We’ve all been there, haven’t we? You’ve got a great data idea. It’s all mapped out. You know what needs to be done. Everyone’s excited. You’re ready to get started. And then…you need to get the business case approved and budget signed off…sigh. So how can you demonstrate that your project is worth investing in? How can you show a credible return on investment (ROI)? How can you ensure your business case is approved? Well, as a data lab helping businesses to design, build, launch & support data solutions, we get asked this all the time. So, let me share how we do it…
Think about the types of data project that a business might undertake – such as:
- Creating or upgrading your data warehouse
- Integrating data from new sources
- Streamlining your processes to add more speed and resilience
- Tightening up your data security protocols
- Transforming manual processes into automated workflows
- Identifying new patterns and trends
- Creating forecasts and predictions for the future
- Generating new customer insight
- Creating data-driven products and services
- Implement data-driven sales & marketing activity
All of these activities require time, resource & budget. So, there is a cost to the business to undertake any of these activities. And any business leader will want to see a demonstrable benefit, or monetary return, for these costs.
Businesses are collecting data all the time. Think about all the data you collect about sales, financials, customer service, marketing interactions, survey responses, employees and more.
This data needs to be stored, secured, processed, backed up…if not analysed. So, you’ll need data storage, data tools, backup capability, security tools, and more. This all costs money. Potentially hundreds or thousands of pounds every month. The cost of data can easily outweigh the value of data. So, if you’re not deriving value from data…you’re throwing money down the drain!
In your business case, there are a range of ways that you can demonstrate that data is delivering a ROI and/or delivering value for your business. The key is to make this as powerful as possible by using numbers and targets, rather than vague softer benefits.
DO share financials, volumes, efficiency statistics & similar
DON’T share vague benefits and fluffy improvements
Here are some ways that you can show money-saving, and money-making benefits, to your decision makers:
- showing that the new system will be £X cheaper by using different technology – this can be as simple as comparing costs today versus the costs for the proposed new solution
- showing that X FTE can be reduced, or re-distributed, by automating manual processes using technology…saving £X per year
- showing X days per month spent on manual tasks, equivalent to X FTE, assuming all-in salary of £Xk, then there is a potential to save £X per year
- driving enhanced sales & marketing conversion rates eg generating X% more leads…worth £X per year
- creating more upsell/cross-sell activity eg X% increase in usage or X% increased conversion to the higher tier of service…worth £X per year
- retaining more customers eg X% reduction in attrition…saving £X per year
- giving customers access to enhanced analytics and charging £X per month more for it…worth £X per year
- showing customers how they compare to other customers to drive more usage/sales by X%…worth £X per year
- offering special offers to targeted high value clients improving retention rates by X%…saving £X lost business per year
- switching off low value clients or loss-making clients…saving £X per year
- using predictive models to target those more likely to respond eg reducing comms spend by £X or increasing effectiveness by X% worth £X
- using data to create attribution models to optimise marketing spend by channel eg reducing comms spend by £X or increasing effectiveness by X% worth £X
I’m sure there will be more, depending on your business model, market and sector. Remember – focus on tangible benefits and results you an quantify and place a value on.
A data project might cost anything from hundreds of pounds to hundreds of thousands of pounds…but I’m sure you can demonstrate a ROI on the cost using all/some of the ideas listed above to show a strong business case. If not, ask us for help…we’re happy to review your business cases for FREE and boost your ROI projections based on our experience working with 40+ businesses on 60+ data projects. So, don’t let the ROI challenge stop you from implementing data solutions – ask us for help.
For a FREE business case and ROI review, please contact the Data3 team at hello@datacubed.nz