ROI

Return on Investment

Many companies face the dilemma of making the right investment decision regarding new solutions. One of such common dilemmas of our customers is the possibility of implementing the Business Intelligence analytical solutions. A common concern are the initial costs required for such implementations, whereas it is impossible to explicitly specify the benefits they offer. Experience shows that quite often companies appear to forget about their business needs which were the main reason of their interest in analytical solutions.

During many meetings, companies focus on such details as data integration, database hardware types or appearance of the reporting tool forms. Such factors frequently determine the choice of the given solution, which, at later stages of the project, makes the customers aware that their approach had been wrong. As a consequence, after many months of carrying out the project, it is hard to actually assess the measurable financial benefits and the extent of reaching the intended business results.

The goal of ROI calculation

Deciding to invest in analytical tools, the companies are not certain whether it will be appropriate and profitable. The ROI (Return On Investment) analysis shows that proper recognition of the business needs and proper satisfaction thereof in the form of business knowledge and technology, such as analytical tools, translates into the expected results. 

In numerous investment projects, such as opening of a new branch or purchase of real estate, many companies analyse profitability of such enterprise.

So why not do the same for the Business Intelligence solution?

Before launching the project of implementing a new analytical solution, it is worth to identify several key factors, which will be taken into account when calculating benefits, both those difficult to measure (descriptive), and those the value of which can be estimated.

As part of the projects, we specify:

• key areas in which implementation of an innovative analytical solution will bring the greatest benefits
• time and numerical parameters used to measure the results, e.g. shorter time of performing bookkeeping analyses
• descriptive advantages of planned post-implementation effect, such as improvement in analysed analytical areas
• measurable benefits - how much did the company gain from the implementation, when did the investment pay for itself

Thanks to such information company management is able to make a rational decision to launch the project and extend it over these areas, where it would be the most profitable.

RETURN ON INVESTMENT IN BUSINESS INTELLIGENCE

MENNICA METALE SZLACHETNE             See ROI Analysis

Measurable benefits

Calculation of return on investment in a Business Intelligence project is one of the methods of calculating the benefits for the company. The most important element of convincing the board to implement a BI project is to present a solid analysis of benefits from such investment and to ensure that it would pay for itself in the future.

Having such bargaining chip as the ROI analysis provides grounds and justification for a Business Intelligence project which can be demonstrated to the board or those who directly decide on its implementation.

It should be remembered that delaying a decision to implement a Business Intelligence analytical project entails the opportunity costs presented herein. Therefore, it is worth to consider, as soon as possible, which benefits can be gained thanks to the implementation, and consequently, to make a rational decision on development of analytical technologies in the company.