Businesses are trying to harness the right data sets and analyze them in the right ways to make good decisions about products, services, customers, suppliers and much more. But BI tools come in so many forms, and the choices can be overwhelming. One of those choices is whether to pursue this business intelligence in-house or utilize new cloud or SaaS BI tools.

This article will attempt to explain what SaaS (software-as-a-service) business intelligence entails, the difference between on-premise and SaaS, some of the pros and cons of choosing a SaaS solution, and how to select the right BI tool for your business.

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Overview

Software as a service business intelligence is defined as a “delivery model in which applications are implemented outside of a company and usually employed at a hosted location accessed by an end user via protected internet access.” That’s a lot to unpack, so let’s take it piece by piece.

A delivery model or deployment method refers to how a software is hosted. On-premise software is hosted and accessed from servers on your facility, often via an intranet system of some kind.

SaaS software is hosted in the cloud, typically across a number of different servers, and accessed by the users through an internet browser. This can be done on any device with an internet connection or only from authorized endpoints at specific locations.

SaaS systems also typically come with a subscription pricing package where users pay as they go month-to-month. With on-premise software, it’s more typical to pay upfront or yearly to purchase the solution.

Based on SelectHub survey data from 2018, users were pretty open to both on-premise and cloud deployment with 69% of respondents saying they had no preference. Of those who did have a preference, 10% leaned towards SaaS and 23% required it. For on-premise, those numbers were 8% leaning and 8% requiring on-premise deployment. This suggests that SaaS business intelligence tools are becoming more popular among software buyers, an interesting trend that is mirrored in most other software categories as well.

Key Features

While every system is different, cloud BI systems usually offer a similar core module of features. Some of those features include:

Platform Functions

• Interactive Visualizations
• Platform Customization

Data Visualization

• Storyboarding
• Geospatial Integration
• Animations
• Barcode Generation
• Table Generation
• Infographics
• Filters
• Widgets
• Drag-and-Drop Interface
• Templates
• Freehand SQL Command
• Layouts
• Themes

Analytics

• Benchmarking
• Predictive Analytics
• Social Media Analytics
• Web Analytics
• Geolocation Analytics
• Ad-Hoc Analysis
• Trend Indicators
• Profit Analysis
• In-Memory Analysis
• Statistical Analysis
• Data Mining
• Machine Learning

OLAP

• Drill-Down
• Data Exploration

Decision Services

• Various Format Export
• Financial Management
• Regulatory Compliance
• Monitoring
• Fraud Detection
• Consulting Services
• Integrations
• Big Data Connectors

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Benefits and Drawbacks

Vendors are always coming up with more advanced SaaS business intelligence software that can take the place of applications developed or maintained in-house on internal servers. But those shopping around for business intelligence software products should know that there are some benefits and disadvantages to SaaS business intelligence adoption.

Here are some of the pros and cons of using software as a service delivery methods for business intelligence tools:

Pros

Flexibility and Scalability

One of the biggest advantages of SaaS BI tools is that companies no longer have to do the hard work of purchasing, installing and maintaining software products in-house. Enterprises that use SaaS business intelligence can skip all kinds of gatekeeping hurdles, such as installation processes, and just enjoy on-demand delivery of the services that they need.

Pricing

Companies that are customers of SaaS business intelligence vendors can also enjoy different kinds of payment models. Subscription pricing allows companies to just use what they need, again, with on-demand delivery, and get rid of it when it’s no longer necessary. That’s not true with in-house structures where companies have invested in a certain amount of data handling for the long haul. On-premise solutions also come with the cost of an IT team dedicated to keeping it available, a cost handled by the support team of a web-based system.

Less Responsibility

Companies using some of these business intelligence tools that are available through the cloud can keep fewer staff on hand and avoid purchasing additional servers and hardware. The user also passes the responsibility of providing data security measures on to the product provider, saving money and stress; most web-based solutions are as secure as on-premise ones in the modern age.

Attracting Top Talent

There’s also a case to be made that using the most modern SaaS BI tools can also help a company to develop a good reputation within an industry. In today’s hiring climate, with record lows of unemployment and a dearth of highly educated IT professionals, companies are playing hardball when it comes to hiring and recruiting. One way to attract the best people is to advertise to them that they’ll be working with the best tools — not wasting their abilities trying to tend to garden-variety server systems.

Cons

There are potential downsides to SaaS BI tools as well. Here are some of the points that shoppers should think about when considering these types of solutions.

Security and Regulations

One of the obvious disadvantages with any type of SaaS BI tool is that it requires putting sensitive data in the hands of a third party. In heavily regulated fields like medicine and finance, this has the potential to violate central industry commitments to keep data 100% safe and secure. However, to the extent that the vendor can provide security guarantees, SaaS business intelligence may be considered just as safe, or nearly as safe, as going with an in-house system. So this con may be decreasing as web security protocols improve.

Hidden Costs

There’s also the phenomenon of hidden vendor costs. Pricing may not be as transparent with some SaaS offerings as it should be, and it’s possible for companies to find themselves overspending as a result. Customization, extra modules, even live support often come with extra price tags.

By contrast, companies can always know how much it’s going to cost them to build in-house systems. It’s important to have an in-depth discussion with vendors to avoid pricing miscommunications and other kinds of similar problems.

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Lack of Customization

Another potential problem with SaaS business intelligence is the inability to customize it to a particular company’s needs. While many of these services are pretty flexible, there’s obviously a benefit to developing an in-house system that’s proprietary. You build it from the ground up, from scratch, and thus you can make sure it’s completely tailored to the needs of the business. Companies can also get some bragging rights by developing their own systems in-house.

But again, the balance is the cost in terms of time, money and resources. Customization coming from a company often comes with a hefty price tag that isn’t always experienced by users of on-premise solutions who customize the platform themselves.

Lack of Integrations

Some who are critical of using SaaS BI tools also contend that it might become a bit harder to integrate other types of software into an architecture that’s using vendor tools. Today there is a lot of talk about the “API ecosystem” or the use of application program interfaces to patch together parts of a Frankenstein architecture in order to achieve diverse functionality without having data silos or bottlenecks. While integration can be easier on an in-house platform, again, it depends on the particular vendor services and the agreements that are in place.

Most of the downsides of using SaaS BI tools are actually points to consider when shopping for these types of vendor services. Using any easy selection platform can help shoppers to understand how various SaaS BI tools contrast, and how vendors compete for their business. Take a look at all of these systems side by side, and choose what’s best for your enterprise.

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Tool Selection

Choosing the right tool requires a sophisticated approach to IT architecture and the ability to define what kinds of resources are going to do the most for a business or provide better returns on investment, while also offering ease of use and scalability. Whether you choose a SaaS BI tool or an on-premise one, follow these steps to make sure the choice is the right one for your business:

Gather Requirements

The first step is to identify which of the many capabilities of business intelligence software you need to utilize, and which are the most important. Different industries, different sized organizations and different deployments all impact which tools you will use, and accurately identifying your requirements is the best way to get an understanding for how much a system will cost you as most SaaS systems are priced by feature.

This BI requirements template will walk you through what features there are to choose from, what they do and which might be most important for your business.

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Compare Vendors

Once you’ve identified your requirements from a BI solution, you can move on to creating a product shortlist. This comparison matrix breaks down how some of the industry leaders in both SaaS software and on-premise solutions perform for the categories identified in the requirements template. We recommend matching the vendors that perform the best in the specific categories you marked most important to make sure they’re a good match for your unique needs.

Submit a Proposal

Once you’ve created a shortlist of the top five or so products identified from the comparison matrix, you’re ready to contact vendors and make your final selection. Submitting a request for proposal (RFP) is how you get a formal break down of how a product will meet your needs.

This BI RFP template will walk you through the proposal process. This is when you can request a quote based on your requirements, get demos and even a trial to make sure your employees will be able to work with the system and that it feels right.

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Conclusion

SaaS BI is a modern software deployment solution that can offer many benefits to organizations of all sizes and industries, including more affordable pricing, vendor-backed security, flexibility and convenience. It also comes with some potential pitfalls that should be addressed like hidden costs, the need for extensive internal support and lack of integration abilities. Whether you’re sold on SaaS business intelligence or would prefer to go with an on-premise solution, you should be prepared to select a new tool for your organization that suits your unique needs!

Do you prefer SaaS or on-premise business intelligence? Tell us why in the comments!