Now that you know how to assess the true ROI for your software investment, and you understand the importance of defining business value, let’s look at how you can apply these principles to ThoughtSpot.
I recently took on the challenge to ensure the ThoughtSpot sales team had strong ROI scenarios. These are real-world customer stories that our prospects can use to help justify making a purchase decision—a decision that I believe is one of the most significant investments for the future of your analytics and BI strategies.
But before a business can create a tangible ROI calculation, they first need to assess the business value. If the buyer is able to determine a positive business value that justifies a tech purchase like ThoughtSpot, an ROI calculation can then help support that decision. Let’s take a look at these steps in action.
Here’s how to assess the value of ThoughtSpot for your business
By applying the standard value assessment framework from the last article to ThoughtSpot, we created the questions below.
Now that you have a great list of questions to determine the business value of a technology like ThoughtSpot, let's answer each one in more detail.
Tech fit:
ThoughtSpot works with any major cloud data platform or warehouse. As the only AI-Powered Analytics provider in the experience layer of the modern data stack, ThoughtSpot can serve as your main analytics tool or complement your existing BI tool or process.
Business value:
For this step, you need to analyze which parts of your business might benefit from self-service analytics—the ability for non-technical users to search data, drill down, and find actionable insights. Of course, ThoughtSpot doesn’t put that burden on you. We conduct use case workshops that help teams and entire departments understand how they can leverage data to make data-driven decisions and discuss what other positive impacts that might have on the company.
Pro tip: Ask your account team to conduct a ThoughtSpot Use Case workshop, or if you don’t have an account rep yet, schedule a meeting with a member of our team—you won’t look back!
People:
Did you know that only about 20-30% of organizations know how to interact or engage with traditional BI tools? Our leadership team repeatedly reiterates that our mission is to democratize data-driven decision making for everyone—not just the data savvy. And that is exactly what we have done for thousands of customers—some of which tell us they have 100% of their people making data-driven decisions on a daily basis.
A Harvard Business Review Survey found that 87% of respondents say their organization will be more successful when frontline workers are empowered to make important decisions in the moment—is your organization among them?
Time to Value (TTV):
Do you have a cloud data warehouse? Do you have well-structured and usable data in it? Does your data team have time to connect to your data so we can do a Proof of Value (POV), and you can start seeing the real benefits of ThoughtSpot for yourself? Our TTV is one of the best I’ve seen in the tech space. The fact that customers can connect their data and start seeing value in a matter of weeks is an amazing testimony to our dev and professional services teams.
See how easy it is to connect with the following data warehouses and platforms:
Time to obsolescence:
Every analyst and BI expert I talk to says the same thing about the future of this space: “The world is becoming consumerized and highly contextualized—so must analytics and BI.” As data volumes grow, businesses have the opportunity to monetize their data, but first, they need the right tools in place. For the third year in a row, Gartner has recognized ThoughtSpot as the most visionary pure-play analytics and BI tool in the Magic Quadrant. Because we’re solely focused on delivering value and innovation to the experience layer, the ThoughtSpot team is constantly soliciting customer feedback, iterating, and rolling out new features to serve the needs of our community.
Speaking of, have you seen the new features rolled out in ThoughtSpot Sage?
Scalability:
We often state that “ThoughtSpot was designed for the BI needs of large, modern organizations.” But what does that mean, exactly? Here’s the two big takeaways:
For one, we have customers using hundreds of billions (!!!) of rows of live data with ThoughtSpot every day—we’re built to handle big data at high speeds.
But what happens when you need to add additional users?? This is where I believe that traditional BI is broken, and this is the second reason why I believe no customer will outgrow ThoughtSpot: we don’t charge by user - we charge by query.
Determining the ROI of ThoughtSpot for Your Business
So, we made it! You’ve determined that ThoughtSpot is a good business fit, and now we can confidently have the ROI conversation.
In my exploration of impact, benefits, and calculations, I came up with four of the most common scenarios our customers care about:
BI report growth and headcount offset
Average cost of building a dashboard
BI tool license cost reduction
Productivity improvement scenarios
These four scenarios have a significant impact for ThoughtSpot customers. To offer a glimpse into the kind of impact I’m talking about, let’s take a look at my favorite scenario: BI report growth and headcount offset.
BI report growth and headcount offset ROI
As organizations realize the value of forward-looking or real-time insights vs historical or hindsight-oriented analytics, they start to see some amazing benefits. However, if that organization is using traditional BI approaches, these real-time reports create new demand and pressure on data teams—pushing the limits of their time and resources. Hello backlog.
So, how do organizations usually respond? They either add more data team headcount or bring in contractors to mediate backlog and decrease time to insight. But it’s not sustainable.
Demand for data continues to grow. Many of our customers tell us that experiencing a 20% demand growth year-over-year is a conservative estimate. Depending on the size of the organization, that may mean adding 1-10 new data team members every year.
Self-service BI is the solution, and ThoughtSpot has the user experience to turn this idea into a reality. A Forrester study found that teams who implemented ThoughtSpot saw an average 70% reduction in report creation”.
Let’s explore how this ROI translates in a real-world scenario
A 15-person data team handles 500 report requests per month, with each report taking a conservative average of five hours to load, prep, and visualize the data. Each team member works eight hours a day for around 220 days a year. Given their number of available hours, this team has a forecasted backlog of roughly 720 reports a year.
15 people x (8 hours a day x 220 days per year) = 26,400 hours
5 hours x (500 reports per month x 12 months per year) = 30,000 hours
26,400 hours - 30,000 hours = -3,600 hours = 720 report backlog in year one
Now, let’s apply that annual 20% growth metric to the number of reports requested per month:
Year two: 600 reports per month = 1,920 unfulfilled reports
Year three: 720 reports per month = 3,360 unfulfilled reports
Year four: 864 reports per month = 5,088 unfulfilled reports
This is not looking so good. So, you start looking for solutions:
Can they reduce the average time required to generate a report? Maybe a little, but not enough to offset the backlog of 5,000+ reports.
Can they ask people to stop asking for reports? Not likely.
The team is left with the only thing they can do to cover this increase in demand for reports—add more headcount.
Based on the backlog numbers we calculated, here’s how many additional full-time employees (FTEs) the team would need to add in order to keep up with demand:
Year two: 5.5 additional headcount
Year three: 9.5 additional headcount
Year four: 14.5 additional headcount
At a conservative FTE cost of $120,000 per year, this organization would have to come up with an additional $3,540,000 in staff budget over the next three years to keep up with the demand in reporting. I can’t make this stuff up—it’s straight math and it’s scary! This is the problem with the traditional BI approach in an era with increased demand and growth in data value.
How does ThoughtSpot help organizations keep up with backlog and report demand?
Remember the Forrester survey that stated ThoughtSpot yields an average of a 70% reduction in report creation for our customers? Let’s say we take a conservative approach and calculate an extremely modest 30% reduction in report requests. Guess what, backlog begone! At just a 30% reduction in the 600 anticipated monthly reports in year two, this 15-person data team meets the increased demand with NO backlog! The same for year four and five. But I saved the best for last…
By not needing to add headcount in years two, three, or four, this customer projects a 3-year FTE savings of over $3.5 million (hard ROI). They also free up extra time for the existing 15 data team members to take on more advanced projects with their increased productivity savings (soft ROI).
I’ll be honest, when I first arrived at these numbers, I had to double and triple-check myself as I couldn’t believe this kind of ROI was achievable. But it is, and ThoughtSpot is helping hundreds of customers achieve this type of ROI. It’s one of the best ROIs I have seen in my entire career, and it is well-worth the time to explore what it means for you.
See this scenario played out in the real-world with Wellthy.
How does ThoughtSpot help businesses monetize data?
For business leaders and product managers alike, data monetization is another important consideration when factoring ROI. When used strategically, your company’s data can be a revenue-generating powerhouse.
By embedding analytics into your product, you can:
Increase adoption
Reduce customer churn
Add additional revenue streams
Find savings on technical costs and resources
ThoughtSpot Embedded helps companies quickly embed analytics into their data products to capitalize on all the benefits listed above. Just look at how MDAudit, a leading healthcare technology platform, embedded ThoughtSpot’s AI-powered analytics technology into their new Enterprise solution to increase new logo growth by 25% in the past year alone.
Start achieving real ROI with ThoughtSpot
I am a fan of action—there is no sense waiting until you find yourself buried in backlog or squeezed by the increased demand for reports and data insights. You know it’s coming. Here are three actions you can take to get ahead:
Take a look at your open headcount and calculate if those roles will be enough to offset the forecasted demand for the data team. If these are net-new headcount, I would suggest you pause on hiring until you take the next step.
Calculate your ROI with a member of the ThoughtSpot team. We’ll double- and triple-check the math, ensuring you have all the answers you need to make an informed decision about your BI and Analytics investment.
Calculate your data monetization ROI. We recently created a digital calculator to add up potential revenue generation and cost savings of embedding analytics into your app with ThoughtSpot Embedded. Try it here.
Thanks for sticking with me on this ROI journey—I felt it was important to share this with our community. I know just about everyone today is trying to figure out how to handle the future of BI in the most supportive, innovative, and risk-free way possible. I firmly believe that ThoughtSpot can solve these challenges for everyone, and better yet—we have the data to prove it.
