Advanced analytics strategy formulation

Steyn, H. J. (2014-12)

Thesis (MCom)--Stellenbosch University, 2014.

Thesis

ENGLISH ABSTRACT: Despite the high potential impact of advanced analytics on the performance of businesses around the world, its uptake and application in an integrated and strategically aligned manner has been limited. This problem is more pronounced with specific reference to optimization. Optimization methods lag behind other analytical methods such as data visualization and predictive models in terms of their level of adoption in organizations. This research suggests that part of the problem of limited application and integration lies in an overall inability of companies to develop and implement an effective advanced analytics strategy. The primary objective of this research is therefore to establish an approach for the development of an advanced analytics strategy for a company. Due to the absence of well described examples or published research on the subject it was necessary to generate insight and knowledge using a research approach that allowed for the development, testing, and improvement of a strategy over multiple cycles. Such a research approach presented itself in the form of action research. An initial advanced analytics strategy was developed for one of the subsidiary companies in a group of companies. The subsidiary company specializes in the importation, distribution, and marketing of industrial fasteners and has branches throughout South Africa. The strategy document was presented to the senior decision makers in the holding company for evaluation. The feedback from the evaluation was used to formulate changes to the initial strategy aimed at improving its alignment with the decision makers’ thinking on advanced analytics and increasing the probability of its implementation. The suggested changes from the first research cycle were used to define the second cycle strategy framework. The second cycle strategy framework included a strategy development process that consisted of three main steps: • Establishing business focus and relevance which included an assessment of the value creating potential of the business, identifying and prioritizing of value creating opportunities, and an assessment of key underlying decision processes, • Developing business relevant concept applications which included determining their potential value impact and creating a ranked pipeline of decision optimization applications. • Selecting concept applications and moving them into production. The strategy development process was informed by a number of different models, methods and frameworks. The most important model was a detailed valuation model of the company. The valuation model proved to be invaluable in identifying those aspects of the business where an improvement will result in the highest potential increase in shareholder value. The second cycle strategy framework will be used to develop an improved version of the advanced analytics strategy for the researched company. Moreover, the generic nature of the framework will allow for it to be used in the development of advanced analytics strategies for other companies.

AFRIKAANSE OPSOMMING: Ten spyte van die potensieel omvangryke impak van gevorderde analitiese tegnieke op die prestasie van besighede wˆereldwyd, is die toepassing en strategiese integrasie daarvan beperk. Hierdie probleem is nog meer sigbaar wanneer die aanwending van optimeringsmetodes oorweeg word. Die mate waarin optimeringsmetodes deur besighede aangewend word, is heelwat laer as ander analitiese metodes soos data visualisering en vooruitskattingsmodelle. Hierdie navorsing plaas ’n groot gedeelte van die probleem voor die deur van besighede se onvermo ¨e om effektiewe gevorderde analitiese strategie¨e te ontwikkel en te implementeer. Die primˆere doel van die navorsing is gevolglik om ’n benadering tot die ontwikkeling van ’n analitiese strategie vir ’n maatskappy voor te stel. In die lig van die afwesigheid van gepubliseerde voorbeelde of soortgelyke navorsing op hierdie onderwerp moes insig en kennis gevolglik bekom word deur die aanwending van ’n navorsingsbenadering wat die navorser in staat gestel het om ’n voorgestelde strategie te ontwikkel, te toets en te verbeter oor verskeie navorsingsiklusse. Die navorsingsbenadering wat gebruik is staan bekend as aksienavorsing. Die eerste gevorderde analitiese strategie is onwikkel vir een van die filiaalmaatskappye in ’n maatskappygroep. Die filiaalmaatskappy spesialiseer in die invoer, verspreiding, en bemarking van industri¨ele hegstukke en het takke regoor Suid Afrika. Die strategie dokument is voorgelˆe aan die senior besluitnemers van die houermaatskappy vir oorweging. Op grond van hul terugvoer is veranderings aan die strategie aangebring ten einde hul benadering tot gevorderde analitiese tegnieke te akkommodeer en om die waarskynlikheid van implementering daarvan te verhoog. Die voorgestelde veranderings is gebruik om ’n strategiese raamwerk vir die tweede navorsingsiklus te definieer. Hierdie raamwerk sluit ’n strategiese ontwikkelingsproses in wat bestaan uit drie hoofstappe: • Vestiging van besigheidsfokus en relevansie wat insluit ’n oorweging van die waardeskeppingsvermo ¨e van die maatskappy, identifisering en prioritisering van waardeskeppingsgeleenthede en die oorweging van die onderliggende besluitnemingsprosesse, • Ontwikkeling van besigheidsrelevante konsep oplossings wat insluit die bepaling van die potensi¨ele waarde impak en die skepping van ’n ranglys van besluitoptimeringsoplossings, en • Die verskuiwing van geselekteerde oplossings na ’n produksie omgewing. Die strategiese ontwikkelingsproses maak gebruik van verskeie modelle, metodes en raamwerke. Die belangrikste model was ’n gedetaileerde waardasiemodel van die maatskappy. Die waardasiemodel was instrumenteel in die idenfikasie van die aspekte van die maatskappy waar ’n verbetering die grootste bydrae kan maak tot die skepping van aandeelhouerswaarde. Die tweede siklus strategiese raamwerk sal aangewend word om ’n verbeterde analitiese strategie vir die nagevorsde maatskappy te ontwikkel. Die generiese aard van die raamwerk sal ’n gebruiker daarvan in staat stel om ’n gevorderde analitiese strategie vir ander maatskappye te ontwikkel.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/96091
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