By Travis Barker, Consulting Partner at Stellar
Does your BI solution generate a positive return on investment, or is it costing you time and money?
Business Intelligence (BI) solutions enable organisations to find and gain competitive advantage. That said, the tools can represent a significant investment – not just in money, but also in the time needed to implement and train employees in their use, and the commitment required to manage data-driven initiatives and projects.
So, is it all worthwhile?
US-based Nucleus Research calculated in 2014 that every dollar an organisation spent on analytics returned an impressive $13.01, an increase from $10.66 three years before.
In March 2017 the same firm reported that data management solutions returned $14.44 for every dollar spent, and noted that the return rate “is considerably higher than that of most other core enterprise software deployments, indicating that a well-planned data management deployment can make a massive impact on a business.”
Perhaps that sounds too good to be true, so let’s look at how you might evaluate the investment and the returns of your current or proposed BI solution, so that you can properly assess the Return on Investment (ROI).
The link between BI investment and net profit is frequently indirect or even intangible. We suggest thinking of data and analytics as the enabler of business change that will lead to lower costs and/or higher revenues.
You may, for example, have a sales team assigned to customer retention. Imagine how much more effective they could be with an analytics solution that predicts which customers are most likely to be considering leaving your company. If all goes well, your staff will keep the customers, but the data-analytics system should get credit at least for “the assist”.