We often get asked what the return on investment will be by undertaking a business intelligence (BI) project. Depending on the circumstances a hard ROI number can be calculated for the project before we begin. More often it is not possible to calculate a hard ROI number or value. We have to rely on what I refer to as soft ROI, value that is hard to quantify but is real never the less.
A hard ROI is possible when we can point to existing processes in developing reports and add up the amount of time spent creating it and value of that time. This includes the amount of time to gathering, validating and correcting the data into something useful, building the reports and distributing them. In these situations, it isn’t new reports and knowledge that is sought but rather get the reports and knowledge they are currently receiving for less cost and in less time. The value of the report and the knowledge is already established otherwise they wouldn’t continue the manual process to get it. As long as the Business Intelligence project costs less than the 3 year or 5 year costs of the manual process there is ROI to the BI project.
The ROI that most projects fall under is not the above situation or at least not anymore. For many companies, BI solutions and tools have been around long enough that they have addressed the replacement of manual processes. The value they seek is in understanding or knowing what they don’t know today.
It is difficult to measure the value of having facts and information to base decisions on. What is the ROI of making a better decision? What is the cost of using our gut feeling and making a wrong decision? It could be small or it could mean the end of the organization. Having the correct information could be priceless. There is the value of making the better decision which could result in cost savings or higher revenues but there is also personal value in the form of reducing the stress associated with having to make that decision with no information.
Evidence-based decisions are about minimizing risk. When decisions are made using information and data, we are making informed decisions. It does not mean that there is a guarantee that our decisions are correct. If it was black and white a decision would not have to be made, the right course of action would just be known. Evidence-based decisions bring information into the process of the decision and assists us in making the correct decision.
Estimating the ROI in these situations is difficult. How do you put a value on learning what you don’t know? It is through insight that we grow and control our future, so what is the value of acquiring that insight. Often, not undertaking a project to understand and gain this insight results in harm coming to us because or competitors are implementing solutions to gain this insight. Being able to keep up with our competitors is a matter of survival. Using new information and knowledge to get ahead is priceless. Measuring the future ROI of better decisions is difficult because the results are mixed together with everything else we do. Measuring not implementing business intelligence to understand and gain insight might be easier, it will show itself in a poor bottom line.
Qlik pioneered Data Discovery and leads the industry with their patented in-memory associative data indexing (QIX) engine (Associative Model) that allows for the probing of all of your associated data. Unlike the traditional query based tools that force users down pre-defined drill-down paths and limit the user to structures conceived when it was created, Qlik allows the user to explore all of their data in the tool, navigating through it as questions arise. With a few selections or simple searches using the global search capabilities the user can find the data they need to answer their question. Most importantly, they can then jump to answering the next question and find the data for it.
Not sure where to get started? When it comes to planning there is only one question you need to answer…
Do you want to be a great organization? And if so, are you willing to put in the hard work and dedication to be one?
If you’re aiming to be a great organization a plan is the first step.