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Business Metrics For Data-Driven Companies

This document provides an introduction to business metrics. It discusses distinguishing revenue, profitability, and risk metrics and how they relate to different business functions and perspectives. It also distinguishes traditional metrics that are influenced by many factors from dynamic metrics that can be significantly impacted by small changes in the short term. An example of a coffee shop's cash flow and profit and loss statements is provided to help define various metrics. The document outlines the topics that will be covered over four weeks to provide a deeper understanding of business metrics and how to apply them to case studies.

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doan nguyen
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249 views

Business Metrics For Data-Driven Companies

This document provides an introduction to business metrics. It discusses distinguishing revenue, profitability, and risk metrics and how they relate to different business functions and perspectives. It also distinguishes traditional metrics that are influenced by many factors from dynamic metrics that can be significantly impacted by small changes in the short term. An example of a coffee shop's cash flow and profit and loss statements is provided to help define various metrics. The document outlines the topics that will be covered over four weeks to provide a deeper understanding of business metrics and how to apply them to case studies.

Uploaded by

doan nguyen
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

1 Week 1: Introduction

1.1 About this specialization and course


1.1.1 About this specialization
1.1.2 Introduction to course 1

1.2 What are business metrics?


1.2.1 Metrics ask us to ask the right question
What is always the right questions?

 What change in our business can & should make right now?
 Increase revenue
 Maximize profitability
 Reduce risk

RIGHT NOW?

1. Real time, computerized system.


2. Just in time.
a. Human being has access to full records of historical record.
3. Empirically tested.
a. Compare A & B version. -> AB testing.

What process should we change right now?

Ex: bricks & mortar retail clothing store.

Sales tax is not a metrics.

Percentage of pp who viewed our ad on a particular website. Link to click through: METRICS.
1.3 Distinguishing Revenue, Profitability, and Risk Metrics

Revenue Sales & marketing


Outward facing
sales by region, product, new vs repeat customers.
sales funnel: potential customers
selling: how effective marketing campaign.

Profitability efficiency, productions logicstics & operations


operational oriented
cash tied with unsold inventory
lose sale becuase of insufficient production

Risk Risk managers & creditors, outside investors.


net cash flow everymonth on debt, small drop in revenue by external shock -> cause collapse.
secured creditors: not paid in time: close down
net cash out
churn rate: subscribers drop off.
financial risk: volatility
leverage

Revenue metrics are for optimistic extroverts, profitability metrics for  fastidious perfectionists, and
risk metrics for informed skeptics.
1.3.1 Distinguishing Traditional and Dynamic Metrics
Attribute of dynamic metrics:

1. Significant change over a month or less

NOT dynamic: stand alone retail store pays on three-year real estate lease.

DYNAMIC: 1000 mall-based store, signing 7 three-year leases each week


 Average monthly rent per square.
2. Specific action that will significantly impact the metric in the short term.

Ex: if they close 25% of US retail store such as GAP did.


Traditional metrics:

- Influenced by a lot of factors.


- Total revenue: aggregate number (general)

Dynamic:

- Small changes can have a big impact.

Ex: average page load times.

Akamai: content delivery network.

1.3.2 Egger's Roast Coffee Cash Flow and P&L Statements


Reading

1.3.3 Egger’s Roast Coffee Case Study Part 1 – Definitions

2 Week 2: working in business data analytics workplace.

3 Week 3: Going deeper into Business Metrics.

4 Week 4: applying business metrics to business case study

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