Many companies have already reached the point where just Excel spreadsheets or traditional operational and transactional systems cannot meet their analytical and reporting needs. They require much more powerful and flexible platforms to help them with their data, and this is where the benefits of implementing BI shine. With their ability to extract and collect a massive amount of data from different sources and present it to the business in a structured and comprehensive way, BI can both uncover business opportunities and save costs. However, many organizations are concerned about the costs of implementing BI projects and how much ROI they can expect from it. Therefore, in this article, we are going to try giving valuable guidance to companies that are embarking on their BI journey.
What are the costs of implementing BI?
When it comes to the costs of implementing a BI project, generally we can differentiate two types of costs – costs associated with the initial implementation such as hardware, licenses, and deployment and post-implementation costs (training, administration, support, etc.).
These are just some of the factors that companies need to keep in mind estimating the costs of their BI project. Therefore, with so many elements to assess regarding the cost and the amount of time it may take for employees to adopt the new BI tools into their workflow fully, it is also essential to consider the ROI that the businesses can expect from the project.
Benefits of implementing BI
Determining the exact ROI of implementing Business Intelligence can be very challenging as many of the benefits that it can bring, such as better decision-making, are intangibles. However, a study conducted by the International Data Corporation found out that ”upon implementation, Business Intelligence generates an average five-year ROI of 112% with a mean payback of 1.6 years on average costs of $4.5 million”.
Additionally, one of the benefits BI offers is a significant time saving as it allows automatic integration of data sources and can prepare data reports instantly, empowering users to analyze large amounts of information in real-time. It also helps organizations avoid errors, which occur from manual entering the data. According to a survey by IBM, “poor data quality costs the US economy around $3.1 trillion annually”, which can be substantially decreased by using BI solutions. Another benefit that BI can bring is concerning gains in productivity, as employees can switch from manually intensive report preparation tasks to productive and creative ones that will grow the business.
Unmistakably, BI can bring numerous benefits to the business. However, to better measure its value, you need to consider the situation before and after the BI implementation stage, for multiple factors, such as:
• time suspended handling data before and after the BI implementation;
• the speed at which decisions are made
• how fast can people access to the data they need
• number of employees involved in reporting
It is important to note, however, that according to a study by Noetix, many companies preferred not to try calculating the exact ROI of BI, finding the process quite complex and believing that the intangible benefits of BI are more critical than the tangible ones. They stated that the most significant cost metrics were the direct costs of software licenses and hardware acquisition, while the key benefits were the improved access to data as well as the enhanced quality of datadriven decision-making.
Although Business Intelligence implementation can be a serious investment for any business, it can result in even more substantial benefits. It may be tough to quantify the actual ROI on the project, yet many companies consider implementing BI either as a necessary cost of business growth or a critical factor in their plan for success and survival in a highly competitive market. After all, in the long-term, it can lead to data democratization on all levels and can transform your organization into a data-driven one as some of the top performers in the world – Amazon, Apple, Johnson & Johnson, etc. How B EYE Can Help You The Business Intelligence industry has expanded exponentially in recent years and it is expected to continue growing. Relying on our proven track records in helping Fortune 500 companies, we at B EYE, can help you discover new opportunities and еmplement data-driven strategies. Our highly specialized, industry-based, end-to-end services let businesses evolve by assisting them in building optimal decision-making processes and achieving efficiency.