Building the Business Case


Building the Business Case

Uncovering the Needs for Data

Mining in your company

• There may be many places within your company where data mining can be used. The first step in building a business case for data mining is to find an opportunity to use it. Here are the possible locations:

– Poorly executed CRM or Simple Campaign


– Poorly matched Customer Investment to Customer


– Inability to Transition Customers to Higher Value States

Defining the Business Value

• The most important part of the equation in creating your business case will be the definition of business value that you use or how you will measure the value of the data mining project. There are

many ways

to measure the value besides a profit or return on investment:

– Increased Revenue

– Profit

– Decreased Costs

– Return on Investment (ROI)

– Competitive Advantage

– Early Adopter

The Costs

• From the

business side

, the value can be varied and can be measured in a variety of different ways – some of them


others harder to measure and more strategic in nature.

and factual;

• The

cost side

of the equation is more straightforward and its components less likely to change from implementation to implementation

– The Data ( collecting, storing, processing, cleansing, and paying for the data)

– Pricing the Infrastructure (data mining software)

– Pricing the Personnel (Data miner, Web Interface designer, Data

Designer, Project Manager, Marketing Interface and Database Interface)

– Costs to sustain

– Containing Costs: Leveraging Existing Investments