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Examples of Defining Business Value for BI and Analytics Initiatives

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Research Publication Date: 26 September 2011 ID Number: G00218934 Examples of Defining Business Value for BI and Analytics Initiatives Bill Hostmann There are different ways of measuring the business value of business intelligence (BI) and analytics initiatives. The definition of "business value" depends on whether it is being evaluated by IT or the business organizations. The business values cited by the top 10 finalists in the 2011 Gartner BI Excellence Award program are used to provide examples of a model defining the dimensions and categories of business value. Key Findings The measures of business value for BI investments must be defined from an IT and a business perspective. The measures of business value are…show more content…
To the business organizations, investments in BI information and technology are necessary, they're enablers, and they contribute to delivering business value, but not the end measure of value. The business measures of BI value are necessarily stated in business (rather than technology/information) terms and include statements regarding BI investments that contribute to the organization's performance visibility and alignment, agility and efficiency of making decisions, or level of business transformation enabled. The business value of software and associated skills/service investments is the sum of both tangible and intangible business values. "Business value" means defining a mix of both quantitative as well as qualitative dimensions. Most business cases rely heavily on the quantitative and financial information required for justification, and most organizations building business cases do not wander far from quantitative measures and methods. They often do not put a value on the qualitative/intangible business benefits, partly because IT does not have the skills or process knowledge/intimacy to define and evaluate intangible business value measures. Many quantitative assessments of business value are based on some major assumptions that are not certain. One option is to propose conservative, moderate and aggressive estimates for the business value. There are different ways of measuring the business value of BI, analytics and
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