This is how the ROI discussion used to go...


...This used to be the discussion, but not any more.  In fact, one of the common requests I get from clients is for ROI examples they can use to help justify spending on BI and PM initiatives.  Rather than develop a full blown internal ROI analysis,  many companies would prefer to point to the return a similar company, in a similar industry, with similar challenges, achieved as a proof point of the value BI and PM can bring.  However, many of the ROI case studies out there are heavily weighted towards intangible or indirect benefits like faster decision-making, a single version of the truth, or more productive staff.  While these are all important and valuable benefits, in today's environment a case for tangible benefits and tangible ROI is often required to get funding.  This has rendered many of the published ROI case studies ineffective in creating a compelling value proposition.

Let's Band Together!
While vendors will continue to develop and adapt their case studies to the demands for tangible value statements, we can also help each other.  If you have a tangible ROI example I ask you to share it as a comment to this blog.  I'm not looking for detailed case studies rather quick anecdotal stories of real, defined, tangible benefits from PM and BI.  These stories are invaluable in educating others on the value of PM and BI as these initiatives compete for limited funding.  A word of caution to vendors though, feel free to contribute stories about your clients but refrain from using this as a blatant marketing opportunity.  Keep it short, keep it relevant, and quantify the tangible impact.

I will start the ball rolling:

1. Through improved control and governance of the purchasing process, more accurate equipment parts forecasting, and cost management a US military unit was able to reduce inventory cost by $3.5M and operating cost by $2.4M.
2. Through improved operational planning and a more accurate production forecast a mid-sized manufacturing company was able to reduce its inventory by 700 tons resulting in a reduction in working capital cost of $78K per year.  The savings from this one line item offset the cost of the initiative in less than three years.

I'm sure you have your own examples, care to share?  I look forward to hearing from you.