BI investments can be a hard sell. Learn how to build a case for BI that is supported by ROI figures and see how our customers are quantifying their success for continued investment in data and analytics capabilities.

The demand for business intelligence (BI) continues to grow. Companies are getting more data, analytic tools are more powerful and approachable than ever before, and more people are entering the workforce with data science and data analysis-related degrees.

And yet there’s a challenge internal to many organizations: BI investments can be a hard sell.

It’s easy to speak to the inherent business benefits of BI and analytics, such as “you’ll get more data in the hands of more users” or “you’ll make faster decisions”. While this is certainly accurate, these subjective benefits aren’t being directly tied to the bottom line. Just because something is a good idea, doesn’t mean it’ll be profitable for the company or beneficial to an organization’s members or constituents.

To take a more objective approach to your BI pitch, you must present the impact of the solution by calculating the financial benefit of a data and analytics solution.

How to Build a Business Case for BI

To combat the difficulty of tying business benefits to analytics initiatives, a comprehensive business case is critical. To win your case for BI, follow these tips when building your business case:

  • Demonstrate the ROI: (View the tips below↓) Any healthy organization is willing to invest in initiatives that will bring a positive ROI. Would your boss/leader/decision maker like for you to approach them with business challenges, questions, problems, and lofty promises from a conceptual technical solution? OR—would they like for you to come to them with a rational projection about a solution’s business value?
  • Tie tactical improvements to the overall business benefit: BI has potential applications all over the enterprise. The question is whether we can tie a financial impact to the effort. Too often BI is thought about as a tactical solution: “Maria in Marketing needs to see a report on how the most recent email campaign performed across customer segments;” or, “Frank in Finance needs to see a projection on how a new product will impact sales in the next quarter.” An ROI on these requests doesn’t exist. BI is strategic when organizations think about leveraging it to improve the business, not just as a means to answer tactical questions.
  • Know your audience: Unless you can talk in the language of the decision maker, you won’t build a coalition of support to build the data culture that will bring improvement to your organization. Buy-in happens when your audience can see how BI will help them meet departmental and organizational goals.

The ROI Behind BI: How to Translate BI Benefits into Financial Terms

There are many ways to translate BI benefits into financial terms. We’ve identified four popular use cases for BI and how to demonstrate the value for each concept. We also provide examples of how some of our own clients are demonstrating ROI.

1.) Reduce IT CostsReduction of IT costs is one of the most approachable places to start quantifying the financial return of data and analytics projects.

A few ways to reduce IT costs:

  • Tool consolidation: These initiatives directly tie to cost savings. Examples include shutting down servers not needed outside of business hours or using a reserved pricing model instead of on-demand for workloads that run full time.
  • Automation: Automating data aggregation, data validation, report certification, and report sharing through BI tools saves many hours of manual work which directly ties to cost savings.
  • Cloud: the cloud offers many opportunities to save on IT costs.

2.) Reduce Manual Business ProcessesYou can save countless hours by eliminating the effort of analysts who spend time searching for, combining, rationalizing data across multiple spreadsheets, and sending out those spreadsheets via email. Modern BI tools allow sharing and collaboration within the tool itself. Even an old school tool like a parameterized dashboard consolidates similar data in one place, reducing efforts to chase down answers to follow-up questions. All this time saved means that employees will be able to focus on higher value tasks and increase their job satisfaction in the process.

This company saved approximately $25,000 in the time it took to manually prepare weekly reports by moving from an Excel-based solution to a BI solution that sources data from a data warehouse:

3.) Increase Top Line Revenue / Decrease Costs– Broader initiatives that affect the organization’s balance sheet hold tons of promise for improvement through analytics. Good places to start are use cases with the highest potential, like those relating to the customer or product. Optimizing an organization’s biggest expenses, such as inventory, labor, or supply chain can provide the best opportunities for cost reduction. Other strategies to consider are up-selling opportunities, product placement, marketing optimization, and location analysis.

There are opportunities in:

  • Customer service: Get customer lifetime value scores into the hands of representatives to encourage upsell opportunities
  • Market basket analysis: To determine which products placement in physical proximity to each other or which products are commonly bundled together
  • Marketing optimization: 360 view of customers allows for more effective marketing, turning to more leads/sales
  • Location analysis: Determine best opportunities for new store or branch locations or determine which branches are redundant

Geospatial analytics helped this customer optimize the customer experience at specific branch locations and identify geographical areas to expand for overall increased revenue:

4.) Data or BI as a Profit Center. Have you considered whether your data or analytics tools would have value outside your organization? Possibly to partners, organizations in ancillary markets, or even competitors? Data is an actual asset—just as much as physical inventory or the collective knowledge of employees; and organizations are monetizing this asset. Retailers have been doing this for years by sharing sales data to their vendors and getting in return the benefit of better sales strategies or product assortments. There are many ways to profit from data, such as providing raw data, an analytics tool, or fixed reports to your customers. To accomplish this, you need to reach a certain level of maturity, quality, and sophistication with your data and tools.

Using their own data, this company offers a self-service reporting and dashboard tool to its members:

To get more tips about how you can build a winning case for BI: listen to the webinar recording.

Analytics8 Analytics8 is a data and analytics consultancy. We help companies translate their data into meaningful and actionable information so they can stay ahead in a rapidly changing world.
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