October 2013

Achieving Fast ROI for BI Projects

On average, organizations using business intelligence (BI) that responded to Analyst Insight
Aberdeen’s May 2013 agile analytics survey spent over $5 million each on BI
Aberdeen’s Insights provide the
last year. Naturally enough, some organizations get more for their money
analyst’s perspective on the
than others. While closely managing the total cost of ownership (TCO) of research as drawn from an
an analytics solution is important, the value liberated by the investment is aggregated view of research
arguably more so. Consequently, this research is focused on how to surveys, interviews, and
accelerate the return on investment (ROI) for BI projects. This Analyst data analysis.
Insight 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 and
cloud-based analytics solutions.
Leaders Defined
Corporate IT Can’t Achieve Rapid ROI Alone
Based on data collected from
The implementation of BI solutions is still largely undertaken by skilled IT 147 organizations in April and
staff. While some solutions may ultimately be easy to use, most May 2013, the top performing
organizations still have thorny issues that they need to address. For 35% of organizations (Leaders)
example, collecting the right raw data, integrating multiple streams of data, were segmented from
transforming data into information, and distributing it to the right business Followers (the remaining 65%)
users in a timely way, typically requires some serious computer science using two criteria that reflect
skills. However, the path to rapid ROI requires the deep involvement of their ability to generate a rapid
analytics users. return on their investment in
analytics. The relative
performance of Leaders and
Figure 1: User Empowerment is one of the Keys Followers is also shown:
√ Average time to achieve
Corporate IT supports positive ROI on last
82% major BI project:
users initiating /
47% Leaders – 6.7 months,
driving projects Leaders
Followers – 16.3 months
Followers
√ Average time required
Users can tailor BI 70% to complete a major BI
to their needs project, from
49%
requirements definition
through to completion of
20% 40% 60% 80% 100% presentation layer:
Leaders – 3.5 months,
Percentage of respondents, n=147 Followers – 9.7 months
Source: Aberdeen Group, May 2013 * All results were normalized to
allow for variations due to
As Figure 1 shows, compared to Followers, Leaders are 43% more likely to company size
allow users to tailor their BI environment to meet their own specific needs
(70% vs. 49%). On average, survey respondents have 11.6 full-time
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent 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.
Achieving Fast ROI for BI Projects
Page 2

equivalents (FTEs) of skilled IT staff engaged in implementing new BI How to spend $5m on BI
projects. Overall, this is used to support an average user base in excess of
3,200 people. Or, to put it another way, there are 280 BI users on average The breakdown of the average
for every FTE devoted to BI implementation. Imagine for a moment that you annual cost for business
intelligence is as follows:
are that one FTE, responsible for getting exactly the information that 280
people need, exactly when they need it, and exactly the way they want to √ Licenses / subscriptions for
see it. For example, some users may want filters applied, so that they see data integration tools: $241k
the subset of the available information that is relevant to them. Others may
√ Licenses / subscriptions for
want additional columns in a tabular report, or different types of graphical
data warehouse tools: $391k
displays in a dashboard. Is it reasonable to expect one person to implement
all the different variations and nuances that those 280 people wish to see? In √ Licenses / subscriptions for
practice, even with the best will in the world, that is unlikely to happen. end-user tools: $231k

Such detailed customization can — and should, for the sake of a rapid ROI √ New BI hardware: $353k
— be delegated to the individual users themselves. Many modern analytics √ Services: $562k
tools allow such changes to be made relatively simply through configuration,
not coding. In this way, individual users could for example: √ Internal BI implementation /
support staff: $3.6m
• Add a column to an hours worked report to show each employees’
accrued leave. This equates to an average
annual cost per BI user of
• Add color coding to an existing gauge on a dashboard display. Such $1,651.
color coding is often used to quickly show when performance in a
* Internal implementation and
particular metric is acceptable and when it is not. support staff costs are calculated
• Add an entirely new chart to an existing dashboard. A manager may, as an average annual cost of
for example, have a relatively short-term interest in keeping a keen $150,000 per FTE
eye 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 driving
organizations to adopt a more flexible approach to BI. Fifty percent (50%) of
overall survey respondents cite the increasing and changing demand for
information as the top pressure they face. Allowing end-users some
flexibility to customize the solution to better meet their needs can increase
their engagement, and also bolster their commitment to making the
analytics solution an enduring success. However, how does it help to deliver
a faster return on investment? It helps by freeing dedicated IT staff to work
on tasks that are far more demanding — and appropriate — for their skill
set.
Not only are Leaders more likely than Followers to enable analytics users to
tailor their solution, but they are also more likely to devolve some measure
of control to them in the early stages of the analytics development cycle.
While 82% of Leaders support business managers initiating projects and
driving solution selection, only 47% of Followers do so. The history of IT is
littered with the corpses of failed projects. In many cases, projects fail
because they simply don’t meet the needs of the users. Involving analytics
users earlier — and deeper — in the lifecycle of BI projects can help to
avoid this. For example, 67% of Leaders use an incremental and iterative
approach to the development of analytics projects. This style of
development builds projects in small chunks, rather than trying to deliver a
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Achieving Fast ROI for BI Projects
Page 3

monolithic project all in one go. In this way, for example, BI developers are Where Does the Time Go?
able to take an early, potentially vague, set of requirements and quickly build
a prototype dashboard. Reviewing this prototype with potential users drives Which part of a new analytics
iteration, and the incremental refinement of both solution requirements and project is the black hole,
sucking in most of the projects
finished BI content. An incremental approach can help to ensure that
resources? In short, data
requirements are not outdated before they are implemented. An iterative preparation. Overall, survey
approach helps to keeps requirements front and center. respondents reported the
Beyond this, deployment options such as Software-as-a-Service (SaaS) also following average allocation of
resources for new BI projects:
enable business managers to have more control over their analytics
solutions. Often, SaaS (or cloud-based) business intelligence solutions are √ Assessing data quality: 13%
rented 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 appeal √ Cleansing or enriching data:
15%
to business executives who feel that their analytics needs are not a priority
for their own corporate IT department. √ Data integration: 22%
√ Data warehousing: 23%
Maximizing Corporate IT Leverage
√ Presentation (creating
In addition to the average of 11.6 full-time equivalents of skilled IT staff used reports, dashboards, etc.):
to implement new analytics projects, a further 12.5 FTEs are needed to 27%
support existing implementations (on average). To many, that may sound
like a huge BI team — but those 24.1 FTEs are supporting just over 3,200 BI Notably, 50% of project
users. As a result, leveraging those skilled IT staff to the full is still the order resources are devoted to data
preparation before a data
of the day. However, as Figure 2 shows, firms that liberate the fastest return
warehouse is constructed and
on their investment do so to a greater extent than others. First, Leaders are populated. Overall, compared
69% more likely than Followers to use a single integrated tool to develop to Followers, Leaders expend
their BI content (76% vs. 45). more resources on data
cleansing and enrichment, and
Figure 2: Integrated Solution and Ease of Deployment fewer on data warehousing.
Both Leaders and Followers
expend an average of 26% to
Single integrated BI 76%
maintain and enhance existing
development tool 45% analytics projects.
BI tools with
57%
built-in data
30%
connectors
Leaders
29%
SaaS / Cloud BI Followers
16%

0% 20% 40% 60% 80%

Percentage of respondents, n=147

Source: Aberdeen Group, May 2013

This approach can lubricate the path to a fast ROI in several ways. For
example, all IT staff responsible for developing BI assets can be trained in
this single toolset. Once up to speed, each staff member can then be
productive on many different types of BI project. That may not be possible if
multiple tools are used within the business intelligence portfolio. For
© 2013 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Achieving Fast ROI for BI Projects
Page 4

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 to On-Time, On-Budget BI
bottlenecks. For instance, there may be three dashboard projects awaiting
attention, but only two IT staff members trained in the dashboard tool. On ROI Leaders are 74% more likely
than Followers to support
the other hand, if all staff are proficient in a single tool, managers have more
business managers initiating and
flexibility in how they allocate those staff to projects. Project delays may be driving analytics projects. This
avoided — and, when a single tool is used, staff naturally become more deep and early engagement with
proficient as time goes by, building and growing their skills with each projects can help to ensure that
project. the needs of business users are
addressed. As a result:
Almost twice as many Leaders also use business intelligence tools that come
complete with connectors to commonly used data sources (57% vs. 30%). √ Leaders are 30% more likely
While not completely solving all data integration problems, this can provide than Followers to deliver
significant help. For example, some data integration tasks require significant projects on-time or early
work that can be quite complex. Multiple data streams may need to be √ Leaders are 27% more likely
cleaned, transformed, and integrated in order to provide the comprehensive than Followers to deliver
picture of the business that a particular project demands. On the other projects on-budget
hand, many BI projects are very simple, requiring the connection of just one
or two data sources. By easing such simple integration tasks, projects can be
completed faster.
Lastly, Leaders are more avid adopters of SaaS (or cloud BI) solutions than
Followers. Prior research by Aberdeen clearly shows how this class of
solution can impact return on investment rates. For example, research
published in February 2012 (SaaS BI: The Compelling Economics of Cloud-Based
Analytics) found that organizations that used SaaS spent $404 per user per
year. In contrast, firms that did not use Software-as-a-Service for their BI Leaders Outperform Followers
implementations spent $658 per user per year. Clearly, if the investment is
In addition to achieving ROI
lower, then the return on invest accrues faster, all other factors being equal. faster and completing projects
However, SaaS BI solutions are also associated with faster project faster, Leaders outperform
development. For example, Aberdeen’s September 2011 research (SaaS Followers in a number of core BI
Business Intelligence: Driving Agility through Self-Service) found that companies metrics:
using SaaS were able to develop a new dashboard in 15 days, on average.
Comparatively, organizations that just used conventional (i.e., on-premise) √ Frequency of finding
information in the time
business intelligence solutions required 24 days on average.
required to inform
decisions:
Conclusions and Recommendations Leaders – 73%,
Followers – 66%
Successful analytics requires a marriage. Both business users and corporate
IT must work smartly — and work together. In particular, organizations that √ Percentage of employees
wish to accelerate the rate of return on analytics investments should with access to BI:
consider the following: Leaders – 36%,
Followers – 27%
• Engage business users early and often. Earlier Aberdeen
research (Visualization: Set Your Analytics Users Free and A Simple Cost √ Percentage of BI users that
Justification for Self-Service Analytics) has extolled the virtues of self- are mostly self-sufficient:
Leaders – 37%,
service business intelligence. Namely improved information access,
Followers – 23%
lower support costs and a more pervasive use of BI throughout the
organization. In addition, this Analyst Insight encourages companies
to stretch the boundaries of how and when analytics users are

© 2013 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897
Achieving Fast ROI for BI Projects
Page 5

involved in BI projects. Beyond simple manipulation of data by BI

users, 70% of ROI Leaders enable these users to tailor and
Survey Demographics
customize the BI solutions that they use. This can increase
managers’ engagement with the solution, improve their ability to The demographics of the 147
find timely information, and free rare IT skills for more challenging survey respondents currently
tasks. Likewise, 82% of ROI Leaders encourage business users to using business intelligence
initiate projects and work actively in defining and driving the were:
solution. As a result, Leaders are 30% more likely than Followers to √ Headquarters: North
deliver analytics projects on time (59% vs. 45%). America – 58%; Europe –
29%; Asia / Pacific – 11%;
• Leverage scarce technology skills with appropriate
Latin America – 1%; Middle
technology choices. Even high performing teams need the right East – 1%
tools to help them succeed. And those responsible for the deep
technicalities of implementing and deploying business intelligence √ Headcount: Large (more
have clear choices to help them achieve a faster return on than 1,000 employees) –
investment. Standardizing on a single tool that can address as many 47%; midsize (between 101
BI needs as possible is a strong first step. ROI Leaders are 69% and 1,000 employees) –22%;
small (100 employees or
more likely to do this than Followers — even when allowing for
less) – 31%
company size. Similarly, solutions that facilitate easy integration (via
packaged data connectors, for example) are almost twice as popular √ Annual Revenue: Large
with Leaders as they are with Followers (57% vs. 30%). Finally, (greater than $1bn ) – 28%;
Software-as-a-Service solutions can help deliver rapid ROI too. First, midsize (between $50m and
large upfront capital costs can often be avoided — there is no data $1bn) – 33%; small (Under
warehouse server to buy, and no BI licenses to purchase. Second, $50m) – 39%
dodging these large purchases and the accompanying installation √ Industry: IT consulting /
work can accelerate provision of the solution. Third, SaaS can be services – 20%; software –
implemented with relatively meager in-house IT skills. As a result, 17%; financial services – 7%;
SaaS can be a strong option for organizations with few IT resources, insurance – 7%; government
or for overstretched IT departments that may want to outsource / public sector – 6%;
part of their analytics portfolio. education – 5%; retail – 5%;
other – 33%
For more information on this or other research topics, please visit
www.aberdeen.com

© 2013 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897
Achieving Fast ROI for BI Projects
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Related Research
Mashup Your Way to Better BI; Packaged Analytics: The Gift that Keeps
September 2013 on Giving; January 2013
Visualization: Set Your Analytics Users BI Without Tears: Analytics without
Free; August 2013 Coding; October 2012
Self-Service Drives the Analytic SME; The Grinning CFO: How to Get a Return
August 2013 on BI Projects in Less Than 4 Months;
Agile Analytics: Staying Afloat on the October 2012
Rising Tide of Information Needs; June Pervasive Cloud BI: Analyst, Advocate,
2013 Problem-Solver - All in One; September
Software-as-a-Service Helps Deliver 2012
Satisfied Analytics Users; May 2013 SaaS BI: The Compelling Economics of
A Simple Cost Justification for Self- Cloud-based Analytics; February 2012
Service Analytics; February 2013 SaaS Business Intelligence: Driving Agility
through Self-Service; September 2011
Author: David White, Senior Research Analyst, Business Intelligence,
(david.white@aberdeen.com);
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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 and represent 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. (2013a)

© 2013 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897