Quantifying the customer percieved value of business intelligence software products
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The global market is focused on analyzing the product development and manufacturing costs. However, companies pay less attention on identifying what is important for the customers and how much it costs to attend to the needs of the customers. Identifying the costs fulfilling the needs of the customers results in understanding on customer profitability. Customer and product profitability information is crucial for the success of a company. Thus, companies need to perform customer profitability analysis on routinely basis which is facilitated by business intelligence software products. The objective of this thesis is to discuss the benefits and importance of customer profitability information and to quantify the customer value of customer profitability information provided by business intelligence software products. This study is based on a startup company selling business intelligence services for small and medium-sized companies, typically out of reach for large business intelligence software solutions. The offering of the case company makes it possible for more and more companies to access business intelligence solutions needed to remain competitive and profitable in the market. This study shows that the quantification of customer value of a business intelligence product can be achieved by three approaches: (1) increase in sales, (2) reduction in costs, and (3) both. In addition, the framework gives companies a tool to observe the changes in customer value achieved through increase in benefits and reduction in sacrifices a customer makes while buying a product or a service. This study is limited to above mentioned three approaches of increasing the value of a business intelligence software product aimed at small and medium-sized companies.