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Analytics deliver staggering ROI

The average analytics project implemented within businesses today is delivering a return on investment of 431% over five years. More than half of the implementations studied - 63% - delivered that payback in two years or less.


Market Analysis

Analytics deliver staggering ROI
The search for benefits from technology is as ancient as the abacus and as complex as the search for the perpetual motion machine. Networks aren't making life any easier of course. The power of multiple computers, harnessed together to deliver business applications far and wide is filling the business with legacy information on the fly and companies are finding it increasingly difficult to squeeze value from this information. Too much data, too little time.

But the search must continue, according to IDC. It's just completed a study of the one market that can help you squeeze value out of your information systems: Analytics. It's unearthed some dramatic findings.

The average analytics project implemented within businesses today is delivering a return on investment of 431% over five years. More than half of the implementations studied - 63% - delivered that payback in two years or less. That's a staggering return for a tech project arguably more used to abject failure. Still, that's what IDC found during its in-depth study that included interviews with 43 people that have undertaken such projects.

With companies from IBM to Oracle, Sybase to Business Objects, the range of analytics products available today is diverse to say the least - and they need to be. Whilst the average project can deliver the ROI above, it's not the same for every project and type of implementation. It very much depends on the situation and requirements.

IDC found that the most successful of the analytics projects were those that had been implemented in tandem with a business process change. Rather than attempting to sit analytics on top of an existing system, therefore, it seems pertinent to be building your analytics as the systems and processes grow.

Still, that isn't the only factor at play in a successful analytics implementation. The study found that operational and production analytics had the highest return on investment, with an average 277%. Financial and business performance analytics have a similar, if not as dramatic, effect. IDC found that this type of project was delivering an average ROI of 139%. CRM analytics, the study found, delivered somewhere in the region of an average 55% return on investment.

Strangely, despite all of this success surrounding analytics projects, it is the off-the-shelf packages that appear to be delivering the fastest and greatest return on investment. Packaged applications, IDC notes, delivered an average return on investment of 140% whilst custom built analytics applications were more in the region of 104%.


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