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 - – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, geopolitical disruptions, cloud computing is disrupting traditional business models,
wage bills are increasing, central banks are concerned over increasing inflation, 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 -
High brand equity
– Bpos Analytics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bpos Analytics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Analytics focus
– Bpos Analytics is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David Fogarty, Peter C Bell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Bpos Analytics in the sector have low bargaining power. Should You Outsource Analytics? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bpos Analytics to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Bpos Analytics is present in almost all the verticals within the industry. This has provided firm in Should You Outsource Analytics? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
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.
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.
Ability to lead change in Strategy & Execution field
– Bpos Analytics is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bpos Analytics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
Capital Spending Reduction
– Even during the low interest decade, Bpos Analytics has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Bpos Analytics has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Should You Outsource Analytics? should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Bpos Analytics products
– To increase the profitability and margins on the products, Bpos Analytics needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bpos Analytics needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Bpos Analytics has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bpos Analytics can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bpos Analytics to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bpos Analytics to hire the very best people irrespective of their geographical location.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Bpos Analytics to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bpos Analytics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Better consumer reach
– The expansion of the 5G network will help Bpos Analytics to increase its market reach. Bpos Analytics will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Leveraging digital technologies
– Bpos Analytics can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bpos Analytics can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Should You Outsource Analytics?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
Stagnating economy with rate increase
– Bpos Analytics can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bpos Analytics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bpos Analytics needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bpos Analytics.
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.