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Quantifying the ROI of a Business Intelligence System

quantifying-roi-business-intelligence-systemA question that we’re often asked is: “Can I afford a business intelligence system?” And it’s a perfectly sensible question, to be sure. Particularly in the present economic environment.

But increasingly, our answer—driven by hard-nosed facts and our customers’ experiences—is to respond by asking yet another question.

In short, can you afford not to have a business intelligence system?

And put this way, the answer is much clearer. From both an operational perspective and a strategic one, it’s difficult to avoid the conclusion that a business intelligence system is an investment with a seductive return on investment (ROI).

Especially a cloud business intelligence system, with its low cost of entry, affordable monthly subscription, and fast time-to-benefit.


Pain points

The chances are, you’ll be familiar—perhaps all too familiar—with the sort of pain points that our customers formerly experienced before moving to Matillion.

  • Getting at information is difficult: it’s spread across different systems, spreadsheets and sites. What’s required is ‘one version of the truth’—and you don’t have it.
  • Bottlenecks form around key individuals skills who possess the technical skills to extract data, and then turn it into meaningful information.
  • Because reporting is manual, it’s infrequent or arrives late. You get January’s sales figures in mid‑February, for instance.
  • Too many people in your organization spend time manually producing reports—downloading data into Excel, manipulating it, and then e‑mailing out the finished reports.
  • The reporting tools possessed by the business are difficult to use, and require technical expertise. This means that users can’t self‑serve, helping themselves to the data that they need.

So can a business intelligence system alleviate these pain points—and in most cases, alleviate them completely? Yes, of course.

Which, in part, is where some of the Business Intelligence ROI comes from. For these pain points are also costs to your business. Direct costs, opportunity costs, and the implicit costs of delays, poor data, mistakes, and opportunities overlooked.

Eliminate them, and the benefits flow straight to the bottom line.


Technology delivers

And the numbers can be impressive. According to Boston, Massachusetts-based Nucleus Research, a firm which specialises in measuring the value of technology, a business intelligence system and self serve reporting tools deliver an ROI on three distinct levels:

Level 1: Report Automation—cutting out manual report production, saving time, and reducing errors, yields an average ROI of 188%.

Level 2: ‘Tactical’ Business Intelligence System —leveraging analytics to improve decision making, rather than just saving time, yields an average ROI of 389%.

Level 3: ‘Strategic’ Business Intelligence System —deployed across most of the organisation, and used to align daily operations with the goals of seniormanagement, Business Intelligence yields an average ROI of 968%.

By any reckoning, those are impressive numbers.


Strategic outperformance

And here’s another impressive number: 75.5%. That’s the percentage of those companies rated as ‘substantially outperforming their peers financially’, which also said that data analysis was “very important or essential” in their organizations and are likely to be using a business intelligence system.

The source? Fostering a Data‑Driven Culture, a report by the Economist Intelligence Unit, published last October. And how does this outperformance arise? Try these, for starters.

Faster decision-making with better information can result in better decisions, sooner. The result? In all sorts of instances, a direct bottom line impact.

Insightful analysis of pricing and margins, what’s more, can help to align strategy to execution, and thereby identify areas to grow, and areas to back away from. The result? Additional revenues and margin, while simultaneously avoiding loss-making revenue holes.

And gap analysis across sales and the supply chain can increase revenues and rationalise purchasing. The result? More sales, lower costs.


Bottom line

All of this, of course, is true for Business Intelligence generally. Here at Matillion, we also advocate Cloud BI

You get to the benefits of a business intelligence system with a lower upfront cost. You get to your benefits with a smaller technology footprint. You get to your benefits sooner. And you get to your benefits with less risk.

All of which, we reckon, tends to yield a higher-than-average ROI, at a lower-than-average cost, and at a lower-than-average risk.

Sounds good? It does to our customers, too. 

To find out more about the ROI of Business Intelligence solutions, download our free eBook below.

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