Let me ask one simple question – what has been the ROI for your business analytics or business intelligence team this last 12 months? 6 months? 1 month?
Did you have a quick answer?
Chances are you don’t have those figures to hand (which is ironic given your newly founded analytics capabilities).
But why? Why do we invest all that effort in trying to find a solution, find a supplier, upskill our staff and convince the board for cash and buy-in but then forget to track the stories, returns and benefits of its success?
Why don't companies track ongoing business analytics ROI?
Simple. Once the decision is made – why bother?
Why go to the trouble of tracking your business analytics ROI when you’re now fully staffed, tooled up and actively adopting analytics techniques in your department or even across the wider business?
Another problem is that often some of the people, thinking and processes that went into the original decision are no longer available. You’ve got over the procurement hurdle and funding is guaranteed for the foreseeable future.
What would the benefits be of tracking business analytics ROI in the future?
Time - How has your time management as a leader improved? What about product lead times and decision-making? Is your team more efficient too? Can you mine your staff timesheets and project throughput data? Is there a before-and-after story to tell?
Risk - Have you reduced the risk of decision-making? Can you think of an example where risks were reduced? What were the knock-on benefits? Did you make better decisions? Which ones? How did they generate profits?
Income - An obvious one, but where are you opening up new revenue opportunities? Has business analytics helped you to spot new market opportunities? What was the financial benefit of these new channels?
Fire Fighting - How has business analytics helped your organization become less reactive? How has it helped strategic alignment? Are you planning initiatives with more assurance? How has this new proactive approach benefited the business?
Expenditure - How have your costs come down? Have you improved data quality for example? Has this reduced costs? Is decision lead time reduction coming down? How is that equating to bottom line gains?
What if you could use these kinds of insight to:
- Validate your approach to senior sponsors
- Identify new strategies for deploying business analytics by replicating on other initiatives
- Discover areas of low-hanging fruit based on past performance
- Increase training to replicate results elsewhere
- Focus on the 20% of initiatives that are creating 80% of the value
Makes sense? Great, so how can you go about doing it?
How can I create a continuous business analytics ROI capability?
Step 1: Recover any financial models and processes that were used in the original procurement process.
Can these be reused? If not, create a simple ROI spreadsheet that looks at all the deployments that are in progress or completed for your business analytics team.
Step 2: Identify what KPI’s you want to track.
Good examples are staff productivity, service lead time, operating costs. If you can get past performance data, prior to purchase, that could be beneficial too. You’ll probably need to gather additional data – how can you automate that or change processes for continued assessment?
Step 3: Turn your business analytics solution back in on itself.
Analyze your own internal performance data. Create some dashboards that highlight the different performance areas that are of interest to the stakeholders you need to impress. For the CFO create an outline of costs and income. For the COO how about staff performance insights?
Step 4: Bake the process into the business.
Teach your teams to spot “success events” where new customers or channels were discovered, product lines were trimmed, campaigns were boosted - create a place where people can quickly “tag” these events so that they don’t get lost.
Create processes to ensure that the data is well integrated and flows from the relevant systems to your central dashboard.
Check for data quality issues. You don’t want to showcase your expertise to senior managers only for obvious errors to creep into their reports, it diminishes the quality of your service.
It's your turn to take action
Think about your situation. How could you create continuous ROI justification? How would it benefit your project? Please enter your thoughts and questions below.