analytics in consulting
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This was a talk I gave in IIM Bangalore in March 2012 to Business Analytics professionals on the analytics of consulting. It covers the hypothesis driven approach to problem solving that is the core of solving problems and walks through the entire lifecycle of a management consulting assignment.TRANSCRIPT
Analytics in ConsultingUsing the Hypotheses Driven Approach to Solve Business Problems
Amit Kapoor
March, 2012 @ IIMB
Context
● Synthesize: Learning to combine, to condense and bring coherence to ideas
● Discipline: Mastering a major way of thinking through sustained practice
● Creativity: Process of having original ideas that have value
Content
● Have a dialogue on the analytics in consulting - hypothesis driven problem solving
● Leverage a short case study to learn in the apprentice model
● Discuss heuristics to apply in every day problem solving
Consulting Problem
Business Problem
Ill-Defined and Unique
Cross - Functional Complexity
Too Much or Too Little Data
Limited Time and Resources
Conflicting Stakeholder Views
Several Critical Unknowns
Consulting ProcessGenerating
the HypothesesMaking
the Case
● Write the problem definition
● Concretize the scope
● Map the issues, and deliverable
● Develop the issue tree ● Generate the
hypotheses● Develop the data
matrix● Refine hypotheses (as
required)
● Collect data and conduct analysis
● Synthesize finding and conclusions
● Develop recommendations
● Develop message and storyboard
● Write and review the output
Testing the Hypotheses
2 31 4Definingthe Question
?
Tablet Case Study - SmartAds
● SmartAds currently is an ad network enabling advertising for smartphones
● Tablets have emerged as a new device format with the success of the iPad
● As a smartphone ad company, I should also be able to serve ads on tablet devices
● What should SmartAds do?
The Strategic Question
● Define the fundamental question the client wants to be answered
● Focus on the big picture and not the details● Explore the gap between what the client has
and what the client wants● Understand how it fits with what else the
client is trying to achieveCase: What should be SmartAds' Go-to- Market Plan for Tablets Ads?
1. Defining the Question
Issues and Deliverables● What issues must you investigate to answer
the fundamental question?● What is the type of output will be produced
from this investigation?● What deliverables are expected? Will that
address the client's requirement?● What time and resources would be required
to accomplish this?
1. Defining the Question
Develop Issue Tree
Strategic Question
Issue 1
Issue 2
Issue 3
Sub Issue 2.1
Sub Issue 2.2
Hypothesis 2.2.1
Hypothesis2.2.2
Sub Issue 2.3
2. Generating the Hypotheses
Issues vs. Hypotheses
What is an Issue?
● Denotes a major piece of the problem
● Pointed to client concerns (“So what?”)
● Limited in number ● Similar in size● Will not “fall”● Phrased as a question● Amenable to closure
What is a Hypothesis? ● Phrased as statement to
prove or disprove● Is an 'hunch' or an
educated guess● Nested under an issue● Provides tentative answer
to issue question● Provides context for or
guides information gathering
2. Generating the Hypotheses
Case Study: Issue TreeStrategic Question Issues
What should be SmartAd's Go-to-Market strategy for the Tablet Advertising Ecosystem?
How will the product and services market look in the tablet advertising ecosystem in the next 3 -4 years?
What is the best Way-to-Play for SmartAds in the tablet advertising ecosystem?
How can SmartAds leverage its capability system developed within the mobile context for the tablet ecosystem?
2. Generating the Hypotheses
Case Study: HypothesesIssue Sub-Issues Hypotheses
How will the product and services market look in the tablet advertising ecosystem in the next 3 -4 years?
How will the tablet ecosystem emerge in the next 3 – 4 years? Which Platforms? Which formats?
H1: Market consolidate around 3 major platforms – iOS, Android, and Win 8
H2: Users will shift content consumption (and hence ads) away from PCs to tablets
... ....
2. Generating the Hypotheses
Types of Hypothesis
Propositional e.g. market consolidate around three platforms - iOS, Android and Win8
● If accepted becomes finding
● Leaves "so what"● Simple to test, more
complex to interpret● Seeks "predictive"
data
Diagnostice.g. users will shift content consumption (and hence ads) away from PCs to tablets
● If accepted becomes conclusion
● Answers "so what" ● Simple to interpret if data
fits, more complex to test ● Seeks "cause and effect"
data
2. Generating the Hypotheses
Develop Good Hypothesis● Connect the Dots - General / specific exp ● Do your Homework - Lit search, web
search, books / journals● Engage with People - Planning meetings,
clients, colleagues● Stand on the Shoulder of Giants - Experts,
practice guides, other assignments ● Gather Preliminary Data - Industry
analysis, probing questions● Think Hard about it!
2. Generating the Hypotheses
Testing the Hypotheses
For Hypothesis 1: Market consolidate around 3 major platforms – iOS, Android, and Win 8
3. Testing the Hypotheses
Device Shipments
● Projection '10 -'15● By Device type
(Smartphone, Tablets & PCs)
● By OS (iOS, Windows, Android)
Installed Base
● Projections '10-'15● By Device type
(Smartphone, Tablets & PCs)
● By OS (iOS, Windows, Android)
Lifecycle Estimate
● Think on two key dimensions○ Method of enquiry: Interview/Focus Group,
Research and Surveys, Observations○ Source of data: Internal, Client, Competition /
Customers, Industry / Government● Be cost conscious in selection of method of
enquiry● Assess reliability and conduct triangulation● Organize and document rigorously
Building the Data Matrix3. Testing the Hypotheses
H1: Device Shipment3. Testing the Hypotheses
H1: Installed Base3. Testing the Hypotheses
H1: Installed Base by OS3. Testing the Hypotheses
H2: Tablet vs PC Usage3. Testing the Hypotheses
Synthesizing the Facts
Facts 1
Fact 2
Fact 3
Finding 1
Finding 2
Conclusion 1
Conclusion 2
Finding 3Fact 4
Fact 5
Recommendation 1
Recommendation 2
Recommendation 3
Recommendation 4
3. Testing the Hypotheses
Developing Recommendation
● Generate alternatives, evaluate, screen and select: Complete the logic tree
● Specify and describe actions, results and benefits
● Take account of existing conditions, barriers and resources
● Cover the assignment topics and outputs● Can be tracked back to address the root
cause findings
3. Testing the Hypotheses
Structuring the Message
Argument First Action First
What's wrong
What's causing It
Here's what you should do
This is how
You must change
Here's what you should do
This is how
Change
Change
Add the why's
4. Making the Case
● Objective: Build relationship, share information, solve problem, take decision
● Audience: Who, characteristics as individual / group, receptivity, expectation, culture
● Purpose: Telling, selling, conferring, collaborating
● Story: Content, emphasis, style ● Medium: Visual (letter, report, text, video) or
Oral (presentation, meeting, one-to-one)
Doing the Communication4. Making the Case
Heuristics for Daily Problem Solving
● Structure your thinking● Build your fact base● Develop an initial hypothesis● Solve the right problem● Don't boil the ocean● Produce an output daily● Synthesize every day (Elevator Speech)● Focus on the change
Contact
● Please access this presentation and speaker notes (rough) at http://goo.gl/582xB
● If you have any reflections or further questions, please feel free to reach out to the speaker at: [email protected]
Backup
Consulting Toolkit
Core Methodologies
Structured Problem Solving /
Analytics
Work Structure and
Management
Oral Communication
Written Communication
Expertise (Functional /
Industry) Content
KnowledgeThought
Leadership
People Skills Teamwork Relationship
ManagementMentoring and Apprenticeship
Career Mgmt. / Work-Life Balance
Leadership and Client
DevelopmentTrusted Advisor Vision and
Influence EntrepreneurshipCollaboration and
Knowledge Sharing
The Client
● Who will judge the success of the project?● Who has the authority to implement the
recommendations?● Whose views will influence the main
decision- makers?● Who will pay the bill?● Who will the team report to? Case: The CEO and BD team
1. Defining the Question
Conducting an Interview
● Interview is a process, not an activity● Preparations is key: objective, selection,
guides ● Conducting the Interview
○ Opening - Establishing rapport, position, orientation○ Middle - People, Actions, Goals, Outcome○ End - Summarizing and projecting
● Questions Chain Link: Open - Probe - Probe - Closed - Mirror
● Listening is paramount
3. Testing the Hypotheses
Case Study: Issue TreeStrategic Question
Issues Sub-Issues
What should be SmartAd's Go-to-Market strategy for the Tablet Advertising Ecosystem?
How will the product and services market look in the tablet advertising ecosystem in the next 3 -4 years?
How will the tablet ecosystem emerge in the next 3 – 4 years? Which Platforms? Which formats?
What are the changes in outlook for advertising spend and type in the the tablet ecosystem?
What are the product and service offering that will be available in the next 3 - 4 years?
What is the best Way-to-Play for SmartAds in the tablet advertising ecosystem?
What ways-to-play are likely to be adopted in the market?
Which way-to-play would be best suited for SmartAds to address the tablet ecosystem?
How can SmartAds leverage its capability system developed with the mobile context for the tablet ecosystem?
What are the key capabilities within SmartAds which create value and enable execution currently?
What new or adjacent capabilities will need to be developed to address the table ecosystem
Case Study: Sub-Issues & HypothesesSub-Issues Hypotheses
How will the tablet ecosystem emerge in the next 3 – 4 years? Which Platforms? Which formats?
H1: Market consolidate around 3 major platforms – Apple Tablets, Google Android (including Amazon Tablet), Microsoft Windows 8
H2: Tablets will increasingly dominate content consumption (and ads) compared to PCs
What are the changes in outlook for advertising spend and type in the the tablet ecosystem?
H3: Current trend of shift in advertising $ will accelerate and online advertising will increase dramatically
H4: Shift to tablet OS platform will result in increase in display advertising across the world
What are the product and service offering that will be available in the next 3 - 4 years?
H5: (Product) Rich media advertising supported by open standards, on both apps and browsers likely to accelerate
H6: (Service) Display value chain consolidating, maturing and value shifting towards branding and away from ad networks
What ways-to-play are likely to be adopted in the market?
H7: Five major ways-to-play in the display ad market – integrator, aggregator, distributor, platform enabler and premium/niche
Which way-to-play would be best suited for SmartAds to address the tablet ecosystem?
H8: SmartAds would need to shift from a Niche player to an Integrator
What are the key capabilities within SmartAds which create value and enable execution currently?
H9: Capabilities set consolidated in five buckets: Assets, Reach, Service Offering, Service Delivery, Enablers
What new or adjacent capabilities will need to be developed to address the table ecosystem
H10: SmartAds would need to extend its capability system beyond Ad Network – largely through acquisition
Case Study: Analyses and DataKey Hypotheses Analyses and Data
H1: Market consolidate around 3 major platforms – Apple Tablets, Google Android (including Amazon Tablet), Microsoft Windows 8
● Projection of mobile, tablet and pc shipment and parc (2010 – 2015)● Break up by platform ecosystems (OS, Windows, Android, Others)
H2: Tablets will increasingly dominate content consumption (and ads) compared to PCs
● Map the possible roadmap for development of different platforms● Segmentation of the tablet and PC usage
H3: Current trend of shift in advertising $ will accelerate and online advertising will increase dramatically
● Projection for advertising spend on mobile vs. other forms (2010 – 2015)● Break up by formats (mobile, tablet and pc)
H4: Shift to tablet OS platform will result in increase in display advertising across the world
● Map tablet usage and impact on ad response and receptivity● Map impact on Ad formats with tablet introduction
H5: (Product) Rich media advertising supported by open standards, on both apps and browsers likely to accelerate
● Map impact on likely to evolve on the tablets● Requirement level for development: standards,
H6:: (Service) Display value chain consolidating, maturing and value shifting towards branding and away from ad networks
● Map value chain players, consolidation / acquisitions, key trends and technologies
● Estimate for value chain breakup- Branding vs. Direct Response, Key Players
H7:: Five major ways-to-play in the display ad market – integrator, aggregator, distributor, platform enabler and premium/niche ● Segment key players based on (outside in) understanding of way-to-play
H8:: SmartAds would need to shift from a Niche player to an Integrator ● Smart Ads Interviews (to be done)
H9: Capabilities set consolidated in five buckets: Assets, Reach, Service Offering, Service Delivery, Enablers
● Map broad set capabilities required in the display ad value chain● Assess (outside-in) the likely capabilities of sample players
H10: SmartAds would need to extend its capability system beyond Ad Network – largely through acquisition
● Smart Ads Interviews (to be done)● Map implication on the revenue and go-to-market