ROI of Business Analytics Increases Significantly as Solution Matures

Grows from 188 percent in initial automation phase to 1,209 percent in predictive phase

BOSTON – April 26, 2012 – Defying typical enterprise software ROI cycles, business analytics increase return on investment substantially as the solution matures and is extended to handle ‘big data’ beyond the firewall including social media and partner ecosystems. A Nucleus Research analysis of 60 deployments shows that an average ROI of 188 percent in the initial automation phase grows to an average of 1,209 percent in the later predictive phase.

“With increasing rates of return on investments in analytics, companies are benefiting from even small initial deployments and are using analytics to drive continuous improvements to business process and decision making. Few investments, financial or otherwise, generate a higher return with increasing levels of investment. Analytics should be a top priority for future investments for most organizations” said Hyoun Park, principal analyst at Nucleus Research.

Business analytics include business intelligence (BI), performance management (PM), predictive analytics and supporting data management technologies.

Evolution of Analytics – Four Stages

Nucleus identified four stages in the evolution of analytics. The initial stage of automating reports yielded an average ROI of 188 percent. This more than doubled to 389 percent on average in the tactical stage where organizations leverage analytics to improve decision making, rather than just increase productivity. ROI jumped to an average of 968 percent in the strategic phase, where enterprises deployed analytics across most of the organization and used them to align daily operations with the goals of senior management.
The predictive phase yielded the highest average ROI of 1,209 percent, as organizations tapped into ‘Big Data’ and extended their analytics to larger data sources beyond their firewall to include partner ecosystems and social media.

The full report is available at NucleusResearch.com

About Nucleus Research

Nucleus Research is a global provider of investigative, case-based technology research and advisory services that provide real-world insight into maximizing technology value. For more information, visit NucleusResearch.com or follow us on Twitter @NucleusResearch