Recently, two friends from major manufacturers (short videos, games) came to talk about business analysis, which really made me curious. In the past, traditional state-owned enterprises did a lot of business analysis, and even they began to struggle.
After chatting, I found out: "The landlord's family has no surplus grain!" The traffic of the toC Internet has peaked, and the cost has increased, so that the large factories that originally spent money like splashing water also have to pay attention to the benefit assessment, so that the business analysis is put on the agenda.
So, what is business analysis for? What should be done appropriately?
What is Business Analytics?
As the name suggests, business analysis is a comprehensive diagnostic analysis of the business status of a business. Business analysis is not a new thing, it is very popular in state-owned enterprises or large traditional enterprises, such as banks, operators, and real estate companies, with more than ten years of experience.
In the whole data analysis system, business analysis is the top-level analysis, which mainly solves two macro problems: whether the overall business status of the enterprise meets expectations, whether the main business methods of the enterprise are effective, and then the detailed analysis is handed over to the corresponding department to do special analysis (as shown in the figure below).
Some students may be curious, what is the difference between this and the analysis report we usually make?
Business Analytics VS Business Analytics
The original purpose of business analysis is to solve the problem of business and finance, work and budget mismatch. Therefore, in general, when an enterprise holds a business analysis meeting, the main business department, the finance department, and the strategic development department/general office (coordination department) are present to jointly review the business situation.
The reason for this is that the analysis done by the business itself generally tends to exaggerate the benefits and underestimate the costs.
Common practices include:
1. Calculate the "natural growth rate" and "engage in ABtest", and the result is that the natural growth rate is counted as a negative number, and group B is a negative number, which makes it seem that group A has a better effect, but in fact, the overall business volume has not changed significantly.
2. Talk about "user satisfaction" and "mental share", and then use sampling survey data to prove that it is effective, but the overall business volume has not changed significantly.
3. On the big promotion, similar to 618/Double Eleven super promotion, this time the overall business volume has changed, but when the ROI can be assessed, only the activity investment, publicity expenses, operating costs, supply chain costs, and employee costs are not counted...... Their own benefits are very good, but the company's overall input-output ratio is declining......
4. As for the cost of product development, product change, brand promotion, etc., it is often overlooked. Evaluate performance, but only evaluate non-financial indicators (such as online time, click-through rate), as for how much revenue is generated, I have never thought about it.
These practices are very common. Individually, each one makes sense, and each sub-project is "profitable", "strategic", and "ROI-positive" can be packaged, but the cost of the entire company is overrun, and the business goal is difficult to achieve.
Some students may ask: Isn't finance the cost, and it's good to let finance count it?
Business Analysis VS Financial Analysis
In fact, the standard financial statements are limited by the national "Accounting Standards", and are more to meet compliance requirements than business needs. The account setting and calculation method are different from the actual business. The intuitive reflection is that the business department "can't understand" and can't use it.
Looking further, the three major financial statements (balance sheet, income statement, and cash flow statement) are all result data, without considering the business transformation process, and there is no business classification label, so you can only see the money you make and lose, and you can't see which link causes the problem, so the diagnosis ability is very weak.
In addition, many companies' financial systems and business systems are not connected. Purchase requisitions, reimbursements are based on business requisitions. However, the business application form does not necessarily correspond to the actual action, and even some business personnel merge/split the application form at will and misappropriate the application resources in order to save trouble, which leads to the chaos of the underlying data and cannot be integrated and analyzed.
Therefore, if you want to do a good business analysis, you must sit down with the business and finance departments and consider it holistically.
So, what are the key points to focus on?
Four key points of business analysis
Point 1: Business classification.
For each business, you should clearly explain the relationship between your work and revenue indicators, and there are five common categories, which you can refer to (as shown in the figure below)
Point 2: Overall layout.
The overall layout focuses on three aspects
1. Set business objectives
Set business goals, not sales of pork, you 100 million, I 500 million, and then pull up the banner to do it. When setting goals in business analysis, long-term planning needs to be considered, and time needs to be reserved for early R&D and design, production line improvement, and MVP testing, focusing on long-term trends. Of course, depending on the business, the scope of "long-term" is different, but it needs to be considered: infrastructure is the main focus on some time, and impulse in some time (as shown in the figure below).
2. Clear driving force
There are many ways to achieve goals (as shown in the figure below), and you need to think clearly in advance about which mode to achieve your goals. Clear driving force not only facilitates subordinate departments to formulate specific tactics, but also provides the basis for non-sales departments to take money when assigning tasks and planning budgets.
3. Phased tasks
In order to implement the overall layout, it is also necessary to split the macro goals into phased goals. Here is the "one vertical and one horizontal" dismantling method (as shown below).
Business analysis must be top-down, starting from the goal, and deducing specific actions. Therefore, the overall layout is very important. With a clear goal, there is a clear way to play. Some companies try to use tactical efforts to cover up the laziness of strategy, and always urge the people below to "calculate the benefits", but the overall layout cannot be seen or touched. At this time, the more counts you count, the more confused your mind becomes.
Point 3: Data integration.
The traditional five-in-one requirements: budget code, project code, commodity code, reward resource code, user ID, and five codes should all be linked, and each money, from which project (note that it is a business project, not a financial account) is used where it is used, and it should be clearly identified.
This restriction is mainly aimed at the marketing/branding department, which has the most project-based expenses and the most dazzling forms of use, among which there are also the most opportunities to fish in troubled waters. Therefore, it can be controlled by classification (as shown below).
Point 4: Perform monitoring.
With a clear goal and task division, monitoring is easy to do, and then you can check whether each department has completed the task by work node. Different from general analysis, business analysis will pay special attention to the external environment and competing products, and prioritize external influences.
brief summary
The Internet industry was accustomed to working fast and burning money for traffic, and the operation was too extensive, and it was only when the traffic peaked in the past two years that it began to consider the operation of the business analysis system. In fact, this set of methods has been in operation for many years in many large state-owned enterprises and banks, and can standardize the management of internal operation systems.
But we also have to see the shortcomings, namely:
1. Too much emphasis on business objectives will weaken the spirit of innovation/enterprising.
2. Too much emphasis on bottom-up will lead to the loss of initiative of subordinates
3. Monitoring progress too strongly will lead to a one-size-fits-all approach from subordinates
This kind of KPI culture is actually very annoying. As for some large enterprises, the beginning of the business analysis report should spend 3 pages on how our branch supports the spirit of superior leadership, which is more widely criticized, not to mention.