One of the most challenging tasks when planning a new business intelligence project is the selection of the right tools to achieve the best possible return on investment. You will have many decisions to make depending on your company’s needs. This poses many questions such as: Will you need new servers? Will you need to host it in the cloud? Will ETL (Extract-Transform-Load) tools be needed to manipulate data or to combine multiple data sources? Will you need cube technology (usually dubbed OLAP)? What type of reporting tool will you need? All of these questions need to be answered carefully as they affect each other on your way forward.
A criteria-based approach should be used in selecting each software. This approach in evaluating software provides you with a quantitative measurement of quality before you commit to a specific tool. When evaluating business intelligence reporting and analytics software, the following 5 criteria are your top priority, but should not be the only criteria used: flexibility, security, learnability, mobility, and evolveability. Let’s take a deeper look into each of these areas.
Even though BI has been around for decades, misconceptions still persist. These myths harm BI’s reputation and can make it difficult to achieve buy-in from stakeholders. Let’s review a few of the common misconceptions I’ve come across in my work as a BI consultant.
1) Dashboards = Business Intelligence
Certainly dashboards with at-a-glance views of KPIs are the most common form of business intelligence, but they’re not the only mechanism for consuming BI content. Many companies use dashboards for quick reviews of very important metrics, but just as many are running monthly or even daily reports with their BI software. Many of our customers use arcplan to send daily financial reports to entire departments every morning. Other BI models include self-service ad-hoc reporting, which goes beyond traditional static reporting, and data discovery, where analysts interactively explore data from multiple sources in a BI interface. Then there are many BI platforms that enable users to use BI like social media – collaborate with peers, leave comments, annotate graphs and more. The truth is, business intelligence solutions nowadays are flexible enough to accommodate however your users want to work. Don’t limit yourself to thinking dashboards are BI. They can help you monitor your business performance easily and should be a part of your BI mix, but think about what other forms of BI can contribute to the success of your initiative.
2) The most popular BI tool must be the right one for my organization
When it comes to BI, one size doesn’t fit all. The hype surrounding popular solutions doesn’t necessarily translate to value for your organization. You should evaluate whether the solutions on your shortlist are compatible with your data architecture, whether they’ll address users’ specific requirements, and whether they’re scalable for future development. You might set yourself up for failure if you only shortlist “hot” vendors. Need a starting point? Try analyst evaluations like BARC’s BI Survey. Its analysis can help you build a list of vendors to evaluate based on product capabilities and user feedback.
3) BI ROI is questionable
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In honor of arcplan 8‘s official release today, let’s talk about Responsive Design and its importance for business intelligence and planning applications. The latest version of arcplan’s platform is focused on mobile BI with a new HTML client that supports Responsive Design, which enables arcplan applications to automatically adapt their layouts to appear optimized on the end user’s device.
Responsive Design is something you’ve probably heard about when it comes to websites, but it’s just as important to application design – especially as organizations are challenged to support multiple devices and provide the best user experience possible on each of them. Responsive applications, like BI dashboards, rearrange their layouts and navigation to fit properly on smartphones, tablets, laptops and desktops. It’s not automatic; there’s no algorithm in the background figuring out the best layout. That is done by the application designer ahead of time. With arcplan, we have implemented “Views,” which define the breakpoints for each type of device. The designer then rearranges the application elements (charts, tables, filters, etc.) for each View. It’s quick, simple, and even better, all of the layouts are contained within one application. Changes made to an object are filtered down to each View/layout. There are no separate applications to maintain for each device. Just one total, no matter how many Views are defined.
So now that I’ve established how cool Responsive Design for BI is, let’s get into why it’s essential now.
Our series on Business Intelligence ROI has explored the importance of ROI for BI projects, provided examples of the types of BI projects that never pay off, and evaluated the methodology for calculating BI ROI. We saw that if a project has measurable returns it is more likely to get off the ground and get you acceptance for future BI projects.
Many of you who are tasked to calculate the ROI of your BI projects were never taught such a thing in school, so let’s break down another element that will help you do your calculations: types of return. Here are 5 types you should evaluate:
1. Revenue enhancement
Simply put, your organization will generate more money as a result of doing your project. Shareholders appreciate these types of projects – you’re reaching the right group of customers who see value in your project – and are willing to pay.
An example of this type of ROI would be one of arcplan’s grocery chain customers – their arcplan BI solution ties together three separate IT systems (one for sales, one for ordering, and one for inventory) and allows them to get a handle on inventory shrink (the loss of products between the point of manufacture and the point of sale…think brown lettuce or rotten tomatoes). arcplan allows the right people to see how many tomatoes are stocked in stores, how many are coming in from the warehouse, and how many are selling. The system allows the grocery stores to sell more tomatoes since they have better-looking inventory and less rotten tomatoes since they’re only ordering the amount they need in each store.
2. Revenue enhancement/margin protection
This means that your organization will increase profits through better efficiency. This does not necessarily mean more revenue but just higher profitability as a result of streamlining your current process.
The grocery store example from above also fits this type of ROI. The same shrink avoidance system allows stores to not only sell more tomatoes, but also to throw out less, thus protecting their profits (less shrink = more profit).
In case you missed arcplan’s webinar on December 13th, Calculating ROI for Business Intelligence Projects, here’s the recording to view at your convenience:
In this webinar, we discuss:
- What ROI terminology really means so you can speak the same language as your finance team
- The 6 kinds of “return” you should expect from your BI project
- The 5 BI projects that never pay off
- A 7-step methodology for calculating the ROI of your BI project
Thanks to everyone who attended, and for those who didn’t, let us know if you’d like to discuss anything you see in the recording.