Should You Outsource Analytics? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Should You Outsource Analytics?
This is an MIT Sloan Management Review article. The surge of interest in big data has led to growing demand for analytics teams. Assembling such teams, however, is difficult. For one thing, many companies lack the in-house knowledge and experience needed to put together a world-class analytics team. What's more, the labor market for analytics professionals has grown increasingly tight. The shortage of analysts -particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics -is driving organizations to consider outsourcing their analytics activities. Analytics is the latest in a string of activities companies are outsourcing to business process organizations (BPOs). It draws heavily on mathematics and statistics knowledge, and many analytics-oriented BPOs have operations in India. Although some companies have world-class analytics capabilities in-house, the authors posed the question: Can an analytically naA?ve company "buy"world-class analytics functions by hiring outside experts? The authors studied both four multinational companies that used one or more offshore analytics BPOs and four analytics BPOs. Two of the client companies had skills that were judged to be "analytically superior"; the other two were judged to be "analytically challenged."The analytically challenged companies saw analytics BPOs as a way to obtain the resources and training needed to manage and execute their analytics and to gain quick access to important insights. By contrast, the analytically superior companies wanted to expand their internal analytic capabilities, in part because they wanted to preserve their ability to develop and protect intellectual property; they tended to use offshore BPOs to perform low-level analytics. According to the authors, the best analytics BPOs have core competencies that go beyond what most companies can perform on their own with internal teams. They advise companies working with analytics BPOs to be clear about who does what, who owns what, how each party can use the information it has and what happens to the information and knowledge in the event that the BPO is acquired.
Swot Analysis of "Should You Outsource Analytics?" written by David Fogarty, Peter C Bell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bpos Analytics facing as an external strategic factors. Some of the topics covered in Should You Outsource Analytics? case study are - Strategic Management Strategies, Operations management, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Should You Outsource Analytics? casestudy better are - – technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of Should You Outsource Analytics?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should You Outsource Analytics? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bpos Analytics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bpos Analytics operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Should You Outsource Analytics? can be done for the following purposes –
1. Strategic planning using facts provided in Should You Outsource Analytics? case study
2. Improving business portfolio management of Bpos Analytics
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bpos Analytics
Strengths Should You Outsource Analytics? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bpos Analytics in Should You Outsource Analytics? Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Should You Outsource Analytics? firm has clearly differentiated products in the market place. This has enabled Bpos Analytics to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bpos Analytics to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Bpos Analytics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Should You Outsource Analytics? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Bpos Analytics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Bpos Analytics are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Bpos Analytics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bpos Analytics has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Bpos Analytics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Should You Outsource Analytics? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Bpos Analytics is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bpos Analytics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Should You Outsource Analytics? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Bpos Analytics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Should You Outsource Analytics? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Bpos Analytics is one of the leading recruiters in the industry. Managers in the Should You Outsource Analytics? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Bpos Analytics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Bpos Analytics has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Should You Outsource Analytics? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Should You Outsource Analytics? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should You Outsource Analytics? are -
No frontier risks strategy
– After analyzing the HBR case study Should You Outsource Analytics?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Should You Outsource Analytics? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bpos Analytics has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Should You Outsource Analytics?, it seems that the employees of Bpos Analytics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Bpos Analytics, firm in the HBR case study Should You Outsource Analytics? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bpos Analytics supply chain. Even after few cautionary changes mentioned in the HBR case study - Should You Outsource Analytics?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bpos Analytics vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Should You Outsource Analytics? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Should You Outsource Analytics? can leverage the sales team experience to cultivate customer relationships as Bpos Analytics is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, David Fogarty, Peter C Bell suggests that, Bpos Analytics is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Bpos Analytics is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bpos Analytics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bpos Analytics to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Should You Outsource Analytics?, is just above the industry average. Bpos Analytics needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Need for greater diversity
– Bpos Analytics has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Should You Outsource Analytics? HBR case study mentions - Bpos Analytics takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Should You Outsource Analytics? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Should You Outsource Analytics? are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bpos Analytics can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bpos Analytics can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bpos Analytics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Bpos Analytics to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Bpos Analytics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Should You Outsource Analytics? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bpos Analytics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Bpos Analytics has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Bpos Analytics can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bpos Analytics is facing challenges because of the dominance of functional experts in the organization. Should You Outsource Analytics? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Bpos Analytics can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Bpos Analytics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Should You Outsource Analytics? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bpos Analytics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bpos Analytics in the consumer business. Now Bpos Analytics can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bpos Analytics can use these opportunities to build new business models that can help the communities that Bpos Analytics operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Bpos Analytics can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Should You Outsource Analytics? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should You Outsource Analytics? are -
Increasing wage structure of Bpos Analytics
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bpos Analytics.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bpos Analytics in the Strategy & Execution sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bpos Analytics business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Bpos Analytics demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Should You Outsource Analytics?, Bpos Analytics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bpos Analytics can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Should You Outsource Analytics? .
High dependence on third party suppliers
– Bpos Analytics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Bpos Analytics is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bpos Analytics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Bpos Analytics needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bpos Analytics will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Bpos Analytics needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bpos Analytics can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Should You Outsource Analytics? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Should You Outsource Analytics? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Should You Outsource Analytics? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Should You Outsource Analytics? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Should You Outsource Analytics? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bpos Analytics needs to make to build a sustainable competitive advantage.