, integration and related services.
No, we provide many strategic IT solutions; BI is the one of them.

5. Which BI functionalities usually included in the complete BI solutions you

provided (check all applicable)?

Reporting Spreadsheet Services

Dashboard Ad Hoc Query and Reporting
OLAP Server OLAP UI (a.k.a. Slicing and Dicing)
ETL Data Mining
Alerts Scheduling

6. What other functionalities/applications would you consider as “must have”

part of BI suite?

B-2
PART B. MINI CASE QUESTIONS

7. Approximately estimate each of the BI costs based on the mini case (mini
case description included in separate file):

Cost Type Estimated Cost

Acquisition Costs

1. BI software licenses SEK

2. Consulting, installation, and configuration SEK

3. RDBMS or other non-BI system licenses SEK

4. Hardware and other infrastructure SEK

Operations Costs

5. Maintenance and Support SEK/year

6. Upgrades SEK/year

7. User Trainings SEK/year

8. What other cost types you used to considered as typical in BI costs

calculation?

9. Which BI vendor(s) would you use in the assumed solution for the mini
case?

SAP (Business Objects) IBM (Cognos)

Oracle (Siebel, Hyperion) SAS

Microsoft Other vendors:

Proprietary/in-house developed

B-3
 Appendix C. Interview and Survey Results

Interview and web-based survey results:

Respondent 6
Respondent 1

Respondent 2

Respondent 3

Respondent 4

Respondent 5
Question

1. What types of enterprises are your Medium, Medium, Medium,

Large Large Large
company’s main target group? Large Large Large
2. What percentage of your customers are
0% 5% 5% 5% 0% 5%
Small Enterprises?
3. What percentage of your customers are
10% 15% 15% 20% 10% 15%
Medium Enterprises?
4. Does your company specialize only in
No Yes Yes Yes No Yes
BI solutions?

Interview only results:

Question Interviewee 1 Interviewee 2

5. Which BI functionalities usually included in the complete All except Data Mining,
All except Alerts.
BI solutions you provided? Alerts, and Scheduling.
6. What other functionalities/applications would you
None None
consider as “must have” part of BI suite?
7.1 + 7.3. Cost of BI software, RDBMS and other licenses 200.000 SEK 200.000 SEK
7.2. Cost of consulting, installation, and configuration 600.000 SEK 500.000 SEK
7.4. Cost of hardware and other infrastructure 100.000 SEK 150.000 SEK
7.5. Cost of maintenance and support 300.000 SEK 300.000 SEK
0 SEK
7.6. Cost of upgrades 20.000 SEK
(included in support fee)
7.7. Cost of user trainings 20.000 SEK 10.000 SEK
8. What other cost types you used to considered as typical
None None
in BI costs calculation?
Microsoft Microsoft
9. Which BI vendor(s) would you use in the assumed
PerformancePoint 2007 PerformancePoint 2007
solution for the mini case?
and SQL Server 2005 and SQL Server 2005

C-4
Appendix D. Business Case Description

BACKGROUND
“MobileComet” is a content provider (i.e. ringtones, pictures, games, etc.) for
mobile devices. Sales operated only through partner mobile operators. At the
moment company has 10 employees and annual turnover of €500K.

All operational data of the company stored in the single source – RDBMS database.
This source contains information about contents, customers, orders, mobile
handsets and their characteristics, and partners (known as aggregators). The
simplified domain model is depicted in figure d.1.

Aggregators are 3rd party resellers, who usually work based on revenue sharing
model. However, aggregators’ interest rates and similar financial information are
not stored in database and available only at financial department.

0..* Customer Order 0..* 0..1 Content

ordered_by
Phone Number 1 1 0..* Content Type 0..1
sold_by Aggregator
Join Date 1

0..*
0..1

Content
1 0..* Publish Date 1 0..*
Artist belongs_to
Alias 0..*
provided_by
Category 0..*
Status 1
Rating 1

0..*

1 Mobile Handset 0..* 0..* Content Format

supports
UA Prof 1 Content Type 1

Figure D.1. Domain Model of Operational Database

D-5
REQUIREMENTS
MobileComet would like to implement Business Intelligence solution which will
help them:
 Monitoring of Key Performance Indicators (KPI) via Dashboard (e.g.
customer base, revenue, profit, etc.)
 Automatic report generation (e.g. financial reports and invoices for internal
usage and 3rd parties)
 Slicing and Dicing; Ad-hoc analysis and reporting (e.g. ability to create
complex, multidimensional queries to provide answer to questions like:
What is the monthly percentage of Samsung phones which failed to load
java games within last 1 year?)
 Provide easier, online and centralized access to all data types.
 Archive operational data. Operational database does not need anymore
keep data older than 3 months. Thus, reduce load of operational db and
save resources of production system.
Only 5 employees need to have access to the BI system. At this stage, company
does NOT need any Data Mining tools. However, they plan to implement it in
future.

DATA SOURCES
Even though company has centralised database, there is a lack of some data. To fill
gaps BI system should be able to access central DB as well as other data sources
listed below:
1. Central Operational RDBMS
2. Statistics provided by Mobile Operators (real-time, usually over
SOAP/XMLRPC)
3. Financial Data (rarely updated excel files, e.g. cost of services, interest rates
of aggregators)

REQUIRED BUSINESS PROCESSES

At this stage company wants to get insight into two main areas:
1. Sales Information
2. Customer Information and Behaviour

DATA WAREHOUSE STRUCTURE OVERVIEW

Data from operational sources captured, cleansed, transformed and loaded into
data warehouse on the nightly basis. Granularity level of the data warehouse
structures is a one minute. There are usually 5000-6000 orders per day in
operational DB.

D-6