2.1.3 Assess Current State

Business data analytics is used to enable organizations to make informed decisions. Understanding the current state of the organization or context of the proposed change is fundamental to informed decision-making.

Information obtained from a current state assessment provides important context so that the results of data analysis can be better interpreted.

Analyzing the current state involves understanding the business need and how it relates to the way the organization currently functions. The results of the current state analysis set a baseline and context for making a change.

Whether discussing the changes associated with the implementation of a new customer relationship management (CRM) system or the process changes proposed after gaining insightful information from the results of a business data analytics effort, analyzing the current state is an important task.

A current state assessment can include understanding the business value chain or how data and information flow throughout the organization. From a data analytics perspective, the analysis of the current state involves determining what the existing data is pointing towards. This can be in the form of insights gained from previous analytics engagements or through the exploration of existing data using statistical or mathematical models or intuitions.

Conducting a current state assessment involves understanding organizational capabilities, resources, and business processes, in order to fully understand the business problem and derive research questions from it. All the tools, techniques, and models used are evidence-driven. For example, a business leader simply stating that there has been a reduction of internet sales due to lack of customer engagement does not conclusively link reduced sales to low customer engagement. Analysts look for concrete evidence from data and analysis to substantiate that hypothesis.

The analyst may uncover insights such as whether the organization has an appetite for analytics, the budget, and the expertise to perform the work. They necessarily become knowledgeable in the business domain and understand trends and evolving business models.

When conducting a current state assessment, analysts use business model canvas, organizational, scope, and process modelling to elicit, analyze, and visually depict the current state of the organization. Conceptual and systems thinking, along with business acumen and solution knowledge, help analysts understand and communicate the current state.

Example of Current State Analysis to Refine Research Questions Using current state analysis to refine research questions can be demonstrated by reviewing some challenges of forecasting for a typical newsvendor problem. A family-owned company that specializes in making world-class bicycles and parts has gone through a recent leadership change. Like many organizations that conduct a yearly forecast, the new leader is also faced with the most critical aspect of the job— forecasting and committing to fulfilling the total product demand, thereby determining a significant share of the next year's success. Forecasting was a pressing issue as the product portfolios had continued to grow even as product life cycles, along with customer patience regarding delivery, were becoming shorter. As always, the company’s order commitment to its suppliers had to be made six months before the start of the season in September, without having any early indication of demand. The new leader wanted to adopt new best practices, knowledge, and processes that included new ways of forecasting the demand. In this case, the business need is to accurately forecast the demand for the products ahead of time, which corresponds to a research question on discovering the factors that influence the forecast. The accuracy of the forecast would determine the strategy for the company for the entire year and impact decisions across the value chain such as procurement, logistics, and marketing. A current state analysis, in the data context, usually involves the study of the business model, supply-chain analysis, analysis of the existing forecasting process, and analysis of the utility of the data available for forecasting. The analysis may reveal many constraints, insights, and assumptions that affect the nature of the research question. If the current state analysis was not performed, the research question would only involve assessing the current forecasting model. An accurate current state analysis may reveal that the business model could be revised. Instead of using the same supplier for procuring bicycle parts, different local suppliers could be used, and the bicycles could be assembled locally. This would change the current research question from trying to improve the forecasting model to researching the factors that would maintain the quality, pricing, and sales. Similarly, if the current state analysis of historical data revealed a clear trend of seasonal demand during longer holidays, the research question would involve a study of seasonal patterns that could be used to upgrade the forecasting model. These two examples, a change in the business model, or a change in the forecasting approach, are clear results of current state analysis that refine the original research problem to new or re-framed research problems that are more relevant.