PDSDS - Week 1 - Day 1 B - Decision Making

Applied A.I.
Solutions
Presenting Data Science-driven Solutions
Professor
Daniel Vitaver-Bronstein, B.Sc., EMBA
daniel.vitaver@georgebrown.ca
Quotations, Reference and Recommended Bibliography:
1 – How To Write A Business Case: Tips, Resources and Examples | JCU Online
2 – Data Science for Busin4ess, Foster Provost & Tom Fawcett, Published by O’Reilly Media Inc., Copyright © 2013 Foster Provost and Tom Fawcett. All rights reserved. 1
3 – Wikipedia , The free encyclopedia
4 – The Art Of The Start, Guy Kawasaki Portfolio, Published by Penguin Group, Copyright © Guy Kawasaki, 2004
Business Analysis - Intro
Business Techniques
for decision-making

Gap analysis
• A gap analysis is a comparison of a company’s current performance with what it

could perform. In other words, an evaluation of actual performance versus target
performance.
• Gap analysis is a technique that companies use to find out what they need to do
to move from their current state to a future one.
• Gap analysis is a means of attaining the aspired goals by figuring out the changes
required to meet the difference between the present and future state of an
organization, process or operations.
• It simply states the course of action required for meeting the desired standards or
benchmark.

Gap analysis – cont’d
• Gap analysis involves the comparison of actual performance with potential or

desired performance.
• Gap analysis identifies gaps between the optimized allocation and integration of
the inputs (resources), and the current allocation-level.
• This reveals areas that can be improved.
• Gap analysis involves determining, documenting and improving the difference

between business requirements and current capabilities.
• Gap analysis naturally flows from benchmarking and from other assessments.

• Once the general expectation of performance in an industry is understood, it is

possible to compare that expectation with the company's current level of
performance.
• This comparison becomes the gap analysis. Such analysis can be performed at
the strategic or at the operational level of an organization.
• Gap analysis is a formal study of what a business is doing currently and where it
wants to go in the future.
• It can be conducted, in different perspectives, as follows:

o Organization
o Business direction
o Business processes
o Information technology
• Types of Gaps
o Performance
o Manpower
o Profit
o Product / Market

• Gap analysis process
o Analyze your focus area

o Determine your ideal feasible future state
o Understand your current state
o Compare current state vs future state
o Identify and quantify the gaps
o Implement relevant measures and KPIs
o Formulate an action plan
o Prepare a report

• Gap analysis tools
o SWOT Analysis
o PEST Analysis
o Ishikawa/Fishbone Diagram
o McKinsey 7S Framework
o Burke-Litwin Causal Model
o Nadler-Tushman Congruence Model

Gap analysis – cont’d Gap analysis – cont’d
• Benefits • Limitations
o Streamline Business Process o Impact of Government
o Identify Market Gap o Impractical At Times
o External Benchmarking o Cost and Time Consuming
o Determine KPIs o Seasonal Changes
o Skill Development o May Demotivate Employees
o Profit Percentage Analysis o Urge for Technology
o Competitor’s Strategy
o Raise Job Insecurity

SWOT analysis
• SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a
person or organization identify strengths, weaknesses, opportunities, and
threats related to business competition or project planning.
• It is very helpful during the preliminary stages of decision-making processes.
• It evaluates the strategic position of organizations.
• It identifies internal and external factors that are favorable and unfavorable to
achieving business or project objectives.
Ref.: SWOT analysis - Wikipedia

SWOT Analysis
Internal Origin External Origin
Attributes of the organization Attributes of the environment
S W O T
Strengths Weaknesses Opportunities Threats
• Things your company • Things your company • Underserved markets • Emerging
does well lacks for a specific product or competitors
service
• Qualities that separate • Things your
• Changing regulatory
you from your competitors do better • Few competitors in
competitors than you your area of expertise environment
• Internal resources such • Resource limitations • Emerging needs for • Negative

as skilled your products or media/press
knowledgeable staff • Unclear unique selling services coverage
proposition
• Tangible assets as • Press/media coverage • Changing costumer
intellectual property, of your company
attitudes toward
capital property,
technology, etc. your company
Helpful to achieving the Harmful to achieving the Helpful to achieving the Harmful to achieving the
objective objective objective objective 11
PESTEL analysis
• PESTEL analysis (political, economic, socio-cultural, technological, ecological, legal)

describes a framework of macro-environmental factors used in the environmental scanning
component of strategic management.
• It is part of an external analysis when conducting a strategic analysis or doing market

research and gives an overview of the different macro-environmental factors to be taken into
consideration.
• It is a strategic tool for understanding market growth or decline, business position, potential
and direction for operations.
• This tool is one of the most frequently applied models in the evaluation of the highly
dynamic external business environment.

PESTEL Analysis
P E S T E L
Political Economic Social Technological Ecological Legal
• Government • Economic • Population • Technology • Weather • Discrimination
policy growth growth rate incentives • Climate laws
• Political • Exchange rates • Age • Level of • Environmental • Antitrust laws
stability • Interest rates distribution innovation policies • Employment
• Corruption • Inflation rates • Career • Automation • Climate change laws
• Foreign trade • Disposable attitudes • R&D activity • Pressures from • Consumer
policy income • Safety • Technological NGO’s protection laws
• Tax policy • Unemployment emphasis change • Copyright and
• Labour law rates • Health • Technological patent laws
• Trade consciousness awareness • Health and
restrictions • Lifestyle safety laws
attitudes
• Cultural
barriers
13
Cost / Benefit Analysis
• Cost–benefit analysis (CBA) is a systematic approach to estimating the strengths

and weaknesses of alternatives used to determine options which provide the
best approach to achieving benefits while preserving savings
• A CBA may be used to compare completed or potential courses of actions, or to

estimate (or evaluate) the value against the cost of a decision, project, or policy.
• It is commonly used in commercial transactions, business or policy decisions,

and project investments.
14
Cost / Benefit Analysis – cont’d
CBA has two main applications:
1. To determine if an investment (or decision) is sound, ascertaining if – and by how

much – its benefits outweigh its costs.
2. To provide a basis for comparing investments (or decisions), comparing the total
expected cost of each option with its total expected benefits.
15
• CBA is related to cost-effectiveness analysis.
• Benefits and costs in CBA are expressed in monetary terms and are adjusted for
the time value of money;
• Benefits and costs over time are expressed in terms of their net present value
(NPV), regardless of whether they are incurred at different times.
• The value of a cost–benefit analysis depends on the accuracy of the individual cost
and benefit estimates.
16
Net Present Value
• CBA generally attempts to put all relevant costs and benefits on a common
temporal footing, using time value of money calculations.
• This is often done by converting the future expected streams of costs (C) and
benefits (B) into a present value amount with a discount rate (r):
t=∞
Bt – Ct
NPV = Ʃ (1 + r)t
t=0
17
End of Week 2 / Day 2
18

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Applied A.I.

Presenting Data Science-driven Solutions

Quotations, Reference and Recommended Bibliography:

• A gap analysis is a comparison of a company’s current performance with what it

Quotations, Reference and Recommended Bibliography:

• Gap analysis involves the comparison of actual performance with potential or

• This reveals areas that can be improved.

• Gap analysis involves determining, documenting and improving the difference

Quotations, Reference and Recommended Bibliography:

• Once the general expectation of performance in an industry is understood, it is

• It can be conducted, in different perspectives, as follows:

Quotations, Reference and Recommended Bibliography:

• Gap analysis process

o Analyze your focus area

Quotations, Reference and Recommended Bibliography:

• Gap analysis tools

Quotations, Reference and Recommended Bibliography:

Quotations, Reference and Recommended Bibliography:

• It is very helpful during the preliminary stages of decision-making processes.

• It evaluates the strategic position of organizations.

Ref.: SWOT analysis - Wikipedia

• Internal resources such • Resource limitations • Emerging needs for • Negative

• PESTEL analysis (political, economic, socio-cultural, technological, ecological, legal)

• It is part of an external analysis when conducting a strategic analysis or doing market

Ref.: SWOT analysis - Wikipedia

• Cost–benefit analysis (CBA) is a systematic approach to estimating the strengths

• A CBA may be used to compare completed or potential courses of actions, or to

• It is commonly used in commercial transactions, business or policy decisions,

Ref.: SWOT analysis - Wikipedia

CBA has two main applications:

1. To determine if an investment (or decision) is sound, ascertaining if – and by how

Ref.: SWOT analysis - Wikipedia

• CBA is related to cost-effectiveness analysis.

Ref.: SWOT analysis - Wikipedia

Net Present Value

Ref.: SWOT analysis - Wikipedia

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