Business Analysis for a Taxonomy

By Carl Weise posted 06-14-2013 13:23


Like all business analyses, the business reasons for a taxonomy can be examined from two different perspective.  These are a quantitative analysis and a qualitative analysis.  Both of these perspectives are important to get the support for a taxonomy in your organization.


Quantitative analysis ensures that your project is grounded in reality, and has measurable impact in changing that reality, your current situation.  The most typical quantitative approach is the return on investment analysis - how much dollar value does your organization get out of a taxonomy from the dollars you have pumped in to it?  Numbers look objective, so they inspire confidence more than opinions do.

This approach is superficially attractive, but for many areas of information and knowledge work, the things you can measure and count do not necessarily mean what you think they mean, at first glance.  Countable stuff is visible stuff.  The real impact of information and knowledge work is often what goes on in people's heads and cannot be completely monitored.

For example:

-  If the average time for information search is halved, does this mean that employees are spending the extra time productively?

-  If teams are accessing and reusing documents from other teams, does this mean that there is more mindless copying going on, and less innovation?

-  If the average time to answer a customer query is shortened, does that mean that the customer is more satisfied with the quality of the answer?

-  If the cost of producing proposals is shortened, does this mean that we are writing better proposals and winning the projects?

- If the employees can always find what they need through the taxonomy, does this mean there is less social interaction, informal knowledge sharing and trust building going on?

Anybody who does quantitative research knows that the same set of numbers can always tell a number of competing stories.  This is why qualitative analysis must always accompany quantitative analysis, to understand what the numbers mean on the ground, in real human situations.

Some improvements in the business - especially at the operational level - are much more open to quantitative analysis and translation into dollar value.  These are the blue segments on the left.


Qualitative analysis connects you to what is important to your staff - the things they attribute value to, and the things that will drive their decisions and choices.

There are three qualitative steps you need to consider in developing a business plan.

Your first step in a business plan connects your taxonomy project to the things that are important to your senior management, as well as to your operations managers, and the decisions they have made or need to make for your organization.  This is why your stakeholder analysis is so important at the start of the project, because this is part of what a stakeholder analysis does - uncover what is important to key influencers and beneficiaries of your project.

The second qualitative element in your business plan relates to ongoing communications and reporting.  A business plan is only the beginning of an engagement with your sponsors and key stakeholders.  It contains a promise, and so you need to manage communications with your stakeholders as you go through the project, indicating what is happening and what progress you are making against the promised goals and outcomes.  Don't wait to the end to report back, you may need additional support and understanding long before that.  Successes - whether planned or unexpected - need to be picked up as they happen, and then communicated.

Collect stories from your activities when you can and communicate them.  You will also use these later to explain your project's impact.  Hence, your business plan must contain progress markers and generate a communications plan.

The third qualitative element in a business plan is the reporting back at the close of your project.  Your case needs to explain to your sponsor and stakeholders exactly how your taxonomy project outcomes will be measured and evaluated.  This shows that you are serious about achieving outcomes for your organization, and not simply spinning a tale.  Your final evaluation should contain both quantitative measures (e.g.  improvement in the speed/success rate of finding information in the sale team during a proposal process) as well as qualitative measures (e.g.  to what degree the improvement in information access has made a positive contribution to sales).

It is a mistake to simply rely on quantitative measures.  People only care about numbers because of the story they tell.  Collecting concrete examples from your activities and giving a qualitative evaluation of the numbers is what completes the circle on your initial promises for the business - you have your empirical, grounded data, you have examples that people can relate to, and you can report on the views of key people in the decision making system about what all this means for the business.

Some improvements in your organization, especially at the strategic level, are much more open to qualitative analysis than quantitative analysis.

What are your thoughts on both a quantitative analysis and qualitative analysis for your taxonomy project?

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