What Is the Main Reason You Should Invest in Embedded Analytics?
In today’s data-driven world, a well-established and implemented embedded analytics solution is the foundation of any successful business. Regardless of your own software application, by integrating powerful embedded analytics capabilities, you gain a tremendous advantage in managing resources more intelligently, streamlining workflows, and optimizing performance.
The primary function of embedded analytics is to power all analytics tools, such as dashboards and reports to better serve data users. Embedded analytics supplies users with real-time, actionable insights and allows them to make the right decisions on all levels and in all departments, from sales and marketing to product development, budgeting, and even HR. With an embedded analytics solution, all your users can dive deeper into data, spot key trends and patterns, and predict outcomes to make more precise, intelligent, and confident decisions that will benefit the organization in the long run.
Contextual data helps reveal where and how processes and decisions can be improved and optimized for maximum performance and profitability.
Embedded Analytics ROI
Return on Investment (ROI) is a popular financial ratio metric that is used to evaluate an investment’s profitability. It is typically calculated by using this simple formula:
(Net Profit / Investment)*100
In the context of embedded analytics, an embedded analytics ROI is the tangible contribution of the solution to a business.
How to Measure the ROI of Embedded Analytics?
You can measure the ROI of embedded analytics by testing your users’ data maturity – did more of your business users start understanding the information presented in dashboards and reports, have they started creating such on their own, and have they started guiding their decisions by data insights?
Often, this would be enough to determine that your investment was worth it. However, here are a couple of ways to measure the ROI of embedded analytics that are more straightforward and can provide you with numbers:
This method of measuring the ROI of embedded analytics covers how and how often your users are using your analytics products/services. You can easily generate and analyze this data once you already have an analytics solution in place.
Example: Let’s imagine you have property management software and recently introduced BI capabilities as part of your suite of features to help customers easily analyze data regarding their vacation rental units. With the data that you can generate about how many of your clients have started to actively use the analytics capabilities, you can use this formula to measure ROI:
((Value per active user * users) / cost of embedded analytics solution) *100
*You will need to attribute a monetary value to each user.
By using KPIs such as NPS (net promoter score) or CSAT (customer satisfaction score) with customer value, you can better attach a dollar value to each incremental point when measuring the ROI of embedded analytics.
You can do so by using the following formula:
((Customer value * new NPS/old NPS) / cost of embedded analytics solution) *100
So, you’ve embedded analytics into your app, and your users are actually using it to drive their decisions. Great! Next comes the question of whether that’s working. Here’s how to check:
Example: Let’s say that the sales of your retail store have dropped, and your team decided to test a new selling strategy that is based on historical and real-time data. For the purpose of the example, let’s imagine the strategy was a success, and it resulted in +16% more sales. You can use that data to measure the ROI of embedded analytics for your retail business.
((Revenue of data-driven initiative) / cost of embedded analytics solution) *100
Other Benefits of Embedded Analytics
Ultimately, embedded analytics tools and technologies empower end-users to quickly understand insights and information presented in a dashboard. The analyst’s goal is to create dashboards that are informative and user-friendly so anyone can dive in and understand the story quickly. Providing various options to slice and dice data enables consumers to gain deeper insights.
Another one of the benefits of embedded analytics is that it helps keep teams on the same page with a centralized place for all business data where everyone can find the data they need when they need it.
Other benefits include increased workflow productivity and efficiency, improved business performance, strengthen competitive advantage, and more. A good embedded analytics solution will also offer white-label analytics capabilities allowing you to match all elements of the embedded analytics solution to your unique brand theme for a better customer experience.
Last, but not least, embedded analytics allows users to explore the full data set in a secure data environment, boosting users’ confidence to extract actionable insights they need to drive their decision-making process.
Embedded Analytics ROI Conclusion
So, this is how you can measure the ROI of embedded analytics for your business when you are investing in such a solution. However, keep in mind that your product/service users are also making an investment when they purchase your software product, including the integrated analytics capabilities, so they would also measure the ROI for their business as well. With this in mind, make sure that you invest in an embedded analytics solution that provides real value for all data users – both internal and external. Look for things such as:
- Purpose-built embedded analytics solution that integrates seamlessly into your user’s workflow.
- Modern architecture and native SDKs utilize the specific features of each platform and provide a superior user experience across all platforms and devices.
- Analytics features and capabilities like self-service, white labeling, dashboard linking, drill-down, data blending, in-context editing, etc.
- Advanced analytics features and capabilities like machine learning and AI, data mining, forecasting, calculations, and statistical functions.
- A truly native mobile app that covers the entire app experience, including dashboard creation, editing, and sharing.