Starting Small Is Good Way to Build BI Benefits

June 10, 2008 from ITBusinessEdge – “Whenever I talk to customers, I ask them how they determined their ROI. And they’ll often say they haven’t yet, or it’s very difficult. With BI, companies will see the benefits of BI and keep on investing in it, because it’s helping them with certain efficiencies and with performance management issues. But at the same time, it’s hard to actually quantify the value in dollar terms. Is it just doing a cost benefit analysis, so over a certain number of years, the money the company might have been spending in certain areas will be less now that it's adopted a BI platform?

For organizations making a first-time investment in BI, I find that if they have a small goal, such as helping customer service reps manage their time more efficiently, and can use BI to achieve those goals, that works better than making a large investment at the beginning.

180 View – We think the topic is interesting and could use a lot more discussion. First in terms of business case, we agree that building a cost benefit analysis for BI is difficult. Any estimates on savings from BI because of better decision-making are WAG (Wild Ass Guesses). However it is ok to have intangible benefits that justify an investment, especially if the benefit is linked to CSF’s (what an organization must do well in order to be successful). There also may be savings from BI that can be quantified. Some organizations need to go through hoops to get something equivalent using traditional reporting tools. Calculate the savings from eliminating these traditional reporting methods to help support the business case.

The other interesting idea in the article relates to starting small. When you can tell a senior executive that, in no later than three months, he will get a solution, it's very different from saying, I'm going to deliver a project in 18 months, and trust me. A small project is a good idea as long as the investment in BI considered the big picture. You would not want to invest in a technology that would fail at a later point.