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 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.
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:
There are many ways to translate BI benefits into financial terms. We’ve identified 4 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 Costs – Reduction 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:
2.) Reduce Manual Business Processes – You 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 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:
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.
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