The Business Case for IT Analytics: The best-kept secret (no more)
Earlier today, we issued a press release announcing the results of a Total Economic Impact™ (TEI) research study we had commissioned Forrester Consulting to conduct on our behalf. The chart below highlights some of the benefits Forrester identified by interviewing a representative sample of our customers.
While we're obviously thrilled that this study validated that our customers enjoy a 214% Return-On-Investment (ROI), a cumulative 3-year Net Present Value (NPV) of $2.8M, and a payback period of less than 3 months, the implications of this study run much deeper.
Let me explain…
Business Analytics / Business Intelligence is a well-established discipline
Although by most accounts, the business analytics industry is more than 30 years old, I would argue that it dates back to WWII, when Allied forces used these techniques to do everything from optimizing the effectiveness of their artillery, to breaking the German codes used in radio transmissions. Back then, this emerging field was known as operations research. This is an area I know too well, having earned a graduate degree in operations research.
While too young to remember WWII (actually, I was not even born then), I have spent more than half of my career building and delivering analytics solutions to organizations across the globe.
Today, businesses large and small use these techniques to do everything from forecast sales, optimize their supply chains, tweak their pricing decisions and marketing spend, and even plan their human resource needs. This industry has blossomed to more than $50B today, and IT organizations are at the forefront of both procuring, delivering, and maintaining these types of solutions for their colleagues in sales, finance, supply chain, marketing, and HR.
Except for IT…
Unfortunately, this is not true for IT. If you look at most IT organizations today, it is apparent that:
- IT is a true partner to the business: The role of the CIO has evolved from a back-office ‘keep the lights on' function, to a true enabler of innovation that helps their organizations stay a step ahead of the competition.
- IT landscapes are getting more complex every day: The emergence (and coming of age) of the cloud, and the myriads of associated new point solutions and methodologies (think DevOps), is making the CIO's job increasingly more complex. Furthermore, ask any CIO, and they will admit that every single day they're challenged to do more with less.
- But yet, CIOs make do with tools that other functions used more than 30 years ago: When you look at how most IT organizations manage their own business, the technologies they use are the very ones they replaced for their colleagues decades ago. According to research we conducted last year, IT business analytics is rapidly becoming an investment priority for IT leaders, with 74% of them considering it critical. Yet, almost half of them rely on spreadsheets or other informal analytic techniques to manage their IT operations.
What really excites me is that this Forrester TEI study has shown there is a better way. The potential platforms like ours have to transform how CIOs can manage their operations is significant, to say the least.
Let's together drive this awareness forward to help our IT colleagues realize the same value they have been delivering for decades.