Analytics deliver 1000% ROI, but enterprise collaboration uninspiring

Business Intelligence delivers great ROI – but maybe not that much…

According to a new study by Nucleus Research, organizations earn an average of $10.66 for every dollar spent on analytical applications such as Business Intelligence (BI) and predictive analytics.

These somewhat dubious claims come after analysing the successes of 60 separate analytics implementations. Naturally, we believe that a well-executed, widespread BI implementation (with high user adoption rates) will yield significant ROI. But, we wouldn’t’ promise an ROI in excess of 1000 percent to our customers.

Nucleus Research suggested analytics projects could yield strong results and returns for two predominant reasons:

  1. New, or ’next generation’, vendor technologies are allowing organizations to more easily integrate data sources with analytical applications
  2. Once implemented, organizations enjoy markedly enhanced organizational visibility, which underpins a streamlining of operational activities and better decision-making, leading to stronger profits

“Although skepticism can be warranted for technologies that are new or unproven, managers who continue to balk at investing in analytics technologies are doing their organizations a disservice,” stated the report. “The companies that use analytics to learn more about their customers, products, and costs will be in a position to cost effectively grow their business at the expense of rivals.”

Organizations struggle to define ROI for collaborative decision-making software

In contrast, a new report by the Altimeter Group suggests that organizations are struggling to achieve tangle benefits and defined ROI for enterprise social networks, or collaborative decision-making (CDM) software.

The study – Making The Business Case For Enterprise Social Networks – included survey data from 13 vendors, 185 end users and 81 “social network decision-makers”.

Only thirty-four percent of respondents said that such CDM platforms had made a “significant” impact on departmental and team collaboration. Further, 43 percent of participants said that these initiatives had made “very little impact” on their ability to make faster decisions.

So, what does this mean for Collaborative BI? Is Collaborative BI doomed to become nothing more than a vendor catch-cry? Doubtful. And here’s why:

  1. CDM software is in its infancy: Despite IDC predictions pertaining to the enormous growth achieved – and predicted – within the CDM software market segment; it’s an area still young. As the market matures, both the software and accompanying implementation strategies will be refined. Evidence of current immaturity can be found within the same Altimeter study. Respondents admitted that they measured the results and ROI for CDM software “very poorly” (33 percent) or “somewhat poorly” (35 percent). No respondents claimed to measure results “very well”. How can something – anything – achieve ROI if the components of ROI remain undefined and unmeasured?
  2. It’s about better, not just faster: Collective decision-making, at least in the context of BI, is about making better, not just faster decisions. The fact that 43 percent of participants said that these initiatives had made “very little impact” on their ability to make faster decisions may in fact have very little bearing on the technology’s ability to support better decision-making.
  3. BI is different: Furthermore, the Altimeter study was written in reference to standalone enterprise social platforms, such as SharePoint, Jive and Yammer. Collaborative BI is different – or at least it should be. A true BI CDM module should be a fully integrated component of an organizations’ existing BI platform. By virtue of this fact, it should also have a direct problem to solve. As a concept, Google Wave was ingenious – bear with me. But, Google Wave failed to achieve high levels of success because it was a collaborative engine without a problem. It was a collaborative platform that had no focus in terms of collaboration. For example, users know they’re sharing photos on Flickr, but Google Wave had no such focal point. For more, see our blog Why Google Wave failed and Collaborative Business Intelligence won’t
  4. Studies on Collaborative BI prove positive results and ROI: Analyst and industry thought leader, Wayne Eckerson, believes that Collaborative BI is set to go from a niche-nice-to-have feature, to an industry-defining component of leading BI solutions:

The Aberdeen Group’s recent report on Collaborative BI – Collaborative BI: Harnessing the Extended Enterprise to Boost Productivity – also claims Collaborative BI deployments have the ability to improve productivity and visibility across the breadth of organizational operations via enhanced knowledge sharing. Recorded benefits include:

  • Improved customer responsiveness
  • Improved business process cycle times
  • Improved cross-functional collaboration
  • Improved external stakeholder collaboration
  • Improved employee retention rates
  • Improved customer retention rates

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