Here are three things to remember when putting together a BI business case:
- Intangible benefits don't count.
- BI has no inherent value.
- Senior managers often make decisions about future outcomes with insufficient data.
Intangible Benefits Don't Count: An effective business case communicates tangible future value in a convincing way. An argument has a chance of convincing a skeptical reader if the reader agrees that argument's assumptions are reasonable and that the conclusion follows logically from the assumptions. Quantifying financial metrics like Return on Investment (ROI) or Net Present Value (NPV) help build the case, but such measures are credible only if readers agree with the underlying assumptions and the logic built upon them.
BI has no inherent value: We in the BI field believe that any organization's fortunes would improve if it rationalized its data stewardship, integrated its data, and applied analytics creatively in management and operations. However true, that view must ring hollow to senior business managers. Without a compelling and motivating story about how a new system contributes to revenue or reduces costs, that system's business case stops dead in its tracks. Of course sometimes "someone at a high level" just wants BI, but organizations don't often embark on BI efforts without first evaluating tangible costs and benefits.
Senior Managers Make Decisions about Future Outcomes with Insufficient Data: Although BI practitioners must make a convincing case for future business value, there's room for uncertainty. Executives and senior managers aren't highly compensated for playing it safe, but rather for understanding current conditions and setting direction based on educated but sometimes courageous predictions of future conditions. A successful BI business case matches or extends the executive's knowledge of current conditions and expands his or her view of potential future outcomes of near term actions.
[Excerpt from "Show Me the Money: A DM/BI Business Value Primer", Bob Lambert and Tri Truong, Information Management Special Reports, March 24, 2009]