By Juan Nunez, Director of Data & Analytics

This blog is the first in a series of blogs where we look at how leading digital companies leverage analytics.  Look for the remaining posts in the coming weeks.


Consider the Change

Begin by asking, “What is changing and what are the impacts?” Many factors can drive change. Business demands may lead to updating the pricing strategy, customer feedback may require a different type of engagement and organizational change can drive the need for process optimization. Whether researching the introduction of a new product or service or the optimization of a process, the nature and source of the change should be explored. Deciphering the context in which these changes will or have taken place, can provide an understanding of its impacts. With this information, the approach needed to measure or predict impacts and the data requirements start to take shape.

Deciphering the Context

Clarity around the context and the impact of the changes can be gained by focusing on the company’s business and operating models. Breaking down their components enable thoughtful consideration of data collection and analysis approaches that can be useful in practice.
Assess the business model: Ask yourself how the activity at hand impacts the ways that the company services its customers or makes money. Does it create new offerings or generate new revenue streams?
Consider the operating model: Will the current operating model support the new activities or does it require a new or updated operating model?
Measure in every stage: Analysis plans should be created for the various stages of an initiative. Consider market-level analysis that can be performed before, during and after the business model and operating model changes take effect. How will a new offering be priced? How will success be measured? What are the measurable impacts on the operating model?
Below are sample questions that can help ground in the business context and describe the impacts of change on the business and operating models.
Armed with an understanding of the business context and the potential impact of change, business leaders can set out to define the analysis approach and data requirement to support it. In the next installment of our Deciphering the Analytics Hype series, we will dive into the definition of practical analytics approaches based on the context of change.

The Idea in Brief

A company’s business model combines how value is created for its customers and how profit is driven from delivering that value.
Operating models evolve to streamline the delivery and execution of the business model and is by design resistant to change.
Market and internal data are critical in the definition, operation and measurement of the effectiveness of a company’s business model.


The Idea in Practice

Understanding business and operating models, along with their interrelation constitutes a critical component of leveraging analytics to the fullest. A series of factors should be considered as decisions on data collection and analysis are made. These will ensure that data is collected purposefully and analysis is performed in context, maximizing the value derived from human and financial investments.
Keep in mind:
Business Model:
A company’s business model is made up of the way that it serves customers, the products and services it provides, and offerings and differentiators that make a customer want to engage in business. Another important component is how the company profits from the services it provides (licensing, subscriptions, managed outcomes, etc).
Operating Model:
A company’s operating model evolves in order to deliver on its business model and, as such, it constitutes the part of a company that is most resistant to change. Its structure, organization, processes, and assets work in coordination to serve their customers.