Thursday, December 1, 2011

Hosted Analytics

Hosted IT solutions, or cloud computing is a technology trend that is enabling businesses to offload much of their IT infrastructure to a remote location that is managed by a third party.  Hosted services provide a variety of solutions: databases, file servers, applications and even computing power.

One service that still seems to remain local, however, is analytics.  For the most part, businesses are conducting their analytics in house and keeping the results somewhat centralized.  While business intelligence (BI) and analytics technologies exist that allow businesses to distribute analytics via the web and mobile devices, the price tag on these tools is quite high and prohibitive for small to medium sized businesses to own.

An emerging service to host analytics is starting to gain traction, however.  This is the notion that a third party would host reports, models, dashboards and analytics on web and mobile enabled platforms.  Since development of analytics requires a specialized skill set combining mathematics, IT, economics, business and statistics, these hosted solutions also often come packaged with business analytics consulting services that help transform business needs and overwhelmingly confusing data into insights and actions.  The full solution, therefore, is a service that enables an organization to understand the baseline of their current state, to set goals for their business through predictive and optimization models, and to monitor against these goals on an on-going basis.  All of this is delivered and consumed through web enabled tools.

While this notion, practice and consumption of analytics is not new, the offering of hosted solutions now allows small to medium sized businesses to get in on the analytics game that was previously enjoyed mostly by larger organizations.  All for a fraction of the price that would be required to make hardware and software purchases in the traditional self-hosting model.

The benefit of all this is that hosted analytics tend to be agnostic to enterprise IT platforms.  What this means is that a hosted analytics solution can tap into your ERP, CRM, HRIS, legacy and home grown systems (whether they are hosted locally or remotely) and gain integrated insights across these disparate platforms.  While some of these platforms do offer analytics modules or components, they often lack this ability to integrate with other systems to gain those cross-platform insights.  Additionally, these platforms are often competing technologies and don't "play nice" with each other when it comes to data integration.  This is why a hosted, independent analytics platform is so important.

While the concept of hosted IT has been around for a number of years now, the notion of hosted analytics is is just now being enjoyed by early adopters.  When it catches onto the mainstream like other hosted solutions, it just may change the way companies do business.