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Pros and Cons of Building Analytics vs. Buying Analytics

By Josh Martin | March 21, 2017
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Application teams are constantly grappling with questions on how to engage their users, improve their end user experience, and attract new users. One of the best ways to do this is via embedded analytics.

According to Logi’s soon-to-be-released 2017 State of Embedded Analytics Report, 92 percent of application teams are already providing embedded analytics in their applications. Embedded analytics empowers end users to get the right data, at the right time, in the right format. It informs your users within the context of their workflows, so they can determine what to do next fluidly and efficiently — without forcing them to export the data from your application to analyze it elsewhere.

If you haven’t considered embedding your analytics deeper into your product, you risk rendering your application obsolete. But whether you’ve decided to enhance your embedded analytics or embed analytics in your application for the first time, the next question is how do you approach the inevitable build versus buy question? Should you code it all yourself or buy a Commercial Off-The-Shelf (COTS) product?

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We put together the table below to summarize key considerations for building analytics versus buying a third-party product. We also provide pros and cons to a third alternative: the combined approach, in which a company partners with a third-party platform that enables them to build their own unique intellectual property (IP) while getting to market faster and scaling more easily.

 

Build

Buy

Combined Approach

Pro 

Total control over functionality and customization Faster time to deployment (especially pertinent to commercial applications where time-to-market is crucial) Faster time to deployment than building, although likely longer than buying a pure COTS

Pro 

Control over integration with your application Frees up resources so your development team can focus on the core application Total control to customize components and ensure your embedded analytics have the same look and feel as the rest of your application

Pro

If analytics fit within your company’s core competencies — and if your internal skills can’t easily be replicated elsewhere — then consider building analytics Fewer resources needed since coding is minimal You focus on your core application while your vendor keeps up with the latest analytics trends, adds new features, and scales your solution for the future

Pro

Minimal ongoing administration overhead Partnering with an expert in embedded analytics gives you access to new, sophisticated capabilities that most COTS products simply don’t offer

Con 

Longer time to deployment Depending on the vendor, you may be limited to basic dashboards and reports with few options to add more advanced capabilities Requires a moderate amount of developer resources

Con 

Building analytics is code-intensive, which means it requires more developer resources than other options Many COTS products have limited (or zero) customization options, meaning your embedded analytics may look like your vendor’s brand, not yours Development time will depend on the ease to develop on your chosen third-party platform (for faster TTM, look for a rich set of out-of-the-box capabilities, robust library, data source connectors, etc.)

Con 

Higher total cost of ownership: platform, ongoing maintenance, research and development, and so on Higher potential for integration issues

The decision of whether to spend time building analytics versus buying analytics or taking a combined approach is crucial to any application team. It’s worth pointing out that, according to new findings in the 2017 State of Embedded Analytics Report, companies that combine the build and buy approaches yield the best results. Through the combined approach, companies are able to offer more sophisticated analytics capabilities, in less time, at a deeper embedded level, while committing relatively fewer resources and a lower cost than building from scratch.

Whatever approach you end up choosing will, of course, be tailored to your application, your user needs, and the amount of resources you have to give. These considerations should help you get started on figuring out which path to take.

 

About the Author

Josh Martin is the Director of Product Marketing at Logi Analytics. Prior to joining Logi he was an industry analyst covering bleeding edge distribution channels and their impact on the consumer market. In this role he was a thought leader and advised clients on how to successfully benefit from market shifts while positioning products and services for long-term success. Josh holds a Bachelor degree in Business from Babson College.

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