A Financial Approach to Evaluating Data, Analytics and AI Investments Using NPV, IRR, and WACC
Extracting tangible business benefits from data and analytics projects, including those involving AI, has proven challenging for most enterprises. In 2019, VentureBeat reported that 87% of data and analytics (D&A) projects failed to reach production [1]. In 2022, Gartner found that only 20% of insights derived from analytics translated into business outcomes [2]. Despite various reasons for this low success rate, many firms struggle to build a compelling business case to secure investment in data and analytics initiatives. So, how can one effectively use the right KPIs to showcase the business benefits of these D&A projects?