| So often when companies are considering a business | | | | project's worth to a company, but it can become a |
| intelligence project or software purchase, a question | | | | brainstorming tool for the types of applications you are |
| arises that seems to stump everyone involved. | | | | looking to create. Above I noted that the Avoid Costs |
| "Where is the ROI in this project?" | | | | portion of this acronym is by far the most focused on |
| This question has stopped many a business intelligence | | | | for business intelligence projects. Why is that? Is |
| project in its tracks. Maybe it's asked by the CFO or | | | | business intelligence only good for eliminating waste |
| CEO. Maybe it's brought up in one of the meetings | | | | and making an organization more efficient? Can it not |
| with a vendor or consultant presenting a solution. The | | | | be used to increase revenue by putting valuable |
| sad truth is if you can not answer this question with | | | | information in front of prospects you haven't been |
| hard numbers in specific areas, the ROI probably isn't | | | | reaching yet? |
| there. | | | | I would argue that some of the best and most |
| I.R.A.C.I.S. is a simple acronym that can be used to | | | | successful business intelligence applications I know of, |
| quantify a business intelligence project's worth to a | | | | focus on the first category of Increasing Revenue. |
| company. It stands for the following: | | | | Business intelligence is all about putting the right |
| Increase Revenue - How will this application and | | | | information into the right hands at the right time. For |
| functionality drive more sales to new or existing | | | | some company's that might be an internal business |
| customers, shorten the sales cycle, and/or bring down | | | | analyst. But for so many others it can be putting |
| the cost of sales? | | | | information in front of your customers, prospects, and |
| Avoid Costs - By far the area most focused on in BI | | | | partners to provide new insight on a purchasing |
| project justifications. How will this application help us | | | | decision. When companies are selling complex |
| improve efficiency, put more information in the hands | | | | products and services, sometimes you need to track |
| of our business people and eliminate wasteful | | | | the customer down where they live. You need to |
| processes? | | | | reach out to them with a compelling message about |
| Improve Service - Will this application affect our client | | | | your product or value proposition and give them a |
| base noticeably? Will we be able to provide more | | | | reason to act on that information. |
| timely and valuable information to our customers, | | | | If you got an e-mail from a major car insurance |
| prospects, and suppliers? | | | | provider, showing your current car insurance provider |
| Many times in a business intelligence effort, there are | | | | and the estimated rate you are paying, and then a |
| outcomes that are deemed desirable. Things like | | | | graph showing a $700 savings in rate comparisons for |
| ad-hoc report generation, more informed operations | | | | the same coverage over one year, that would be a |
| staff, and less lag time in financial reporting are nice. | | | | compelling e-mail to receive. It would probably motivate |
| But they will not justify the investment in a business | | | | you to pick up the phone or go to a website to |
| intelligence solution from a quality software vendor | | | | instigate further. |
| without direct and secondary benefits quantified in the | | | | This would in turn Improve Service and Avoid Costs. |
| there areas mentioned above. | | | | Being able to present this kind of accurate and timely |
| Let's face it, business intelligence solutions are not | | | | information to a prospective customer shows them |
| cheap. There are many scalable solutions on the | | | | that you have systems in place to save them money |
| market today that range from traditional software | | | | and provide the best possible service. It shortens the |
| implementations, to SaaS (Software as a Service), | | | | sales cycle and the cost of sales, driving up margin |
| and even open source solutions. Large companies | | | | and profitability. It instills confidence in the company |
| have long embraced the benefits of business | | | | from a customer standpoint and also gets people |
| intelligence and now with these diverse offerings the | | | | talking about your product or service. |
| small and mid sized companies are also taking | | | | In the Information Age we live in, the data and |
| advantage. However, any business intelligence project | | | | information that companies have are their most |
| is only as good as the planning, effort, and data that go | | | | valuable assets by far. Getting this information out in a |
| into whatever software platform you are using. Hence | | | | usable format to the correct audience can be the role |
| another phrase often heard in many BI projects, | | | | of business intelligence in any company. This should be |
| "garbage in, garbage out." | | | | a goal when looking at what business intelligence can |
| By using the I.R.A.C.I.S. model to quantify the value of | | | | do for a company. Don't limit yourself to just eliminating |
| the solution to the company, you provide everyone | | | | waste and automating internal processes. I certainly |
| with a clear roadmap to what is deemed a successful | | | | think projects that focus on those topics are |
| project. From the executive sponsor at the company, | | | | worthwhile and valuable to a business. But when you |
| to the vendor you are working with, there is no | | | | expand your thinking and remember that using the |
| ambiguity as to what is expected as a final outcome. I | | | | internet to deliver information in a variety of formats is |
| would challenge any company that is considering a | | | | the most cost effective way to reach a critical mass |
| business intelligence project of some sort, that if you | | | | of people, only then can you realize your full ROI on |
| can't find a solution that addresses at least one of the | | | | the purchase of a business intelligence solution. |
| three areas above, if not all three, that the project is | | | | So the next time a discussion breaks out about a |
| probably not worth doing at all. And if the solution or | | | | business intelligence project or initiative, think of the |
| software product is incapable of scaling to address all | | | | I.R.A.C.I.S. model as a way to discuss and evaluate a |
| three areas in the long run, then it probably isn't the | | | | projects worth to your company. You might be |
| best product for you. This may seem like harsh criteria, | | | | surprised what you can come up with when your |
| but in an era where most large companies own 3 or 4 | | | | thinking turns towards revenue generation and service |
| separate business intelligence tools, it's apparent that | | | | improvement. Just remember, after you're done |
| more critical thinking is needed before a solution or | | | | creating a new line of business or increasing an |
| platform is purchased. | | | | existing one, to ask your boss for a commission. |
| Not only is this acronym a good way to quantify a | | | | |