Book Image

The Economics of Data, Analytics, and Digital Transformation

By : Bill Schmarzo
5 (2)
Book Image

The Economics of Data, Analytics, and Digital Transformation

5 (2)
By: Bill Schmarzo

Overview of this book

In today’s digital era, every organization has data, but just possessing enormous amounts of data is not a sufficient market discriminator. The Economics of Data, Analytics, and Digital Transformation aims to provide actionable insights into the real market discriminators, including an organization’s data-fueled analytics products that inspire innovation, deliver insights, help make practical decisions, generate value, and produce mission success for the enterprise. The book begins by first building your mindset to be value-driven and introducing the Big Data Business Model Maturity Index, its maturity index phases, and how to navigate the index. You will explore value engineering, where you will learn how to identify key business initiatives, stakeholders, advanced analytics, data sources, and instrumentation strategies that are essential to data science success. The book will help you accelerate and optimize your company’s operations through AI and machine learning. By the end of the book, you will have the tools and techniques to drive your organization’s digital transformation. Here are a few words from Dr. Kirk Borne, Data Scientist and Executive Advisor at Booz Allen Hamilton, about the book: "Data analytics should first and foremost be about action and value. Consequently, the great value of this book is that it seeks to be actionable. It offers a dynamic progression of purpose-driven ignition points that you can act upon."
Table of Contents (14 chapters)
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Appendix A: My Most Popular Economics of Data, Analytics, and Digital Transformation Infographics

The Economic Value Curve

The Economic Value Curve measures the relationship between a dependent variable and independent variables to achieve a particular business or operational outcome, such as retaining customers, increasing operational uptime, or reducing inventory costs. The Economic Value Curve measures the impact that increasing or decreasing one of the independent variables has on the dependent variable (the business or operational outcome).

In Figure 3.1, for example, if we want to increase the business outcome (dependent) variable "Uptime Percentage", then we must increase our spend or investment on the "Maintenance Spend" independent variable.

Figure 3.1: The Economic Value Curve

The challenge with the Economic Value Curve is the Law of Diminishing Returns. The Law of Diminishing Returns is a measure of the decrease in the marginal (incremental) output of production as the amount of a single factor of production (input) is incrementally...