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Art of BI: The Business Value of Data Visualization
Like any other investment, the money put into business performance analysis systems must generate a satisfactory return. The return on business intelligence (BI) systems must be significant; most Fortune 500 businesses already rely on them, and thousands of small and medium businesses migrate to them every year. This blog post will look at how they measure the return on investment (ROI) in BI systems. For a more in-depth look at the business benefits of data visualization, download our white paper, Are You Data Blind? How Good Data Visualization Delivers Business Solutions Faster.
The Cost Method for Measuring the Value of Data Visualization
One of the easiest methods of valuing the contribution of data visualization (DV) and BI systems is to look at the cost savings. Here are some of the ways you can calculate the financial impact of BI on business costs.
– Cost of Software/Subscriptions: When the cost of use for the new DV or BI system saves money over continuing with the current system, savings are easy to calculate. With continuing declines in the cost of data storage and transmission, organizations are likely to save 15% to 50% off the current setup by assessing and upgrading to current standards.
– Cost of Hardware: If you can consolidate a number of independently-operated financial divisions into a single platform, the hardware savings alone can be substantial. A cloud-based, managed services solution can be significantly more economical than the cost of maintaining multiple on-site or hybrid data centers whose data must be consolidated for reporting purposes.
– Cost of Staff: The toll that poor data analytics takes on a workforce is enormous. If your current system is a manual system (such as Excel spreadsheets) that must be imported, combined, and debugged, you can find your team having to run the numbers again and again, looking for the problems and running out of time to report. Having CFOs debug Excel spreadsheets is a waste of talent and training. Having everyone pressed in to service to close every quarter is an expensive way to keep the books.
With good DV you don’t have to dig through tables, columns, rows, or pivot tables to find the right info; it is available right there with trend charts, line graphs, and hundreds of other graphical representations to choose from.
– Cost of Wasted Talent: Your management team should be focused on ways to see obstacles in advance and navigate around them toward strategic objectives. They can’t get the benefits of great data visualization if they must spend all their time repairing audit trails. With good data visualization, line managers can see the reports they want without having someone in IT assemble them.
– Cost of Theft and Fraud: One benefit of a closed-circle BI system, where everyone inputs data and gets reports from the same system, is the tight auditability. Manual systems, where data is combined from multiple people who keep their own books, are prone to losses through fraud and theft. You don’t have to worry about the good people interacting with your system, but those who are trying to hide something know and exploit the weaknesses of manual systems.
– Cost of Opportunities Missed: The opportunity cost of capital is what you could have made if you’d done something else with the money. When an organization has poor visibility into its own performance in the past and in the present, it misdirects capital that could have been invested more successfully while improving current performance. Compare the performance of the organization against a benchmark to estimate the opportunity costs eliminated by upgrading your BI.
The Benefit Method for Measuring the Value of Data Visualization
Cost issues often drive organizations into the arms of BI. Problems with business closings, financial reporting, tax filings or mysterious losses can make a comprehensive data analytics system look like a bargain! But the other side of the ledger — the benefits of upgrading — is even more impressive, potentially, than the cost savings.
– Time and Talent Benefits: With good data analytics, both employee time and talents are liberated. The software takes over a lot of the grunt work, such as making sure people report their numbers in a timely fashion, keeping track of who entered what, and what’s still missing. Now your CFO can use their training to spot growth opportunities rather than fixing the books.
– Confidence and Comfort Benefits: With good data analytics, you don’t “run a balance.” Everything is in balance 100% of the time. You don’t get surprised by actual numbers coming in ways different than projections. You can make tough decisions about budget allocations based on real-time cash flows. You’re confident the thresholds you set will alert you to problems before they get a chance to compound.
– Pattern Recognition Benefits: Good data visualization clears the clutter and lets you see trends that otherwise are difficult to spot. Through these maps of divisional behavior, managers see the effects of their decisions and can share successful techniques quickly across the team.
“Data visualization allows decision makers to see connections between multi-dimensional data sets and provides new ways to interpret data through the use of heat maps, fever charts, and other rich graphical representations.” — Brian Gentile, “The Top 5 Business Benefits of Using Data Visualization“
– Data Mining Benefits: With the consolidation of historical data into a BI system, organizations can take advantage by unleashing amazing computing capabilities on their existing data. Organizations will often see a boost in their per-client performance once BI gets ahold of the data. In the present, the BI system see opportunities and make suggestions in real time — at the moment of transaction — so that fewer opportunities are lost.
– Opportunity Benefits: Just as you can calculate the opportunity costs of an investment, so you can calculate the opportunity benefits. Good DV shifts resources to higher-value activities in a measurable way.
“[T]here is an ongoing attempt to make data visualization tools easier to maintain and customize without having to rely exclusively on IT departments for continual changes or customizations.” — Lindsay Wise, “How Data Visualization Boosts BI’s Value“
Datavail Can Help You Boost Your ROI
With options like Oracle BICS now on the market, and self-service tools like Tableau available by subscription, data visualization is more affordable than ever. Data visualization offers a high ROI because it allows users to see relevant data aggregated and explained graphically faster than searching a stack of Excel spreadsheets. Good DV allows you to see the forest and the trees — the big trends and the minute data that supports them.
There are ways to maximize your data visualization investment to ensure you are getting the most out of what you’ve bought. Datavail has consulting experts with years of experience working with data visualization applications and building custom dashboards and reports.
Here’s how we can help you get better business solutions faster:
- Assessment of current BI environment
- Evaluation of existing reports and dashboards
- Migration to cloud-based analytics solution
- Report and dashboard customization
- Monitoring, testing, and custom training
At Datavail, we have successfully completed DV and BI projects for customers large and small. Contact Datavail today and get on the path to better visuals, better reporting, and better decisions. Datavail is a specialized IT services company focused on Data Management with solutions in BI/DW, analytics, database administration, custom application development, and enterprise applications. We provide both professional and managed services delivered via our global delivery model, focused on Microsoft, Oracle, and other leading technologies.