If the number email messages I received from my last column on the analysis of the IDC study is any indication, the topic on calculating the Return on Investment (ROI) is quite high on many organizations' priority list. Thank you so much for all of the emails.
While Return on Investment is a simple phrase, the implementation of ROI is complex. The usual calculation is as follows:
The complexity comes from trying to determine what is the present value of the benefits and costs.
Present Value of Benefits
The IDC study broke the benefits into 3 categories:
However, remember that your investment in one thing may have a "trickle down" effect on other things that may not be specifically attributed to the data warehouse. For example the creation of reports for a manager to see 15 days earlier may allow that manager time to analyze the data more completely to find a new business process that will increase productivity of the manufacturing process. Most ROI calculations would be on producing the report faster, but the "trickle down" of more efficient processes may never show up.
Present Value of Costs
Costs of the data warehouse are pointed out in many flavors. They are
Conclusions
The distribution of ROI in the IDC study show that savings were about 20% for Keepers, 30% for
To continue reading for free, register below or login
To read more you must become a member of SearchSQLServer.com
Gatherers, and 50% for users. What can this tell us? Correct! We need to have our users involved during the development of the data warehouse.
The IDC study also points out that these are the tangible benefits. There are intangible benefits as well. Some of the intangible benefits described are:
But, after all is said and done, let us remember that data warehousing is not about random, endless query authoring. It is about timely and consistent execution to create opportunistic behavior. The results of which should be better than the obvious observation method.
About the Author
Chuck Kelley is president and founder of Excellence In Data, Inc. and an internationally known expert in database technology. He has more than 20 years of experience in designing and implementing operational/production systems and data warehouses. Kelley has worked in some facet of the design and implementation phase of more than 35 data warehouses and data marts. He also teaches seminars, co-authored a book with W. H. Inmon on data warehousing and has been published in many trade magazines on database technology, data warehousing and enterprise data strategies. Please feel free to email him at chuckkelley@usa.net with comments (negative or positive) about this column or ideas for future columns.
For More Information
