It’s a nightmare scenario for anyone responsible for reporting in a business: You walk into the office in the morning, ready to tackle your task list, when you realize that none of your reports ran overnight.
Whether you’re in finance, marketing, or ops, this is a dreaded feeling. And it can seriously hinder your organization’s ability to make effective decisions company-wide.
Your day is then resigned to “fix it” mode. You spend your time running the reports again, sifting through the data, and trying to figure out where the system went wrong along the way. Say goodbye to all those tasks on your daily to-do list.
And, if it happened once, it’s likely to happen again soon.
The problem? Your business took the do-it-yourself approach to your data warehouse.
We don’t fault you. Many organizations think that a DIY, in-house setup for their data warehouse is the ideal solution. But it’s time to breakdown the true cost of DIY data warehousing. After all, your data warehouse is the cornerstone of your business intelligence efforts, so it pays to get to the bottom of the DIY vs. “done for you” debate.
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The True Cost of DIY
At the root of the debate is price. Do-it-yourself is often perceived as the cheaper, more effective approach. After all, why pay someone else to do the work when your existing team can do it in-house?
When you look at the total cost of ownership (TCO) for the hardware, software, staffing, and operating costs, a DIY data warehouse is usually two to three times more expensive than our “done for you” solution.
And, that’s not even taking into account the lost profits that occur when your reports fail or you have inaccurate, incomplete data.
1. Setup and Operating Costs
Do-it-yourself has a nice ring to it. And, it certainly sounds cost-effective. But think of it like a home remodeling project done by a homeowner with no construction or home repair experience.
You head to the big box hardware store for materials and quickly run into problems and questions you’re not equipped to answer.
What kind of grout is best for my project?
Is it better to start my tile pattern from the center or the edge?
How can I reduce my number of cuts and tile waste?
Do I have enough tile to allow for cuts, error, and chipping?
It’s quite easy to end up buying more than you needed and waste money, or not enough and have to rush to buy more supplies halfway through your project, causing delays. And if it’s installed wrong, you’re back to square one.
For DIY, it’s around $30,000 for off-the-shelf data warehouse software alone.
Then, buying the hardware needed for your server comes with its own set of questions and challenges.
Predicting your business’s storage and capacity needs both now and in the future is tougher than calculating your flooring square footage requirements, believe us. And the last thing you want to do is run out of space or end up overspending for far, far too much.
A done-for-you data warehouse solution takes care of all this guesswork for you. You pay a one-time fee at the beginning of your contract to set everything up, and you lean on the established infrastructure already in place. From there, it’s subscription-based. Because the hardware, software, and maintenance are spread across multiple businesses leveraging the same infrastructure, monthly costs are manageable and low by comparison. It’s a shared cost that’s much more affordable than building it yourself, and a good data warehouse provider will follow a “pay for what you use” model so there’s no fear of overpaying for capacity you don’t end up needing.
2. Staffing Costs
Who runs your in-house data warehouse now? If you’re like many organizations, it’s whoever fell into the job – usually a data analyst or your already overloaded IT department.
While that definitely cuts costs upfront, your data warehouse is likely not getting the attention or maintenance it needs. Not to mention what would happen if you were to experience turnover or any gaps in skill on the team if one person were to go on sick leave or vacation.
If you’re serious about a DIY data warehouse, then you need to get serious about your data warehouse staff.
Qualified candidates for your key data positions (yes, that is positions with an “s”) often net six-figures in most markets. And because data expertise is such a sought after skill today, prepare to face a very tight talent pool. These folks don’t come cheap and retention will be tough, thanks to their highly specialized skills that are much in-demand.
When hiring for your data warehouse, there are three to five different job titles you’re looking at, depending on your specific needs.
- ETL Developer, to move and extract data.
- Database Administrator, to make sure the database is sanitized, scrubbed, and clean.
- Business Analyst, to get the requirements from the business and make sure the right data is collected.
- Report Writer, to design, build, and test reports.
With a done-for-you data warehouse, you don’t need to worry about staffing costs or retaining top talent. Top experts in all the above specialties are on staff, and the cost of employing them is rolled into your monthly fee and spread across the shared platform.
3. Intangible Costs
As with any business initiative, there are some costs that aren’t easy to calculate in a concrete way. All the same, they’re something you should consider when deciding between a DIY data warehouse and the done-for-you approach.
Think about those times that you didn’t get the data you needed because your DIY data warehouse didn’t deliver the reports you needed in a timely manner. Or your reports weren’t accurate.
When you have the wrong numbers, you can make the wrong decisions.
Plain and simple.
And, when you don’t have numbers at all, you miss the opportunity to make a potentially profitable decision. When this happens, can you truly say you have the business intelligence you need to operate your company and grow it to its fullest potential?
Lost time really does equal lost opportunity and money in these cases. Still trust your DIY data warehouse to always run smoothly?
In the best-case scenario, you’re well-staffed in that department. But it’s more likely that your data analyst is scrambling (and failing) to do all the necessary work. Many businesses don’t track important key performance indicators for this very reason.
With a done-for-you data warehouse, you have “one source of truth” that you can rely on. The metrics and KPIs you need to run your business successfully are always there when and where you need them.
Done-For-You is the Clear Winner
Turns out that when you look at all the costs – quantifiable and intangible – a DIY data warehouse is much more expensive than initially thought. With a done-for-you, fully managed data warehouse solution, you get effective and efficient data management and reporting for an expert team that’s always there for your business.
And, most importantly, your business gets the accurate and actionable business intelligence you need to succeed.
A strong data warehouse is part of becoming a data-driven company.
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