InetSoft Webinar: Tangible Return on Investment

This is a copy of the transcipt of a Webinar hosted by InetSoft. The speaker is Mark Flaherty, CMO at InetSoft, and he discusses the topic of “Embedded Business Intelligence.”

Mark Flaherty: So how do companies generate a tangible ROI from business analytics? This is a question that I frequently get from the end users that I talk to. Obviously, for this particular discussion, we are talking about ROI from two different perspectives, again from the perspective of the ultimate end user of the technology, but then also the ROI from the perspective of a software provider looking to add these capabilities. I think Nick did a great job of talking about that type of perspective of ROI and certainly, I would look for any other thoughts that he has on that. But from the end user perspective, when it comes to ROI, it’s obviously something that is difficult to quantify sometimes, but if you look at the legitimately tangible performance improvements that you can create, they are really fall into two different categories: the growth side and the efficiency side.

On the growth side, when implementing efficient business intelligence capabilities and techniques and tools, you are going to find yourself in a position to affect your sales pipeline, identifying more prospects to put into the pipeline, qualifying those prospects more efficiently and more quickly, selling in new accounts more quickly - so you are increasing your revenue on the sales side, marketing intelligence, finding new markets to bring your products to, looking for ways to generate more revenue from existing accounts that whole growth side.

And then on the efficiency side, there are myriad opportunities from a P&L standpoint, from a cash flow standpoint. I mean if you are looking for analytics from a supply chain standpoint or from an inventory management standpoint, if you can use analytics to understand ways of moving your inventory faster, turning your inventory faster, you are going to wind up with a lot more cash on hand at the end of the year, allowing you to invest in other areas of the business, - so there is the working capital optimization aspect of it. It is the ability to identify unnecessary costs and time that is spent in the process of generating your product or service.

So it's a variety of different ways both on the growth and on the efficiency side. Often times, it can be difficult to quantify, but it's helpful to look at it in terms of those two buckets. And the last thing I wanted to add, I talked a little bit about the pervasiveness and how that leads to ROI, well the value of pervasive business intelligence is directly linked to the engagement and the tools, so the degree to which companies are having the tools be used on a frequent and a meaningful basis, you are putting more brains at work, more brain power at work leveraging these tools to deliver more business value. And that lowers the total cost of ownership because you are applying, you are spreading that cost whatever you invested in analytics, and you are spreading it out among more meaningful, more frequent, more engaged users and getting more business value for that money spent.

From the software provider’s side, our number one goal is to provide better service because if you do that and all for new services you can charge for that and that is obviously our goal. And I think the beauty of this is getting back to again one of the earlier points, what this tool is giving us and as we start rolling it out to more and more customers, what we will have, it's interactive yet at the same time, it can be rolled out even to a point.; we have got one customer that is talking about just having a screen setting up showing the load, the truck load.

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So there is really no interaction other than they are going to have something very visible to the workers out there, showing the right of how their trucks are being loaded, and how they are doing on from a timing standpoint, so that they can react immediately like behind the curve because they like to deliver. They get orders today and they deliver tomorrow that’s one of the things that they like to do, so that’s an area we are working with them on. So there are lots of ways that dashboards can be personalized with the different executives based on the KPIs that they are interested in.

So is BI more appropriate for strategic planning or for tactical decision support? The answer to that is, yes, typically or at least traditional tools were designed mainly for strategic planning purposes, delivering reports on a period basis to understand what happened in the past and how we might want to alter the strategy of how we are going to conduct our business. That’s still a very important aspect of business intelligence and that still goes on very frequently today. I think that the urgency on the other hand is coming from the tactical side as we talked about before the shortening of that decision window and some of the aspects of real time analytics that Joe was talking about. I think the urgency is coming more from the tactical side as people want to know what’s going on in their business today. I don’t want to know what happened 10 days ago or a week ago or an hour ago, I would like to know ideally what’s happening in real time, so that I can make adjustments to how I run my business. I think that that’s where the greatest urgency is coming from. So it's both strategic and tactical, but seeing a lot of uptake on the tactical side.

Finally, what level of technical expertise does a user need to leverage BI in a meaningful way?

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I think that from my perspective we have seen quite an increase in the number of business users that are leveraging these tools and I think that all someone needs or should need, when it comes to expertise and technical or otherwise, all someone should need is domain expertise and knowledge of their own particular business function or area coupled with healthy curiosity of what drives the business and what decisions could be made to improve the way that the business work. So with those two things in the mind of the end user, I think that that’s really with the power and the usability of many of today’s tool, I think that’s really all anyone needs.