ROI calculations make for compelling sales tools, and an important way for the vendor to truly understand the value their product delivers. Here’s the catch though: these calculations are almost always focused only on cost-savings, as opposed to demonstrating revenue increase. In other words, the more challenging question is how do you accurately attribute revenue growth back to your dashboard or BI deployment?
Naturally, at Klipfolio, we are interested in understanding the two sides of an ROI scenario better. Here’s what we’ve done so far, and where we need your help.
It’s relatively straightforward to calculate the costs (investment) of your dashboard project, taking the licensing, support, and labor – and if necessary, hardware and vendor services such as integration and training – and adding these up for Year 1, and then through to Year N. OK, so far so good.
Now, we can tackle the less ambiguous of the benefit aspects: cost savings. For Klipfolio Dashboard, the greatest cost savings will be on labor. For example, a reduction in the time your users require on a daily basis to search for, consolidate, and digest critical data; or how much manual time and effort can be saved for your BI analysts whose job it is to produce reports. This calculation is a fairly simple [number of users benefiting] X [time savings] X [average salary equivalent].
There may be additional cost savings, such as bandwidth reduction (although even substantial bandwidth reduction has been found not to have much of a cost impact), and some one-time savings, such as being able to cancel current software.
OK, so there we have the easy stuff. You can now understand your investment and cost-savings on a Year 1 and Year N basis. Of course, as with any ROI calculation, you want to run it through a sensitivity analysis, weighting success, and partial success and failure, so you have a range of worst case to best case.
This is where we need your help. Here is a quote from Gerard Banaghan, Director at Premier Stationary, who summed our thoughts up quite well: "Klipfolio gives us a minimum of an hour a day saved, but the more important benefits are harder to measure. They're to do with quality and efficiency."
Measuring productivity or revenue gain is difficult. And indeed, you’ll be hard-pressed to find good examples of this type of measurement. Klipfolio Dashboard delivers increased data visibility; it improves information awareness. Customers enthusiastically tell us Klipfolio Dashboard is performing to or above their expectations. For us, this is the missing ROI piece. Have you calculated ROI using performance or revenue gain? If so, how have you done it?
We’re looking forward to hearing from you. Based on these discussions, we will work with Lyndsay Wise at Wise Analytics to expand our understanding, survey all of our customers regarding the ROI that Klipfolio Dashboard is delivering, and then share the results with you.
