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Issue Date: February 2008

Opinion piece: driving ROI from your BI investment

14 February 2008
David McWilliam, managing director at Cognos South Africa

The cost of implementing a BI solution can be counted in the price of the software and the time and effort it takes to clean and structure data, build reports and train staff to use the system. How, when and how big a return the business gets on this investment depends on the planning and strategic goal setting that precedes and accompanies implementation and rollout.
BI today delivers much more than reports, it includes scorecards, performance management and dashboards, helping not only individuals make faster, more informed decisions but also increasing visibility and accountability to assist organisations to better manage business performance. However, enabling this functionality means the data and process foundation that feeds it needs to be carefully created, which may entail some housecleaning. In addition, getting the benefit of this functionality takes buy-in from the whole organisation, from the executive to management and staff.
So how do you measure the benefits? If it is mere process re-engineering and optimisation you are after, benchmarking efficiency and productivity before and after implementation will quantify those benefits for you. If, however, your BI vision is larger than this, your bottom line should give you an answer within a year or two.
The business case for BI, like any other technology solution, needs to be solid before you embark on an implementation. This technology has been around long enough for the benefits to have been proven over and over again.
Take, for example, the results Netherlands-based ENECO Energie achieved. Its Cognos performance management platform based on the Balanced Scorecard methodology has helped the company decrease its accounts receivable balance by approximately €10 million. The company also gained higher process efficiencies in its customer contact centre and billing department, resulting in a savings of approximately €2,5 million. Furthermore, by raising conversion rates on marketing campaigns and gaining insights into customer segments for direct mailings, ENECO has saved approximately €1 million. However, there are some clear proven practices that if not applied; no BI implementation will achieve the full business benefits it promises.
At the top of this list is collaboration between IT and business. Business needs to be able to identify areas that can be improved and enhanced and know how they want to achieve that using BI. The key word here is ‘using’ BI as it is only by using the solution to gain business advantage that the project’s cost can be justified.
Introducing tried and tested implementation methodologies is important as this will deliver shorter time to return on investment through faster, more efficient rollout. The software vendor or selected implementation partner should have this expertise. If they do not, reconsider their appointment.
A clear strategy for achieving BI benefits should also be mapped out. There are definite short and long term benefits to be gained. Quick wins include greater accuracy, faster turnaround on key processes and functions such as sales and accounting through automation and integration of information from disparate systems, as well as increased productivity.
Executive sponsorship is critical. Change is never easy and reaching the point where the BI system delivers direct benefits to users takes time. In many instances, until this point is reached there is little support within the organisation for the technology. It is often only at the executive level that the true value of BI and PM to improved business performance can be understood.
As any business that has implemented BI and PM will tell you, the benefits these systems deliver are not single or unique events. BI and PM systems are designed to promote continuous improvement. While a considerable investment in time and effort are required to ensure the success of a BI implementation, the returns can be immense, assisting organisation to not only be more productive and efficient, but more agile and competitive.

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