Louis Barton, executive vice president of Frost Bank, opened the TDWI Business Intelligence Strategies program on Monday night in Orlando, Florida, with a presentation on the return on investment (ROI) of enterprise business intelligence (EBI). His vision of business intelligence is to "provide a common Web portal with intuitive, consistent information delivery and the ability to manage by pointing and clicking key performance indicators throughout the business to see where the business is headed."
The approach he used at Frost Bank includes getting executive buy-in and using the right BI tools to get a single view of the customers, which includes data stewardship.
Barton stated that "BI puts a magnifying glass on data." He recommended getting the data in shape before applying any BI tools. He also recommended that the first iterations focus on people/paper/process-intensive applications, benchmarking the metrics and quantifying the measurements to improve the processes. Frost Bank measured their successes in three ways: reduced costs, increased revenues and diminished risk. He made sure that management knew of every success and documented the financial gains to have information for a business case.
The enterprise BI infrastructure was instrumental in helping the bank improve processes so they could analyze data differently and reduce costs, concluded Barton.
ROI for Business Analytics
Also released at TDWI was IDC’s study, "The Financial Impact of Business Analytics," which concluded that analytics projects positively impact an organization’s bottom line.
The study, which investigated the ROI realized by organizations that have successfully implemented and utilized analytic applications, included 44 in-person interviews in North America and Europe with information systems (IS) managers, business managers, department managers, and system users spanning a range of industries.
Key findings include:
- Analytics projects yield 431 percent average ROI. Organizations that have successfully implemented and utilized analytic applications have realized returns ranging from 17 percent to more than 2000 percent with a median ROI of 112 percent.
- Business analytics implementations generated an average five-year ROI of 317 percent. More than half (63 percent) of those studied had a payback period of less than one year.
- The best results are achieved when analytics goes hand in hand with business process change. Each case had a strong business process focus, in one of these 3 areas:
- Operations/production analytics (related to the production or delivery of a product or service) showed the highest return with a median ROI of 277 percent
- Financial/business performance management analytics had a median ROI of 139 percent
- Customer relationship management analytics had a median ROI of 55 percent.
- "Buy" projects (implementing a packaged analytic application) yielded a median ROI of 140 percent, while "Build" projects (custom development) yielded a median ROI of 104 percent. The approach adopted depends on the problem addressed, the level of skill within the organization, and the availability of packaged solutions.
The full report offers case studies with best practices and other tools for key decision makers to guide their organization toward high-yield analytics projects.
For more information on the IDC study, visit www.idc.com/analyticsroi.
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