DEPLOYMENT OF THE BUSINESS ANALYTICS MODEL
Of course, this is what we’ve always been doing or tried to do—but it’s the first time I am able to put it into words and see our endeavors in a useful analytical model.
—program manager for a large radio station
Case Study: How to Make an Information Strategy for a Radio Station
Now that we've introduced our theoretical model, let's apply this information to a concrete example in order to understand it better. This case study features the BA initiative of a large radio station that broadcasts nationwide. The case study is a simplified and somewhat creative version of real events, and its objective is merely to outline a BA process. Its focus is on the helicopter perspective, an improved conceptual tool, and the first important insights. The case study relates to the BA model in Exhibit 1.1.
Overall Strategic Targets of the Business
The radio station's vision is that there is a demand for radio entertainment in the shape of good music, entertaining talk, and news. Its mission is to become a leading player in the national market. The station's specified business goal is a market share of 25 percent and an ROE of 15 percent. The executive management cockpit or dashboard of the radio station with KPIs for monitoring business performance in relation to strategic objectives is illustrated in Exhibit 1.2.
The current status, which can be read from the instruments in the executive management cockpit, is an actual ROE of 9 percent and an actual market share of 17 percent. So the station has a way to go in order to achieve its targets of an ROE of 15 percent and a market share of 25 percent. The business strategy and objectives are thus presented by means of the following metrics (measures) or KPIs. Note that success and good performance are derived from the actual values of these measures in relation to the objectives.
Goal (KPI 1) : ROE = 15 percent. Actual = 9 percent.
Goal (KPI 2) : Market share = 25 percent. Actual = 17 percent.
The two KPIs are used to control and manage the radio station. Return on equity (KPI 1) is the most important KPI, and it is affected by the market share (KPI 2). The thinking is that a bigger market share (KPI 2) will mean more concurrent listeners and increased advertising revenue, which means a bigger ROE for a given level of cost. A new BA
Exhibit 1.2 Executive Management Cockpit of Radio Station with KPIs Prior to BA Initiative initiative is planned and implemented in the business. The process is outlined in the following section using the BA model.