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Data Gathering and Analysis

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DOCUMENT DESCRIPTION
After we have formulated our hypothesis, the next step is to gather the proper data (to analyze to test this hypothesis). It is important to have a structured approach to both data gathering and data analysis.

This presentation introduces a 7-phase approach to data collection and analysis. We will also discuss the 4 key areas of data analysis, usage of business frameworks & visual tools, and research strategy.

This training guide also includes a group training exercise.

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FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits

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Data Gathering and Analysis

  1. 1. This is an exclusive document to Flevy Pro community - http://flevy.com/pro Management Consulting Training Data Gathering and Analysis Form Hypotheses Gather Data Analyse Data Find Insights Develop Conclusions and Make Recommendations Define the Issues
  2. 2. 2This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  3. 3. 3This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Having a structured approach to data gathering and analysis is crucial for proper hypothesis-driven analysis Presentation Overview After we have formulated our hypothesis, the next step is to gather the proper data (to analyze to test this hypothesis). It is important to have a structured approach to both data gathering and data analysis. This presentation introduces a 7-phase approach to data collection and analysis. We will also discuss the 4 key areas of data analysis, usage of business frameworks & visual tools, and research strategy. This training guide also includes a group training exercise. The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  4. 4. 4This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro To recap—articulating the hypotheses determines the analysis that needs to be done Management Consulting Problem Solving Process Understanding the purpose of the analysis helps us manage the process of analysing data, choosing the tools and structuring the answer. Form Hypotheses Gather Data Analyse Data Find Insights Develop Conclusions and Make Recommendations Define the Issues So what?—aha, new thought What the client should do What are the questions keeping the client awake at night? Factual information gathered to prove or disprove hypotheses Analyse what the data tells us Statements that provide direction and structure for the analysis The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  5. 5. 5This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro We use a mixture of facts and sensible assumptions to test our hypotheses and generate a series of findings Data-Analysis-Findings Relationship The analysis process involves transforming the right inputs into the right kind of outputs. DATA ANALYSIS FINDINGS Description Elements Examples • “Raw materials” for the analysis • Facts with identified sources • Stated expert beliefs based on experience (also sourced) • Changes made to inputs based on an analytical framework • Appropriate and intelligently structure manipulation • Formulae and methods generally accepted • Data (facts) • Assumptions • Mathematical rules • Logical arguments • Last year’s cost = £10 • Last year’s revenue = £12 • Growth of costs and revenue has been 10% and 5% per year respectively • Growth rates continue • Cn = C n-1 (1.1) • Rn = Rn-1* (1.05) • Sn = Rn - Cn • Description “highlights” based on data output • Predictions/inferences based on results • Transformation of facts into a useful output -1 0 -5 0 5 1 0 1 5 2 0 • Business is unprofitable after 2005 • Increase revenue/reduce cost! The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  6. 6. 6This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Hypotheses, and therefore analysis, usually falls under four categories— customers, competitors, capabilities and economics Categories of Data Analysis We will address each of these areas in more depth over the next several training guides. Company Capabilities Economics / Profitability Drivers Areas we need to understand to answer our clients’ questions Customer Needs Industry / Competitors • What is the economic value to the customer? • What different customer segments exist? • What factors drive customer purchases? • How do customers make purchases (through what channels)? • What are the characteristics of the company’s largest customers? • How large is the market and how fast is it growing? • What are the relationships across the value-chain? How are these changing? • Who are the major competitors? What is their market share and how fast are they growing? • What are the sources of competitive advantage? • What capabilities are required to deliver value? How is this changing? • What are the capabilities required to compete successfully? • How strong are our client’s capabilities relative to its competitors? • How do companies make money? • What determines pricing? • What is the cost structure? Is it changing? Why? • What are the major unit costs? • What are their drivers? • What is the cost position of our client compared to competitors? Is it changing? Why? The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  7. 7. 7This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  8. 8. 8This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Analytical tools can be split into strategic frameworks and advanced graphical/visual tools Analytical Tools Overview The analytical tools you select should be driven by the purpose of the analysis and the required output. Analytical Tools Visual Tools • Tools to better present large and complex amount of data, painting a clear picture or telling a story • Example tools include: – Graphs – Waterfall charts Business Frameworks • Frameworks helping to identify key issues or drivers for a set of strategic decisions or choices • Example frameworks include: – Porter’s five forces analysis – SWOT analysis – ROCE analysis Analytical Tools The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  9. 9. 9This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Bench- marking Different types of analysis vary in complexity and the amount of data required Matrix of Analysis Methodologies / Frameworks However, all analysis must be logical and rigorous. Analysis: “A tracing of things to their source and so discovering the general principles underlying individual phenomena.” Assimilation: “To take fully into the mind, experience effects of (e.g. knowledge).” Assumption: “That which is taken for granted or supposed.” Data: “Facts given from which others may be inferred.” Business Case WHAT? HOW? Analysis Assimilation Assumption Data BCG Growth-Share Matrix Economic Modeling NPV/ Cashflow Analysis Market Segmentation Financial Analysis Survey Analysis ABC Expense Vouchers Value Chain Analysis The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  10. 10. 10This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  11. 11. 11This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro What analysis would you undertake to prove these hypotheses (one per group)? Testing Hypotheses – Breakout Group Exercise What is the analysis required? Large companies with centralised HR departments can already deliver a full range of services to their expat employees Small companies are unlikely to use the service HR departments would use a service that reduces their cost and hassle Expats would appreciate a service that eased the process of settling into a new country A one-stop-shop managing the whole process is the answer We need to move quickly while the space still exists The global expat community is growing HYPOTHESISThe content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  12. 12. 12This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  13. 13. 13This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro The client is a large European financial services company Case Study Materials – Client Background It has core banking capabilities, offering retail banking services: – Current accounts – Savings and investments accounts – Personal loans – Credit cards – Mortgages It has a large European branch footprint It has a high level of capital and strong technological ability It is under pressure from shareholders to increase the volume and quality of its revenues The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  14. 14. 14This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro The client decided to build a new business online Case Study Materials – Positioning Matrix Take current business online Expand product/service range online Build a new business online 1 2 3 Strategic options Using e-business in addition to current sales channels Actively acquire and retain customers Build customer retention through new businesses Typeofcustomer relation-ship Rationale InteractionCommunicationInformation Specialised Comprehensive Range of service offering Take current business online Expand product/service range online Build a new business online 1 2 3 Broad The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  15. 15. 15This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Building a new business online follows some clear business principles Case Study Materials – Business Model Attract traffic Develop strong anchor proposition Offer best advice & choice products/services Create customer loyalty Offer comprehensive solutions for targeted community Build new brand for providing best solutions in the internet Use community for creation of market transparency Intermediate Intermediate best products and services throughout community Leverage online customer relationship The strongest value driver in the internet is the ability to intermediate goods and services across a large customer group. A powerful way for building retention to customer groups is to target specific needs of communities via a best advice proposition. HYPOTHESES 1 2 3 The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  16. 16. 16This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro The client wanted to target the expatriate community with the new business Case Study Materials – Target Audience Providing good online services to a market of potentially valuable customers allows the client to cross sell its traditional products. Valuable Customers • Expats tend to be high net worth individuals (HNWI) High Internet Penetration • An online offering is an attractive proposition Value Added Service • There is a lot of “hassle” moving from one country to another, e.g.: − Tax issues, forms, credit issues Target Expatriate Community The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  17. 17. 17This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  18. 18. 18This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Here are some example analyses Testing Hypotheses – Breakout Group Exercise What is the analysis required? Large companies with centralised HR departments can already deliver a full range of services to their expat employees • Interviews with HR departments to understand what services they currently provide • Interviews with Expats to understand what services they require, and whether they think their companies already fulfil them Small companies are unlikely to use the service • Interviews with HR departments of small companies to understand their likelihood to pay for such a service • Small company expat numbers analysis to size the market HR departments would use a service that reduces their cost and hassle • Interviews with HR prioritising their needs from an expat service Expats would appreciate a service that eased the process of settling into a new country • Quantitative focus interviews with expats prioritising the services needed to meet their needs: • Forced choice ranking, card sort, etc. A one-stop-shop managing the whole process is the answer • Focus groups to help define and test potential offerings We need to move quickly while the space still exists • Further market and competitor analysis to define space, and any potential threat of entry: • 5-forces, size, growth, market share, gap analysis, competitor profiling The global expat community is growing • Interview companies to understand trends in ex-pat working • Analyse growth of work permit applications HYPOTHESIS The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  19. 19. 19This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  20. 20. 20This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro It is important to gather all and only the data you need to perform your analysis Data Gathering & Analysis Approach You must therefore start by understanding the output of your analysis, and work back to the input. Determine Output Required Identify Type of Information Needed Develop Search Strategy Identify Sources Gather Information/ Data Review Information Perform Analysis • Identify what data and analysis will test your hypothesis • Storyboard output • Determine quantitative and qualitative support needed • Outline breadth and depth of information • Define roles and responsibilities • Determine types of sources (e.g., case studies, interviews, annual reports, etc.) • Develop source/ contact list • Identify multiple sources for each type of information • Search databases • Conduct interviews • Compile financial information • Organize notes • Track information search results The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  21. 21. 21This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Contents Data Gathering & Analysis Overview Analytical Tools Group Training Exercise − Question − Case Materials − Model Response Data Gathering & Analysis Approach Research Strategy The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  22. 22. 22This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro A good research strategy incorporates secondary and primary sources to gain all the data required Research Strategy – Sources Research Strategy PRIMARY SOURCES Purpose: • Fill-in gaps from secondary sources • Confirm findings • Test hypotheses Examples: • Industry Experts (Analysts, Academics, Consultants) • Client/Focus Interviews • Best Practice Site Visits • Focus Groups • Employee Interviews • Executive Interviews • Most primary research is structured and conducted by members of the engagement team SECONDARY SOURCES Purpose: • Build understanding and fact-base • Identify issue and trends • Develop findings and hypotheses Examples: • Periodicals • Analysts’ Reports • News Articles • Academic and Business Press/Journals • Financial and Statistical Reports • Company Directories • Market Research • Internal Company Reports • Most primary research is structured and conducted by members of the engagement team The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  23. 23. 23This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Be aware that data is not always readily available—in many cases, some kind of data estimation is necessary Research Strategy – Estimation Data estimation may be required in a wide variety of situations: – e.g. estimating market size, estimating the number of customers in a particular segment, estimating a firm’s costs and revenues etc. A range of methods exist for undertaking data estimation: – Proxy-based methods – Top-Down approach – Bottom-Up approach When estimating data, always triangulate your results i.e. compare data from a variety of sources/methods to ensure robust results. Even where secondary data is available, it may be useful to back it up with your own estimation (e.g. if data only available from a single source). The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  24. 24. 24This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro There are some practical “rules of thumb” for data gathering Research Strategy – Rules of Thumb Don’t gather data unless you know what it is for. Structure data gathering in a way that enables you to quickly prove or disprove your hypotheses: Drive toward giving sources a slide which shows the desired output, as well as format. Ask for data in a way that is consistent with your storyline. Do not assume clients understand their own data (although one person often does). Get an understanding of what the data means: Understand critical assumptions. Get context of when, how, and by whom data was collected and analyzed. Recognize the iterative nature of data gathering—leave doors open to return to data sources. Always use multiple sources: Sources rarely agree. Use them to triangulate on insights and answers. Always cite sources for your data, detailing all assumptions. The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  25. 25. 25This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro There are some “pitfalls” to be aware of as you move through the analysis process Research Strategy – Pitfalls Purpose Process Structure • The client’s issue/problem • So what? • The next question • Thought before action • Frequent review/validation • Flexibility • Separation of data/assumptions from analysis and output • Logical flow and presentation Methodology Data Collection • Clear understanding of type of analysis • Leveraging work done before • Structured process for gathering data • Variety & creativity • Degree of complexity required THINK ABOUT… • “We need to know something about...” • “Analyze this data...” • “You could try and show that...” • “Gather the data first, then think what to do with it.” • “Once we’ve got it, it won’t take long to analyze.” • “Do it quickly now and organize it later” • This number won’t change” • “This is the way to do this sort of analysis” • “We did xyz there, so we’ll do the same here” • “This will tell us all we need to know” • “This one point of data is enough” BEWARE OF… The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  26. 26. 26This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com The content on this slide has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/data-gathering-and-analysis-1692
  27. 27. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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