Achieving Big Business Value from Big Data Initiatives

August 13th, 2019

ROI.
Risk reduction.
Cost savings.

Ask 3 different people what their idea of business value means and you’ll often get three different answers. When you’re trying to implement an enterprise-wide data hub, it’s often necessary to show value early and often but how can that be easily done when there are multiple stakeholders?

To justify the investment, it’s critical to show how your new data hub will meet the goals of IT, Finance, and any other departments involved in the initiative. By accurately measuring value, your project will be poised to cut costs, generate revenue, and radically transform the business.

Join Rick Karl, Zaloni’s VP of Value Engineering, as he shows what’s needed when trying to highlight the value an enterprise data hub can provide to an organization.

Topics include:
– Challenges in demonstrating business value for complex data initiatives
– How to perform a business value assessment for modern data efforts
– Making the business case that aligns IT and Finance objectives

Ready to increase your business value from your big data projects? Request your custom demo today!

Read the webinar transcription:

[Brett Carpenter] Hi everyone and welcome. We’re going to give people a few more minutes to not quite a few minutes but a little bit more time for more people to join. So sit tight and we will be right with you. All right. I think that’s pretty good. First off, everyone. Thank you for joining today’s webinar, achieving big business value from Big Data initiative. My name is Brett carpenter, I’ll be your emcee for this webcast. Our guest today is Zaloni’s, Vice President of Value Engineering, Rick Harl. Now we’ll have time to answer all of your questions at the end of the presentation. So don’t hesitate to ask them at any point using the Ask a question box, that’s located just below the player window. Before we begin, I’d like to briefly touch on for the slide here briefly touch on who we are and what we do as a loading helps enterprises, drive competitive advantage by cataloging, and enriching and actioning data for rapid business value. By utilizing the learning data platform to create a unified data supply chain. Businesses can be more agile and move rapidly to the cloud, by providing their business users. Self Service access to trusted data and delivering fast time to value at scale. Now with that, I’m going to turn it over to Rick, to talk about what’s needed to effectively measure business value from your big data projects, Rick.

[Rick Karl] Thanks Brett, good morning, Good afternoon, everyone. This is Rick Karl with Zaloni. Thank you for joining us today. It’s gonna fall off a little bit on what Brett just said, in terms of how we prepare data for end users because it truly is the end users that are the ones that generate business value and business value is really what we’re going to talk about today so what is Zaloni, again, following up on what Brett said we’re really a data management platform. We can ingest massive amounts of data. Both structured data and unstructured data from really any source, we ingest it. We apply some data cleansing tools. We can master all that data, do all that while maintaining Daniels data lineage for future use. And that but i think is what we do in a nutshell. But what, what’s the purpose of all that. And the purpose is to provide business end users. Self Service access to trusted data and self service I guess is kind of a key word there, because the people using the data are the ones again that are going to generate value in any way that it’s measured and we’ll talk about various ways that data is measured. That might be from a revenue standpoint, increasing that from a cost savings perspective, or from adherence to some type of learning towards compliance issues so that’s probably as technical as we’ll get today. Because prevalent talk primarily about how to measure value why it’s important, and the means with which you can accomplish that. 

So, I’m going to move on here. And so it’s talking about the, the agenda a little bit. Today we’re going to talk about what is business value. And what is a business value assessment primarily. Why is it difficult to measure value. Why do some companies find that so incredibly hard when it sounds so simple. And when it comes to Big Data projects or Big Data initiatives. Why is it exceptionally difficult sometimes to measure it after the fact, or even before starting the initiative. We’ll talk about ways to mitigate some of the difficulties there and to make it easy for you to measure business value and how it can help, quite frankly, So we’ll talk about the challenges of measuring business value. We’ll talk about what business values your, your data initiative can deliver. And we’ll talk about how to perform an effective assessment, you’ll hear me talk about a business value assessment, also known as a BVA. And what that is and how to perform that it was only methodology that we use to perform the business value assessment, and then we’ll have time for questions and answers and be happy to take any of those that you have, at that point, but let’s just talk about business value a little bit before we move on, 

Business value can be both tangible and intangible. It can be quantifiable, and generally usually is. Sometimes it’s not. And sometimes business value is kind of difficult to to quantify, sometimes it’s a qualification of things. Sometimes it’s just the kind of an insurance policy for an organization. And sometimes it’s, it’s a measure that is difficult to put onto a spreadsheet. But nonetheless, very important to an organization so that’s why it becomes somewhat difficult to measure business value unless you’ve done it before many times and Zaloni and team have done business value assessments for many organizations, and we look forward to doing one for you 

(6:48: Business Value Types)

So let’s move on to one of the types of types of business value can be both economic and strategic and I think that’s very important from an economic standpoint. Certainly, you’re looking at increased revenue, and how do you do that well competitive differentiation, doing something better, faster, cheaper than your competitors and cross selling and upselling customer acquisition customer 360 in numerous industries, new products or services, anything that you can think of really that would increase revenue and the top line growth. And I should stress so really the process that we’re going to talk about today this business value assessment process is applicable to any and all industries. And it just has different twists and different players takes different terms, depending on what business you’re in what industry you’re in. We can talk about decreased costs too and again these not across all industries and all industry verticals, and the primary primarily revolves around improving improving operational efficiency and improving productivity in the organization through better risk management, through marketing optimization, supply chain optimization and that might mean your purchasing and procurement people it may mean finished goods inventory as a raw material inventories, those types of things if you’re in that type of vertical. And it just simply made me in the management of your data infrastructure the money that you spend on it. The money that you spent to initiate new products and new projects rather, and it’s just the type of architecture that you have in place on the final thing I would note is value can be both economic and strategic from an innovation standpoint in a compliance standpoint. That might mean new business models using a different approach to your, your it architecture. It might mean new revenue streams for products and services. It could, it could be innovation or compliance around customer experience I can think about some of the online purchasing. Amazon type websites that are out there. b2c. You can think about the way that that’s changed in the last five years with customer experience is now being just really through the roof in terms of their expectations. It might be around improved product development speed to market really. And sometimes r&d organizations are very very slow and mired in process, and it frustrates end users the ability to get that data to the end users faster, to be able to make quicker decisions is something that customers that companies wrestle with all the time. And the quicker they can get something to patent and get it to market, the more competitive advantage they have against their competition. And finally, compliance. Violence is important, especially in regulated industries. So if you think about banking, insurance, health care, those types of things. compliance with laws and regulations are becoming ever more important as the scrutiny on on these types of organizations as well as social networks grows. So it’s important to be able to comply with all laws and regulations and know you know that you’re doing that, in a cost efficient manner without throwing hundreds of hundreds of people at it, which is something that we’ve seen some of our customers do. So, one is talking about the various types of business value I think that sums it up fairly well. 

(10:00: Challenges measuring business value)

Next, why is it so hard to measure Why is business value hard to measure. Well, sometimes it’s about different priorities. There are different priorities in the organization and I think we all know that. If you’ve worked in or been a part of a large organization, you know that different people have different priorities in the organization they think that one project or one initiative is more important than another. They have some pet projects, what have you. So sometimes difficult to measure priorities because they’re different. And it’s hard to put a roadmap together because there are lots of priorities out there, and nobody knows really what the value of a particular project is going to be. So sometimes those pet projects just surface to the top, and they’re not necessarily the most important project to the organization. Secondly, it’s really important to identify player business goals and metrics to track and determine his success. And that’s why it’s really important to define what your metrics are up front for clarity and to keep your data initiative focused. We’ve all heard about scope creep. We’ve all heard about initiatives that go on and on and on. And that’s kind of hidden the next, the next subject under project we call the project inflation. I would also call it scope creep. But it looks at companies that take on more than they can handle, and I think we’ve all been aware of, or have a friend that’s worked at an organization where there’s a never-ending initiative, it just never seems to hit its goals, it never seems to hit its targets. It goes on and on and on. There are cost overruns and everybody gets frustrated and eventually, the project succeeds to some degree or fails miserably and a lot of money gets wasted and a lot of fingerpointing goes on business value assessment we’ll talk about that a little bit more in just a second. We’ll help build consensus for big data initiative, and what the roadmap should be for those big data initiatives are things that are most important to the organization. And then, in those times we recommend starting small onboarding one line of business perhaps at the time, and focusing on a specific set of use cases or maybe even a single use case and building off those successes that clearly show values. So, the way I like to think about it is to find what your goals and objectives are in terms of your, your data initiative. Pick one or two things that are low hanging fruit that have very high returns to the organization. Get them, get them accomplished in your company, and then celebrate success. So 90 days off with something celebrate success, move on and do it again. So it’s kind of opposite of the big bang theory but a very gradual approach to what can be significant economic benefits to the organization.

(13:00: How to perform an effective business value assessment )

So how to perform an effective business value assessment. Really it’s a two-week process from start to end. So I’m talking about a little bit more about the Zaloni approach to business value assessment, identify a clear sponsor is real afford, somebody with, with whom Zalni can work in your organization. and that sponsor doesn’t have a whole lot of work that they’re taking on when we do the business value assessment we’re essentially talking to or interviewing, having conversations with six to 10 individuals at varying levels in the organization. And our purpose there is to ask very nonintrusive open-ended questions and I’ll go through those questions in just a second. But a clear sponsor that can help with the logistics of those things is very important. We listen intently, to the answers to the questions we ask, we capture the pertinent quotes from all the stakeholders. And that actually is a lot of fun to understand what people say in a, in an environment where it’s simply a couple people, three people from Zaloni and one person from the company in a very confidential situation where we’re listening and writing down the things that they think are most important. And then, in doing that, what do we look for and what we look for consistent themes. We looked for people who said the same type of thing in terms of the opportunities for their company and what they would do differently if they could. And we call those we buy multiple things that people say that are essentially the same. We call those the economic drivers, and you’ll see a spreadsheet or a model of a spreadsheet in just a little while, that talks about what the economic drivers are and how we can then try to quantify what the likely benefit of achieving that difference in the organization will make for really for all the stakeholders that are involved in the initiative. So what are those four key questions. The first one is hey you know what your, your, your business goals and objectives are. And we’re talking with if you can bear with me a second. Let me go back, we’re talking with people that are middle management of the company. People that are power users maybe data scientists so final data or data that’s meant for users. And then we’re talking to a couple of executives of stature in the organization. All asking them the same type of questions and looking for essentially the same type of answers again just set differently. So what are your business goals, objectives, most people can answer that they know what they are. They have been told what they are, they generally part of their performance review. So that’s an easy question. The second one is what are your significant challenges and issues with getting to those business goals, then this becomes a bit of a longer conversation. We’ll talk about the things that are roadblocks for them. The things that they would like to see done differently in the organization type of data that they’d like to get or problems with the current data that they do get, and they’ll really kind of open up the kimono if you will. During one of our interview sessions and really tell us. You know what the problems are that they’ve been dealing with in some cases for years, what they think they would do different if they own the company, and that’s kind of the way we phrase it. The third question is without almost constraints without the problems that people said they had with data or with the lack of data or with timeliness of data, all of the problems that you hear about data sometimes lead some somehow eventually reaches the end users. Without those constraints, what would you do differently. And how would you act differently, what kind of tasks, would you do differently. And finally, if you did those things differently. And you didn’t have those constraints in front of you. And the things around your data the problems that you have around your data has largely disappeared. Oh, that’d be worse in the organization. People generally know the answer to that. They have to think about it a little bit but they know by and large that they spend 20 hours a week, gathering and cleansing data, they know that their friends to cubicles down does the same thing. They know that people in other departments use the same data, but just in a different way and they’re frustrated because the data isn’t good. and so we spend a lot of time talking about the quality of data, and minutes of data, the accuracy of data. And then, what people have to do to gather data and actually use it and then, what they end up doing with the data. When it’s viable when it finally arrives at their desk. So, some tips here involving key stakeholders on the business side note understanding top business challenges and build support for the initiative, and second continually tracking KPIs to measure the actual value versus the estimated value, and use this data to refine the strategy and tweak the roadmap. When we do when we do all the business value assessments, one of the things that comes out of that as a roadmap of what could you do first what could you do second. In terms of big data initiatives. And those initiatives are then ranked by his ability to execute and let the likely value is going to be again a roadmap. And again we look for 90 days success is to be able to build on the success that you’ve gotten early and to do more and more as time goes on without overwhelming the organization. So once you’ve identified what the use cases and types of business value you might want to measure. The next step was trying to put some numbers to date. And again, as I said before it’s not always possible to put numbers on every type of improvement. Some things are certainly qualifiable but not quantifiable when we give an example here, in terms of reducing costs and this is around purchasing and raw materials, and everybody, every organization has issues around purchasing and enroll materials whatever it is that they might, what would what would be the impact of increased discounting for timely payments. What would increase your ability to negotiate payment terms or better payment terms. How could you eliminate unnecessary systems such as the same vendor being purchased or having their purchase orders come from six or eight or different people in your in your organization. How can you centralize that and save money. And then there’s operational improvement and efficiency. How can we improve the download and validation process. How can we spend less time searching for information. And finally, when it comes to most organizations that have to file tax returns and they all do, how do we reduce errors and IRS filings. One of the big hidden costs to most organizations, believe it or not, as most pay penalties every year for misinformation on their tax returns because most large organizations are audited and big. Not a team that spends a lot of time once again gathering data cleansing data, trying to figure out what to do with that data and then ultimately in their case filing their tax return. 

(21:00: Sample Value Assessment)

So wanted to run. Next, the run through just the basic, simple sample value assessment and this is a simple, what looks like a bit of a, an Excel spreadsheet. We’re gonna look at a couple of areas first would be increased revenue. And then this is an output I should say of the business value assessment, but we would look at increased revenue through perhaps more targeted selling, we would match that against what is the pre-tax profit. We will look at other areas of revenue, there are probably multiple areas of revenue that can be achieved through better information and better data. we will look at savings to your organization in terms of staff and employees. I’ve worked with clients quite frankly that I’ve had the opportunity to reemployed dozens of people into more productive roles, people that were generally spending time searching for data and cleansing data that if they had that they could go do something a whole lot more productive and a whole lot more meaningful to them. Again, I’m going to follow up on our purchasing and raw materials. Sometimes it’s easy to find the one to 2% decrease in, and the raw materials that you purchase. And for most organizations, that’s absolutely enormous because a large part of that falls to the bottom line. And finally, one of the areas of savings you might find is in regulatory compliance and risk avoidance. Some organizations pay rather large fines and penalties, especially in banking and health care. If they don’t follow rules and guidelines that are presented by federal, state and local governments. So we’re going to look at that. In terms of increases revenue and savings. Then we looked at your investments in software and implementation. And finally, the Zaloni way is to look at a phased approach to looking at the benefits that you would get we recognize that not all benefits accrue to a big organization all at once. So we looked at the benefits of a particular data initiative or project and we say the organization is going to get to see half of that in the first year, two-thirds of that in the second year, and probably all three thirds are the full amount in the final year or year three, and we generally look at projects over a three year period. So what are the outcomes of the BVA is a customized, and a lot more complicated financial analysis, such as this basic framework, but I think you get the kind of the gist of where we’re going with that. And finally, if you think about the business value assessment, what does an organization want to see in terms of making investment decisions because they’re always competing projects. There was projects that compete for funding, and there is generally limited funding for new initiatives. And so we’ll provide the organization, whatever it needs in terms of what we think the net present value of a project is going to be what we think the internal rate of return of a project is going to be what we think is the number of MONTH payback that a project is going to be, that takes into account things like the cost of capital, the discount rate. Maybe the interest rate the prevailing interest rate at the prime rate. And we’ll look at the total ROI which is really the present value of savings, minus the investment, divided by the investment so there are lots of formulas and things that aren’t important right now but the bottom line is if your organization has a particular way to evaluate new projects, then we’re happy to evaluate them in that manner. We get all those all that data by the way from doing the interviews with the key stakeholders, and by sometimes using external benchmarks, but primarily by talking with people in the organization about what it is they would do differently, and what it would be worth to the organization, finally, 

(25:00: Key Takeaways)

Finally wanted to go to key takeaways. Every day an initiative should have really must have modifiable goals and objectives that are understood and about an attainable. The BVA can help build confidence in how to build consensus on roadmap, and can help build a real certainty in your implementation process that again allows for incremental success and understanding why a particular implementation or a particular initiative is happening at a particular time. The second thing can help do is understand the importance of generating value that is measured and committed to communicating it to the organization that’s really key to success. Too many IP focused projects linger on and linger on and linger on, and they initially, or they eventually I should say they fail because the business value is never measured and never achieved. So on that note I would also mention that we do the business value assessments, before, during, or after a particular business initiative, and sometimes all three. Certainly, before the concept begins. We like to sit down. And again, attend a period in your organization, talking with individuals they’re truly understanding what it is they’re trying to achieve. We like to talk to individuals before a data project begins. We like to talk to people during the status or get the status during an implementation. And after we’d like to go back and measure the success of a business initiative in terms of what were the economic benefits that you got. What did you learn from that implementation. What will you do differently on the next implementation, and how well is this working for you so that we don’t repeat mistakes. Often, very often actually most of the time, projects are launched initiatives are launched, and nobody ever goes back and measures. Was that something that was worth doing? Was that something that exceeded, or even met our expectations? Is that something that we would do all over again. And so that’s again more reasons why it’s important to measure the business value. Finally, we’re happy to use our proven process that we’ve used. I’ve used personally dozens if not hundreds of times at your particular business to help you identify and measure business value. It’s a service that we offer in conjunction with a proof of concept. There’s no charge for that service, and we’re happy to discuss how to customize that service specifically for your organization. So with that, we’ll take questions. 

[Brett Carpenter] So I think we’ve got a few that have come in already Rick. So I’ll just dive right in and again if you have any that you want to ask, just use the ask the question box that’s located just below the player window. For this first question. I know that you just mentioned that the cost is. And there’s no cost associated with BVA but what’s the normal duration for one of these assessments.

[Rick Karl] Oh great, great question. Thanks for somebody for asking that the normal duration is about two days on site. Working face to face with people at a particular company. And those sessions are generally about one hour long, and their one on one discussions with the Zaloni and the employee of the company. So we spend about two days doing that. And then we go away and put a report together. After doing some extensive work in the background and come back with not only a roadmap that we think would be of interest to the company will also first crack ads. We think it would be worth to the organization to embark on that endeavor that whole process takes about two weeks. So from the time that we spend two days on site. We’ll be back two weeks later to go over hopefully with the entire group of people that we talk to, what did we learn what would we recommend as only the organization, and why and what do we think the economic value is going to be so it’s roughly a two week period from start to finish.

[Brett Carpenter] All right, perfect. So the next one is, how, how does a business value assessment differ from a PLC, or a proof of concept.

[Rick Karl]  great question. So when a POC is more technical in nature trying to prove out a particular use case or a set of particular use cases, was use cases can be the things that we talked about during the business value assessment as well. So, if you think about the split effort, one on the business side to say hey what’s the quantifiable value of the use cases that we’re looking at in the PLC, that would be one part of the effort. The second part would be the actual proof of concept itself to show that the zaloni platforms ZDP is capable of answering the questions and tackling the issues at hand. So, one side business one side technical proof, if you will.

[Brett Carpenter] Alright, looks like. Another one is, how can I measure my actual ROI. After a project is complete.

[Rick Karl] Sometimes its important to have a baseline. And if you don’t, that’s not a problem. After a project is complete, what we typically do is what’s called a backward looking BVA. So the BVA is conducted after the fact. And we talk to people kind of in the same manner and say hasn’t happened that used to be. And then how is it now what are you doing differently than you did before, because you’re now an end user of trusted data. What are you doing differently than you were doing the floor, how does that impact in your work and your workflow, and what things are you able to do differently that you believe benefits the company so we would go back. And again, talk with power users of the data. People that provide the data. Anybody that is really interested in progressing the organization’s economic value through the use of better data and talk to them about what’s different. And we’ll be able to measure from where they were to where they are and present those numbers as an economic benefit or business value. 

[Brett Carpenter] Okay, so it looks like we don’t have any more questions right now. If you’re watching this and have a question, later on, feel free to reach out to us and we will definitely get an answer for you. But for now, I want to thank all of you for joining this presentation for Rick for taking the time to speak with us about what it takes to really measure the business value that your big data initiatives can provide. This presentation will be available on demand. And the slides will be available in the Attachments tab. That’s also located just below the player. Now with that. Thanks again and we will see you next time.