Are ROI and ROA Creative Works of Fiction for BI Programs?

Every BI program manager tries to make a connection between the projects that his team has delivered and the value proposition for the organization. These connections are often tenuous and incorrectly stated.

 

ROI for BI programs is important but difficult to measure directly. Often the business impact is many steps removed from BI usage and BI is only one of several contributing factors. ROI can be so elusive that I wonder, “What’s the point?”

Return on Assets (ROA) is a complementary valuation model that is more readily calculated. You know the cost of having an enterprise data asset – people, hardware, software, and service costs. BI increases the value that is derived from that asset by connecting people with data. Understandable data structures and easy access to data are the keys to ROA.

The ROA calculation that I commonly see is for those instances where modernization efforts have led to reductions in the cost of maintaining an infrastructure. Just about everyone, whether or not they are technical, knows about the cost benefits of virtualization and cloud. Although these are still good messages, cost containment is no longer the primary concern of many CIOs. However, the messaging of reducing costs while increasing business capabilities will forever be strong!

In this market, access to secured data is key to being recognized as a value-centric IT organization. When calculating the ROA for your IT department, think in terms of data access, data usage, and data capabilities that are industry differentiators.

Leave a Reply