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This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research andrepresent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

October 2013

Achieving Fast ROI for BI Projects

On average, organizations using business intelligence (BI) that responded toAberdeens May 2013 agile analytics survey spent over $5 million each on BIlast year. Naturally enough, some organizations get more for their moneythan others. While closely managing the total cost of ownership (TCO) ofan analytics solution is important, the value liberated by the investment isarguably more so. Consequently, this research is focused on how toaccelerate the return on investment (ROI) for BI projects. This AnalystInsight found that those organizations that achieve a faster ROI (Leaders see sidebar definition below) encourage close user involvement in analytics

projects. In addition, Leaders also favor the use of integrated BI tools andcloud-based analytics solutions.

Corporate IT Cant Achieve Rapid ROI AloneThe implementation of BI solutions is still largely undertaken by skilled ITstaff. While some solutions may ultimately be easy to use, mostorganizations still have thorny issues that they need to address. Forexample, collecting the right raw data, integrating multiple streams of data,transforming data into information, and distributing it to the right businessusers in a timely way, typically requires some serious computer scienceskills. However, the path to rapid ROI requires the deep involvement ofanalytics users.

Figure 1: User Empowerment is one of the Keys

Source: Aberdeen Group, May 2013

As Figure 1 shows, compared to Followers, Leaders are 43% more likely toallow users to tailor their BI environment to meet their own specific needs(70% vs. 49%). On average, survey respondents have 11.6 full-time

49%

47%

70%

82%

20% 40% 60% 80% 100%

Users can tailor BIto their needs

Corporate IT supportsusers initiating /driving projects

Percentage of respondents, n=147

Leaders

Followers

Analyst Insight

Aberdeens Insights provide theanalysts perspective on theresearch as drawn from anaggregated view of researchsurveys, interviews, anddata analysis.

Leaders Defined

Based on data collected from147 organizations in April andMay 2013, the top performing35% of organizations (Leaders)were segmented fromFollowers (the remaining 65%)using two criteria that reflecttheir ability to generate a rapidreturn on their investment in

analytics. The relativeperformance of Leaders andFollowers is also shown:

Average time to achievepositive ROI on lastmajor BI project: Leaders 6.7 months,Followers 16.3 months

Average time requiredto complete a major BIproject, fromrequirements definitionthrough to completion ofpresentation layer: Leaders 3.5 months,Followers 9.7 months

* All results were normalized toallow for variations due tocompany size

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Achieving Fast ROI for BI ProjectsPage 2

2013 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897

equivalents (FTEs) of skilled IT staff engaged in implementing new BIprojects. Overall, this is used to support an average user base in excess of3,200 people. Or, to put it another way, there are 280 BI users on averagefor every FTE devoted to BI implementation. Imagine for a moment that youare that one FTE, responsible for getting exactly the information that 280people need, exactly when they need it, and exactly the way they want tosee it. For example, some users may want filters applied, so that they seethe subset of the available information that is relevant to them. Others maywant additional columns in a tabular report, or different types of graphicaldisplays in a dashboard. Is it reasonable to expect one person to implementall the different variations and nuances that those 280 people wish to see? Inpractice, even with the best will in the world, that is unlikely to happen.

Such detailed customization can and should, for the sake of a rapid ROI be delegated to the individual users themselves. Many modern analyticstools allow such changes to be made relatively simply through configuration,

not coding. In this way, individual users could for example: Add a column to an hours worked report to show each employees

accrued leave. Add color coding to an existing gauge on a dashboard display. Such

color coding is often used to quickly show when performance in aparticular metric is acceptable and when it is not.

Add an entirely new chart to an existing dashboard. A manager may,for example, have a relatively short-term interest in keeping a keeneye on the sales of a new product line.

This approach, end-user customization of the last mile of analytics

delivery, is even more compelling in light of the pressures drivingorganizations to adopt a more flexible approach to BI. Fifty percent (50%) ofoverall survey respondents cite the increasing and changing demand forinformation as the top pressure they face. Allowing end-users someflexibility to customize the solution to better meet their needs can increasetheir engagement, and also bolster their commitment to making theanalytics solution an enduring success. However, how does it help to delivera faster return on investment? It helps by freeing dedicated IT staff to workon tasks that are far more demanding and appropriate for their skillset.

Not only are Leaders more likely than Followers to enable analytics users totailor their solution, but they are also more likely to devolve some measureof control to them in the early stages of the analytics development cycle.While 82% of Leaders support business managers initiating projects anddriving solution selection, only 47% of Followers do so. The history of IT islittered with the corpses of failed projects. In many cases, projects failbecause they simply dont meet the needs of the users. Involving analyticsusers earlier and deeper in the lifecycle of BI projects can help toavoid this. For example, 67% of Leaders use an incremental and iterativeapproach to the development of analytics projects. This style ofdevelopment builds projects in small chunks, rather than trying to deliver a

How to spend $5m on BI

The breakdown of the averageannual cost for businessintelligence is as follows: Licenses / subscriptions for

data integration tools: $241k

Licenses / subscriptions fordata warehouse tools: $391k

Licenses / subscriptions forend-user tools: $231k

New BI hardware: $353k

Services: $562k

Internal BI implementation /support staff: $3.6m

This equates to an averageannual cost per BI user of$1,651.

* Internal implementation andsupport staff costs are calculatedas an average annual cost of$150,000 per FTE

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monolithic project all in one go. In this way, for example, BI developers areable to take an early, potentially vague, set of requirements and quickly builda prototype dashboard. Reviewing this prototype with potential users drivesiteration, and the incremental refinement of both solution requirements andfinished BI content. An incremental approach can help to ensure thatrequirements are not outdated before they are implemented. An iterativeapproach helps to keeps requirements front and center.

Beyond this, deployment options such as Software-as-a-Service (SaaS) alsoenable business managers to have more control over their analyticssolutions. Often, SaaS (or cloud-based) business intelligence solutions arerented month-to-month, and require little or no upfront capital investment,and little IT skill to implement. As a result, this type of solution can appealto business executives who feel that their analytics needs are not a priorityfor their own corporate IT department.

Maximizing Corporate IT LeverageIn addition to the average of 11.6 full-time equivalents of skilled IT staff usedto implement new analytics projects, a further 12.5 FTEs are needed tosupport existing implementations (on average). To many, that may soundlike a huge BI team but those 24.1 FTEs are supporting just over 3,200 BIusers. As a result, leveraging those skilled IT staff to the full is still the orderof the day. However, as Figure 2 shows, firms that liberate the fastest returnon their investment do so to a greater extent than others. First, Leaders are69% more likely than Followers to use a single integrated tool to developtheir BI content (76% vs. 45).

Figure 2: Integrated Solution and Ease of Deployment

Source: Aberdeen Group, May 2013

This approach can lubricate the path to a fast ROI in several ways. Forexample, all IT staff responsible for developing BI assets can be trained inthis single toolset. Once up to speed, each staff member can then beproductive on many different types of BI project. That may not be possible ifmultiple tools are used within the business intelligence portfolio. For

16%

30%

45%

29%

57%

76%

0% 20% 40% 60% 80%

SaaS / Cloud BI

BI tools withbuilt-in data

connectors

Single integrated BIdevelopment tool

Percentage of respondents, n=147

Leaders

Followers

Where Does the Time Go?

Which part of a new analyticsproject is the black hole,sucking in most of the projectsresources? In short, datapreparation. Overall, surveyrespondents reported thefollowing average allocation ofresources for new BI projects:

Assessing data quality: 13%

Cleansing or enriching data:15%

Data integration: 22%

Data warehousing: 23%

Presentation (creatingreports, dashboards, etc.):27%

Notably, 50% of projectresources are devoted to datapreparation before a datawarehouse is constructed andpopulated. Overall, comparedto Followers, Leaders expendmore resources on datacleansing and enrichment, and

fewer on data warehousing.Both Leaders and Followersexpend an average of 26% tomaintain and enhance existinganalytics projects.

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example, if two distinct tools are used to develop reports and dashboards,then not all technical staff may be trained in both tools. That may lead tobottlenecks. For instance, there may be three dashboard projects awaitingattention, but only two IT staff members trained in the dashboard tool. Onthe other hand, if all staff are proficient in a single tool, managers have moreflexibility in how they allocate those staff to projects. Project delays may beavoided and, when a single tool is used, staff naturally become moreproficient as time goes by, building and growing their skills with eachproject.

Almost twice as many Leaders also use business intelligence tools that comecomplete with connectors to commonly used data sources (57% vs. 30%).While not completely solving all data integration problems, this can providesignificant help. For example, some data integration tasks require significantwork that can be quite complex. Multiple data streams may need to becleaned, transformed, and integrated in order to provide the comprehensive

picture of the business that a particular project demands. On the otherhand, many BI projects are very simple, requiring the connection of just oneor two data sources. By easing such simple integration tasks, projects can becompleted faster.

Lastly, Leaders are more avid adopters of SaaS (or cloud BI) solutions thanFollowers. Prior research by Aberdeen clearly shows how this class ofsolution can impact return on investment rates. For example, researchpublished in February 2012 (SaaS BI: The Compelling Economics of Cloud-Based

Analytics) found that organizations that used SaaS spent $404 per user peryear. In contrast, firms that did not use Software-as-a-Service for their BIimplementations spent $658 per user per year. Clearly, if the investment is

lower, then the return on invest accrues faster, all other factors being equal.However, SaaS BI solutions are also associated with faster projectdevelopment. For example, Aberdeens September 2011 research (SaaSBusiness Intelligence: Driving Agility through Self-Service) found that companiesusing SaaS were able to develop a new dashboard in 15 days, on average.Comparatively, organizations that just used conventional (i.e., on-premise)business intelligence solutions required 24 days on average.

Conclusions and RecommendationsSuccessful analytics requires a marriage. Both business users and corporateIT must work smartly and work together. In particular, organizations thatwish to accelerate the rate of return on analytics investments shouldconsider the following:

Engage business users early and often. Earlier Aberdeenresearch (Visualization: Set Your Analytics Users Free and A Simple Cost

Justification for Self-Service Analytics) has extolled the virtues of self-service business intelligence. Namely improved information access,lower support costs and a more pervasive use of BI throughout theorganization. In addition, this Analyst Insight encourages companiesto stretch the boundaries of how and when analytics users are

On-Time, On-Budget BI

ROI Leaders are 74% more likely

than Followers to supportbusiness managers initiating anddriving analytics projects. Thisdeep and early engagement withprojects can help to ensure thatthe needs of business users areaddressed. As a result:

Leaders are 30% more likelythan Followers to deliverprojects on-time or early

Leaders are 27% more likelythan Followers to deliverprojects on-budget

Leaders Outperform Followers

In addition to achieving ROI

faster and completing projectsfaster, Leaders outperformFollowers in a number of core BImetrics:

Frequency of findinginformation in the timerequired to informdecisions: Leaders 73%,Followers 66%

Percentage of employees with access to BI: Leaders 36%,Followers 27%

Percentage of BI users thatare mostly self-sufficient: Leaders 37%,Followers 23%
http://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspxhttp://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspxhttp://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspxhttp://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/8604/RA-business-intelligence-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8604/RA-business-intelligence-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8604/RA-business-intelligence-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8319/RA-self-service-business-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/8604/RA-business-intelligence-analytics.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/7072/RA-agile-business-intelligence.aspxhttp://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspxhttp://www.aberdeen.com/Aberdeen-Library/7479/RA-business-intelligence-software.aspx

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involved in BI projects. Beyond simple manipulation of data by BIusers, 70% of ROI Leaders enable these users to tailor andcustomize the BI solutions that they use. This can increasemanagers engagement with the solution, improve their ability tofind timely information, and free rare IT skills for more challengingtasks. Likewise, 82% of ROI Leaders encourage business users toinitiate projects and work actively in defining and driving thesolution. As a result, Leaders are 30% more likely than Followers todeliver analytics projects on time (59% vs. 45%).

Leverage scarce technology skills with appropriatetechnology choices. Even high performing teams need the righttools to help them succeed. And those responsible for the deeptechnicalities of implementing and deploying business intelligencehave clear choices to help them achieve a faster return oninvestment. Standardizing on a single tool that can address as many

BI needs as possible is a strong first step. ROI Leaders are 69%more likely to do this than Followers even when allowing forcompany size. Similarly, solutions that facilitate easy integration (viapackaged data connectors, for example) are almost twice as popularwith Leaders as they are with Followers (57% vs. 30%). Finally,Software-as-a-Service solutions can help deliver rapid ROI too. First,large upfront capital costs can often be avoided there is no datawarehouse server to buy, and no BI licenses to purchase. Second,dodging these large purchases and the accompanying installationwork can accelerate provision of the solution. Third, SaaS can beimplemented with relatively meager in-house IT skills. As a result,SaaS can be a strong option for organizations with few IT resources,

or for overstretched IT departments that may want to outsourcepart of their analytics portfolio.

For more information on this or other research topics, please visitwww.aberdeen.com

Survey Demographics

The demographics of the 147survey respondents currentlyusing business intelligencewere:

Headquarters : NorthAmerica 58%; Europe 29%; Asia / Pacific 11%;Latin America 1%; MiddleEast 1%

Headcount: Large (morethan 1,000 employees) 47%; midsize (between 101

and 1,000 employees) 22%;small (100 employees orless) 31%

Annual Revenue: Large(greater than $1bn ) 28%;midsize (between $50m and$1bn) 33%; small (Under$50m) 39%

Industry : IT consulting /services 20%; software 17%; financial services 7%;insurance 7%; government

/ public sector 6%;education 5%; retail 5%;other 33%
http://www.aberdeen.com/http://www.aberdeen.com/http://www.aberdeen.com/

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Related Research

Mashup Your Way to Better BI; September 2013Visualization: Set Your Analytics UsersFree; August 2013Self-Service Drives the Analytic SME; August 2013

Agile Analytics: Staying Afloat on theRising Tide of Information Needs; June2013Software-as-a-Service Helps DeliverSatisfied Analytics Users; May 2013

A Simple Cost Justification for Self-Service Analytics; February 2013

Packaged Analytics: The Gift that Keepson Giving ; January 2013BI Without Tears: Analytics withoutCoding ; October 2012The Grinning CFO: How to Get a Returnon BI Projects in Less Than 4 Months; October 2012Pervasive Cloud BI: Analyst, Advocate,Problem-Solver - All in One; September2012SaaS BI: The Compelling Economics ofCloud-based Analytics; February 2012SaaS Business Intelligence: Driving Agilitythrough Self-Service; September 2011

Author: David White, Senior Research Analyst, Business Intelligence,([email protected] );

For more than two decades, Aberdeens research has been helping corporations worldwide become Best-in-Class.Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter the facts that enable companies to get ahead and drive results. Thats whyour research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.

As a Harte-Hanks Company, Aberdeens research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage the powerof insight to deliver innovative multichannel marketing programs that drive business-changing results. For additionalinformation, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call(800) 456-9748 or go to http://www.harte-hanks.com.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by

Aberdeen Group, Inc. (2013a)
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