Your Return On Investment on Business Inteligence

Regular readers know that I'm quite passionate on performing effective business intelligence (BI), feeding sensible KPI's, quite the opposite of the expensive self-fulfilling technological driven BI-solutions most organizations seem fit to undertake. It seems we have a Berlin-wall here between the people that think like me and the BI-vendors. In The Netherlands this wall appeared after a survey by consultancy and analyst company Passioned (nice name!).

Passioned performed a country wide BI-investigation covering the period 2006-2008. Some main conclusions are:

  • 6,6% of the interviewed organizations reported a company wide measurable positive ROI from BI-investments
  • Within the public sector this percentage is as low as 3,4%, in the private sector 9,1%
  • 21% reported a small success on the investments, either at departmental level of on specific topics like sick leave levels

The report led to fierce discussion in the Dutch ICT-press. Users reported the well known issues with pure technology driven implementations, non organizational embedding, ever growing budgets and endless implementations and in the end not leading to significant improvements. Vendors replied with the litany of no clear definition of targets, no commitment by the user's management and thus no adaption of the organization. In summary: the other one is to blame.

Where there is a fight, there is room for a paid consultant! So the BI-consultancy firms are on the rise. Not forced to sell a technology they can concentrate on defining beforehand an integral plan on what business objectives to support, what KPI's are to be fed, how this best can be implemented and requiring what organizational changes. Last but not least the question than arises against what cost and resulting a desired ROI.

But watch out for the oldest of consultancy pitfalls that is present when complex technology is involved: make sure that they are really independent and not the long implementation arm of the BI software vendor.

In my opinion there is a 3-step approach to maximize the ROI on BI-investments:

  • The organization themselves should set the requirements for a KPI supporting BI solution, lean and mean
  • BI-consultants then can be asked to detail, plan and cost the implementation, including the selection of the best suited and priced technology
  • Solution vendors then can be invited at a point to offer a solution with a results dependent pricing structure

The above is no rocket science but will require more work and some more arguing upfront and certainly will prevent a lot of projects and investments to start in the first place. But when commissioned in this way BI-investments will be lower and show dramatic better ROI than the results measured today.

Do you agree with me to position BI as a valid supporting tool to fed your KPI's in helping to manage your organization?

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