Is the Data Business Case like choosing to go to University?

New use cases make producing a business case easier for modernising your Data Platform

A business case for a new Data Platform is notoriously difficult to produce as hard evidence of benefits can be elusive.

Perhaps, because modern Data Platforms are embedded in operational business processes and have decision-making or revenue generating responsibilities, this difficulty will disappear.

What could this mean?

To produce a business case for a traditional Data Platform you are left looking for savings from the replacement of expensive legacy equipment and licenses with cloud infrastructure, and operational benefits from improved decision-making. Equipment and licence savings alone are usually too small to justify the investment and it can be difficult to pin an accountant down who would agree bankable benefits from improved decision-making. How can we count how much better the business would be with better decisions? How many fewer mistakes we might make, and what are the costs to clean up after making mistakes (and the opportunity cost involved)? And this is assuming that managers are willing to share details of mistakes they have made in the past which would be shared with senior management in the capex committee.

Some organisations can measure the benefits of decision making in monetary terms. The problem is that you need a mature data ecosystem: this implies that you have already built a new Data Platform. An immature organisation will be unable to measure the value that maturity will bring. Thus, trying to produce meaningful payback figures for an investment committee can be a painful ‘Catch 22’.

An interesting analogy is to compare the business case for Data Platforms with the question “did you need a business case to decide whether to send you child to university?” 

A university education is clearly a huge investment, but its value is really a matter of belief.As a parent, it is a lot easier to see the value if you have been to university, because you will have experienced the benefits yourself.If you haven’t been to university, you have to take the benefits on trust.

Generally, we either believe in the value of a university education or we don’t.We do not do a business case.It is easier to see benefits for vocational subjects such as medicine or data science because the link to well-paid work is clearer.But for most the business case is the belief that on-average a graduate will be better off as a result of going to university.

So how do organisations justify an investment? We can appeal to the good nature of the investment committee with the message that “everyone else is doing this and so should we”. This relies on belief that “data” will deliver: perhaps not a suitable basis for business decision-making.

It is possible to make a case, even if your organisation lacks the maturity. Here are a few ideas:

• Find case studies of decision-making (positive or negative), preferably internal that illustrate the points being made and provide evidence of the monetary impact.

• If you have top executives who recently joined from outside and they have seen data benefits elsewhere, co-opt them to become willing champions of the cause, providing support against nay-sayers in the investment committee.

• Pilot a low-cost, low-visibility new Data Platform that can be delivered off-the-radar.Plan for early success, and recruit managers who would be keen to work with an extended Data Platform. Use this as evidence to support an informed business case.

Today Data Platforms are used for more than decision making. There are new and emerging use cases such as data science, automated decision-making, robotics or creating data-driven revenue streams. These are more tangible and are often linked to wider strategic objectives that already have approved business cases, and being strategic, the benefits are usually substantial.

By linking the Data Platform to these kinds of initiatives and by showing that these initiatives could fail or under-deliver without the new Data Platform the case can be made for a properly funded investment. No senior manager wants to hear that their strategy can’t be delivered because their Data Platform isn’t up to it, especially if they are a year or two into delivery. The secret is to get the business in early while the business still has discretionary funds to spend on the Data Platform and to convince the strategy sponsor that a new Data Platform is an essential part of delivery.

The discipline of the business case is vital. We produced a free white paper talking about how to write a business case for Business Intelligence to help. 

Don’t get left behind while other competitors start accelerating ahead.