It is important to understand how to quantify the benefit you can gain from a BI tool and ensure optimal ROI in terms of time, money and resources and then move on to actual, tangible gain.
Many questions arise when searching for a BI tool. Most revolve around features, capabilities, resources and pricing, which are all very important, but together actually constitute the most important question which is, "How fast will I be able to benefit from this selection, and to what extent?"
In this article we will understand which parameters are essential in understanding and quantifying ROI from a BI tool.
So many questions!
A few of the more common questions we get when working with our clients’ procurement process are:
“How fast will this tool become productive?”
“How quickly will my team be able to adapt to this new tool?”
“When will I be able to start gaining from this selection?”
“What is the expected period of development, before this option proves it’s value, and more?”
Or basically, what is the expected ROI, in terms of both time and cost, I can expect from choosing a certain BI platform?
ROI, Return on Investment, can, at times, be the most important criteria when on our BI tool shopping spree. There are several leading questions we must answer about a specific tool, and how it will suit our organization best, while understanding the expected ROI, breaking it down and being able reach a close evaluation of when the investment in such a tool will make it worth while, let alone profitable. It is crucial however, to make sure we keep our fundamental requirements at the top of our priority list, so as not to select a tool which can quickly resolve a short term issue, but not be adequate for more important future needs. This article aims at understanding these parameters and quantifying an investment in a BI tool.
We’ll initially distinguish between these parameters as direct and indirect benefits, and then move to short vs. long term value.
Direct benefits:
1. Time Saving
One of the main reason many SmB’s look for a BI tool is to improve reporting efforts. Many may still be spending a few days at a time to generate quarterly reports, or weeks at a time to generate annual reports. Most BI tools out there today enable not only quick and efficient report and dashboard generation within minutes, but also enable us to utilize daily interactive dashboards to monitor on-going KPIs. Most BI tools will get you on the fast track to report and dashboard generation and get you out of that “Excel Hell”.
2. Resource utilization optimization
The time, energy and resources required to generate heavy duty periodic reports will be drastically improved quite quickly after moving forward to a BI tool of your choice. Quick report generation, data mashup, less need for quality assurance and testing or no more long iterations back and forth between analysts, IT, business owners and managers before releasing reports are all immediate benefits of a BI state of mind. These will all be reduced a few short steps after incorporating a powerful BI tool, and enable your analysts, managers and other employees to free their time to do what they are supposed to do, instead of long on going report generation.
Indirect Benefits:
1. Process improvement
Not only will the report and dashboard generation processes improve by instilling a BI tool into your organization, but also most likely all other processes which are either dependant on those processes, or being monitored by these dashboards. Many time, a short period of time after starting to analyze data in areas we hadn’t before, or to a certain extent, we start realizing flaws, inefficiencies, deficiencies or other problems, aches or pains, which we can now target, resolve and improve. These can, at many times begin even before we start actually building an internal BI platform for on going needs, rather at initial stages of investigation, analysis we can finally have a clear view of our data and ultimately our organization.
2. Flexibility
Apart from time and operational resources being freed to dedicate to more important on going needs, we will also see a rise in flexibility once introducing a BI tool. You may start noticing that urgent answers to complex questions which once took days or weeks (if not months!!) to generate, now may take a few hours at most. No need to run back and forth between your business owners, analysts, IT managers, operations or whomever else used to be in the loop. With most BI tools out there today, these quick answers are just a few clicks away.
Costs:
1. Product
Prices of off-the-shelf tools can vary widely, from several hundred US a month to tens of thousands a year. Each tool provides its own strengths and suitability to different needs and scenarios, which is why it is extremely important to invest in procurement and realizing which tool is the best for your business today, tomorrow and in the future.
2. Implementation
Although most popular tools available today have extremely advanced since the heavy duty solutions from the 90’s, which would require complete departments of DB Administrators, IT facilitators, business analysts and more, they are still a bit far from plug-and-play solutions. It is strongly recommended to invest upon initial implementation for your business in order to see fast results and even faster ROI. Being part of such implementation processes will instill proper BI project management capabilities in your business and even more a BI state of mind, in addition to seeing fast results and learning the tool from expert training.
3. IT
Infrastructure
Most off the shelf tools can crunch very large magnitudes of data on relatively cheap servers and network infrastructures, such as Sisense which enables loading and querying anything between 50M to 300M records on a 16GB server with 8 cores, for several users. That’s a standard laptop! Once you start dealing with larger magnitudes of data you’ll need to allocate a larger server. That being said, due to sensitivity of data, security and other important parameters, it is usually strongly recommended to host the BI environment on a dedicated server.
Personnel
Although off the shelf tools enable much easier maintenance and management, most businesses often have a dedicated resource for IT management, either within the business or as a 3rd party partner. This is important for the responsibility of server functionality, software upgrades, 3rd party integrations and more.
Consulting
This could be a substantial phase in ensuring optimal implementation, adoption and ultimately the quickest route to realizing ROI. Partnering up with a consulting firm, even if for the first few steps will make sure you and your team gain an accelerated learning curve with the tools capabilities, achieving required KPI’s, even if they don’t seem too clear to begin with, learn and understand the BI state of mind, by empowerment, training and implementation, which will ultimately improve overall project management, delivery and deployment.
Ongoing costs
Ongoing costs may be a minor expense compared to the rest of this list, though can become very important as you progress with the organizational BI state of mind. Processes such as support, system maintenance and training can boost efficiency, empower your team maintain a healthy and functioning server and much more. It is important and recommended to consider such items in initial planning stages.
For more on the above contact us at SimpleXity BI, We will help you understand how to quantify the benefit you can gain from a BI tool and ensure optimal ROI in terms of time, money and resources.