Noetix Corp. recently announced results from a market survey conducted to better understand the challenges and alternatives for conducting return on investment (ROI) and total cost of ownership (TCO) studies for business intelligence (BI) implementations. The results reveal that most companies do not believe they are using their current BI tools to their fullest potential. Moreover, if enterprises could conduct ROI studies more efficiently, it would be easier to get BI projects approved, justify the cost of purchasing hardware and software, and support the rollout of BI applications to larger user communities.
Though BI is becoming a key differentiator in many industries and is widely seen as giving companies the ability to extract more value from their data in order to improve corporate performance, most survey respondents stated that companies are not making good use of their BI infrastructure. Reasons for this included the following:
- Lack of training was listed as the biggest obstacle to making better use of BI, followed by limited staffing resources.
- Most custom reports remain very sophisticated, drawing on two to ten data sources, and typically take from several hours up to five days to create.
- IT staffs still create the majority of BI reports, followed by business analysts.
- Dissatisfaction with BI technology is found among all user communities and is most widespread in IT staff groups. Only 46 percent of IT respondents were satisfied with their organizations BI infrastructure.
- The idea that BI applications can create more work is also a significant reason why enterprises are not getting the most out of their BI implementation.
A previous Unisphere Research study showed that while 89 percent of all companies conduct ROI studies for technology implementations, fewer than 45 percent conduct ROI studies for BI implementations and only 23 percent had ever conducted a TCO study.
According to this more recent study, there is widespread agreement that companies should conduct ROI studies for BI implementations that cost more than $50,000, however, there are many challenges to doing this, including the following:
- Neither IT nor financial staffs possess all the right skills to conduct an ROI analysis for BI investments.
- It is difficult to measure and track the ongoing costs of a BI implementation including updates of the software, consulting fees, service and support, hardware maintenance, and licenses.
- It is difficult to aggregate and quantify the direct benefits of BI investments.
While it is difficult to conduct ROI and TCO analyses, survey respondents see these studies as being critical to the success of enterprise BI efforts. Effective ROI analysis will make it easier to get BI projects approved, allow for forecasting and justifying the cost of purchasing hardware and software, and support the rollout of BI applications to larger user communities.
Respondents stated that ROI calculations could be improved with metrics such as the ability to document the use of BI tools, the ability to document time saved creating custom reports, and documenting that fewer IT resources were consumed.
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