Read the radio station case study (ATTACHED) in Chapter 1 of the textbook, then write a three-page paper that proposes how the results would change if the radio station also had information on the locations and occupations of their listeners. Also, discuss how each piece of information in this case study information could be collected.
Laursen, G.H. N., & Thorlund, J. (2016). Business Analytics for Managers: Taking Business Intelligence Beyond Reporting (2nd Edition). Wiley Professional Development (P&T). https://ambassadored.vitalsource.com/books/9781119302537
Case Study: How to Make an Information Strategy for a Radio Station
Now that we've introduced our theoretical model, let's apply this information to a concrete
example in order to understand it better. This case study features the BA initiative of a large
radio station that broadcasts nationwide. The case study is a simplified and somewhat creative
version of real events, and its objective is merely to outline a BA process. Its focus is on the
helicopter perspective, an improved conceptual tool, and the first important insights. The case
study relates to the BA model in Exhibit 1.1.
Overall Strategic Targets of the Business
The radio station's vision is that there is a demand for radio entertainment in the shape of good
music, entertaining talk, and news. Its mission is to become a leading player in the national
market. The station's specified business goal is a market share of 25 percent and an ROE of 15
percent. The executive management cockpit or dashboard of the radio station with KPIs for
monitoring business performance in relation to strategic objectives is illustrated in Exhibit 1.2.
Exhibit 1.2 Executive Management Cockpit of Radio Station with KPIs Prior to BA Initiative
The current status, which can be read from the instruments in the executive management cockpit,
is an actual ROE of 9 percent and an actual market share of 17 percent. So the station has a way
to go in order to achieve its targets of an ROE of 15 percent and a market share of 25 percent.
The business strategy and objectives are thus presented by means of the following metrics
(measures) or KPIs. Note that success and good performance are derived from the actual values
of these measures in relation to the objectives.
The two KPIs are used to control and manage the radio station. Return on equity (KPI 1) is the
most important KPI, and it is affected by the market share (KPI 2). The thinking is that a bigger
market share (KPI 2) will mean more concurrent listeners and increased advertising revenue,
which means a bigger ROE for a given level of cost. A new BA initiative is planned and
implemented in the business. The process is outlined in the following section using the BA
Functional Strategy and Business Case
BA activities must always be based on the business‐driven environment, with the management
specifying or creating one single information strategy that must be subject to the company's
overall business strategy (vision, mission, and objectives).
The program manager of the radio station has come up with a strategic initiative to increase the
business's market share from the current 17 percent to 25 percent. The radio station must hold on
to its listeners longer. The program manager specifies this strategy as: “From our current record
of holding on to our listeners for 15 minutes, before he or she changes channel, we must in the
future hold on to our average listener for 30 minutes.” The program manager introduces the
performance target: average listening time as a new measure or KPI for the production department. The target is that the average listener must be kept on the broadcasting frequency for
30 minutes. The average listening time thus takes its place as a new KPI on the management
Note that this strategic target penetrates right into the core business of the radio station. If the
target—to hold on to the average listener for 30 minutes—is achieved, it will mean a bigger
market share, increased advertising revenue, and, ultimately, an improved ROE. So, it is
expected that an increase in KPI 3 will affect both KPI 2 and KPI 1 positively.
Before launching the BA initiative, the program manager prepares a business case for the project.
He expects a larger market share (KPI 2) of up to 25 percent as a result of the increase in average
listening time (KPI 3) of 30 minutes. This is expected to improve the pricing of advertising slots,
so that the advertising revenues of the radio station increase by $4 million per year. Based on
these expectations, he calculates that return on equity (KPI 1) will increase from 9 percent to 13
percent. In addition, he expects that the BA initiative will incur a resource consumption of three
employees in four months as well as necessitate purchasing software and consultancy services
Total costs are estimated to be $1 million. The business case speaks in favor of carrying out the
project. The reason is an expected growth in the annual cash flow of $4 million from increased
advertising revenue, and that the project will cost only $1 million to implement.
Moreover, the payback period is only one quarter, and the project is not considered to entail any
risk. Note that if the business case shows a negative result (or if the project looks risky), the BA
initiative should not be implemented. Business cases are a good way of evaluating and
prioritizing BA projects. We'll cover more about business cases in Chapter 8.
The management of the radio station now has the first elements of its information strategy in
place, and it's directly related to the overall strategic objectives of the business.
Business Processes and Actions
The business processes of the production department must now be adjusted in such a way that
they actively show a behavior that secures the average listener for longer, thereby increasing the
value of KPI 3.
There is an acknowledgment among the staff that they need more information and knowledge
about their listeners' characteristics and preferences at different times and in connection with the
different programs. In other words, the processes must be adapted to a listener profile to enable
the DJs and newsreaders of the radio station to continuously deliver content that is to the current
listeners' tastes. In the future, the radio production must be based on factual knowledge about the
current listeners' characteristics and preferences. This means that whatever is broadcast must be
customized to suit current listeners' interests, and results must be measurable on an ongoing basis
and readable on the management dashboard—now with the three measures or KPIs: KPI 1:
return on equity, KPI 2: market share, and KPI 3: average listening time.
Analytical Processes and Front Ends
In the analytical environment, it is the task of the analyst to create information and knowledge to
drive business processes in the direction of delivering content that, to a greater extent, falls into
the listeners' tastes. The main questions for the analyst are:
• Who are our listeners?
• What do they like to listen to?
• Who listens to what and when?
The analyst quickly realizes that he does not possess sufficient data about the listeners to be able
to work out listener profiles. If he did have this data, it could be merged with the program
database of the radio station in the data warehouse, and subsequently constitute the basis of the
creation of knowledge about listener profiles at different times and for the different programs of
the radio station.
The analyst needs the data warehouse to provide him with data on the listeners' ages, genders,
and tastes and preferences 24/7. He needs this information for the profiles. The database
specialist does not have this data stored, and it cannot be obtained from an external supplier.
Therefore, the database specialist asks the IT department to create a new operational data source
to collect data on listener profiles at different times of the day.
Data Sources: IT Operations and Development
IT operations and development decide to collect data on the listeners' ages, genders, tastes,
moods, and listening times via a questionnaire. They develop an electronic questionnaire that
listeners can complete on the radio station's website. The survey is announced and promoted on
air, and sponsor prizes are given out via a prize drawing for the participating listeners. The data‐
collection process enables the creation of new operational data sources in the technically oriented
environment, and the process is controlled and managed by developers and operational staff from
IT operations and development. Using ETL tools, the database specialist or the ETL developer
now continuously transfers the new data source into the data warehouse. Here it is merged with
the other databases of the radio station (for instance, the database on past aired radio programs).
After having been merged, the data is moved out into a data mart area so that the analyst can
In the analytical environment, the analyst now has access to data and starts to transform the
collected and merged data from the data warehouse into information and knowledge. The result
of his analytical processes using statistical methods and tools such as data mining shows that the
typical listener in the early hours of the morning is a fun‐loving 30‐year‐old woman.
The analyst also has report‐developing competencies and has prepared a front‐end report with
the results from his BA tool, which could be Microsoft Excel. The report contains information
and knowledge about listener profiles for different times of the day and for the different
programs. The report is released weekly with new numbers to the business's intranet, where it
can be accessed and used by business users in the production department. Note that the analytical
environment is positioned in the border area between the technically oriented environment and
the business‐driven environment, and we find people with competencies in both areas. The front‐
end solution and the report could also be delivered by a report developer from the technically
oriented environment, based on results from the analytical processes.
The radio station's operational decision makers, DJs, and newsreaders must now change their
daily business processes and actions in such a way that their actions provide better support for
the achievement of the strategic targets of the business. As mentioned, the strategic target for the
production department is to hold on to listeners for longer with a view to increase market share
and ultimately improve ROE. In the morning, they all read the released front‐end report to make
use of the information and knowledge from the controller's analytical processes.
Before each DJ puts on a song, he looks at the BA report and asks himself the question: “Is a
fun‐loving 30‐year‐old woman going to like this music?” If he's about to play a heavy metal CD,
it'll probably go back on the shelf. Instead, “Material Girl” by Madonna still might stand a good
Equally, all news will be sorted through by the newsreader. Before reading any news, he now
asks himself the question: “Is a fun‐loving 30‐year‐old woman going to find this piece of news
interesting?” If the news is about motoring, it'll probably end up in the paper bin, whereas news
about either the current economic crises or the latest cinema film is likely to be broadcasted.
What is happening on this radio station is BA: decision support delivered to operational decision
makers based on data analysis (creation of knowledge). The purpose of the exercise is to direct
the decision makers' daily business processes toward achieving strategic targets.
Today, automatic digitalized decision making, based on analytics, is increasingly used to control
and optimize operational processes at Internet radio stations. Data collected from users (e.g., IP
addresses, how many people are turned in, the media player they are using, how long they
listened, and their computer's operating system) can be used by an robot/algorithm to decide, for
example, which shows/tracks to repeat (or skip), the required bandwidth (to support a good user‐
experience), and advertising content.
Evaluation of the Business Analytics Process
Over the next six months, the radio station succeeds in holding on to its average listener for 9
minutes longer than before, and all three KPIs are improved. (See Exhibit 1.3.)
Exhibit 1.3 The Radio Station's Dashboard with KPIs after BA Initiative
Following the BA initiative, the radio station's average listener stayed tuned in for an average of
24 minutes (KPI 3). The radio station's market share (KPI 2) went up to 20 percent, and ROE
(KPI 1) increased to 12 percent. The business is on its way to achieving its overall strategic
targets, and the production department's BA initiative must be said to have been successful. It
could not have been done without BA—from strategy to data sources.
The purpose of the case study was, as mentioned, to provide a quick overview and to show how
BA can be deployed successfully to support and influence the behavior of operational decision
makers with a view to achieving overall business targets.
The 12 most important conclusions to draw from the case study in terms of the establishment of
successful BA are:
• The BA initiative of a business area or a department must support and promote the
department's overall strategic targets, which equally must support and promote the
overall strategic targets of the business as a whole. We will take a closer look at the
relationship between business strategies and the BA function in Chapter 2.
• The strategic targets of the BA activities of a given business area must be measurable
with one or more KPIs to ensure that performance and progress can be followed on an
ongoing basis. The chosen KPI or KPIs must be able to influence the overall KPIs of the
company. We will discuss more about KPIs in Chapter 3.
• A planned BA activity must stand up to an evaluation based on business case principles.
In other words, a BA initiative must create value for the company just like any other
investment. Increased revenue or savings must justify the investment. Read more about
business cases and the prioritization of BA projects in Chapter 8.
• It must be specified what kind of information and knowledge are required for the
operational decision makers and digital processes, and how they are to act on this
information. This part needs to be taken very seriously. It's important to understand that it
is here, and only here in the process‐changing area, that BA creates value for the
company. In all other contexts, BA is just a cost. We will say more about this subject
in Chapter 3.
• The analyst/controller must be able to decode business users correctly, specify the
requirement for relevant data, and use the right methods so that useful information and
knowledge are presented for decision support. Front‐end applications and reports
conveying knowledge must have correct functionality and be simple and intuitive
for business users. More about analyses and reporting methods will be seen in Chapter 4.
• The data specialist or the ETL developer in the data warehouse must be able to merge and
enrich data with useful dimensions and perspectives. Data quality must be very high to
ensure credibility from the business side. More about data warehouse and data quality
in Chapter 5.
• IT operations and development must be able to establish an infrastructure for new data
sources and secure valid retrieval of source data. Further information on data sources will
be presented in Chapter 6.
• The achievement of BA in large organizations is a process that involves contributions
from many functions and people. The BA model provides a helpful overview of structure,
people, and activities, so it's necessary to use it in the planning stages of BA initiatives. It
may help to create an organizational function to handle BA activities across the functions
of the organization to ensure the necessary coordination. More about the organization of
BA will be discussed in Chapter 7.
• The analyst/controller will typically be a key person in BA activities and represent a kind
of cross‐functional person holding all the strings together. This is because of his or her
presence in both the business‐driven environment and the technically oriented
environment (refer to the BA model). The analyst will usually have the necessary insight
into processes and strategies in the business‐driven environment as well as the necessary
technical insight to be able to enter into a constructive dialogue with the data warehouse
and IT department.
• BA is a holistic and hierarchical discipline, stretching from business strategies to
sourcing from operational data sources. The business‐driven environment must assume
full ownership and manage the process. The technically oriented environment must
support the process with infrastructure, data delivery, and the necessary application
• BA is a support process. It can be seen as a chain that is only as strong as its weakest link.
If, for instance, the analyst cannot derive the right information from data, then all other
activities are of no use. The same is true if we do not deliver the right data to the analysts,
or if the business users chooses not to act based on the new knowledge. In Chapter 8, we
take a closer look at what to be aware of as project manager of a BA project.
• Successful BA processes should have a fixed structure that always begins with the
specification of the information strategy, which is derived from the objectives of the
business strategy. Sketching an information strategy of the radio station using the BA
model is visualized in Exhibit 1.4.
Who What to Do Radio Station Example
Executive management sets
overall strategic targets for
Executive management sets
overall business targets:
Return on equity (KPI 1) = 15%
Market share (KPI 2) = 25%
operational decision makers
in HR, sales, production,
marketing, finance, etc.
strategic target at the
Program Manager sets target;
Average listening time (KPI 3) =
Operational decision makers
improve upon business
processes using information
created by the BA function.
DJs and newsreaders improve
their processes by broadcasting
music and news in accordance
with listeners' tastes at different
times of the day.
Operational decision makers
demand and use information.
DJs and newsreaders demand
information about listeners'
tastes/profiles at different times of
Analyst, controller, data
manager, and report
requirements and create
information using analytical
Analyst identifies listeners'
profiles at different times of the
day by using data mining
methodology, and report
developer creates reports.
Data warehouse function
ETL developer and database
Gather, enrich, and supply
data for business use, based
on requirements from
ETL developer and database
specialist gather, enrich, store and
deliver data on the listeners' age,
gender, tastes, moods, and
listening times, based on
requirements from analyst.
Data source and IT
Maintain and develop IT
infrastructure for data to be
IT professional creates new source
data by developing an electronic
questionnaire on the Web site to
be completed by radio station
listeners, based on requirements
from the data warehouse team.
Exhibit 1.4 Sketching an Information Strategy
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