In today’s digital era, data & analytics projects play a critical role in the
digital transformation journey for any organization. However, many still
struggle to understand, communicate, and measure the business value of
D&A projects. Understanding and show showing the ROI of any project is
essential to foster transparency with stakeholders and build a strong
foundation that D&A projects contribute value.
What is business value?
Business value, by definition, is a tangible or intangible benefit that can be
realized by the stakeholder of a project. Tangible business value focuses on
how the project affects the income statement, through reducing costs or
increasing revenue. Equally important, intangible value covers productivity
enhancements, key differentiators, and customer satisfaction,
like improving hiring efficiency of an organization. You need to measure ROI
on your data and analytics strategy, but do you actually do it?
It starts by making a paradigm shift in first identifying the business goal and
then regularly linking your initiative back to your business strategy and
outcomes. Many project teams are solely focused on operational
efficiency and therefore they do not any value achieved throughout the
project. Through a well-defined framework, you can begin
to understand the value created, how it adds to the business, and how
it aligns with business strategies.
3 Steps to Show Business Value
1. Understanding and identifying the business vision
The first step is to understand what problem the business needs to solve
and what the business wants to achieve. We used an interview method to
identify who will use the data, when the information is needed, and how
they will engage with the insights. We then understood that the commercial
sales department started a commission campaign for a new wireless
product, and the stakeholders wanted to encourage the sales team to make
more sales of this new product to capture the market.
Through this exercise, we identified the tangible and intangible values of the
project—the strategic value was to improve productivity, and the economic
impact was to improve the sales figure and footprint of the new product.
2. Gather necessary data and develop insights
Once the business objective was clear, next categorize business value
buckets, such as revenue gains, cost savings, and customer satisfaction, and
identify which data points would affect these buckets. For example, if you
1
claim to be adding incremental revenue, then track the amount on a daily,
weekly, or monthly basis. We captured data on how much manual effort was
required to calculate the commission, and how many additional product sales
occurred.
3. Articulate business value for stakeholders
The last step is presenting the business value. A key aspect in articulating
business value is understanding what is valuable for the business
stakeholders. In banking, it’s about delivery services, so the value is
productivity improvement by saving hours of manual effort. Whereas in
retail, it’s about sales, so the value is the improvement in revenue or gross
sales (in % or $ terms). Articulating the value that a data & analytics
project will deliver reminds the stakeholders of the value delivered.
We used a simple comparative method to articulate the three business
benefits our solution provided. We validated it with the business sponsors
before showcasing the stakeholders.
Use Case: Finding Value in Intelligent Automation
Our customer is a world leader in light controls and lighting control systems for both residential and
commercial applications. They are the leading manufacturer of more than 17,000 energy-saving light,
shade, and temperature controls for new and existing homes and offices.
At InfoCepts, we built an automated performance tracking system to determine commissions for their
sales team based on multiple criteria and needed to provide insights to the Product Manager for
effective decision making. Prior to the tracking system, they were manually capturing monthly data and
performing calculations, which were time-consuming and prone to data inaccuracy.
2
Though it may seem like the tracking system was a standard process automation project, the business
intent for the commission program was different. By using a well-defined framework, we were able to
determine the business value by connecting the project to the business goal.
Revisit Your Business Strategy
There is no one-size-fits-all formula for measuring business value. But following the easy 3-steps
of understanding the business vision, gathering necessary data and developing insights, and articulating
business value for stakeholders will guide you through the process. Next time you undertake a data &
analytics project, take the time to connect the effort to the intended results. Communicate the value
of your project within your organization, it will show what data & analytics can accomplish.
How to create business value from data:
The rewards for using data are big. Smart organizations are using it to improve user experience,
personalize interactions, improve loyalty and usage, create better products and processes, improve
quality, lower waste, leverage preventive maintenance and reduce costs. In other words, data is the
perfect ingredient to put a smile on the faces of customers, employees and stakeholders. And yet,
according to Forrester Research, less than 10% of enterprises generate advanced insights driven by data.
Something is going wrong.
It isn’t easy going for Chief Data Officers (CDO) and Chief Analytics Officers (CAO). The tools and
technologies around data (image recognition, automation, artificial intelligence, stream analytics,
machine learning, data visualization, etc.) are not just difficult to harness, but in the wrong hands, they
often throw up frustratingly irrational results.
In addition, there are the challenges of trying to figure out where to apply data sciences. Should it be to
projects that improve customer experience, that create new learning or improve existing processes?
Should it be to projects that add to revenue, improve market share or reduce costs? Prioritizing the
goals of data analytics can become confusing. Without adequate guidance, enterprise can quickly go
down the wrong path with investments, time and resources.
Finally, once you’ve mastered the technology and clarified the business goals, there remains the
business of actual data collection. Organizations have been collecting data for ages. Now they have even
more options, ranging from their own data stores and customer interactions to data hunters, brokers,
aggregators, public databases, syndication services and very sophisticated data ecosystems. The data
supply side is exploding. It is a problem of plenty.
To further complicate matters, this is a fast changing area of technology, forcing most organizations to
acquire the types of data that their existing tools and skill sets can manage. Senior executives will readily
acknowledge that this is a problem. They must still rely on gut feel and personal judgment. This is not
altogether bad. If anything, an experienced and confident executive who is driven by instinct is an asset.
It is even better when the executive is right most of the time. But the fact remains that this kind of
business instinct needs to be institutionalized if it is to scale across the organization and if it is to survive
the executive--which brings us back to the problem of data collection, acquisition and quantifying its
benefits.
3
This leads us to the four key issues that enterprises must keep in mind when dealing with data to
generate business insights:
1. Identifying the right projects that benefit from data
2. Sourcing the right data (type, volume, quality)
3. Quantifying the benefits of using data
4. Putting the right resources behind #1 and #2
These appear to be simple goals. However, CDOs and CAOs will readily agree that this is not the case.
With very little time to ramp up data and analytical capabilities within the enterprise before competition
gets there, CDOs and CAOs would do well to team up with reliable data consultants. It’s the painless—
and effective—path to building a strong data driven organization.
UNDERSTANDING STRATEGIC BUSINESS DRIVERS
If you've mapped out your company's operating strategies before considering your strategic
business drivers, you may be putting the cart before the horse. Your organization's strategy is a
critical statement that outlines how you expect to achieve certain goals. But what are the
underlying drivers of your company's beliefs, actions, and desire for success? Defining these
should come first, and then your corresponding strategies and projects will follow.
What Are Strategic Business Drivers?
Your business' strategic drivers are the collection of people, conditions, and
information that initiate and support activities that will help your company define
and accomplish its goals. These drivers represent the key influences or factors that
matter to the success of your organization. Some of the most common strategic
business drivers include:
Financial Objectives
Increase Shareholder Value. Many people believe that the sole reason for a
business to exist is to turn a profit. While this makes logical sense, a company
that is only focused on the bottom line is likely going to alienate their clients
and ultimately fail. If you exist as a hedge fund, this might work. Otherwise,
having profits as a strategic business driver is fine provided it isn't the only
factor that is influencing your company's strategies.
Growth. It’s often said in business, if you’re not growing you’re dying.
Growing companies are better able to serve their customers, employees and
owners with new and innovative products, more jobs, higher salaries and
better returns. Companies not focused on growing are often left behind by
their competition and ultimately lose customers and employees.
Customer Objectives
Brand. Your brand is the collection of values, symbols, customer experience
and reputation that creates recognition and awareness in the marketplace of
4
your company and its products or services. Some organizations are driven to
build a particular brand image or reputation, often including visual
representation to enhance recognition. This is particularly true with consumer
brands. Some of the world's most powerful brands are recognizable based on
logo alone, including Nike, McDonald's, and Apple.
Customer Focus. A customer centric organization is focused on the overall
customer experience from product or service design to marketing awareness to
purchase process and post-purchase follow up. It means putting the customer
experience first. Examples of customer centric companies include Amazon,
USAA and Hilton.
Product/Service Objectives
Value. A company that wants to increase the perceived value of its product or
service to build a competitive advantage would have value as a strategic
driver.
Products/Services. Product or service centric companies take the approach of
designing and creating the best product or service they are capable of
delivering, paying less attention to external market factors, then attempting to
find a market for their product or service. These companies have a product
roadmap that is focused on continuous improvement and/or producing
additional features.
Market. The market in which you operate may in itself be a strategic business
driver, manifesting through market forces such as competitor pricing,
distribution issues, and access to promotional outlets.
Intellectual property. If your company is involved in producing valuable
technology or other products that may be subject to patents, copyrights, or
licenses you may be concerned about holding onto those and other intellectual
property ownership rights. The same may be true for organizations that license
such intellectual property if it’s core to the business.
Production Capacity. A company that has substantial investments in fixed
assets needs to keep those assets working as much as possible to reduce costs.
Examples of these types of concerns include manufacturing facilities and
airlines.
Resources. On the other end of the spectrum from the previous driver, your
company might be driven by access to certain resources. An example of this is
an oil and gas company or a precious metals mining concern.
5
Threats. There may be certain threats that could impact your business so
substantially that they become strategic business drivers. These might include
security threats, the influence of inclement weather, and even government
regulations.
Employee/Internal Objectives
People. Aside from serving customers, a company may also be driven by a
desire to serve other stakeholders. This might include investors, employees,
business partners, suppliers and even members of their community.
Technology. Technology is a strategic driver that almost every modern
organization should consider putting at the top of their list. This refers to your
firm using technology and innovation to serve clients better and gain a
competitive advantage in your market.
Social/Environmental. Your organization's goals may be driven by some
issues that lie beyond your products and services. These include social and
environmental issues such as equality and sustainability.
How an Organization Chooses its Key Drivers
Strategic drivers are shaped by both internal and external forces. Internal drivers
may include mission, people, and profit goals. External drivers include markets,
competition, taxes, regulations, technology, and customer needs. Once you choose
the particular drivers for your business, you can prioritize them and create strategies
around them. The following are examples of several common strategic drivers and
strategies that stem from those drivers.
Strategic Driver - Strategy Examples
Profits - A regional bank has a goal of achieving a 20% annual growth rate in
profits.
Customers - A business wants to maintain a 90% or better positive customer
satisfaction rating.
Social/Environmental - An automaker vows to make 10% more of its
vehicles each year either hybrid or EV.
People - A construction firm promises to reward business partners and
employees for exceeding production goals.
Technology - A chip manufacturer has a goal of producing a CPU that is 10%
faster than anything currently on the market.
Threats - A business in the cannabis industry invests in a fintech firm to
protect its financial interests.
6
Ownership - A biopharmaceutical company commits to hiring additional staff
to handle and monitor drug patents as well as the FDA approval process.
Aligning Projects with Strategic Business Drivers
Most companies undertake a variety of short and long-term projects that are either
internal to the organization, external, or some combination of the two. If you've ever
been involved in a project that has fallen off course, you know how frustrating, time-
consuming, and expensive that can become. One of the best ways to ensure that your
firm's projects remain on track is to align them with your company's strategic
business drivers.
Agreeing to launch a new product or begin a project just because it's convenient or
advocated by management may not make sense once it is viewed with a fresh pair of
glasses. Before a project is even considered, the first step should be to confirm that
it aligns with your firm's top strategic business drivers. When your company follows
a formal process to prioritize and agree on the right projects based on this strategy,
you will have fewer missteps and a higher success rate with each venture.
Examples of Strategic Business Drivers in Success Businesses
Many well-known companies have defined their strategic business drivers and used
them to generate long-term success. For example, GE clearly wants to serve its
clients in as many capacities as possible (Customer driver). They are an example of a
company that offers a portfolio of basic and value-added services to customers such
as technology assessments, strategic planning, and even capital investment. If you
want to focus on the social/environmental aspect of your business, look no further
than Siemens as a benchmark. The German industrial conglomerate is known as
the most sustainable company in the world even though its businesses range from
power plants to medical imaging machines.
For an organization to find success, it should clearly define the strategic value that it
brings to its stakeholders (e.g., clients, employees, suppliers) and the marketplace at
large. One of the first steps to defining your company's goals is to identify and
prioritize its strategic business drivers. These in turn serve as the basis for
strategies, tactics, and programs/projects necessary to run and grow your business.
These strategic drivers are the DNA of your overall business. If they are poorly
defined, your goals may run off course, and your business could fail. It's essential
that you have a method in place to monitor your business drivers and make
adjustments as needed. We'll explore those topics in depth in Parts 2 and 3 of this
series.
Table of Contents
What is Data Analysis?
7
What is the Data Analysis Process?
Types of Data Analysis
Data Analysis Methods
Businesses today need every edge and advantage they can get. Thanks to obstacles like rapidly
changing markets, economic uncertainty, shifting political landscapes, finicky consumer
attitudes, and even global pandemics, businesses today are working with slimmer margins for
error.
Companies that want to not only stay in business but also thrive can improve their odds of
success by making smart choices. And how does an individual or organization make these
choices? They do it by collecting as much useful, actionable information as possible, then using
it to make better-informed decisions!
This strategy is common sense, and it applies to personal life as well as business. No one makes
important decisions without first finding out what’s at stake, the pros and cons, and the possible
outcomes. Similarly, no company that wants to succeed should make decisions based on
ignorance. Organizations need information; they need data. This need for data is why the
discipline of data analysis enters into the picture.
Now, before getting into the details about the data analysis methods, let us first understand what
is data analysis.
What is Data Analysis?
Although many groups, organizations, and experts have different ways to approach data analysis,
most of them can be distilled into a one-size-fits-all definition. Data analysis is the process of
cleaning, changing, and processing raw data, and extracting actionable, relevant information that
helps businesses make informed decisions. The procedure helps reduce the risks inherent in
decision-making by providing useful insights and statistics, often presented in charts, images,
tables, and graphs.
It’s not uncommon to hear the term “big data” brought up in discussions about data analysis.
Data analysis plays a crucial role in processing big data into useful information. Neophyte data
analysts who want to dig deeper by revisiting big data fundamentals should go back to the basic
question, “What is data?”
What is the Data Analysis Process?
The data analysis process, or alternately, data analysis steps, involves gathering all the
information, processing it, exploring the data, and using it to find patterns and other insights. The
process consists of:
8
Data Requirement Gathering: Ask yourself why you’re doing this analysis, what type of
data analysis you want to use, and what data you are planning on analyzing.
Data Collection: Guided by the requirements you’ve identified, it’s time to collect the
data from your sources. Sources include case studies, surveys, interviews, questionnaires,
direct observation, and focus groups. Make sure to organize the collected data for analysis.
Data Cleaning: Not all of the data you collect will be useful, so it’s time to clean it up.
This process is where you remove white spaces, duplicate records, and basic errors. Data
cleaning is mandatory before sending the information on for analysis.
Data Analysis. Here is where you use data analysis software and other tools to help you
interpret and understand the data and arrive at conclusions. Data analysis tools include Excel,
Python, R, Looker, Rapid Miner, Chartio, Metabase, Redash, and Microsoft Power BI.
Data Interpretation: Now that you have your results, you need to interpret them and come
up with the best courses of action, based on your findings.
Data Visualization: Data visualization is a fancy way of saying, “graphically show your
information in a way that people can read and understand it.” You can use charts, graphs,
maps, bullet points, or a host of other methods. Visualization helps you derive valuable
insights by helping you compare datasets and observe relationships.
Types of Data Analysis
There are a half-dozen popular types of data analysis available today, commonly employed in the
worlds of technology and business. They are:
Diagnostic Analysis: Diagnostic analysis answers the question, “Why did this happen?”
Using insights gained from statistical analysis (more on that later!), analysts use diagnostic
analysis to identify patterns in data. Ideally, the analysts find similar patterns that existed in
the past, and consequently, use those solutions to resolve the present challenges hopefully.
Predictive Analysis: Predictive analysis answers the question, “What is most likely to
happen?” By using patterns found in older data as well as current events, analysts predict
future events. While there’s no such thing as 100 percent accurate forecasting, the odds
improve if the analysts have plenty of detailed information and the discipline to research it
thoroughly.
Prescriptive Analysis: Mix all the insights gained from the other data analysis types, and
you have prescriptive analysis. Sometimes, an issue can’t be solved solely with one analysis
type, and instead requires multiple insights.
Statistical Analysis: Statistical analysis answers the question, “What happened?” This
analysis covers data collection, analysis, modeling, interpretation, and presentation using
dashboards. The statistical analysis breaks down into two sub-categories:
9
Descriptive: Descriptive analysis works with either complete or selections of summarized
numerical data. It illustrates means and deviations in continuous data and percentages and
frequencies in categorical data.
Inferential: Inferential analysis works with samples derived from complete data. An analyst
can arrive at different conclusions from the same comprehensive data set just by choosing
different samplings.
Text Analysis: Also called “data mining,” text analysis uses databases and data mining
tools to discover patterns residing in large datasets. It transforms raw data into useful business
information. Text analysis is arguably the most straightforward and the most direct method of
data analysis.
Next, we will get into the depths to understand about the data analysis methods.
Data Analysis Methods
Some professionals use the terms “data analysis methods” and “data analysis techniques”
interchangeably. To further complicate matters, sometimes people throw in the previously
discussed “data analysis types” into the fray as well! Our hope here is to establish a distinction
between what kinds of data analysis exist, and the various ways it’s used.
Although there are many data analysis methods available, they all fall into one of two primary
types: qualitative analysis and quantitative analysis.
Qualitative Data Analysis: The qualitative data analysis method derives data via words,
symbols, pictures, and observations. This method doesn’t use statistics. The most common
qualitative methods include:
Content Analysis, for analyzing behavioral and verbal data.
Narrative Analysis, for working with data culled from interviews, diaries, surveys.
Grounded Theory, for developing causal explanations of a given event by
studying and extrapolating from one or more past cases.
Quantitative Data Analysis: Statistical data analysis methods collect raw data and process
it into numerical data. Quantitative analysis methods include:
1. Hypothesis Testing, for assessing the truth of a given hypothesis or theory for a data set
or demographic.
2. Mean, or average determines a subject’s overall trend by dividing the sum of a list of
numbers by the number of items on the list.
3. Sample Size Determination uses a small sample taken from a larger group of people and
analyzed. The results gained are considered representative of the entire body.
10
We can further expand our discussion of data analysis by showing various techniques, broken
down by different concepts and tools.
DIFFERENT TYPES OF DATA:
Qualitative or Categorical Data
Qualitative data, also known as the categorical data, describes the data that fits into the
categories. Qualitative data are not numerical. The categorical information involves categorical
variables that describe the features such as a person’s gender, home town etc. Categorical
measures are defined in terms of natural language specifications, but not in terms of numbers.
Sometimes categorical data can hold numerical values (quantitative value), but those values do
not have mathematical sense. Examples of the categorical data are birthdate, favourite sport,
school postcode. Here, the birthdate and school postcode hold the quantitative value, but it
does not give numerical meaning.
Nominal Data
Nominal data is one of the types of qualitative information which helps to label the variables
without providing the numerical value. Nominal data is also called the nominal scale. It cannot
be ordered and measured. But sometimes, the data can be qualitative and quantitative.
Examples of nominal data are letters, symbols, words, gender etc.
The nominal data are examined using the grouping method. In this method, the data are
grouped into categories, and then the frequency or the percentage of the data can be
calculated. These data are visually represented using the pie charts.
Examples of Nominal Data:
Gender (Women, Men)
Hair color (Blonde, Brown, Brunette, Red, etc.)
Marital status (Married, Single, Widowed)
Ethnicity (Hispanic, Asian)
Ordinal Data
Ordinal data/variable is a type of data which follows a natural order. The significant feature of
the nominal data is that the difference between the data values is not determined. This variable
is mostly found in surveys, finance, economics, questionnaires, and so on.
The ordinal data is commonly represented using a bar chart. These data are investigated and
interpreted through many visualisation tools. The information may be expressed using tables in
which each row in the table shows the distinct category.
Examples of Ordinal Data:
The first, second and third person in a competition.
11
Letter grades: A, B, C, and etc.
When a company asks a customer to rate the sales experience on a scale of 1-10.
Economic status: low, medium and high.
Quantitative or Numerical Data
Quantitative data is also known as numerical data which represents the numerical value (i.e.,
how much, how often, how many). Numerical data gives information about the quantities of a
specific thing. Some examples of numerical data are height, length, size, weight, and so on. The
quantitative data can be classified into two different types based on the data sets. The two
different classifications of numerical data are discrete data and continuous data.
Discrete Data
Discrete data can take only discrete values. Discrete information contains only a finite number
of possible values. Those values cannot be subdivided meaningfully. Here, things can be
counted in the whole numbers.
Example:
The number of students in a class.
The number of workers in a company.
The number of home runs in a baseball game.
The number of test questions you answered correctly
Continuous Data
Continuous data is data that can be calculated. It has an infinite number of probable values that
can be selected within a given specific range.
Example: Temperature range
The amount of time required to complete a project.
The height of children.
The square footage of a two-bedroom house.
The speed of cars.
12
