The Value of Business Analytics: Identifying the Path to Profitability

IDENTIFYING INTANGIBLE VALUE

Tangible benefits are important, but they are not the whole picture; people make decisions based on more than just economic return. Strategic, personal, and general benefits may not be sufficient to get a business case over the line, but they should help win internal support for a given project.

Business analytics projects often deliver substantial intangible returns. These could include:

• Personal time savings and improved productivity
• Strategically valuable insight
• Reductions in uncertainty
• Faster and better decision making
• More trustworthy data

Observant readers will note that each of these indirectly delivers economic return; the challenge is that the economic return is often difficult to capitalize or measure. A good example is improved productivity/time savings. While it is true that increased amounts of available time offer the opportunity to either redeploy resources or increase activity coverage, the reality is that most organizations are hesitant to book economic returns from productivity improvements unless headcount is reduced. As this is often counterproductive to the objectives set by the business analytics team, it commonly means that the organization is unable to book the associated benefits in any meaningful way.

However, the importance of these benefits in gaining internal support cannot be understated. Although the organization may not be willing to book the economic returns associated with time savings, a manager within another group ...