So, you’ve decided that it’s time to put the power of data into your products and services. Good decision! Embedding analytics into your apps is no longer just ‘’nice to have’’; this kind of functionality is nowadays. It is of imperative importance.
According to a survey conducted by Reveal, the main business reasons end-users want business intelligence/data analytics software is to make smarter, data-driven business decisions (45%), understand business problems better (44%), and increase work productivity (43%).
Whether you want to improve productivity, get ahead of your competitors, make more intelligent business decisions, or increase your revenue, embedding analytics into your apps will help you achieve that and much more.
So, the question is should you buy an established solution or build yourself an embedded analytics software from scratch? This article compares the pros and cons of buy vs build to help you make up your mind.
What Is Embedded Analytics?
Embedded analytics is software that integrates business intelligence (BI) capabilities and data visualizations directly into other existing software applications’ user interfaces (UI). The goal of an embedded analytics solution is to improve the context and usability of the data for all business users. Users can extract valuable insights in the context of their workflow and then promptly act upon those insights.
Embedded Analytics Benefits
The benefits of embedded analytics are tremendous for everyone. The robust capabilities and functionalities of embedded analytics platforms allow users to easily understand the meaning of data, uncover insights, and build reports and dashboards independently. That is a great benefit for ITs and data analytics experts, too; it frees up their time to focus on their own important tasks.
Another great benefit of embedded analytics is that it provides you with all the important data and insights directly into the applications that your users are already using. That eliminates the need to switch between different apps and, of course, increases productivity as distractions are shed to the minimum.
Cultivating data-driven decision-making, however, is perhaps the greatest benefit of embedded analytics. In-context analytics enables analytical thinking and allows your users to make faster and smarter business decisions based on the information available at the moment or visible on the specific screen that they are viewing.
Data is more legitimate and solid than a gut feeling, but just because you are making decisions based on data, that doesn’t mean that these decisions will always be correct. That is very important to note, so you don’t forget or neglect to continuously measure and monitor everything that is going on around your data.
Should You Build or Buy an Embedded Analytics Solution?
Depending on your business needs, resources, and budget, these are the pros and cons of both buying and building an embedded analytics solution:
Pros & Cons of Building Your Own Embedded Analytics Solution
PRO: You Have Total Flexibility & Control
One of the most convincing arguments in favor of building your own embedded analytics solution is that it lets product managers remain fully in control over every aspect of the application. That includes functionalities, branding, user experience – everything. By keeping all aspects of development in-house, you have the complete freedom to design the solution tailored specifically to your unique business needs.
PRO: Perfect for Small and Fast Projects
Building your own analytics solution in-house can be the best option when working on small projects with a limited set of requirements. What that means is that if you only need some basic analytical functionalities that your development team can easily build, then building might be the best option for you. However, if you need any advanced functionalities, please consider the extra time and cost associated with adding them to your own solution (also, lots of advanced functionalities will require a specific skill set or experience to be built).
PRO: Data Security Is in Your Hands
Depending on the point of view, this could be seen as a pro and as a con at the same time. When building a solution on your own, data security will be in your own hands, and you will have full control over how you secure it. For some companies, this is a huge benefit, while for others, it isn’t, as they don’t have the expertise to do it themselves.
CON: It Requires a Lot of Development and Maintenance Resources
You should be well aware that building your solution from scratch is not an easy task and requires a lot of hard work. And you are then maintaining it. This process involves a great understanding of data analytics, and if you don’t have specialists on the topic, we recommend the buying option. Of course, you can invest time and resources in training your development team, but is it worth the extra time and money?
CON: It’s Very Time-Consuming
On average, building your embedded analytics solution takes a minimum of seven months to complete. If you also take a couple more months to properly train your development team in data analytics, the whole process can take about a year or more. Can you spare that time? Every day you spend without being able to easily access, analyze and understand data results in missed opportunities and loss of revenue.
CON: High Cost to Build
It is estimated that the average cost of building embedded analytics is as much as $350k (based on average U.S. salaries). Based on that estimation, that cost includes 4 software developers and 1 QA professional for 7 months, 2 UX/UI designers for 6 months, and 1 data scientist for a month.
The standard price when buying an embedded analytics solution is between $30K to $75K per year.
Pros & Cons of Buying an Embedded Analytics Solution
PRO: Allows You to Focus on Your Core Product
So, when building your solution, your development team must switch their efforts towards building the analytics solution instead of focusing on working and improving your core product. Buying allows your developers to focus on what your product/service was initially designed for.
PRO: Faster Time to Market
When buying an established solution, instead of losing months in development, you can meet your customers’ demands faster. In the highly competitive SaaS market, buying a pre-built solution drastically improves time to market and, therefore, profits.
PRO: Includes Maintenance
You don’t have to worry about maintenance when buying an embedded analytics solution. Typically, 90% of the cost of software during its lifetime is tied to keeping it up and running. When buying, however, this is covered for you by your service provider, and you don’t need to spend extra money on it.
PRO: Maximum Security Guaranteed
The embedded analytics solutions that are out there on the market must comply with high data security standards, the quality of which is assessed by SSL security certificates. With this in mind, you shouldn’t worry about keeping your data safe and protected even when you opt for the buy option.
According to Nucleus research, analytics return $13.01 for every dollar spent. That’s a 13:1 ROI for you and your customers when you offer embedded analytics in your SaaS solution.
CON: Support Is Often Not Included and Comes as an Add-on
Support services are offered by almost all embedded analytics providers, but unfortunately, these are not typically included in the price of the package but instead come as an add-on. Having that in mind, make sure to ask embedded analytics vendors the right questions to find out what you’ll get for the price they’re asking.
CON: Vendor Limitations
Depending on the vendor, you may be limited to basic dashboards and visualizations or have limited customization options. It’s worth taking some extra time to well research the market and the different solutions out there, so you can find the one that has it all and best fits your needs.
These are the key differences and pros and cons of building vs buying an embedded analytics solution. Hopefully, the information in this article will make the build vs buy dilemma easier for you. If you choose to buy, remember that choosing the right partner to go with is extremely important. Don’t just invest in the first nice solution that you come across; take time, do your research, and test.