BI2013_Bjarne Berg_BenchmarkingBI_v11

Report
Benchmarking BI: How
to Identify Critical
Success Factors and
Calculate ROI of Your BI
Initiatives
Dr. Bjarne Berg
COMERIT
© Copyright 2013
Wellesley Information Services, Inc.
All rights reserved.
In This Session …
•
•
•
•
Attend this session to gain insight into key benchmarks for BI
project staffing levels, support requirements, BI project durations
(upgrades or new implementations)
A tool to calculate ROI, NPV, IRR, and Payback for SAP BI
Estimate return on BI investments using three different metrics –
replacement cost analysis, new capabilities analysis, and decision
option analysis
Benchmark your BI performance against best-of-breed and
industry averages for project timelines and execution, costs and
staffing levels, and ongoing support
1
What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
2
BI Spending is Increasing and Gaining Momentum
KEY FACTS
• 50% of the 2,600 respondents in TechTarget’s
annual survey said that they would increase
their BI spending by at least 10%
TechTarget.com, 2012
•
39% of CIOs in a SnapLogic survey said that BI was the #1 priority
Bimeanalytics.com, “CIO Insights”, 2012
•
BI initiatives are also the #1 priority, ahead of cloud computing, in
Gartner's survey of 2,335 IT managers and CIOs
http://www.gartner.com/newsroom/id/1897514
Corporations are looking for a competitive edge with BI. For example,
IDC estimated that BI spending increased by 6.9% to $1.8 trillion in 2012
3
Why Are Companies Investing in BI?
•
•
FACT: If you want to become a large organization, you need BI as
a cornerstone in how you manage
Examples



43% of retail companies with
revenues under $250 million
use Excel as the core BI tool
13% of mid-sized retailers use
Excel as their core BI tool
5% of retail companies with
revenues over $1 billion use
Excel as the core BI tool
Source: RSR 2011. Sponsored by SAP
Key Question: How is SAP BI enabling large organizations to
grow and manage better than smaller companies?
4
The Relationship Between Sales and Use of BI
FACT: Pushing BI and analytics to operational line managers and
store managers increases sales
•
•
Examples


Retail organizations who
outperformed their peers in
sales growth had 53% usage
of BI at line manager levels
Retail organizations who
outperformed their peers in
sales growth had 52% usage
of BI for store managers
Source: RSR 2011. Sponsored by SAP
Saturating BI at all levels of the organization creates focus and pushes
decision making downwards; it makes the company more agile!
5
But, Is Business Intelligence Really Worth the Cost?
•
In the annual BI survey by the Business Application Research Center
(BARC), it was found that most BI investments are relying on soft
justifications




Faster BI
More accurate reporting
Improvements in business decision making
Improvements in customer satisfaction rates
BARC, Bi-survey.com, 2012
•
Few were able to justify BI initiatives with hard Return on Investment
(ROI) calculations, i.e., tangible cost reductions
After 20 years of BI and Data Warehousing, CFOs and CEOs are now
demanding proof of benefits before investing more in these technologies
6
But, Is Business Intelligence Really Worth the
Cost? (cont.)
SAP BI Capability
•
BI capabilities have to have hard
tangible benefits in order to sustain
the current level of enthusiasm and
funding
•
The trick to do this is to not align
benefits to reporting, dashboarding,
and tools. Instead, focus on
operational improvements and
make the benefits measureable
Key ROI Benefits
Better capital utilization and cash investments
Better Marketing program financing of internal resources
BPC - Financial
Less variance of budgets
Forecast
Earlier directional change alerts
Reduced interest payments
Reduced inventory
Less obsolete inventory
BPC - Business
Less back orders
Planning
Increased focused customer service
Shorter OTC cycle
Shorter P2P cycle
Targeted selling to prime customers
Increased bundling and cross-sales
Marketing Analytics
Increased customer loyalty
& sales
Earlier detecting of demand changes
Lower marketing costs (reduced waste)
Cross use of resources
Reduced downtime
PCA, CCA and
Manufacturing and vendor consolidation
COPA
Alignment of true costs to sales and operations
Alignment of budgets to successful operations
Earlier detection of unprofitable areas
Better customer segmentation by true profitability (not sales)
Better proactive issues resolution (2-way loyalty)
Suggestive selling (market basket analysis)
CRM
Targeted promotions
Life-time value (LTV) customer analysis
Early customer product adopter analysis
CEOs and CFOs are increasingly asking for real evidence that BI and
Analytics helps reduce costs, increases profits, and actually
contributes to the enterprise and is not merely a non-value cost area.
7
BI — ROI Calculators
•
There are many BI ROI
calculators and tools available
on the Internet
•
Some are vendor and tool
specific, while others are
focused on BI and Analytics in
general
•
Some calculators are very complex and
comprehensive, while others are simplistic and
easier to use
Depending on the size of your initiative, a more
comprehensive calculator may be more appropriate.
8
What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
9
The Current BI Time-to-Market is Too Slow…
A key complaint is that BI
development is simply too slow
Currently BI time-to-market is
measured in months instead of
the time scale businesses
operate (days/week)
Source: SAP AG
For costs to go down, and ROI to
increase, we have to get better at
delivering BI solutions faster
Source: B. Oosterhof, Informatica
BI Self Service is a key component to
reduce time-to-market
SAP BI Self-Service for power users and
authors is key to fast delivery and higher BI ROI
10
Time to Market — We Are Simply Too Slow …
•
It has been estimated that 66% of development costs can be reduced
by using an Agile or a Rapid Application Development approach for BI
Source: B. Oosterhof, “Agile and Operational BI,” Informatica, 2011
•
Furthermore, up to 500% of the time-to-market can be reduced through
rapid prototyping instead of writing functional specs
W h e n to S e le c t D iffe r e n t M e th o d o lo g ie s
H ig h
Jo in t Ap p lica tio n D e sig n
(J AD )
S ys tem d ev elo p m en t Life - C yc le
b ase d m eth o d o log ie s
(S D L C )
T im e to
D elivery
I.e. Scrum, Agile
E xtrem e P ro g ra m m in g
(E P)
R ap id Ap p lic a tio n D e ve lo p m en t
(R A D )
Low
Low
For data warehousing, ASAP
and JAD may be appropriate
methodologies, but for
business intelligence Agile,
Scrum, RAD, and interactive
prototyping are almost
always the most cost
effective answers
H ig h
Im p act o f F ailu re
Source: Dr. Berg, Data Management Review Magazine
11
BI Time to Market — Realizing Benefits Earlier
•
•
Benefits (i.e., sales) should be measured
both in terms of the time when benefits
emerge and the magnitude of benefits
Don’t just write the estimated benefits,
track the benefits of previous BI initiatives
•
•
Most business sponsors believe IT projects are
full of rework and missing features
You have to change their mentality from building
systems to doing BI: New features are always
added
Source: Michael Krigsman, "75% believe IT projects are 'doomed'. 2011
The Business Case for BI should require some tangible way to quantify what
these are and when you should be seeing them in a way that can be measured
12
ROI on BI Projects — Replacement Cost Analysis
•
The easiest form for ROI Analysis is to take the cost of a BI
investment and simply compare it with the costs of the existing one
Current Operations
Application servers
74,000
Hardware
Database server
261,000
support
Total
$ 335,000
Database
RDBMS annual fees
289,000
Backup and disaster
Recovery
172,000
recovery
Upgrades
Patches and upgrades
45,000
Performance tuning
Performance
49,000
and householding jobs
Storage
SAN costs
201,000
Current total expenses $1,091,000
Database
New HANA Initiative
Application servers
Database server
Total
RDBMS annual fees
Recovery
Backup and disaster recovery
Hardware
support
Upgrades
Patches and upgrades
Performance tuning and
Performance
householding jobs
Storage
SAN costs
Current total expenses
HANA Implementation costs
TOTAL NEW BI INITIATIVE
20,000
365,000
$385,000
172,000
24,000
$581,000
$302,000
$883,000
Project savings $208,000
After this project analysis, we can now estimate
the ROI based on a 3-year payback period
13
ROI on BI Operations — Replacement Cost Analysis
•
In this case, we are replacing the current RDBMS with HANA, so the
past costs and future benefits are easier to quantify
Area
Yr 1
Current
Future
74,000
20,000
261,000 365,000
289,000
172,000 172,000
45,000
24,000
49,000
201,000
1,091,000 581,000
Application servers
Database server
RDBMS annual fees
Backup and disaster recovery
Patches and upgrades
Performance tuning and householding jobs
SAN costs
Total
Net Present Value (10% discount rate)
TOTAL NPV
$ 1,395,124
HANA Project Cost and HW (investment)
$ 667,000
Return on Investment (ROI)
209.2%
Savings
54,000
(104,000)
289,000
21,000
49,000
201,000
510,000
$ 510,000
Current
74,000
261,000
289,000
172,000
45,000
49,000
201,000
1,091,000
Yr 2
Future
20,000
365,000
172,000
24,000
581,000
Savings
Current
54,000
74,000
(104,000)
261,000
289,000
289,000
172,000
21,000
45,000
49,000
49,000
201,000
201,000
510,000 1,091,000
$ 463,636
Yr 3
Future
20,000
365,000
172,000
24,000
581,000
Savings
54,000
(104,000)
289,000
21,000
49,000
201,000
510,000
$ 421,488
To account for the cost of capital, we discount all future savings by 10%
compounded annually. This is known as the Net Present Value (NPV).
We divide the NPV with the investment to get the simple ROI.
14
Option Theory — The Inherent ROI of BI
•
•
There is an intrinsic value of increasing the time from discovery to
time-when-action-is-required
This value is created by simply having more time to evaluate more
options before action is required
Issue or
Opportunity
Discovery
No
BI
With
BI
Option
found
Decision
made
Action
Required
Time
Time to
analyze
Issue or
Opportunity
Discovery
Option
found
Option
found
Option
found
Time to
Evaluate
Time to
Implement
Action
Required
Decision
made
Time
Time to
analyze
Time to
Evaluate
Time to
Implement
Option Theory: With BI, we discover opportunities earlier, get more time to make
decisions, can evaluate more options, and have more time to implement them
15
What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
16
A Step-by Step Example of ROI Calculator
•
In this example, we are
using the BI ROI
calculator from Hall
Consulting and Research
•
It is one of the most
comprehensive BI
calculators available and
relies on a 6-step
approach:
Profile
 BI Initiative Selection
 BI Maturity Assessment
 Initiative costs
 Initiative Benefits
 Analysis and Report

Source: Hall Consulting and research
In this demo example we will look at the major
activities of this tool, but there is also an enterprise
edition with even more capabilities
17
A Step 1a – The Profile – Organization
•
In this ROI tool we first enter
the organizational profile. This
include:
Industry
 Location
 PC users
 BI users
 Financial Information and cost
structure

18
A Step 1b – The Profile – Financial Information
•
From HR we enter the
key labor cost
numbers including:
Salaries
 Overhead
 Standard hours per
year

These Labor Costs are used throughout the tool for estimates of ROI, Net
Present values (NPV), Internal Rate of Return (IRR) and benefits graphs 19
A Step 1c – The Profile – Preliminary capabilities assessment
Using simple scores or investments and importance, we quickly build a capability
as-is and to-be BI Capability Profile that we guide us in the BI ROI benefits case
Having a basic understanding of the current
environment will help us focus our BI initiatives later.
20
A Step 1d – The Profile – Preliminary BI maturity assessment
•
Using basic scores and answering a few questions, the maturity profile is generated
Building, or enhancing, systems in a mature BI organization is
substantially less costly than in emerging organizations.
21
A Step 1e – The Profile – Results
•
The profile generates a
preliminary cost per user,
a cost for the organization
and the overall benefits.
•
This will automatically be
updated by the next steps
where we refine hardware,
software and
implementation costs
•
Throughout the tool, the
system updates key
numbers from other Excel
tabs and change graphs
accordingly
KPIs per users are key to
benchmarking
22
A Step 2a – BI Initiative and Application Selection
•
The next major step
is to determine the BI
applications in scope
for our initiative.
•
Business cases and
BI strategies should
not be focused on a
single project, but
instead look at major
initiatives over 24-48
months.
Strategy is long-term
(1-5 years);
Tactics is short-term
(1-12 months)
23
A Step 2b – BI Source System Selection
•
It is estimated that as
much as 40-70% of a BI
and DW initiative is spent
on Extracting,
Transforming & Loading
data (ETL).
•
In this screen we are
adding data sources from
a high-level and making
an assessment of the
type, volume, complexity
and integration to the DW.
This helps drive a more accurate cost picture of what is
required to integrate into the BI solution using key benchmarks
24
A Step 2c – Enhancements to Data Warehouse
•
In this section we are
looking at changes
required to the data
warehouse to
accommodate our BI
initiatives.
•
It also include process
improvement, metadata
management and
enhancements required to
data marts and data
structures.
The tool also has help and explanations included in each tab
to guide a users to the tasks required in these input sheets.
25
A Step 2d – Enhancements to BI and Analytics
•
In the last initiatives input
tab, we enter the changes
required to BI and
Analytics. This include:
Reporting
 Scorecard/Dashbaords
 Analytical Tools
 Workflow and
collaboration

We are now ready to view the
output from the exercise so-far
26
A Step 2e – BI Initiatives Profile
•
The system then generates a BI capability
profile of what the current state of the BI
environment is and what capabilities the
initiative will focus on.
These profiles can help communicate with the sponsor the focus of your initiative
27
A Step 3 – BI Maturity Assessment
By filling out a
survey based on
objective questions,
a BI maturity profile
is automatically
generated.
28
A Step 4 – BI Initiative Labor Costs
•
Default values workload by week are
selected based on scope, scale and
complexity of initiatives. However,
these can be changed by planners.
•
Detailed Graphs are also created
based on labor estimates.
29
A Step 4 –Software and Hardware Costs for BI
•
By filling out a detailed guided
spreadsheet with cost numbers for
storage, application servers, database,
software, utilities, support, desktop
software, training and more, these
graphs are generated for user costs.
30
A Step 5a – BI Initiative Benefits Input - Revenue
•
A key to justifying BI
spending is to identify
tangible and credible
revenues generated
by the investments.
•
Work with your
finance and sales
groups to get
numbers you can
justify to your
management team.
31
A Step 5a – BI Initiative Cost Savings and Productivity
•
In addition to revenues, benefits can
also be expressed as:



Cost avoidance (easy to quantify)
Cost savings (harder to quantify)
Increased productivity (hard to quantify)
also known as new capabilities ROI
32
A Step 6 – Final Step – ROI Analysis and Report
•
The last step is to
review the final
report. Key
measures required
in a business case
include:
 ROI
 NPV
 Bayback
period
 IRR
 Costs
 Benefits
 Total
Cost of
Ownership (TCO)
33
Calculating ROI with a Spreadsheet Tool
34
What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
35
Benchmark Your Organization Against Eight
Companies
Industry
Number of Employees
Percent knowledge workers
# of knowledge workers
Average salary per knowledge worker
Estimated Hourly saved weekly by BI
per knowledge worker
Annual Cost Savings
BI Costs per knowledge worker
Net Benefits
ROI on Saved labor Hours
•
•
Banking
50,000
35%
17,500
$64,300
2.5
$82,181,180
$4,271
$7,438,680
10%
Manufactu
Higher
ring
Education
5,000
1,200
10%
50%
500
600
$42,160
$88,000
1.0
3.0
Energy
20,000
30%
6,000
$63,000
1.3
Automobile
60,000
11%
6,600
$68,000
1.3
Airline
8,000
12%
960
$38,000
1.5
$615,820 $4,627,416 $14,355,506 $17,044,315 $1,598,562
$908
$2,830
$1,650
$1,340
$1,250
$161,820 $2,929,416 $4,455,506 $8,200,315
$398,562
36%
In this example we are looking at
key benchmarks from eight
companies that are using
Business Intelligence and
Analytics instead of a traditional
list reporting and Excel
The organizations range from
1,200 employees to over 80,000
173%
45%
93%
33%
Retail
22,000
8%
1,760
$41,000
2.0
Manufacturi
ng
81,000
6%
4,860
$71,200
1.0
$4,216,090 $10,108,800
$1,800
$1,624
$1,048,090 $2,216,160
33%
28%
36
Savings for Knowledge Worker by using BI
Industry
Number of Employees
Percent knowledge workers
# of knowledge workers
Average salary per knowledge worker
Estimated Hourly saved weekly by BI
per knowledge worker
Annual Cost Savings
BI Costs per knowledge worker
Net Benefits
ROI on Saved labor Hours
Banking
50,000
35%
17,500
$64,300
2.5
$82,181,180
$4,271
$7,438,680
10%
Manufactu
Higher
ring
Education
5,000
1,200
10%
50%
500
600
$42,160
$88,000
1.0
3.0
Energy
20,000
30%
6,000
$63,000
1.3
Automobile
60,000
11%
6,600
$68,000
1.3
Airline
8,000
12%
960
$38,000
1.5
$615,820 $4,627,416 $14,355,506 $17,044,315 $1,598,562
$908
$2,830
$1,650
$1,340
$1,250
$161,820 $2,929,416 $4,455,506 $8,200,315
$398,562
36%
173%
45%
93%
33%
Retail
22,000
8%
1,760
$41,000
2.0
Manufacturi
ng
81,000
6%
4,860
$71,200
1.0
$4,216,090 $10,108,800
$1,800
$1,624
$1,048,090 $2,216,160
33%
28%
While the hours saved per knowledge
worker ranged from 1.0 to 3.0 hours in our
sample, best of class knowledge workers
spend 1.3 fewer hours per week looking
for pertinent information compared to
knowledge workers in all other
organizations
Source: The Aberdeen Group, Aug. 2012
37
KPI — BI Cost Per Knowledge Worker
•
•
•
A key measure of costs of
ownership is the cost per
knowledge worker. In our sample,
that ranged from $4,271 to $908 per
employee.
This included helpdesk, training, desktop licensing, software maintenance,
change requests, print costs, and estimated additional developer support
It did not include hardware, new development, data center operations, backup,
recovery, network costs, and upgrades to software components by IT staff
From a Total Cost of Ownership, you should also include the cost of executive
and casual users (tends to be lower per user but you will have more casual
users). You can find the number of users in your SAP EarlyWatch report. 38
ROI for BI Investment by Knowledge Worker
Labor Savings
Using the expected ratios of the
knowledge workers relative to other
workers, as well as their average
salaries, labor savings per week,
and the overall cost per knowledge
worker, we found an overall ROI
•
•
This ROI is for Knowledge workers alone and does not include additional
benefits from better access to cleaned data, ability to do collaborative decision
making, or more timely decisions and better agility of the organization
Plan for a comprehensive business case for SAP BI,
but labor hours are the easiest to quantify
39
KPI Benchmarks of ROI by BI Platform Type
•
•
ROI of BI depends largely on the number of BI systems and data warehouses
you maintain
“Best-of-breed” BI and data warehouses use whatever tool is best in its class.
This includes ETL, reporting, management, database, scheduling, admin, etc.
•
Integrated BI and
DW systems use
a single platform
•
Integrated BI has
significantly less
costs and higher
long-term ROI (on
average)
Source: SAP AG, Enterprise Business Intelligence ROI
white paper
Using a single BI and DW platform instead of Federated Data
Warehouses can significantly increase the ROI of BI
40
The Various Costs of BI by Platform Type
•
•
Direct Costs
 Acquisition costs
 Infrastructure costs
 Implementation and
Deployment costs
 Support and Lifetime
costs
 Uptime, Reliability,
and Performance
costs
Indirect Costs
 Shadow IT costs
 Compatibility costs
 Lost Opportunity
costs
Type of Cost
Acquisition Costs
Infrastructure Costs
Best of Breed (various tools)
Initial outlays may be lower, can rise
significantly over time
Incremental
Implementation and
Deployment Costs
Considerable, especially integration
efforts and patchwork BI over time
Uneven releases of upgrades multiplies
Support and Lifetime Costs
support costs
Uptime, Reliability, and
Complex to diagnose and resolve due to
Performance Costs
the number of parts
Completely dependent on the quality of
Shadow IT
the effort
Potentially very high
Compatibility Costs
Lost Opportunity Costs
Likely due to process
Single-Architecture (SAP BI)
Initial outlays can be higher, more
controllable
Marginal
Significant, but controllable and
predictable
Upgrades in sync with broader systems,
though license fees and maintenance still
significant
Single
point of contact and responsibility
Consistent UI and integration with
operational process will tend to reduce it
over time
Likely
very low
Somewhat less likely, but the same
Source: SAP AG
forces are in play
Improve ROI:
The trend for most organizations is to simplify
the BI landscape, reduce the number of tools,
and go to a single DW and BI platform
41
A Health Check: Is Anyone Using your System?
Named Users: 14,503
Real Users:
7,509 (52%)
Active Users: 1,309 (9%)
Named Users: 1,672
Real Users:
783 (47%)
Active Users:
191 (11%)
Named Users: 67,534
Real Users: 50,912 (75%)
Active Users: 6,279 (9%)
Named Users: 2,330
Real Users:
762 (33%)
Active Users:
129 ( 6%)
Named Users: 549
Real Users:
127 (23%)
Active Users:
24 ( 4%)
Source: SAP AG
User trend reports are found in the SAP EarlyWatch report – It is a
Health Check to see if your initiative is failing or succeeding
42
What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
43
BI Project Durations for ROI Planning
•
While there are many considerations for various BI
projects including skillsets, budget constraints,
available resources, scope and number users, there
are some basic rule-of-thumbs you can use in your
ROI calculations
Project Type
HANA
Implementation
BW
Upgrade
Project Scope
Fast
Normal
Slow
Small Project (500Gb)
2-4 weeks
4-12 weeks
12+ weeks
Medium Project (1-3TB)
4-8 weeks
8-16 weeks
16+ weeks
Large Project (3-100 TB)
8-16 weeks
16-20 weeks 20+ weeks
Small system/few users
4-6 weeks
6-10 weeks
Medium system/ 300+ users
6-10 weeks
10-16 weeks 16+ weeks
Large system incl. other areas
10-16 weeks 16-20 weeks 20+ weeks
10+ weeks
Each BI project requires its own milestone plan and detailed
project plan. However, for high-level budgeting these
durations may help your business case.
44
BI Project Durations for ROI Planning (cont.)
•
For reporting and analytics, the data scope and the
availability of existing skilled staff and existing
infrastructure will drive much of the timelines
Project Type
Dashbaord
Project
Project Scope
Fast
Normal
Slow
2-4 dashbaords existing data
2-3 weeks
3-8 weeks
8+ weeks
2-4 dashbaords new data
3-8 weeks
8-12 weeks
12+ weeks
8-10 dashboards existing/new data 10-12 weeks 12-20 weeks 20+ weeks
WebI
Project
BW
Project
5-8 reports existing data
1-2 weeks
2-4 weeks
4+ weeks
5-8 reports new data
2-6 weeks
6-8 weeks
8+ weeks
10-20 reports existing/new data
10-12 weeks 12-20 weeks 20+ weeks
2-3 Infocubes, ETL and DSOs
4-6 weeks
6-10 weeks
4-8 Infocubes, ETL and DSOs
6-10 weeks
10-16 weeks 16+ weeks
8-12 Infocubes, ETL and DSOs
10-16 weeks 16-20 weeks 20+ weeks
10+ weeks
Each BI project requires its own milestone plan and detailed
project plan. However, for high-level budgeting these
durations may help your business case.
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What We’ll Cover …
•
•
•
•
•
•
Introductions
Return on Investments (ROI) of a BI project
A Tool to Calculate ROI, NPV, IRR and Payback for SAP BI
Key benchmarks — BI project staffing levels and support
requirements
BI project durations (upgrades or new implementations)
Wrap-up
46
Where to Find More Information
•
Asim Abdel Rahman El Sheikh and Mouhib Alnoukari, Business
Intelligence and Agile Methodologies for Knowledge-Based
Organizations: Cross-Disciplinary Applications, IGI Global; 1
edition (September 30, 2011)
•
Thomas H. Davenport and Jeanne G Harris, Competing on
Analytics: The New Science of Winning, Harvard Business School
Press; 1 edition (March 6, 2007)
•
http://iteconcorp.com/ROICalc.html

•
Computing The ROI for IT Projects and Other Investments
http://hallcr.com/BI.aspx

Another calculator for ROI calculator on BI projects
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7 Key Points to Take Home
•
•
•
•
•
•
•
ROIs on BI projects must be based on tangible and measurable
benefits
ROI should be calculated at a program level and tracked over time
There are many tools available to help you do this – Don’t reinvent
the wheel
Benchmark your BI initiatives in terms of project duration, cost per
employee, labor savings, ROI, payback periods, and BI platform type
Be prepared to back up your business case with hard facts from the
business users and avoid a technology focus
Replacement projects and cost avoidance efforts are easiest to
quantify
Some projects are done out of operational necessities and ROI may
not be required (audits, SOX, compliance, financial SEC reporting,
etc).
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Your Turn!
How to contact me:
Dr. Bjarne Berg
[email protected]
Please remember to complete your session evaluation
49
Disclaimer
SAP, R/3, mySAP, mySAP.com, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP products and services mentioned herein as well as their
respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and
service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled by SAP.
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