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)
10
Other Books You May Enjoy
11
Index
Appendix A: My Most Popular Economics of Data, Analytics, and Digital Transformation Infographics

The Economies of Scale

Historically, organizations sought competitive advantage through business models that exploited the Economics of Scale. Economies of Scale manifest themselves in cost advantages that enterprises can enjoy due to their scale of operation (typically driven by the volume of output), with cost per unit of output decreasing with increasing production. Organizations leveraged the world of "mass"—mass procurement, mass production, mass distribution, mass marketing, mass media—to erect insurmountable barriers of entry to competitors (see Figure 7.1):

Figure 7.1: Economies of Scale

Volume affords an enormous competitive advantage. As the Quantity (Q) or volume of items manufactured increases from Q1 to Q2, the Cost ($) of the item decreases from C1 to C2.

Over the long run, the Long Run Average Cost (LRAC) continues to decrease, though LRAC can creep back up due to inefficient overuse of resources (like overtime). Economies of...