Analytics in Consulting

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