BI and Analytics Tool Selection Framework: Core Components Required for Success

Selecting the right BI or analytics tool can be a challenging endeavor — there are a many great options in the market, but there are critical factors you must consider to ensure the tool aligns with your organization’s specific data needs and future growth plans.

Analytics8 has helped hundreds of organizations with tool selection through tool assessments, ‘bakeoffs’, and proof-of-concept builds using the guiding framework below.

In this blog, we cover the foundational steps we recommend taking in order to guide you through selecting the right BI or analytics tool, including:

1. Determining the Tool Fit: how to align the tool with your data systems and growth trajectory. ↵
2. Considering Your Data Platform: how to match the tool to your specific data architecture. ↵
3. Accounting for Data Transformation: how to determine where data logic will be stored. ↵
4. Weighing the Intangibles: ways to ensure the less tangible aspects of the tool are considered. ↵
5. The Migration: how to create a practical and strategic plan for switching to a new tool. ↵

#1: Determining Tool Fit

This step is pivotal for ensuring a BI tool effectively aligns with your organization’s existing and future data architecture, operational needs, and growth plans. It involves assessing the tool’s compatibility with back-end data platforms, learning curve for developers and users, financial implications of licensing models, and capacity to scale and be widely adopted.

When evaluating overall tool fit, consider these key factors:

1. Optimal fit within your current or anticipated architecture: The right tool should not only interface well with your current systems but also adapt to future data needs. It’s a core component of your data ecosystem, vital for seamless connection to data sources and efficient data handling. Remember to regularly review its fit, particularly as technology evolves.
2. User and developer learning curve: A complex tool can hinder adoption, so prioritize a tool that’s user-friendly and accessible to all skill levels. Foster a learning environment, perhaps through a community of practice or a center of excellence, to ensure comfort and proficiency with the platform.
3. Anticipated scale and adoption: Choose a tool that can scale with your organization’s growth and technological advancements. It’s not just about the current fit but also about future capabilities. Widespread adoption is a sign of having the right tool; but truly effective use of the tool is when it enhances data processes and decision-making.

Tip for Tool Fit Assessment: Carry out a detailed compatibility test between your existing data platforms and potential BI tools. The assessment should cover the tools’ technical abilities plus their ability to meet your specific data analysis requirements. Test the tools in scenarios that mirror your typical data workflows to understand their real-world functionality.

#2: Considering Your Data Platform

The choice of BI tool should be heavily influenced by the nature of your data platform, and it’s fit with your back-end architecture. Consider data sources, data transport, data storage, data transformation workflows, and any associated machine learning or AI pipelines.

BI and analytics tools are not standalone entities; they must integrate and operate in harmony with all the software and tooling you have behind it.

What best describes your data platform?

Before you select a BI or analytics tool, look at what best describes your current data platform today, or where you want to go in the future: modular, cloud, or decentralized.

Here is some guidance based on your platform:

• Modular Data Platform: This approach involves using various vendor microservices for different data functions, like data transport, data warehousing, and data transformation. Examples include Fivetran for data transport, Snowflake for data warehousing, and dbt for data transformation. A modular data stack offers flexibility in choosing BI tools, as you’re not tied to a single vendor. We have deployed Power BI, Looker, Tableau, Qlik, and Sigma on Snowflake without any issues.
• Vendor Cloud Platform: Platforms like Microsoft Fabric, Google BigQuery, or AWS Redshift often favor their own BI tools due to native feature integrations and bulk licensing advantages. For instance, using Microsoft Azure typically aligns with adopting Power BI. While there are exceptions, vendor platforms generally guide toward a more unified toolset.
• No Central Data Platform/DWH/Lakehouse: In scenarios where organizations lack a centralized data platform and rely on various source systems, the BI tool may be crucial for both data ingestion and data transformation. This situation demands a BI tool versatile enough to handle a wide array of data types and complexities, often without the support of a central data warehouse or lakehouse. Careful evaluation of the BI tool’s capabilities in such environments is vital to ensure it can effectively manage and scale with the data requirements.

Considerations Across Scenarios: When selecting a BI tool, it’s vital to weigh the trade-offs of your data architecture. A monolithic platform offers ease of management but can be costly and may restrict flexibility. Conversely, a modular setup using microservices is more cost-effective but demands a broader skill set to manage various systems.

#3: Accounting for Data Transformation

When selecting a BI tool, determine where the data transformation logic will best serve your organizational needs. This strategic placement directly affects data flow and tool efficiency. While BI tools may offer some transformation capabilities, the goal is to utilize them in a way that aligns with your architecture, ensuring a streamlined data pipeline and effective use of system resources.

The path for data transformation logic is dependent on the BI tool. For efficient data management, ensure your BI tool isn’t the primary source for storing your data logic.

Here are some tips to ensure the role of your BI tool is contributing to efficient data management:

• Maximize your data platform’s compute power: Utilize your cloud data platform’s computational power for data transformations, keeping the data logic and dimensional models centralized. This not only improves efficiency but also simplifies future migrations. If you’re currently using your BI tool for complex data logic, consider transitioning these processes to your cloud platform. This approach ensures a single, consistent source of truth for your data, making it easier to manage and adapt your system over time.
• Assess latency and refresh requirements: Determine your users’ data latency and refresh needs, such as real-time data streaming or nightly batch reloads. Assess if in-memory caching or direct querying is suitable. Keep in mind, over-stressing the data warehouse with frequent direct queries for real-time data might impact overall performance. Align the BI tool’s capabilities with these data SLAs to ensure optimal performance and user satisfaction.
• Optimize use of BI tool data management capabilities: Use BI tools for aggregations, counts, and user-defined dimensions — tasks where BI tools excel. If complex data transformations are in the BI tool, treat them as interim solutions, aiming to move these to a data warehouse or data lakehouse eventually. Avoid overly complex structures in the BI tool to facilitate future migration. Emphasize data modeling and schema design, ensuring calculations are simple and straightforward. This approach helps in maintaining a clean, manageable BI environment, avoiding the pitfalls of complex, unmaintainable data models within the BI tool.

#4: Weighing the Intangibles

Consider elements beyond technical specifications that influence user and developer satisfaction. There are three main intangibles you should consider when selecting your BI or analytics tool:

• Licensing costs: Assess the scalability of licensing costs for your BI tool, not just the current price. Anticipate how costs will evolve as your usage grows. Consider the potential jump in expenses as you move between tiers and plan for the long term, ensuring you won’t be caught off-guard by a price surge as your needs expand. This foresight in budgeting is crucial for sustainable tool adoption and avoiding unexpected financial strain.
• Use case requirements (over features): Rather than being swayed by the broad spectrum of features, focus on the specific use cases that will impact your organization the most. Evaluate if the functionality aligns with practical, high-value applications within your business. This ensures you invest in tools that your team will actively use and benefit from, rather than acquiring sophisticated features that do not translate to real-world utility.
• Product roadmap (or lack thereof): Engage with the BI tool’s community and monitor the vendor’s product roadmap and discussions. Active user groups and a clear, forward-looking roadmap can indicate a thriving tool with robust support, essential for both end-users and developers who may seek resources for troubleshooting. A lack of activity or updates could be a red flag, signaling a decline and potential challenges in finding skilled personnel or support in the future.

#5: Migration Plan 

When it’s time to migrate to a new BI or analytics tool, you need a strategic and thoughtful plan to ensure a smooth transition. Your plan must account for all elements of the technical infrastructure and user experience, including thorough report rationalization, UX/UI, data source reconciliation, and a meticulously planned cutover strategy. The plan should minimize impact and optimize adoption across your organization.

Before making the move, ask these three questions:

1.) What needs to be carried over?
Start your migration plan by taking stock of the adoption and usage of your current BI reports. Assess which reports are being utilized and essential to carry over to the new tool. This step is your opportunity for a “spring cleaning” of your BI environment, allowing you to declutter and migrate only what’s necessary. Engage with end-users to understand their needs and usage patterns, ensuring that the migration focuses on high value, actively used reports, and retiring those that are redundant or obsolete.

2.) Is data accessible and available for the reports you want?
Once you identify what reports needs to migrate (or built net new), ensure that the necessary data sources are both accessible and complete. This is fundamental; without the necessary data, development in the new BI tool can stall. Verify the availability of each data source required for your initial use cases to guarantee a smooth, quick transition and to facilitate early adoption of the new system. This thorough vetting, known as data source reconciliation, is key for a successful migration.

3.) Does my cutover plan minimize negative impact to the organization?
Devise a clear change management strategy. Decide if you’ll transition to the new BI tool gradually or maintain both the old and new systems in parallel for a time. This careful planning is critical for minimizing disruption for your business users. A well-communicated, phased approach can ease the transition and foster acceptance, turning a technology shift into an opportunity for positive change and improvement within your organization.

Watch: A Deep Dive into Selecting the Right BI or Analytics Tool with Analytics8 Tool Selection Framework

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