Determining the ROI for business intelligence initiatives can be a pretty squishy proposition, as Lyndsay Wise, principal of BI consultancy Wise Analytics, told me earlier this year. She said:
Whenever I talk to customers, I ask them how they determined their ROI. And they'll often say they haven't yet, or it's very difficult. With BI, companies will see the benefits of BI and keep on investing in it, because it's helping them with certain efficiencies and with performance management issues. But at the same time, it's hard to actually quantify the value in dollar terms.
Now that the slumping economy has companies prioritizing IT investments with a hard, fast ROI and scaling back on others, does this mean BI investment will suffer? Back in April, Gartner predicted BI spending would grow at a double-digit clip until 2009, then slow a bit due to vendor and product consolidation. In contrast, Forrester Research forecast that BI would play a key role in kicking off an extended period of increased IT investment, beginning in 2009. Both of these pronouncements came before the economy began to head south, so now both bets are likely off.
Companies need to remember that BI can be good for their bottom lines, writes Michael Corcoran on TDWI's Web site. While Corcoran is chief marketing officer for Information Builders, a provider of BI software, and thus has a vested interest in convincing folks of this, he nonetheless offers four specific examples of how companies used BI to save money and make money. The examples:
To more clearly connect BI to business benefit, I'd suggest following some of the good advice from another real-world company, Rush Health Associates, that I shared in a post last month. Among the tips: Don't become so enamored of the technology that you lose sight of the business objectives it's meant to enable. Create a roadmap outlining specific goals and measurable success metrics. Bring folks from business and IT together early in the process.