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William McKnight

Hello and welcome to my blog!

I will periodically be sharing my thoughts and observations on information management here in the blog. I am passionate about the effective creation, management and distribution of information for the benefit of company goals, and I'm thrilled to be a part of my clients' growth plans and connect what the industry provides to those goals. I have played many roles, but the perspective I come from is benefit to the end client. I hope the entries can be of some modest benefit to that goal. Please share your thoughts and input to the topics.

About the author >

William is the president of McKnight Consulting Group, a firm focused on delivering business value and solving business challenges utilizing proven, streamlined approaches in data warehousing, master data management and business intelligence, all with a focus on data quality and scalable architectures. William functions as strategist, information architect and program manager for complex, high-volume, full life-cycle implementations worldwide. William is a Southwest Entrepreneur of the Year finalist, a frequent best-practices judge, has authored hundreds of articles and white papers, and given hundreds of international keynotes and public seminars. His team's implementations from both IT and consultant positions have won Best Practices awards. He is a former IT Vice President of a Fortune company, a former software engineer, and holds an MBA. William is author of the book 90 Days to Success in Consulting. Contact William at wmcknight@mcknightcg.com.

Editor's Note: More articles and resources are available in William's BeyeNETWORK Expert Channel. Be sure to visit today!

Below are some learnings and tips on BI/DW ROI from Neil Freake, Senior Manager of BI/DW at Scotiabank, a client who I had the privliege of presenting with yesterday at the Shared Insights show. The presentation was titled "Providing ROI with Business Intelligence." This was an additional slide so it's here, as promised, for the attendees... and all of you.

- Financial Models need to factor in attrition rates
- Calculating “lift” is often not a viable argument (wholly dependent on assumptions)
- Benefit is based on Profit NOT Revenue (ergo…understand margin calculations)
- Financial Models must be more accountable when defining costs (i.e., SOX)
- First Run Cost Estimates are always off +/- 25%
- Payback Calculation – two camps
- Cost Camp: begin to calculate as soon as you incur costs through cumulative life of benefits
- Benefit Camp: Calculate payback after project has been implemented (Not recommended or realistic)
- Soft Dollar benefits are easier to argue / more difficult to prove
- Hard Dollar benefits are rare, more difficult to argue and almost impossible to prove.
- Most organizations use a 10% interest rate when calculating NPV
- How well you define your assumptions will dictate how well your model stands up to financial scrutiny
- Every financial model has weaknesses (highly subjective)
- Would have to be in a lab to prove benefits
- Double dipping benefits – most common error in business cases (who has the right to claim a benefit?)
- ROI is purely an internal (and sometimes external) marketing tool
- The higher the dollar amount the more scrutiny your project will face


Posted August 17, 2006 12:35 PM
Permalink | 1 Comment |

1 Comment

Great points! One of the best signs that you should focus on an area is some clear measures that everyone agrees will improve the bottom line it they are improved. Then you don't need to calculate the bottom line improvement, just the improvement in the measure.

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