Q: What should be done to maximize ROI?
It starts with simple mathematics we learnt in elementary school. Let’s start by looking at the basic equation for ROI:
So if we want to increase ROI, we either need to increase benefits or decrease costs—that part is simple enough to understand but there are some common mistakes to be wary of.
Let’s start with the costs. A common mistake is an investment decision based on comparing license costs only of the different BI solutions. This is especially true when estimating deployment, support, and infrastructure costs over multiple years which can be difficult upfront. However, as much as 70%+ of the total cost of ownership (TCO) is not found in license costs but in deployment and support. A recent analyst report showed 78% of TCO for organizations surveyed was costs other than software license.
Q: …and, what is a common mistake around evaluating benefits?
Not all solutions deliver the same level of business benefits. This is especially true in business intelligence where a solution’s unique capabilities can result in different decisions and outcomes. For example, the ability to embed BI within a transactional workflow or the ability to search across the full data set including metadata can result in different, more well-informed decisions. We all know that more timely decisions (say during a workflow process) or decisions made with more data (say data errors or extreme outliers) generally results in better outcomes. But that is where elementary mathematics ends, and we need to look at some things beyond that…
Q: …what are those?
Time to value is a key one! In addition to the simple ROI equation we looked at, I see ROI as a function of business benefits, time to value, and TCO…
We already talked about business benefits and costs (i.e., TCO). But in my view, if the goal is to maximize ROI—versus just achieving a positive ROI—an organization should pay more attention to time to value. This is where one of the levers of value engineering is!
We can achieve significantly faster time to value if we prioritize the stream of business benefits. This is because the business benefit is not just one number—they are actually a stream of benefits (cash-flows coming in) tied to various BI applications / projects. So if we prioritize the stream of benefits by prioritizing the BI applications / projects, we can significantly increase ROI. As a matter of fact, it is possible to get 25-35% higher ROI!
Q: Any final suggestions on what else customers should look at to maximize ROI?
Yes, I think time to value can be driven by many levers and Qlik continues to invest in its solution and ecosystem in unique ways that positively affect time to value. Take for example the 300 partner solutions on Qlik Market, or 80+ apps on the QlikView demo site, or the 40+ apps on Qlik Sense demo site—these readily available industry or function-specific solutions shorten time to value. For more custom BI apps, Qlik provides significant extensibility with open source extensions such as D3 visualizations on Qlik Branch or a plethora of data source connectors. Additionally, Qlik is heavily investing in Qlik Accelerators which are pre-built analytical applications that leverage our prior customer work to accelerate the solutions for specific functions or industries. I see all of these as levers of higher ROI on BI projects!
If you are considering Qlik and want to conduct a custom Value Engineering study, please contact your Qlik sales representative.