Return on investment (ROI) is important in any tool, and business intelligence (BI) tools are no exception. If anything, showing the cold hard numbers is even more critical for a visualization tool since the true impact is not immediately apparent. Given the current economic landscape, your business may be wary of spending money on additional software and tools. Today I will go into detail on how business intelligence tools give quantifiable ROI with the employee hours saved, costs reduced from bad or outdated data, benefits from real time insights, and reduced data security risk. At the end you can see the total cost in dollars you are losing by sticking with traditional reporting.
All the Hours Saved from Manual Reporting
Manual reporting takes time; it takes employee hours and internal resources. This expense is often overlooked, but according to CMS Wire, employees spend 36% of their time manually searching for and combining information to use. On top of this, 44% of time they spend looking for the information, employees are unable to find what they need. This can also be directly translated to dollars lost. In an example from IDC, workers with a salary of $80,000 and a workweek of 41.8 hours face a cost of $5,700 for each employee per year due to wasted hours. If you have 100 employees, that is $570,000 per year to manually collect data. All that time downloading CSVs, creating slide decks, and presenting data manually in meetings simply takes time. Those hours that your employees were working on manual reporting could be spent on strategic initiatives and deeper analytics to gain insights to predict and prescribe actions based on the data. Overall, just from reducing the manual hours from reporting by implementing a business intelligence tool your company could save hundreds of thousands of dollars in opportunity cost per year.
Living in the Past Has a Cost
How often have you been in a meeting going over a report from last month’s data? Data from last quarter? Last year? We have all been there, but it is important to recognize just how much basing your business decisions on old data can cost. Making business decisions based on old or bad data could cost upwards of $15 million, according to Gartner.
Power BI has the functionality to pull your data in at whatever time interval your business needs. Data can be refreshed daily if it is not time sensitive — or if the automated data source is only available daily, such as a third-party CSV connection that outputs a daily file. The data can also be refreshed for live data reporting every time you open the report. This means that resources like your internal sales data can be updated in real time. Your business is now able to make more effective business decisions based on the data and could save up to $15 million by avoiding bad data.
Live Data and Real-Time Insights
Business intelligence tools do not stop at providing your data in real time. They provide tools and resources for you to make real-time analytical insights about that data. This allows your business to notice faults with incoming data, issues with ongoing campaigns, or breaks in a production line as it is happening. The cost of production line shutdowns alone can be upwards of $22,000 per minute. This cost can be staggering with an average of 800 hours of downtime per year for manufacturers. Reducing this number by even 1% with real time analytics instead of manual monthly reporting would result in savings of $10,056,000 per year.
Data Security Costs
Manual reporting is not secure. A major reason why this is the case simply boils down to human error. With the leading cause of data breaches being caused by human error, reducing manual human reporting could significantly reduce your risk of a breach. According to IBM, the average cost of a security breach in the U.S. is $8.19 million. Security Magazine reported that 80% of U.S. IT business leaders anticipated a critical breach or successful cyber attack during 2019. That’s a good reason to do anything you can to save that $8.19 million, and a BI tool is a simple, cost-effective place to start.
On top of this, Power BI has a number of high-level data security features to reduce this risk. This includes secure architecture, data storage, user authentication, data and services, and transport layer security (TLS) functionality. More information on these features can be found here.
What You Get for Your Dollar
At first glance, business intelligence tools have an uncertain ROI, but when employee hours saved, costs reduced from bad or outdated data, benefits from real-time insights, and reduced data security risk are taken into account, there is a clear return:
- All The Hours Saved From Manual Reporting: $570,000
- Living In The Past Has A Cost: $15,000,000
- Live Data and Real Time Insights: $10,056,000
- Data Security Costs: $8,190,000
By staying with manual reporting, you could be missing out on potential revenue — or losing existing revenue — of up to $33,816,000 from your bottom line. With the cost of a Power BI implementation being $9.99 per user per month for Pro or $4,995 per month for Premium, the ROI comes out staggeringly positive even if your business operates at a much lower scale than the above examples.
If you would like to learn more about how you can get started with a BI tool, contact us for more information.