Bottom up and top down approaches to estimating costs for a single BI report

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By Boris Evelson

How much does it cost to produce a single BI report? Just like typical answers to most other typical questions, the only real answer is “it depends”. But let’s build a few scenarios:

Scenario 1: Services only. Bottom up, ABC approach.


Assumptions.

• Medium complexity report. Two data sources. 4 way join. 3 facts by 5 dimensions. Prompting, filtering, sorting ranking on most of the columns. Some conditional formatting. No data model changes.
• Specifications and design – 2 person days. Development and testing - 1 person day. UAT – 1 person day.
• Loaded salary for an FTE $120,000/yr or about ~$460/day.
• Outside contractor $800/day.

Cost of 1 BI report: $1,840 if done by 2 FTEs or $2,520if done by 1 FTE (end user) and 1 outside contractor (developer). Sounds inexpensive? Wait.

Scenario 2. Top down. BI software and services:

Assumptions:

• Average BI software deal per department (as per the latest BI Wave numbers) - $150,000 Average cost of effort and services - $5 per every $1 spent on software (anecdotal evidence)
  Average number of reports per small department - 100 (anecdotal evidence)

Cost of 1 BI report is $9,000. Still sounds inexpensive? Let's keep going.

Scenario 3. Top down. Information management software and services.

Assumptions:

• Average BI software deal per department (as per the latest BI Wave) - $150,000
• Average ETL software deal per department (as per the latest ETL Wave) - $150,000
• Cost of 1Tb DW (as per latest DW Wave) - $50,000. Let's also figure in a 3x for production + development test + DR environments.
• Average cost of effort and services - $5 (anecdotal evidence)
• Since the effort of building full blown DW/ETL environment usually go beyond one department, let's increase the number of reports by 3x to 300

Cost of 1 BI report also comes out to $9,000 since we are now using economies of scale for ETL and DW accross several departments. But that's not the end of it.

Scenario 4. Top down. Fully loaded:

Assumptions:

• 10% of enterprise operational data quality cost of $1M and 2x for services 10% of enterprise operational MDM cost of $5M and 2x for services
  Not counting (since I don't have good numbers - if you do, please provide) a) 10% of enterprise intranet portal, b) 50% of enterprise performance management applications c) servers (physical or virtual) for production, development, test, UAT and DR regions d) additional data center support and infrastructure

Cost of 1 BI report is now $13,000. Still waiting to collect more data on the 3rd bullet point above, but i can easily see how the truly fully loaded cost might grow to $20,000.

Of course this is only one side of a complete picture, cost/benefit equation, since the cost of producing a BI report cannot be looked without referencing the value it provides. After all, if that one report produces $100,000K in cost savings or in additional revenues, then even $20,000 becomes very attractive.

Suggestions for bringing the cost of BI down?

• Since services and support are major parts of the cost equation - enable end user self service 100 reports is a very low estimate, most organizations have more. Practice agile BI to reduce the effort it takes to develop each report, and ensure that the requested reports are actually used.
  Leverage other best practices for reducing your BI costs found here.
  In certain specific use cases, consider BI Saas (watch for the upcoming report in a few days).

I welcome and encourage comments and will update this blog with all relevant and useful suggestions.



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