Business Intelligence as a Gain, not a Cost

Business Intelligence as a Gain, not a Cost

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The tip of the iceberg

When assessing a potential purchase of a tool, initially, everybody especially sees the cost behind the purchase. As with any investment, it's key to weigh the total cost with the benefits it generates.

While the costs are easily assessable, it's worth to remiind about the concept of a "total cost of ownership", which may consist not only of an obvious monthly subscription, but as well as maintenance fees, investing in cloud computing or your machines, cost of development, training etc.

Although the implementation costs may be high, they are just the tip of the iceberg when compared to the benefits that are waiting below the water.

The benefits are much less obvious... until you get to know them.

A business intelligence tool can demonstrate its value in many ways, the simplest of which are generating insights that lead to increased revenue or cost savings. To name a few:

  • Identify and prioritize business problems: Identify key business problems that can be solved using the BI tool. Prioritize the problems based on their potential impact on revenue, cost savings, or operational efficiency.
  • Improved decision-making: BI tools provide valuable insights into business operations, customer behavior, and market trends. With this information, businesses can make more informed decisions and take action based on data rather than intuition. This can lead to better performance, increased productivity, and higher profits.
  • Save time and money: BI tools can automate data collection, analysis, and reporting, saving businesses time and resources. By reducing manual processes and providing real-time data, businesses can react quickly to changing conditions and make better use of their resources. Simply put - the hours that used to be spent on updating and checking the data in spreadsheets can be invested in other, more fruitful activities.
  • Competitive advantage: By leveraging data and insights, businesses can identify new opportunities, optimize their operations, and stay ahead of competitors. BI tools can help businesses analyze their strengths and weaknesses, identify areas for improvement, and develop strategies to stay ahead of the curve.

In summary, a BI tool can be treated as a gain by providing valuable insights, improving efficiency, enhancing the customer experience, and providing a competitive advantage. By investing in a BI tool, businesses can unlock the full potential of their data and make more informed decisions that drive growth and success.

tip of the iceberg, costs and benefits

How to convert the gains into monetary value? What's the ROI/ROC?

The answer is an evasive "it depends". There's no secret mathematical equation, as the valuation of gains is individual for each company. The possibilities are endless, but just for the sake of not ending in a sad tone, the general idea and thinking pattern behind a valuation would be:

  • Increased Revenue: Calculate the increase in revenue that results from the BI tool. For example, if the BI tool helps you identify a new market opportunity that generates $100,000 in additional revenue, you can attribute that gain directly to the tool.
  • Cost Reduction: Calculate the cost savings resulting from the BI tool. For example, if the BI tool helps you identify inefficiencies that lead to a 10% reduction in expenses, you can calculate the monetary value of that cost reduction.
  • Improved Efficiency: Calculate the time and resource savings resulting from the BI tool. For example, if the BI tool automates a process that used to take 10 hours a week, you can calculate the monetary value of those 10 hours in terms of labor costs saved.
  • Competitive Advantage: Calculate the impact of the BI tool on market share or customer acquisition. For example, if the BI tool helps you gain 10% more customers than your competitors, you can calculate the monetary value of that increased market share.
  • Better Resource Allocation: Calculate the impact of the BI tool on resource allocation. For example, if the BI tool helps you allocate resources more effectively, resulting in a 5% increase in productivity, you can calculate the monetary value of that productivity gain.

In summary, to convert gains of implementing a business intelligence tool to a monetary value, you need to quantify the impact of the tool on revenue, cost savings, efficiency gains, competitive advantage, and resource allocation. Once you have calculated the monetary value of these gains, you can compare them to the cost of implementing and maintaining the BI tool to determine whether it is a worthwhile investment for the company.

Searching for a business intelligence tool, why not Qlik Sense?

When searching for a business intelligence tool, there are many options to choose from, but Qlik Sense is definitely one to consider. Qlik Sense is a powerful BI tool that allows users to easily create and share interactive visualizations, reports, and dashboards. It offers a wide range of data connectors, enabling users to pull in data from multiple sources, and has an intuitive interface that makes data analysis and exploration a breeze.

Additionally, Qlik Sense offers a flexible and scalable platform, allowing businesses to easily expand and customize their BI capabilities as their needs evolve. Overall, Qlik Sense is a top contender when it comes to finding a powerful and user-friendly BI tool that can provide a competitive edge in today's data-driven business environment.

The first 1.0 version of Qlik Sense was originally released in 2014, as a successor to QlikView, which was initially released in 1994.