Is your data analytics vendor shaping your business?

Four things to watch out for

Cloud analytics platforms can drive profitability and enable faster, more accurate business decisions.

But there are four expensive mistakes to avoid when you engage a vendor to help get you there.

Whether you are building on top of existing systems or building a data warehouse from scratch, there are now multiple tools and vendors to help you.

If you don’t have a data warehouse or data lake configured yet, working with a vendor that brings infrastructure-as-code tools can significantly accelerate your progress. Without those tools, it’s tempting to give every user unrestricted access in the early phases of development. But putting off security policies just exposes your organization to greater risk.

However, the same teams that bring these useful “getting started” tools often try to make your business fit into a structured script in other, less beneficial ways.  Let’s look at four key mistakes these partners often make.

Mistake 1: Starting from scratch

In some cases, your vendor’s consultants will review your existing environment and recommend starting over with their superior infrastructure setup or preferred technology. While there may be genuine benefit to their recommendations, they typically don’t care if the benefits outweigh your costs.

At this point technologies have matured to the point where most tools can do the job if you work with them, although they have different strengths and weaknesses.

If your organization wants to start over using a specific technology, it makes sense to hire someone who has a lot of experience building those kinds of systems from scratch. But if you have something that already generally works, look for a consulting partner who will build on what you’ve already started.

Mistake 2: Reinventing the wheel

If you do already have a data platform setup, hopefully you’ve found a vendor who is willing to work with the tools you’ve got. Sometimes they say they’re willing, but need to do some configuration or bring in an extra tool that helps them do their job more effectively.

These situations can be incredibly challenging to navigate. No one likes the number of different tools and systems you need to create a functioning analytics stack. And it’s often necessary to keep adding more as you build new capabilities.

However, in some cases the vendor is simply more comfortable with a different tool or wants to use their normal infrastructure-as-code setup. In these cases, they might ask for a new environment in your existing systems or to add extra technologies to meet a specific need.

To be able to work more efficiently across different clients, they subtly try to reshape your environment to match their standard.

These little changes make it more challenging for your internal analytics and IT team to navigate the now-sprawling and duplicative systems. They also introduce more points of failure, and make you more dependent on the new vendor.

Knowing you may want to move on from a consulting partner while keeping everything they built for you, it’s important to carefully balance development speed on the part of the vendor against your goals after they’re gone.

Mistake 3: Ignoring your business rules

Some vendor consultants take the previous mistakes even further and attempt to choose analytics problems that they can solve without understanding your business. This kind of vendor will give you a menu of specific solutions they offer such as “executive dashboards” or canned forecasting / churn / marketing analytics.

There’s nothing wrong with this kind of solution when it’s sold appropriately. Canned analytics can be a fabulous starting point. However, the maturity of the field means that if you want more of a cookie cutter approach, you probably don’t need to work with consultants at all.

There are now off-the-shelf solutions with enough configurability to produce standard reporting to support data driven decision making.

If what you are looking for is a more customized approach that matches the complexity of your business, you should treat these structured engagements with skepticism. Understand how the vendor will learn about the nuances of your business and data gaps, and how they will help drive or work with your team to build useful analytics in that context.

Mistake 4: Overlooking existing analysis work

Every organization has some individuals working with data to help them do their jobs, whether that’s accounting and finance, or specific people involved in the operations side of the business.

The expertise those people have is invaluable to help build useful analytics tools for the company. Unfortunately, since analytics projects are often managed separately either by IT or from the C-suite, people often fail to work together to share the existing internal knowledge.

Like the other mistakes in this article, this one often comes from wanting to use a more standardized approach rather than deeply understanding your business. It isn’t easy to understand someone’s spider-web of interconnected excel spreadsheets or code. But it’s even harder to guess the right way to piece together data accurately.

Know what you have, and what you want

A cottage industry of consulting companies helping clients get started with cloud analytics has grown over the past decade. Since so many organizations were starting from zero, it was easy for vendors to focus on that use case alone.

However, there are now companies that need help building on top of those foundations. Not every vendor understands the importance of improving an existing system. It’s easier for them to control and predict a fresh build with canned reporting.

When organizations are asking for a predictable analytics project, the best way to pull that off is to eliminate the pesky unknowns of working with someone else’s setup and challenging data.

As you consider bringing in a new team to help enhance your current analytics, make sure they’re balancing the value of what you’ve got against the real costs of starting over. And ask yourself what you really want to accomplish, today and in the future.

Contact us if you'd like to build on your existing systems or want an outside opinion before agreeing to a vendor's recommendation.