Reasonable costs for CI/BI operations

[Marcus Emne]

All,

Just as one might say that marketing spending around 5% of total revenue or R&D could have another X% of total revenue, what would u say would be feasible for CI/BI activities as a percentage of total revenue (or whatever metric you prefer) for a high tech company selling consumer goods through external distribution? Or if you have ever used any ROI calculations to get the budget you need for CI/BI operations, such as improved efficiency, OPEX cut etc. and in numbers.

Best regards,
Marcus

[Marcus Emne]

Robert,

Thanks, it fit in to my own assumptions where I assuem that a span from 0.01% to 0.5%, determined by industry and maturity of business, as a feasible range.

BR,
Marcus

[Jens Thieme]

I would be very careful to restrict or direct any CI operation on a ratio like percentage of whatever.

As much or less as most companies measure the true impact of smarter decisions through CI or any theoretical loss when axing the CI unit in an economic down turn - the value of any business function is proven (or not) by the maturity of functions using, needing it or (on contrary) not even noticing its absence.

Saving your company tens of thousands of hours because your marketers don't google the business news anymore as it is served to them in digestible taxonomy matching their KIT's can be as much a valuable CI asset as providing crucial raw material intelligence in defense of pricing positions. The bottom line impact can be measured (at least as a theoretical figure) fairly simply and thus supporting any investment in CI as long as it pays back a multiple of its incremental cost.

On top: there are business models that are outright intelligence operations in themselves and others that only need very simple basics. Even with your well defined segment Marcus, I would not be surprised to find significant differences in CI org sizes and budgets among peer players there and yet: it all boils down how well the CI investment pays back in the long run.

[Marcus Emne]

Guess your spot in when stating that CI operations are divers in its nature and that return may be recognized in many ways. The reason why I raised the question in the first place was to get some benchmark figures on total spending of CI, secondly I´m interested in knowing more about how other companies think of ROI when it comes to CI. At the end of the day it is the CFO and the executive board that set the budget and if you can’t argue the value of the cost, the ax may fall. So again, seeing CI as something that both provides the organization with decision based facts (in the right format, to the right person, in right time etc.) could be seen as an activity to decrease a risk premium and a window towards business opportunities and development. That risk premium could be translated into $. Secondly good CI operations would bring time efficiency to the organization, hence save time, hence $. That would sum up to my denominator in a CI ROI.