The latest and greatest BI and analytics technologies are at the top of many companies' must-have lists. And it is easy to see why-- these tools allow businesses, such as retailers, to gather huge amounts of valuable information to predict customer behavior and increase revenue.
As with any new tech, there is a lot of uncertainty about pricing and terms surrounding BI and analytics purchasing. Vendors will continue to try and get higher profit margins from investments as long as businesses are willing to spend aggressively for these purchases.
Before your next BI/analytics purchase, consider the following to help avoid overpaying:
Consider third-party providers
Chances are good that a third-party provider can give you a better deal that your existing vendor, especially i they are experienced with these technologies. Don't forget to compare pricing and terms from several alternate providers.
Remember that ROI has nothing to do with price
Vendors will try to increase pricing based on their ROI projections. The truth is that these ROI claims are often inflated and have zero impact on price.
Think twice about bundling
Vendors will often offer you a bundle of products and services at a discount rate. Always break down exactly what is being offered in the bundle to see if you even need everything included. If you don't need it all, any discounts will be cancelled out by the fact that you are paying for things that you don't use.
Beware of fixed fees
Don't be misled by fixed-fee implementation costs. This is a terrible misnomer as the fees are rarely, if ever, "fixed. Always ask vendors to calculate costs based on time and materials. This is the only way to really know true cost-to-serve.
Position the purchase to your advantage
Make sure that everyone involved, including potential vendors, understand what you are trying to accomplish with the BI and analytics and how you plan to measure any results. Positioning yourself properly can save you up to 20 percent on your purchase. Always benchmark pricing and compare prices and terms from several different vendors to ensure you get the most value from your new purchase.
As with any new tech, there is a lot of uncertainty about pricing and terms surrounding BI and analytics purchasing. Vendors will continue to try and get higher profit margins from investments as long as businesses are willing to spend aggressively for these purchases.
Before your next BI/analytics purchase, consider the following to help avoid overpaying:
Consider third-party providers
Chances are good that a third-party provider can give you a better deal that your existing vendor, especially i they are experienced with these technologies. Don't forget to compare pricing and terms from several alternate providers.
Remember that ROI has nothing to do with price
Vendors will try to increase pricing based on their ROI projections. The truth is that these ROI claims are often inflated and have zero impact on price.
Think twice about bundling
Vendors will often offer you a bundle of products and services at a discount rate. Always break down exactly what is being offered in the bundle to see if you even need everything included. If you don't need it all, any discounts will be cancelled out by the fact that you are paying for things that you don't use.
Beware of fixed fees
Don't be misled by fixed-fee implementation costs. This is a terrible misnomer as the fees are rarely, if ever, "fixed. Always ask vendors to calculate costs based on time and materials. This is the only way to really know true cost-to-serve.
Position the purchase to your advantage
Make sure that everyone involved, including potential vendors, understand what you are trying to accomplish with the BI and analytics and how you plan to measure any results. Positioning yourself properly can save you up to 20 percent on your purchase. Always benchmark pricing and compare prices and terms from several different vendors to ensure you get the most value from your new purchase.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT cost reduction service consulting
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