C ER TI FI ED A N ALYTIC S

P RO FE SS I ON AL ( CAP )
®

E XAM IN AT IO N STUDY GUI DE

5521 Research Park Drive, Suite 200, Catonsville, MD 21228 USA

855-249-2589
C H A P T ER 2
DOMAIN I – BUSINESS PROBLEM FRAMING

WHAT WILL YOU LEARN IN THIS CHAPTER?

In this chapter, you will learn about the first step of an analytics project: framing the
business problem. You will learn, as a part of these processes, how to determine
the business problem, identify and enlist stakeholders, determine if the problem
has an analytics solution, refine the problem statement as necessary, and define
the set of business benefits.

Learning Objectives

1. Obtain or receive the problem statement and usability requirements

2. Identify stakeholders

3. Determine whether the problem is amenable to an analytics solution

4. Refine the problem statement and delineate constraints

5. Define an initial set of business benefits

6. Obtain stakeholder agreement on the business problem statement

Key Concepts/Fundamentals

OBJECTIVE 1. RECEIVE & REFINE THE BUSINESS PROBLEM

A business problem statement generally starts by describing a business opportunity

or threat, or an issue in broad terms. For example, it could simply start by saying
'our growth has been stagnant for the last two years' or a bit less broad 'our Seattle
plant is experiencing production problems and is missing deadlines.' Most client
firms in their early meetings with you (the analytics professional) will tend to report
what they are experiencing as problems. As they do that, they will use their own
language and key terms. Do get definitions of all terms, as meanings change
between organizations.

Another factor to consider is that the client firm representatives in these meetings
also play an important role in what is reported and how it is reported. It is natural
that each representative (of the firm) uses their own lenses and contexts to report
(and thus frame) the way they see the problem. These views are all very important
on their own merits because they inform the analyst in some useful way. However,

17
 because of the individual lenses used to report these observations, sometimes
these views can have a good degree of variance regarding causes and effects, and
thus may obscure the real issues.

One popular way to frame a business opportunity or problem is to obtain reliable

information on the five W’s: who, what, where, when, and why.

• Who: are the stakeholders who satisfy one or more of the following with
respect to the project: funding, using, creating, or affected by the project’s
outcome.

• What: problem/function is the project meant to solve/perform?

• Where: does the problem occur? Or where does the function need to be
performed? Are the physical and spatial characteristics articulated?

• When: does the problem occur, or function need to be performed? When

does the project need to be completed?

• Why: does the problem occur, or function need to occur?

OBJECTIVE 2. IDENTIFY STAKEHOLDERS

Of the five W’s, who (the stakeholders are) is probably the most critical to the long
term success of the project. Stakeholders are anyone affected by the project, not
just those in the initial meetings, and they may have different levels of input or
involvement during the project. A stakeholder analysis helps identify the following:

• The interests of all stakeholders, who may affect or be affected by the

project, along with their constraints.

• Potential issues that could disrupt the project.

• Key people for information distribution during execution phase.

• Groups that should be encouraged to participate in different stages of

the project.

• Communication planning and stakeholder management strategies during

the project planning phase.

• Ways to reduce potential negative impacts and manage negative

stakeholders.

18
OBJECTIVE 3. DETERMINE WHETHER THE PROBLEM IS AMENABLE TO AN
ANALYTICS SOLUTION

Before more time and money is spent on solving the problem, it is time to figure
out if this problem is likely to have an analytics solution. First of all, does the answer
and the change process to get there lie within the organization’s control? Second,
does the requisite data exist or can it be obtained? Third, can the likely problem be
solved and/or modeled? Last, but perhaps most importantly, can the organization
accept and deploy the answer? The problem may not be amenable to an analytics
solution because of the characteristics of the problem or the limitations of the
analytic tools/methods available. The problem statement could be reassessed to
make it amenable to the available analytic tools/methods, or if this is not possible,
the project deemed not feasible. If there isn’t a feasible way forward, the ethical
analyst will say so to the key stakeholders.

For the Seattle plant example, it may be decided to use mathematical optimization
software to improve the plant’s process. This will work as long as data exist on inputs
and outputs for each step in the plant process, and as long as the stakeholders are
willing to accept new ways of operating that won’t necessarily match current work
policies and procedures.

OBJECTIVE 4. REFINE PROBLEM STATEMENT & DELINEATE CONSTRAINTS

After the initial analysis, it may be necessary to refine the problem statement to
make it more accurate, more appropriate to the stakeholders, or more amenable to
available analytic tools/methods. As part of this process, it will become necessary
to define what constraints the project will operate under. These constraints could
be analytical, financial, or political in nature.

For the Seattle plant example, an optimization problem with a large number
of constraints or a complex objective function may not be solvable within the
capability of the available software/hardware combination. In this case the problem
may need to be restated with fewer constraints and/or a less complex objective
function. This may cause the problem statement to be updated to make sure that
the approach will satisfy—just to name a few of the potential constraints—desired
accuracy and repeatability, program cost, timeframe, and number of stakeholders
impacted, either positively or negatively.

19
 OBJECTIVE 5. DEFINE AN INITIAL SET OF BUSINESS BENEFITS

With the problem statement set, it is now possible to define the initial set of
business benefits. These benefits may be determined quantitatively or qualitatively.
If quantitative, it may be financial (e.g., net present value) or contractual (e.g.,
service level agreements). This is also known as the business case.

For the Seattle plant example, an initial determination of the financial benefit due
to optimal use of resources should be determined along with an initial view of the
required project goals determined, e.g., plant is currently losing money at the rate
of 3% of gross sales with current performance and needs to come to 5% margin
on gross sales. The key profit driver is on-time performance, which is currently
68% and needs to get to 98%. How will it get there? At this stage we think it is
because there is plant capacity being wasted, so we’re going to look at optimizing
our scheduling and manufacturing processes to reduce overall time by reducing
queue and wait time. You’ll note that we haven’t said, yet, that we’re going to
simulate incoming orders with one distribution and performance of each machine
on the floor with their own distributions, even though we may be thinking about
doing just that. At this stage, the problem is a business problem and the objectives
are business objectives.

OBJECTIVE 6. OBTAIN STAKEHOLDER AGREEMENT ON THE PROBLEM STATEMENT

With the problem statement refined and the initial business benefits determined,
it is necessary to obtain stakeholder agreement before proceeding further with
the project. It may be necessary to repeat this cycle several times until stakeholder
concurrence with the particulars of the project are achieved and permission to
proceed is granted. At the end of this process, you will have agreement on the
project’s objectives, initial approach, and resources to get there.

SUMMARY

Although business problem framing is not the analytical heart of an analytics

project, it is probably the most important because it sets the expectations and
limitations of the project.

20
FURTHER READING

Davenport T, Kim J (2013) Keeping up with the Quants: Your Guide to

Understanding and Using Analytics (Harvard Business Review Press, Boston).

Framing the problem at https://www.boundless.com/business/management/

decision-making/observation-framing-the-problem/.

Kirkwood CW (1997) Strategic Decision Making: Multiobjective Decision Analysis

with Spreadsheets (Duxbury Press, Pacific Grove, CA).

Lindstrom C (2009) How to write a problem statement, March 18, http://www.

ceptara.com/blog/how-to-write-problem-statement.

Nixon NW (2013) Focus first on framing, not solving, the problem, April 18, http://
philadelphia.regionsbusiness.com/print-edition-commentary/focus-first-on-
framing-not-solving-the-problem/.

Seelig T (2013) Shift your lens: The power of re-framing problems. Seelig T, ed.
inGenius: A Crash Course on Creativity (HarperOne, New York), http://stvp.
stanford.edu/blog/?p=6435.

Spradlin D (2012) The power of defining the problem, September 25, http://
blogs.hbr.org/cs/2012/09/the_power_of_defining_the_prob.html.

21