In every business, return on investment is so important that it is included in every business proposal.
To ensure your BI solution is worth it and works in favor of your organization, you need to see a return on investment (ROI) for whatever monetary investment you make in your product.
So, how do you calculate the return on your business intelligence investment?
Calculating your return on investment in business intelligence software isn't easy, but it's not impossible. The real difficulty lies in determining which financial advantages can be directly ascribed to your BI system and may be credited to something completely unrelated, such as new staff, a company boom, or tapping a new market.
This is simple in certain circumstances, such as supply chain analytics. Analyzing purchasing habits, pricing, and contracts can result in verifiable and immediate cost reductions.
BI may help you better focus marketing efforts within your consumer groups in certain circumstances, such as marketing analytics. However, other factors like price and rival activity will also play a role in calculating the return on investment on your part.
In this guide, we'll break down everything you need to know about calculating the return on investment for your business intelligence tools and how to make sure your BI pays for itself in the long run.
What is the Return on Investment for Business Intelligence?
When measuring return on investment for business intelligence, you’ll need to consider tangible and intangible cost savings.
Tangible Cost Savings
You'll be able to see your tangible costs quite easily, as these costs are likely already recorded and easy to find. Determine the measurable costs of implementing a BI system, which may be easily assessed by looking at your current expenses, and then calculating the return on investment soon follows.
Hardware, software, technical assistance (if not free and included with your product), staff training to utilize the tool, and continuous maintenance are substantial expenditures. You most likely already have a list of these items in your business expenses.
Consider your possible additional tangible costs if you haven't yet installed a BI tool but plan to. Will hiring a developer to use the technology cost money, or can you train your current personnel for less?
You can also figure out how much money you'll save by retiring old systems or numerous data integration technologies across teams and departments.
Intangible Cost Savings
Intangible cost savings for BI tools are a little more difficult to calculate. Essentially, these are the cost savings you will receive by implementing a BI tool in the long run.
Such cost savings are more conceptual than tangible cost savings. These are just a few intangible cost savings you can enjoy by implementing the right BI tool:
- Users have more freedom and autonomy when developing business reports.
- Teams can minimize the risk of human error by reducing the amount of manual involvement and effort required to create reports.
- Decision-making and other organizational processes are more efficient.
- Risk mitigation, cost avoidance, and error detection.
- Improved data management.
- A higher level of staff and customer satisfaction.
- Customer relationship management improvement.
- Improved internal communication on critical information.
- The information presented is more timely and of higher quality.
- Discovery of new ideas and opportunities.
- Improvement of an organization’s image.
- Increased transparency and accessibility to essential data.
- Improved business knowledge via new analytical functionalities that were not readily available before the BI installation, resulting in a competitive advantage.
These very conceptual potential organizational benefits and cost-savers are very difficult to calculate. Still, these BI advantages contribute to the company's larger goal of achieving long-term strategic business objectives.
You have some options for quantifying these intangible benefits of a BI solution. You can conduct scenario analysis to examine the potential outcome of implementing a BI product.
After intangible advantages have been obtained, organizations can employ the process of elimination to attach quantitative values to those intangible advantages.
Comparative analysis may also be used to assess intangible benefits by comparing them to similar benefits or fixed-value assets.
How to Make BI Pay For Itself for Return on Investment
As a general rule of thumb, you should not be spending more money on a business intelligence tool than the value and benefit you are getting from that tool.
Luckily, there are a few key ways to improve your return on investment for BI solutions.
Keep a close eye on your tangible costs as they come. When it comes to intangible benefits, use the techniques we mentioned in the previous section to discover potential cost savings of a specific tool.
It isn’t easy to calculate the ROI on BI software unless you test-drive it for a few months. We recommend looking into BI products that don’t require a contract or minimum timeframe to avoid spending a ton of money on something that may not have the ROI you’re looking for.
Don't forget to factor in your intangible advantages when evaluating your return on investment in business intelligence solutions. A BI tool’s financial contribution is much more than cost or time savings. BI solutions can also be strategic instruments for achieving corporate objectives in the long term.
How Can DashboardFox Assist with Your BI Software Needs for Return on Investment?
This is especially the case when you compare DashboardFox to other BI tools, as most providers follow a subscription approach that will require ongoing monthly or yearly subscription payments.
We’re all familiar with those graphics that show the up-front cost is just the tip of the iceberg! So DashboardFox can typically save you money on the initial cost. But what about the ongoing cost?
DashboardFox can also save you so much in terms of your cost of operations and maintenance, as our platform does not require high-level technical development to use and operate.
Dashboardfox was designed to save you a lot of money on ongoing costs. A few examples:
Applying Upgrades. The updating process in Dashboardfox takes less than 10 minutes (and we’re being generous). The update itself is downloading a file, taking about 30 seconds to run it, and you’re complete.
But we do always recommend you take a fresh backup of your database and file system before applying the update, so we’ll account for 9 minutes to that. Why is it so simple? We’ve built DashboardFox from the ground up. It’s a simple architecture.
Other tools have acquired many products over their history, and they are all not as tightly integrated, which means harder updates.
Cost of Operations. This is a broad category, but essentially we mean how much time, resources, and money it takes to use the product. DashboardFox is a self-service tool primarily. You don’t need to allocate a dedicated report builder with a highly technical skillset. So, even if you want a centralized report builder, they don’t need a high (i.e., expensive) pedigree.
Training and Support. While we offer instructor-led web-based training for an additional cost, most of our customers do just fine with our free training options. This includes videos on our support site, but mainly working with our team via Priority Support to assist them with questions.
Unlike other vendors who provide product bugs and technical support, the priority support for DashboardFox for the first year is concierge, VIP-level support. You can schedule a live screen share with a member of our team, and we will help you build the reports you need and teach you how to do it along the way.
The only time you get the answer “you have to purchase services for that” is if you want to outsource and have us do it for you. And after the first year, you have the option to renew that level of service for another year. As long as we’re helping you, it’s Priority Support.
Ready to get the ROI on business intelligence software that you deserve? Get in touch with our team at DashboardFox today!