Business Intelligence business case can be a simple subject, when a business function is looking for creating a data-mart. In this case the demand comes from business and business has worked out their mathematics to justify the needs. The main issue comes, when you are building a business-case for foundation investments for an end-to-end platform.
Enterprise Business Intelligence foundation investments include
- Purchasing of enterprise BI Data Warehouse, OLAP, Enterprise reporting, analytics tools
- Enterprise wide meta-data management initiative
- Enterprise wide foundation Data Warehouse Dimensional Model(For example creating standards dimensions around customer, supplier, locations, channel etc..refer Dimensional modeling in Data Warehouse) development
- Process-based/business objective based ( and not function based) BI initiatives
An initiative like this is typically initiated by CEO, CFO OR the head of information management, as most of the functions don't have the waiting time OR the budget to support an enterprise wide BI. In this situation, typically Head of Information Management OR an equivalent role will be responsible for presenting the initial assessment and business-case for the management.
In this scenario, following is the list of hard-hitting quantifications you can do. Points to Note- #1-The purpose here is not to be manipulative, but to look into quantification on the following areas, as they are dearest to the shareholders and sponsors. #2- BI will not be the only driver on ensuring the benefit, therefore quantification needs to be done only on the BI value-add.
List of Key Business Intelligence business-case quantifications for BI investments
Regulatory and Compliance adherence
Enhanced data quality and having a central system of record, will enable us to produce faster and accurate compliance and regulatory reporting. This will also help us to get more time to review our submissions. The BI initiative can also enable early warning signals in case of any deviation in relation to compliance.
Reduction in the financial write-offs
A better data quality and also data integration linking multiple systems, will help to audit and report on end-to-end transaction flow from a single reference point. The main reason for financial write-offs (apart from credit write-offs OR capital erosion due to wrong investments OR bad risk modeling etc....), is inability to reconcile linked financial transactions across multiple systems, due to mismatching codes etc. A BI with data-integration will enable a better financial reconciliation OR at least a root-cause analysis
Maximizing Customer Satisfaction Index
Customer satisfaction is the buzzword with media and the CEOs. A BI initiative, allows you to track the customer touch points across multiple systems, to have an end-to-end view of customer interaction. Secondly, by using data-warehouse for enterprise reporting, you can share a single version of truth with the customer. By using BI, you can also track the organizational performance on various customer sensitive parameters (TAT on delivery, TAT on support call, TAT on customer query..)
Along with providing a single customer view, BI can also provide the data for business modeling of customer profile and product affinity analysis. With both these enablers, the organization can train the contact centre executives, customer service executives, sales staff and marketing staff (for leads and mailing campaigns), to go for cross-sell and up-sell.
Better and clear assessment of non-financial revenue and costs.
In a typical board meeting, a CEO can get many different versions of sales revenue and costs. Finally, CEO has to rely on the CFO for the costs and revenue. However, there are genuine versions of sales revenue and costs, which a CEO must know. These pipeline versions are:
- Business ordered by the customer, but not yet processed.
- Returns done by the customer (negative revenue), but not processed.
- Costs incurred by the company, but invoice not received..
The systems carrying the information on these revenue and cost pipelines, are typically field and non-core systems, which are managed with lesser attention. BI enables us to integrate data across the core and non-core systems, and allows us to reconcile the financial figures and yet to hit figures. This helps the business to do better projections and take more informed decisions.
Exposure Management
BI provides an end-to-end customer relationship by providing single view of the customer. This enables business to do the risk profile, de-dupe multiple customer records of the same customer, manages the exposure to the customer etc. This avoids financial loss.
Customer Management
BI allows you to do various analytics and data mining tasks like churn analysis, affinity analysis, customer segmentation, customer value and profitability analysis. This enables higher customer retention and segment-based products and service infrastructure (For example lower cost services for lower value relationships..)
Employee Headcount reduction
The number of people involved in MIS and Analytics will reduce, as BI will increase the productivity and accuracy.
Increase in IT and Business Process Productivity
Using Master Data Management, Metadata Management and ETL, one is able to pro-actively address many data related issues, which helps reduce the load on IT and business to do reconciliations and production issue management. These repositories and capabilities (master data, meta-data.), will reduce the data modeling and system design efforts. For example IT does not have to design master tables like customer master, supplier master from zero-base, as they will be documented in the meta-data repository.
How to do the Business Intelligence Benefits Quantification
The points mentioned above, could be termed obvious, by most of the readers, who have been associated with BI. There may be many other hard-hitting business benefits which can be added, given your specific context. The challenge now is on how to quantify the benefits so that sponsors can sign the cheque. Unlike OLTP (OR transactional applications), business-case for BI is often loose, as it is not an operational delivery application. One has to ensure a balance in terms of quantification, and one to have some basis behind the quantification. Some tips for quantification of business benefits:
- Use Case-Studies and Research Reports: There are many case-studies published by Vendors, and independent research organizations. This is specifically useful for the components, which do not have any direct benefits (like building a meta-data repository).
- Get some Vendors and Industry specialists to come and talk to the management- Do not overdo it. Getting vendor-independent consultant OR an established expert, will work better.
- Instead of asking open ended-question from the business owners, ask specific questions - For example, instead of asking …'what will be the business benefit, if you have a single customer view', one should ask- 'Given everything stays the same, if I provide you the single view of your customers, and give you the list of top 5 other products, he/she is most expected to buy, how many more products you will be able to sell?'.
- Ask the business top10 of SWOT items, and build you business case around them. If they are on top of the mind of your business stakeholder, you will get faster and more accurate answers related to quantification.
- Involve external entities- involve external vendor OR a consultant to develop the quantification. This will give an external view benefit, in terms of convincing the sponsors.
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