01st Jun, 2018
Denave, Team, Designation
Thanks to the rise of Big Data, businesses now have the power to crunch huge piles of data related to everything under the sun – from internal operational processes to the industry landscape.
And Business Intelligence is key when it comes to providing real-world intelligence to decision-makers and stakeholders in a comprehensible format. The intelligence generated by BI software forms the basis of business-critical decisions taken by those at the helm.
While this understanding is now definitely becoming more prevalent, however, when doing business, implementation holds more importance than just understanding. And despite the potential impact BI can have on a business, its adoption has been considerably slow across the industry.
One of the main reasons behind a slow adoption rate are the challenges around the understanding of BI implementation due to poor cost-benefit analysis.
Delving deeper into this analysis, let’s first have a brief glimpse at what the process looks like and then understand the scope for BI implementation and its respective impact.
The process begins with data consolidation from various sources – the complete process being known as data engineering. Being the most critical and foundational task, the extent of manual effort that goes into it is maximum in terms of volume.
Then comes in the visualization part where the task is more dependent upon the selection of right platform and the correct judgment in regards to the structure selection for visualization. Of course, here as well, the element of human ‘expertise’ or intelligence has a decisive role to play.
Narratives upon that visualization are then the next step where the human discretion on what needs to be highlighted, holds extreme importance. Lastly comes in the Analytics application stage which at times is followed by Machine Learning application as well.
For this Analytics stage too, there is human expertise required and the same may be in plenty when we look at the consulting conglomerates. However, in this entire picture, while the cost of having a BI solution was not considered, the cost (or loss of the same) which comes on the account of:
- Cost of human error
- Cost of lost opportunities given the lags in human discretion
- Cost of delayed decisions, cannot be ignored.
When this cost element is compared with the cost of having a BI solution and thus, less erroneous data, impactful visualizations, insightful narratives and intelligent analytics, coupled with the opportunity of swifter informed decisions, BI wins hands-down!
To strengthen the understanding, here is a look at some of the measurable impacts of BI on a business:
- BI leads to a marked improvement in decision making as the decisions are based on actionable market intelligence.
- BI not only impacts decision making but is also instrumental in optimizing business processes by allowing stakeholders to view and analyze data in real-time.
- Adopters of BI have revealed that they have been able to make their operational processes more efficient with the operational insights gained through BI.
- Stakeholders and decision makers are able to identify and foresee industry trends thanks to competition and industry mapping done on BI.
- BI makes it easier to mitigate business challenges by allowing stakeholders to identify the reason behind the challenge and implement a quick, data-driven resolution.
- BI makes compliance maintenance significantly efficient.
In a typical situation, a buyer will look at the licensing cost of a BI product and compare it with the direct benefit that might derive from data analytics. This line of reasoning is somewhat flawed as it fails to make a cost-benefit analysis in the true sense and fails to judge the actual, long-term impact of BI on a business.
Instead of looking at the cost incurred by the BI solution, it is important to do a spend vs benefit mapping for getting an actual picture. A detailed cost-benefit analysis will not only allow you to make an informed decision when it comes to BI implementation but also pre-warn you about some of the extra costs which you’ll have to endure in the long run in case if you avoid BI implementation because of the initial cost.
The requisite analysis will also allow you to pre-empt any roadblocks that might creep up during BI implementation.
A typical BI implementation involves evaluating your organization’s business and operational needs, zeroing in on the right product that can help you reach your business goals, evaluating how the product can fit with your operations, final implementation and also, the resource training.
Talking about implementation concern points, the stages can be broadly characterized under – Scaling, Manpower, and Integration.
A over-the-top cost-benefit analysis will tell you that investing in a low-cost BI tool can solve your current needs. The line of reasoning here is that since the data generated by your business processes is low, you don’t need to invest in a modern BI platform.
However, the data you are generating today is likely to be doubled or tripled by next year. A detailed cost-benefit analysis will allow you to predict the amount of data you will be generating down the line and invest in a platform accordingly.
The cost calculation for manpower will outweigh the benefits of a BI platform if your cost-benefit analysis only takes into account the manpower that will be required for managing the platform.
There is no doubt that significant manpower will be required in the initial stages but since most modern BI tools are more or less automated, you will end up using far less manpower than anticipated, in the longer run.
A skewed cost-benefit analysis will inform you that the cost of integrating the BI platform into your ecosystem is too high. But when the implementation is done right, a BI platform can be made to seamlessly integrate with your existing business processes.
This is not to say that there will be no extra costs at all but they will be minimized. It all depends on your requirements. For example, if you want a dedicated data visualization tool on top of your BI platform, then, of course, that will be an extra cost, however, accompanied by extra insights.
Business Intelligence capabilities, when integrated with your business processes, can empower you and your team of decision makers to take informed steps based on actionable insights.
Denave’s Business Intelligence solutions are designed to work as an extended arm for your existing business operations. This is done by drilling Business Intelligence capabilities at strategic stages of your business operations.
In line with the current business landscape, the time had never been more apt to invest into BI solutions, however, doing a proper cost analysis is the key to take the right pick for your business. Gartner predicts that the Business Intelligence market is expected to grow to US$22.8 Billion by 2020
Is BI implementation on the cards for you?