Calculating the Return on Investment (ROI) on a business project is a necessary evil. On the one hand, you need ROI to determine the most impactful ways of spending your human and financial capital. Yet on the other, these calculations are notoriously challenging to figure out, as there are so many factors that come to bear. Data Initiatives are especially difficult to evaluate, as their success rests on the organizational buy in that results from stakeholders believing in their value.
While the factors that contribute to ROI calculations are unique to each organization, there are several that remain relatively consistent. For a data tool implementation, they include:
- Cost of Educating Data Team - With any new tool, you'll have a temporary cost to consider in terms of team education and on boarding. However, it's important not to skimp out on education to ensure that the team will be fully activated.
- Cost of Tool - The tool you use will also come with associated licensing costs, however ROI calculations can help you determine whether this is a good investment or not.
- Activation of Analysts - When Data Analysts can be activated to fully collaborate and leverage their expertise into a data team, project operationalization will occur much faster.
- Decreased Strain on IT Resources - IT teams are often overburdened with data access requests. Minimizing this workload can increase data and IT team productivity.
How to Determine ROI
Calculating the ROI of your data initiatives and tools starts with transparency. Each stakeholder and part of the project needs to be evaluated for dependencies and anticipated benefits or costs. But as long as you approach the process in good faith, and try to incorporate as accurate predictions as possible, you're on the right path.
If you're ready to take the next step and lock in on the concrete business value of your data initiatives, learn about the challenges and solutions for increasing ROI, and take our sample calculator for a spin, get access to the free toolkit now.