ROI in Data, the Indirect Method

There is much written these days on how to get more value from your data and, most recently, how to achieve attractive return on investment (ROI) in Big Data. Perhaps a better question to ask is, how can data help the other investments you are making across the enterprise to generate measurable business improvements and thereby significant returns on those investments? One specific example is investment in business process improvement.

Business process reengineering, Six Sigma, and business process management (BPM) are disciplines that have been around for decades.  Companies continue to invest in these areas with process owners and teams, green belts and black belts, and BPM tools. After years and years of practice, do the incremental improvements achieved create an attractive ROI? It will be difficult to create a strong business case because the underlying problem to achieving better returns is the complexity and quality of data on which these processes depend.

Over these same decades, and certainly in the recent past, the complexity of companies’ data assets has grown exponentially.  Complex application environments, lack of common language and data definitions across the enterprise, poorly designed databases and data warehouses all conspire to lower the quality and usefulness of data. If an organization does not invest to meet this challenge, how many breakthrough improvements can be expected in process change, not to mention in Big Data analytics? If most organizations look closely, they will likely find that at the core of those seemingly intractable business problems lies a data problem. Yet, the more common solutions to these problems are to improve process, redesign or implement new applications, or to buy tools. If the underlying data challenges are not addressed, you produce inconsistent, untimely, or incorrect information—only faster.  Investing in comprehensive data management and data quality programs will create much higher probability to achieve business improvement ROI. High-quality data will become a great multiplier in business improvement initiatives.

Contributed by Bruce Quade.