What’s the ROI of a business intelligence system? The answer, in short, depends on what sort of business intelligence system we’re talking about.
Which, of course, makes perfect sense. You can’t calculate the return on an investment without knowing the cost of the investment.
But it’s with respect to this question of cost that traditional ‘on-premise’ and cloud-based business intelligence systems diverge widely.
Simply put, compared to cloud-based business intelligence systems, deployments of traditional ‘on-premise’ business intelligence cost more, absorb more internal resource during the implementation, and take longer to deliver a return.
And what’s frightening is the scale of the divergence. Let’s take a look.
Talk to experts, and some rough rules of thumb regarding ‘on-premise’ implementations look like this:
- Ancillary costs—that’s installation, hardware, consultancy, support, and so on—work out at around 300‑700% of license cost.
- Smaller projects are at the lower end of this range; bigger and more complex projects at the upper end. Spend £20,000 on software, and you should plan to spend £60,000 on everything else. Spend £100,000 on software, and it could be £500,000 ‑ £700,000 as an ‘all in’ cost.
- Average on‑premise Business Intelligence projects take 12‑24 months to implement.
Our guess: all three sets of numbers are bigger than most businesses expect. At least, that’s the reaction we hear in the marketplace.
Fixed price, fast delivery
How about cloud-based business intelligence systems? Well, if you’re a regular reader, you won’t be surprised to learn that the costs are significantly lower, and more predictable, and the time-to-benefit is much, much faster. Much, much faster.
At Matillion, for instance, we deliver business intelligence projects with cost‑effective, fixed-price implementations, and one all-inclusive monthly subscription that includes support and on‑going changes.
What’s more, the implementation process has been designed to be low‑pain and fast, so we can deliver an effective, enterprise quality, Business Intelligence and Self‑Serve Reporting project in a few weeks.
In short, a full, fit-for-purpose business intelligence system, delivered and working at a fixed price, followed by an affordable monthly subscription.
And just as importantly, a self‑serve, cloud‑based business intelligence system results in approximately 60% lower support costs than traditional solutions.
Where’s the return?
That’s the cost of the investment taken care of. What about the benefits? There are two ways of looking at these.
Let’s start by looking at the strategic difference that business intelligence systems make—the ability to better understand the insights buried in your data, and to therefore make better decisions.
- Faster decision-making with better information can translate into direct bottom line impact.
- Insightful analysis of pricing and margins helps align strategy to execution, and identify areas to grow and areas to back away from.
- Gap analysis across sales and the supply chain can increase revenues and rationalise purchasing.
- Inventory analysis can reduce stock levels and free-up working capital.
- Time saved in the production of manual reports equates to increased employee productivity and/or reduced headcount requirements.
Show me the numbers
All of which has evident appeal. An appeal which is made even more enticing by some estimates of typical ROI put forward by Nucleus Research. Take a look:
- Level 1: Report Automation. Cutting out manual report production, saving time, reducing errors—an average ROI of 188%.
- Level 2: ‘Tactical’ Business Intelligence. Leveraging analytics in order to improve decision making, rather than just saving time—an average ROI of 389%.
- Level 3: ‘Strategic’ BI Business Intelligence. Business Intelligence is deployed across most of the organisation and is used to align daily operations with the goals of senior management—an average ROI of 968%.
‘On-premise’ or the Cloud?
All in all, a pretty compelling case for Business Intelligence, and a strong endorsement of the value of business intelligence systems. With gains like these on offer, why delay?
But equally, why pay more to unlock them?
‘On-premise’ business intelligence systems cost more to implement, cost more to maintain, and take longer to deliver their ROI.
Cloud-based business intelligence systems are faster, simpler and less expensive, leading to an ROI which is quicker—and greater.