Estimating the ROI of Cloud Sales Reporting
The ROI of sales reporting isn’t difficult to understand. New insights into customer profitability. New insights into sales trends. And new insights into products where demand is cross-linked, enabling better targeting of promotions, plus Amazon-style customer recommendations. In short, more sales revenues, and also more profitable sales revenues.
But how about the ROI of Cloud Sales Reporting? Does a move to the Cloud change sales reporting’s basic proposition—and its ROI?
The answer: yes. Because with Cloud Sales Reporting, you get all the benefits of sales reporting—but get them quicker, with more certainty, and at lower cost.
Cloud Sales Reporting: what’s the timescale?
Once you’ve decided on a sales reporting project, there’s an immediate decision to make: should you go for traditional ‘on-premise’ sales reporting, or should you go for modern Cloud-based sales reporting?
Go down the on-premise route, and it’s likely to take a lot longer to get to the point where you’re actually getting those sales reports.
That’s because a sales reporting project is really just one—specialised—aspect of a Business Intelligence project. There will be Business Intelligence software to select and implement. A data warehouse to design and build, if you don’t want to run sales reporting against the main ‘live’ ERP database. And there will be users to train, and reports to create.
All in all, it can easily take a year, and often more.
Cloud Sales Reporting, on the other hand, is much, much faster. That’s because the Cloud Sales Reporting vendor does the work, using its own products, with which it’s very familiar.
In the case of Matillion Cloud Sales Reporting, for instance, a typical implementation takes four to eight weeks elapsed, from signed order to users being trained.
Cloud Sales Reporting: what’s the cost?
Traditional on-premise sales reporting is also pricey. The software license purchase usually represents about 20% of the overall cost, with the remaining 80% coming in the form of expenditure on consultancy, hardware, ancillary software (such as databases and operating systems), and training.
Then there’s ongoing annual maintenance to consider, which typically comes in at about 40% of the overall project cost.
In other words, a £40k expenditure on business intelligence software for sales reporting can add up to £200k in total project cost, and a further £80k in annual running costs.
Cloud Sales Reporting? Much cheaper.
Matillion’s Cloud-Sales-Reporting-as a Service model, for instance, wraps the entire cost into a one off fixed price set up, together with a monthly subscription fee: no hardware, software, or further consultancy required.
Cloud Sales Reporting: estimating the ROI of sales reporting.
The deliverables from a sales reporting project aren’t in doubt. Amazon.com’s well-known ‘customers who bought this also bought that’ recommendation engine, for instance, has been estimated to contribute 20% of the firm’s revenues.
But of course, only you will be able to predict exactly what benefits sales reporting might deliver in your own business. And critically, you won’t be able to know these for certain until your sales reporting project is complete.
Meaning that if you go down the on-premise route, you’ll have spent a fairly hefty chunk of capital expenditure before you’ll actually know if the deliverables are truly there.
So being prudent, it’s probably best to work on the assumption of a range of possible deliverables, creating an ROI in the form of a range, as well.
Likewise costs. While it’s straightforward to obtain the costs of the relevant software licences, these amount to only 20% of the overall cost. For the remaining 80%, there are uncertainties to take into account—how long will it take to build that data warehouse, for instance? How much consulting help will be required? And so on.
Finally, don’t forget the timescale factor: it could be a year or more before the actual achieved ROI can be measured with any certainty, because it could be a year or more before an on-premise sales reporting project delivers any benefits.
Cloud Sales Reporting? Estimating the ROI is a very different proposition—chiefly because there’s only the question of the scale of the delivered benefits to deliver.
With Matillion’s Cloud-Sales-Reporting-as a Service model, for instance, upfront and ongoing costs are known to the penny. Timescales are measured in weeks, stripping out a huge amount of uncertainty, and a similar delay in time-to-benefit.
Cloud Sales Reporting: The bottom line.
In short, Cloud Sales Reporting offers both a lower cost—thereby lowering the capital investment hurdle that a sales reporting project has to pass—plus a more certain and easily estimated ROI.
In fact, from a strict capital investment point of view, with Matillion’s Cloud-Sales-Reporting-as a Service model, there’s only the upfront payment to Matillion to consider—everything else is paid for out of operating income.
Or, put another way, paid for out of the increased profits that the Cloud Sales Reporting project itself has generated. And generated, what’s more, in a timescale that’s measured in weeks, not months or years.