- CEO
With a background in Engineering and Management, and having held leadership positions within multiple companies, Pierre has extensive experience helping organizations across the …
VIEW PROFILE

Advanced Analytics as a core enterprise capability is there to serve the business to make better-informed decision. Being able to effectively measure a Return on Investment, or at least an improvement in performance, on the back of an Advanced Analytics project is paramount. In other words, any Advanced Analytics project that is not business outcome driven is worthless.
Advanced Analytics Projects over time have delivered tangible benefits in multiple areas across organisations: Customer and Advanced Customer Relationship Management; Operations and Value Chain; Fraud and Compliance; and Product Development
The complication is that there are a number of challenges directly related to measuring Return on Investment for Advanced Analytics Projects.
In this article, I present some of the challenges and good practices linked to measuring RoI for Advanced Analytics Programmes or Projects.
Always Start with the Business Problem, Otherwise You are Dead in the Water
Too many companies approach Advanced Analytics exclusively through data – “Here is my data, tell me what I can do with it”. This is the equivalent of looking for a needle in a haystack where a bunch of data analysts approach line of business people with ideas:
- Data Analyst: “With the data that we have, we could really predict churn very accurately”–
- Response: “Well, I am losing less than 0.2% of revenue linked to churn so it’s not really on my radar”
- Data Analyst: “Ok I will keep looking”
- Data Analyst: “With the data that we have, we can identify factors that drive customer satisfaction”
- Response: “I already an NPS score above 80% and was awarded the Best Customer Service award for my Industry, I don’t really need this”
- Data Analyst: “OK Let me come back to you…”
You understand where I am going. Advanced Analytics initiatives have to be shaped the other way around – start with a business challenge/opportunity in mind, and then explore the data and confirm or adapt the business question to the available data. As a result, it will be much easier to identify the Key Performance Indicator that will be used as a target and reference point for Advanced Analytics Initiatives.
Involve the Line of Business People – Actually Request that Line of Business People Own and Lead the Advanced Analytics Initiative
The quest for “making better informed decisions” will drive significant change in any business both from a business process and cultural point of view – moving away from the “trusting your gut” mind-set is simply not that easy. Looking at it from the change management angle this means that business people have to lead and embrace the project. For Return on Investment it is also critical for two key reasons:
- The stakeholders that will recognise the value of the work are best positioned to identify the right objectives/measures/targets for the project.
- Advanced Analytics initiatives, as any change initiatives include soft benefits (the concept of “making better informed decisions” is important and soft as well) – only line of business people can recognise and sponsor these benefits however hard are they to be measured
By the very nature of Advanced Analytics projects, it can be hard to make a 1:1 association between an Advanced Analytics Intervention and a particular KPI
Advanced Analytics Insights, when deployed effectively, represent the trigger point of changes to multiple business processes. At the same time multiple factors can impact a particular KPI initially targeted by an initiative if this KPI is too vague. It is key to identify as precise a KPI as possible for any Advanced Analytics initiative, again this can only be done if Line of Business people are involved.
Advanced Analytics deliver significant Return on Investment…mainly in the form of many incremental benefits realised over time
In isolation, any Advanced Analytics project, when well scoped and executed, helps improve business performance by saving a couple of % from an efficiency perspective or increase revenue by a couple of % without significant Product/Service R&D investment. The sum over the years of these improvements across the organisation can add-up to tens of % of savings or additional revenue. This is the reality experienced on the ground by those organisations that have been successful in developing an advanced analytics capability.
These incremental gains have two significant impacts on the way organisations should look at Return on Investment in Advanced Analytics
- If the approach to investing is “let’s try a 1st project and see whether we can wow people with the Return on Investment”, likelihood is that you will not go further than the 1st project, and as a result forego any potential future benefits that will make a huge difference to the business
- A programme view for Advanced Analytics is required, not one project and then see but 3-4 small initiatives that coupled together demonstrate the beginning of a successful story – we call it Think Big – Start Small
It is Hard to Quantify “Making Better Decisions” or “not making bad decisions” over the long run
Advanced Analytics as a core enterprise capability is about making better informed decisions. The right metrics linked to the right projects will help identify performance gains – moving the dial initiative. Then over time this core capability is used across the organisation to move the dial and to avoid bad decision, effectively becoming a great piece of infrastructure. Avoiding bad decisions is hard to measure but it is probably the biggest benefit of all.
When an organisation reaches this stage, it is key to start measuring “time to analytics solutions” as the key benefit and focus on how effective the organisation is at using this piece of Infrastructure.
So, to wrap it up, let me summarise the key messages:
- Start with a business problem, this will make the identification of KPIs and targets much simpler
- Get the business people to lead the Advanced Analytics project, this may require a lot of education, but it will pay significant dividends in benefits realisation and benefits measures
- Systematically invest the time to define very precise target KPIs
- Be patient and Think Big-Start Small. It is about a programme, not an isolated initiative
- Accept that over time Advanced Analytics will become a powerful piece of Infrastructure
More Analytics Blog Posts
Read more >>
Read more >>
- SPSS Statistics Version 26 includes new statistical tests, enhancements to existing statistics and scripting procedures…Read more >>
- Top tips and tricks for running ANOVA and non-parametric tests along with more advanced forms…Read more >>
- SPSS Statistics Version 26 includes new statistical tests, enhancements to existing statistics and scripting procedures…Read more >>
- Healthcare systems face multiple challenges, including ageing populations, evolving healthcare needs and rising costs. Tailored…Read more >>
- Forecasting predicts future values of a particular quantity based on previously observed values of that…Read more >>
- Alan shows you how identify new, data driven, re-order points for your stock items that…Read more >>
- In this short video you will learn how to run a Time Series model within…Read more >>
- Alan now looks more closely at the quality of information you hold on your inventory.…Read more >>
- Alan takes you through the Smart Inventory Management interactive dashboard, showcasing an overview of your…Read more >>
- In this third video, Alan shows you how to extract the key findings from a…Read more >>
- Join us at the Technology Event of the Year! Watch Rob McCullagh present Presidion’s innovative…Read more >>
- This second video concentrates on using Hold-out samples to create more robust predictive models. In…Read more >>
- SPSS is a fully customisable analytical software. Due to the highly flexible nature of SPSS…Read more >>
- In this video, the first of a series, Alan takes you through running a Decision…Read more >>
- If you have ever found that your company has engaged with Analytics initiatives that have…Read more >>
- In the 4th video of our series you will learn how to build stacked tables,…Read more >>
- In this video you will learn how to tailor your tables, run T-test & create…Read more >>
- In June 2018, I was invited to speak at the UK Manufacturing and Supply Chain…Read more >>
- In this video you will learn how to protect respondent's identity and boost the statistical…Read more >>
- Best practices and key considerations before, during and after deploying an analytical initiative to maximise…Read more >>
- In the first video of the IBM SPSS Custom Tables series you will learn: How…Read more >>
- I’ve often seen analytics described primarily by way of the technical complexity of the techniques.…Read more >>
- Being able to effectively measure a RoI on the back of an Advanced Analytics project…Read more >>
- Throughout industries analytics has taken on an almost ubiquitous nature of late. There are increasing…Read more >>
- Analytics is being discussed more and more often in top table conversations, but why do…Read more >>
- Watch Pierre Baviera speaking at “Demystifying Data” Business Breakfast at the Imperial Hotel (Cork), in…Read more >>
- A 3 step process to Understand, Assess and Audit your Data for Advanced Analytics.Read more >>
- Presidion’s Framework Approach for a Technology Review involves a 3 step process, leading to the…Read more >>
- With inspirational quotes from Data and Analytics gurus worldwide.Read more >>
- Take the Analytical Maturity model presented in Thomas Davenport’s “Competing on Analytics”. Would you consider…Read more >>
- There are times when deploying advanced analytics initiatives can feel like you are in a…Read more >>
- After our last A4B “War Stories - Data Analyst Down”, we asked the keynote speaker,…Read more >>
- The truth is that there are many factors and forces at work that help build…Read more >>
- While I’m not sure this statement is true when referring to people, I really believe…Read more >>
- As I observe and read about the raging fires causing massive destruction, I have been…Read more >>
- After our last A4B we asked the keynote speaker, Anthony O’Neill (Director, Analytics Centre of…Read more >>
- The science and psychology to get the 'Bikini Body' you have always wanted (with Predictive…Read more >>
- The reasons behind, and some hints to help you during difficult conversations and challenging situations!Read more >>
- When you start with Analytics you might feel overwhelmed, you have all that incredible power…Read more >>
- Preventative and Conditional Maintenance are often mistaken with Predictive Maintenance. This animation gives you an…Read more >>
- Reports from the insurance industry consistently highlight that the quality of customer experience remains the…Read more >>
- Unlike the consumer sector, manufacturers have been using IoT for years. Properly focused IoT capabilities…Read more >>
- The World is going through the Digital Revolution. What does it practically mean? Well, it…Read more >>
- Does your organisation struggle with understanding how to use analytics? These days it is not…Read more >>
- As a CEO, it’s important that you not just have some good one liners to…Read more >>
- Predictive Maintenance, the modern approach to maintenance that maximises productivity while reducing overall costs.Read more >>
- It is a truism that business need to win new customers and retain existing customers.…Read more >>
- Oil and Gas companies are borrowing from data rich industries to transform their maintenance procedures.…Read more >>
- Will the reign of terror ever end? Can we fight ISIS? Here are the tangible…Read more >>
- Answers to key questions and tips for creating a clear strategy to deliver Big Insights…Read more >>
- More often than not predictive analytics projects represent unfulfilled potential. Is your next project doomed…Read more >>
- Using asset specific data to predict where, when and why a specific asset will fail…Read more >>
- Can one of the most common applications in Retail sector (Market Basket Analysis), determine Next…Read more >>
- With the explosion of Big Data in the past few years there has been a…Read more >>
- One of the most important elements of any data analytics project within any business is…Read more >>
- How many times do you have to be told something before you believe it? Do…Read more >>
- Do you think you are a “good” Analyst? Are there certain traits, attributes and qualities…Read more >>
- Good predictive models take the time and experience of skilled analysts to develop. How do…Read more >>
- We hear that “Data is the new Oil” but how do you extract real value…Read more >>
- Fraud in organizations can be epidemic if not curbed at the inception. According to a…Read more >>
- Were you ever faced with identifying insights from open ended text data? From call center…Read more >>
- The Irish playwright was on the money - no matter what way you look at…Read more >>
- There are two certainties in life, death and taxes. This proverb rings true especially for…Read more >>