I went to a great Business Intelligence panel last week put on by CSIA, Colorado’s Technology Association. It was a combination of presentations by IBM and JCB Partners, along with a panel discussion that also included a couple of local executives who had successfully implemented BI at their companies.
One of my favorite questions from the audience was not a surprising one: a woman asked how they had measured the ROI of business intelligence projects. Unlike many of the other questions, the panelists did not have an easy or straightforward answer. A couple of the panelists did not think ROI could be measured quantitatively. The consultant on the panel had a more solid answer, but still acknowledged the challenge compared to other investments. It seemed a little ironic to me that business intelligence, which at its core is about measuring and managing performance, can’t be measured and managed itself.
So I just did a quick search on “ROI Business Intelligence” and came across this article titled “Business intelligence ROI: Five keys to justifying BI investments”, which basically backs up the conclusion of the panel with the following conclusions: executives just need to embrace it, the benefits are soft, trying to drive to hard metrics is hard and unnecessary, etc.
So the bigger question is as technology moves more towards providing better information to influence decisions … will hard benefits become a thing of the past? In the past, more technology investments were about improving productivity than they are today, and productivity improvements are much easier to quantify.
Wednesday, December 16, 2009
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1 comments:
Lisa,
Due to the prevalence of the opinion it shouldn't affect me, but I still groaned at yet another refrain of how you can't really measure the value of business intelligence. The thought has become so prevalent that people have come to accept it as fact. Makes me think of people who parrot the opinions they hear about on TV, from others, the article headline, etc. without getting the facts (or at least reading the whole article). After all, we would all like to appear knowledgeable on a subject (mea culpa, mea culpa, mea maxima culpa). It's easy to go along with the opinion-makers because our stance is less likely to be questioned. It takes time to put in the intellectual effort to get the facts and support our own hypothesis.
I can tell you from experience that it is not only possible, but also necessary to define hard business benefits for BI. As you point out, it's hypocritical to promote creation of an enterprise BI solution (which have a significant TCO impact on the organization, no matter what the technology or what your vendors tell you) without "hard" benefits from the business. Building a business case around your BI solution has a transformative effect. Most people feel and believe the solution will benefit them, but haven't crystallized on how. With some experienced coaching those feelings are given form and quantified. This increases the commitment to the program, helps sort out priorities, and energizes efforts on enabling projects to see the valued from the BI implementation. I have done this many, many times.
A common mistake is focusing on improvements to the current reporting process (usually in IT and/ or involving business people running reports). While there are typically savings to be had there, even they tend to be "soft" as I haven't worked with many clients who were actually prepared to reduce headcount based on a more efficient process. The argument usually goes, "They won't require so much time to gather data, they can spend more time on value-adding analysis." Look carefully at the majority of people involved in this data gathering process and you'll find that they're typically not high-value analysts.
The key is getting outside of IT and the current users to get the business leaders to define the benefits. If someone experienced in building BI business cases can't help the business make the case, don't do the project - the company will likely end up in the hole.
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