Nucleus Research study says analytics pays back $10 for every dollar spent
Nucleus Research reports that after a recent examination of 60 analytics-related ROI case studies, the organization found that for every dollar invested in technologies such as BI, PM, and predictive analytics, organizations get back an average of $10.66. Nucleus’s analysis included ROI case audits of analytics deployed by customers of leading vendors including IBM, Microsoft, Oracle, SAP, SAS, TIBCO Spotfire, and Information Builders.
According to the report, “Analytics pays back $10.66 for every dollar spent,” software buyers may think that vendors over-hype visibility as a benefit of analytics, but in fact, the highest-ROI analytics deployments made data more available to decision makers and enabled them to find ways to increase revenues or reduce costs. Nucleus found analytics enabled improved visibility in three areas:
- Revenues. The more managers knew about what customers were buying and why, the better able they were to accelerate sales cycles, cross sell, and maximize pricing.
- Gross margin. By serving up highly granular data on costs of goods sold, analytics applications helped decision makers identify the highest margin products so that they could push the right products and increase gross profit.
- Expenses. Operating costs were also important. The more managers of cost centers and lines of business learned about their operating costs as a result of an analytics deployment, the better able they were to reduce or eliminate expenditures that were unnecessary or generated low returns.