ROI, Customization, and Mobility
In my series so far, I’ve tackled questions about buying criteria, cloud BI vs. SaaS BI, and data management. Today is the last installment and tackles the remaining most common questions we hear from SMBs about business intelligence. This series is all about expediting and simplifying BI by dispelling myths and providing practical advice for moving beyond manual processes to automated reporting, dashboards and advanced analysis.
8) What’s the ROI for business intelligence?
This is a question we’re asked more often all the time, as SMBs know they need BI but struggle to justify the investment. BI vendors need to understand that SMBs can’t invest in solutions that don’t quickly generate returns.
Unfortunately, a large percentage of BI projects fail to meet the businesses’ objectives. I don’t bring that up to scare you away from BI, but instead to encourage you to ask the vendors on your shortlist for proof of their ROI. It’s part of your due diligence when it comes to selecting the right vendor. First, ask them about their success rate. Do they have happy and long-term customers? As an example, the average tenure of arcplan’s customers is more than 7 years, the longest of any vendor included in Gartner’s Magic Quadrant for Business Intelligence – an indicator of long-term customer satisfaction. How do the vendors on your short-list stack up?
The next step is to ask your vendor to estimate the ROI you should expect…
At every turn, we’re confronted with the reality that mobile BI is making its mark among modern organizations. Studies are confirming this, with TDWI‘s December research report revealing that 70% of participants see mobile analytics as an important part of their company’s BI strategy. Howard Dresner’s Mobile Business Intelligence Market Study found a similar number – 68% see mobile BI as either “critical” or “very important” to their business. And from my own experience with customers and prospects at arcplan, it seems as though everybody is jumping on the mobile BI bandwagon. Before diving head-first into your own mobile BI deployment, lay out a smart strategy that will ensure the project’s success.
Let’s consider the most basic (and important) factors of any organization’s mobile BI strategy: where the money’s coming from, who the project is aimed at, and what kind of BI applications are appropriate for mobile devices.
1. Return on investment
As with any other business project, your mobile BI strategy must have a discernible return on investment in order to get off the ground. In another article, we explored the 5 types of return on investment and the importance of categorizing a business project into one of these buckets. Revenue enhancement is one of the easiest forms of ROI to prove for a mobile BI project. Here’s an example: one of our customers is a company that tracks the effectiveness of pharmaceutical sales reps on arcplan-powered dashboards. The data has revealed that the average sales call for these reps is only about 3 minutes long, so every second counts. One company instituted a pilot program to switch reps from laptops to tablets, which start up significantly faster, to see if this would have a positive effect on sales. It worked – the switch increased the productivity of the reps in their meetings (allowing them to pull up research studies and email them to physicians quicker). This responsiveness on the part of the devices (and therefore the reps) has led to an average sales call duration increase of over 30%. Consequently, these reps have been able to increase the number of sales for the pharmaceutical company they represent. This pilot program proved revenue enhancement ROI and stakeholders gladly signed off on the larger project (tablets for everyone!) as a valuable investment.
I just returned to Germany after spending last week in Las Vegas for the Collaborate 12 conference. arcplan had a booth at the show, billed as the “Technology & Applications Forum for the Oracle Community,” for the first time in 4 years. We’ve noticed trade shows having a bit of a renaissance and this one – with 6,000 attendees – was no exception. With our strong Oracle customer base and our billing as the most widely-used BI front-end to Oracle Essbase, we thought 2012 was the perfect time to return to Collaborate. And after our great experience at KScope 11, the Oracle Developer Tools User Group Conference last year in Long Beach, we want to participate in more conferences where the attendees are the users and creators of BI applications in their enterprises. Collaborate turned out to be a terrific (re)addition to our lineup.
The conference kicked off with a keynote from Oracle CIO & SVP Mark Sunday on “IT at Oracle: The Art of IT Transformation to Enable Business Growth.” His presentation stressed the importance of simplifying IT, which complements arcplan’s vision and our 2012 tagline: It simply works™. With our focus on reducing infrastructure and helping our customers leverage what they already have, this message really resonated with us.
The rest of the session topics reflected Collaborate’s heterogeneous nature as a melting pot of three different user groups (OAUG, IOUG and Quest)…
Mobile business intelligence is a necessity for executives, remote staff and sales people who need access to business-critical data at all times. Its benefits are numerous and go beyond return on investment. They’re often intangible and hard to describe (and therefore it’s sometimes hard to justify a mobile BI investment). There are many articles from the CIO or CEO’s perspective, but we wanted to hear directly from business users. So we surveyed arcplan clients and compiled a list of priorities for an effective mobile BI solution from the users’ perspective. Their priorities reflect what users around the world expect:
1. Value Beyond ROI
While management insists on concrete ROI for business intelligence expenditures, users are more concerned with the value of BI solutions in their lives. Mobile BI derives its value by delivering at-a-glance views of business-critical information at all hours of the day or night so whether users are traveling, in meetings, or in a different time zone, they can grab their smartphone or tablet PC and get information that helps them take action.
As BI (literally) moves into the hands of business users, it delivers another important benefit: freedom. Specifically, mobile BI gives users the freedom to view reports as needed, without help from IT and without the limitation of an office setting. Mobile BI users include account managers en route to client sites, supervisors on the plant floor, and store managers who never sit behind a desk – all of whom need data to make decisions at all hours of the day. With mobile BI, different work schedules no longer stand in the way and users become more self-sufficient with the freedom to access information anytime.
3. Bring Your Own Device (BYOD)
The “BYOD phenomenon” refers to users who bring their personal devices into the workplace and connect to the corporate network. It allows users to mix business and personal applications on their own mobile devices rather than carrying separate phones and tablets for work and life. Many mobile BI strategies allow for BYOD so users who prefer Android can use those devices even if the company regularly issues Blackberry phones, for example. In order for this strategy to make sense…
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).