The ROI of data analytics software: even more bang for your buck
There is a growing appetite for business intelligence across the analytics community, and organisations that invest in this area are being rewarded handsomely. As the ROI of data analytics software continues to increase, businesses are seeing huge returns on their investment, with research suggesting that the average return on every dollar spent is a whopping $13.01.
There are a whole host of benefits to implementing business intelligence and analytics software, both short and long-term, both financial and operational.
The operational benefits can be seen in the day-to-day improvements to the reporting process – and these benefits are not to be underestimated. However, expressing benefits in monetary terms is what brings the true ROI of data analytics software to life.
In this blog we take a look at the increasing ROI of data analytics software and the driving forces behind this trend.
The increasing ROI of data analytics software
When companies are evaluating business intelligence and analytics solutions, one of the first questions asked is likely to be ‘what value will it bring?’
For key decision makers – and in particular senior executives – this question is likely to be focused around the financial benefits that a potential solution could bring. For this reason, it is important to be able to give an accurate figure, in order to garner executive support for the project.
So what is the ROI of data analytics software?
A recent study by Nucleus Research found that the ROI of data analytics software has been increasing continuously over the last few years. They estimated that in 2014, every dollar spent on analytics saw an average return of $13.01. This shows a significant increase from 2011, where a similar study found that a dollar spend yielded a return of $10.66.
This study covered a wide range of industries and included organisations of all sizes, so although the exact ROI varies from business to business, the research provides a reasonably accurate representation of the achievable ROI of data analytics software.
Driving factors behind the increase
So we know that the ROI of data analytics software is rising, but what factors are driving this trend?
According to the research report, businesses are investing in these applications in an effort to ‘improve the effectiveness of business processes, to increase visibility, and to drive greater profitability and results’.
As these businesses become increasingly demanding and hungry for insight, vendors are being forced to improve their offerings continuously. The report states that over the last three years, vendors have made a more concerted effort to improve the ROI of data analytics in areas such as Cloud deployment, collaboration, security and mobility, in order to meet this growing demand.
With new and improved solutions on the market, businesses are able to use data analytics software to unlock huge increases in productivity. Companies are moving away from the reliance on manual reporting processes and instead now have access to faster, easier, and more reliable information. These significant gains in productivity and the time consequently saved by employees represent a critical factor in the increasing ROI of these tools.
Another driving factor behind the increasing ROI of data analytics software is the increased visibility that it offers organisations. With the implementation of a successful business intelligence solution, confidence in the data itself increases, and this reduces the internal confusion and debate surrounding data quality. Effective data analytics software makes it much easier for a ‘single version of the truth’ to be achieved.
A changing market
Over the last few years, the landscape of the business intelligence and analytics market has changed considerably, and this has had a knock-on effect with regard to the ROI of data analytics software.
A market previously dominated by a few large vendors is now much more open to competition and has become flooded with new entrants. This is great news for buyers, as they now have a much greater number of vendors to choose from and can be a lot more particular about their individual requirements.
New vendors into the market are focusing on factors such as ease of use, integration, competitive pricing and fast implementation which all contribute to a higher potential ROI. This increased competition is also forcing existing vendors to improve and innovate – or risk being left behind.
It is not only the vendor landscape that is changing, however – buyer behaviour has also changed significantly over the last couple of years.
Traditionally it was line of business staff who were responsible for the key purchasing decision within the business. However, due to factors such as data governance and data quality, the role of IT within the purchasing process became much more prevalent. Now, it appears, we have gone full circle and the power is back in the hands of line of business staff as factors such as the Cloud have completely redefined the way software is acquired.
The ROI of Cloud BI
Data analytics software offers a huge potential ROI in the long run, and with the Cloud, you can get ever more value from your investment! Another study by Nucleus Research, for example, found that Cloud BI applications deliver, on average, 1.7 times more ROI than traditional on-premise solutions.
This is because the Cloud offers a platform on which to deliver effective analytics solutions, without the expensive upfront costs, maintenance and support. Not only that, but because Cloud BI comes as a recurring subscription, there is more motivation for vendors to innovate and improve their offerings, in order to retain customers.
Data analytics software offers businesses the potential to achieve a huge ROI, and Cloud BI delivers even more value on top of this.
Is it time you evaluated a successful Cloud Business Intelligence solution today? Download our free guide below to find out more