Posted on: May 14, 2021 | 2 min read

Ways to Measure the Value of a Data and Analytics Strategy

One of the top reasons why businesses are hesitant to launch any new initiative is because they do not know if they will receive the return on investment (ROI). We see this all the time with our cloud or data and analytics strategy engagements. Companies have previously been burned by consulting groups after spending thousands of dollars, hundreds of hours, and all they feel like they receive is a stack of papers at the end.

Ensuring you have an action-based roadmap in place and are leveraging a partner that can help build the resources that they recommend are two major ways to avoid strategy consultant burnout. Nonetheless, strategy is not an overnight thing, but there are ways to measure the inputs and outputs to ensure you are reaping the benefits.

Soft ROI or value-based outcomes are qualitative. These facts revolve around the intrinsic benefits outside of quantitative or monetary value. Examples include employee retention, product improvements, and customer satisfaction. These are all things that can potentially have metrics associated, but the value is beyond just the quantitative number associated.

While there are tons of calculations to reach hard ROI, the equation is Return/ Investment. In business, most initiatives have an initial investment associated. The return, however, may take longer to comprehend.

For example, data literacy is the ability to comprehend concepts related to data. There is no immediate valuation you can put onto an employee for their ability to read a dashboard, for example, but the value can come out in diverse ways. Tip: Review How to Equip Your Workforce for a Data Science Initiative, with this blog. From an investment of $5,000 for the team, you see a dollar amount increase in total sales, increase in self-service (time saved), and decrease in hours (payroll) associated with your IT (Information Technology) team translating reports. These elements can take form into hard and soft ROI.

If you are considering a strategic engagement and are hesitant on if it will reap value – simply ask the strategic partner about ways that they have calculated value for other clients. Especially in a number and fact-based function, it is always on the mind of consultants like us.

Get more details on Ways to Measure the Value of Data and Analytics Strategy, including a breakdown calculation in this Learning Brief. Otherwise, contact a team member at info@ccganalytics.com to get started with a data and analytics strategy today!

Written by CCG, an organization in Tampa, Florida, that helps companies become more insights-driven, solve complex challenges and accelerate growth through industry-specific data and analytics solutions.

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