The PPPC Methodology
Process, Product, Profitability & Collaboration
The PPPC model justification
The intuitive justification of this methodology is developed from the second law of thermodynamics - entropy - in which the observation of a system left to spontaneous evolution, increases its entropy or a trend towards disorder. The maximum state of disorder is a state of order or equilibrium in a closed system. The business scenario of our interest is a market, in which the interactive elements of the system, are an imperfect model representation of the situation named “business case” and humans, with their experience,their communication, intellectual and creative capabilities. It is possible then for a human to interpret the course of action of the system with some probability, therefore, it is possible for humans through cycles of evolution, to influence the system or the business case, on behalf of a convenient equilibrium state for the business, meaning an actionable team solution within the same system environment.
In addition to “the business case” and the human interaction, the main element that merge the system components is information; but, information comes as an intangible raw material or data. Because data is part of the entropy system, it behaves as well in a chaotic manner. Information is the processed data through machine hardware and software devices using advanced analytics and data science tools and techniques. Information is the added value of data and it is used when applying the methodology.
The main purpose of the PPPC methodology is to to go after a defined business actionable solution, by the enhancement of a company or team competence and by adding data value to a business case, with a market and customer - centric approach.
The business core, goals, or direction of evolution are defined within the company strategy. The PPPC methodology adapts itself and complements any business strategy. Global Software Solutions Group has found during more than fifteen years of experience that companies in all sort of industries work exhaustively to close a permanent gap between the business strategy value definition and the iterative actions to align daily human actions according to that definition in search of the growth and benefits. The PPPC methodology additional value is that gap minimization while maximizing the company operation and benefits.
The PPPC elements
The PPPC methodology describes each business case through four interactive quadrants with the following considerations:
Each quadrant contains part of the the business case story in terms of the process, product or service, the profit or the collaboration perspective.
Each quadrant have a “quadrant - measure” relation: process - differentiation; product - sales (or income); profit - loyalty; collaboration - customer knowledge.
The mix of those interactive description “quadrant - measures” relation reflects the business case distinctive advantage.
A business object is the element implied in the purpose of the key question exploration such as a customer, a market or market niche, a distribution channel, a business structure, the organization or any other related object under examination.
The Key Performance Indicators (KPI`s) board that allow to have control over the business case development and the activity plan. May be efficiency oriented in a resource/ cost relation definition or efficacy oriented in a time frame definition.
A marketing positioning statement of the business case object, an essence from the core business strategy.
The business analytics journey which defines the scope of the advanced data analysis life cycle and the required software tools in terms of the data journey as follows: a) Descriptive : ¿What happened? b) Diagnostic:¿ Why it happened? c)Predictive: ¿ What will happen ? d) Prescriptive: ¿ What should we do?. The descriptive analysis is a historic perspective of the business case, the diagnostic analysis search for the variables relation and influence in the business case, the predictive analysis develops forecast models for the business case and the prescriptive analysis uses artificial intelligence to suggest scenarios for the business case decisions.
Insight discovery is the action that uncovers hidden information and creates momentum to identify the critical factors that emerge in a business case solution analysis.
Process and differentiation
Every business has a strategy that defines its core business and the way it operates; as a consequence the processes operation and development are reflected during the business course of action.The business case story reflects a process which might involve several company functions or areas. Under the process - differentiation quadrant that process is designed with the customer interaction in mind through an agile flow chart that defines at least each activity, the responsible functionary for each activity and the required documentation through the process.
In marketing, positioning refers to the customer perception of the product or service as a rational and emotional object; many variables may influence a product or service market position, some of them are any sort of advertising, the product price, the cultural expression, the media interaction, etc. The way the product or service support processes are related to the customer in a direct or indirect manner will affect also the market customer or segment positioning. Services related industries behave every time more with an automated processes approach; such processes as, logistic and customer services ,improve customer experiences for any kind of industry. Therefore, the differentiation of a process in terms of its efficiency or efficacy within a competitive environment is the measure for the process; the qualification of that measure will impact the market customer position of the object under the scope of the business case definition.
Product and sales (or income)
The product or service is the sales object that results from the core business value definition and its related strategy. Income generation is the commercial process which has to follow a company standard while maintaining a grade of flexibility that allows an effective and efficient sales action to the business people according to their responsibility level. The commercial process affects directly the business case object positioning within the market environment. Amazon mobilizes its logistics and an automated commercial processes with a customer centric approach while building a successful and strong market positioning.
The measure for this quadrant is the amount of sales or income defined in units or money terms. This measure may have a pipeline or sales cycle; to have control over its time to market is relevant to compete in any industry; efficacy from the customer perspective becomes an important sales driver.
Profit and loyalty
With a competitive market global scenario the indirect costs trend have a positive slope vs. the direct manufacturing costs; and in services industries it is the most important cost structure. Therefore, the traditional accounting systems that are build as a law requirement do not have access to the analytic detail. Profit analysis with an indirect cost analysis deep understanding are required to define issues such as product or services profit subsidies; different business case objects such as market segments, customers or distribution channels investment criteria; the cost of service analysis for the retail industry is a success factor if thousands or references have a timely inventory and logistics cost volume and unit equilibrium control. Each business case have its own profit analysis scope according to the key question definition.
Loyalty is the measure for this quadrant and the reason is that a high loyalty customer oriented business is convenient because there is a high cost of a new customer acquisition and it is extremely sensitive to price variations. Price elasticity 1 is in most business cases an important positioning buying decision driver, but at the same time it affects the company gross profit. Therefore, there is a relation between customer loyalty and the price positioning that has to be carefully managed in a market customer centric approach.
Collaboration and customer knowledge
The natural trend within an organization to develop customer oriented processes and functions is through cooperation; meaning a low synchronous customer interaction, sometimes with a sequential order within ideas and actions towards an opportunity identification or in search of a business case solution. A more effective way to encourage customer business case requirement is through collaboration; meaning a high synchronous customer interaction. Collaboration imply a well defined customer relation employee role and function; a set of highly synchronous company actions not necessarily in a linear sequence and at an adequate time and space execution rate. In terms of information it is required a variety, volume, velocity, veracity and valuable (5v) data management to find a business case solution, every time with an increment of data sources. Most organizations have both principles, cooperative and collaborative, but the classic example to understand the organization behavior is in the customer service situation, in which the customer wants to scale its case to the boss in search of a solution. If that is a frequent circumstance, then the organization have a cooperative momentum.
Customer knowledge is an asset which drives the collaboration approach. When adequate information in terms of customer knowledge is used through the 5v in a customer business case solution identification, the company will behave in a collaborative way and will increase the customer loyalty while adding value to its market positioning. Customer data insight discovery is an essential path towards understanding customer behavior as a complement to any marketing research action and the team input experience.
The Model description
In general terms, the PPPC methodology works as follows: first it identifies the business case story and a related key question which reflects the meaning of the business situation. Second, it collects the available data from the system represented by the business case. It won´t be possible to collect all the data from the system, that is why it is an imperfect model, but it is possible to collect as much as the required good quality data to accurately develop the business case.
Next, at the third step the data is processed with the technology tools and advanced analytics or data science techniques; the expected output will be the insights discovery that represent hidden information that will uncover critical factors. The information system,in addition to the human skills and experience, are crucial to decide how accurate is the business case model; if adjustments are needed it would be required to go to a previous step. During the fourth step, the insights and critical factors will help the team to redefine the business case on behalf of the KPI`s business definition; a course of action will emerge and the KPI`s board will be updated according to the business value detected in the answer to the key question. In the fifth step, management advisory, intuition, communication and analytic skills will be needed by the team of experts to design an agile “activity plan” that push for an alignment of the critical factors to the expected business scenario detected at the appropriate and necessary course of action. During this last step, the activity plan execution will influence the system players according to the key question and will be measured through the KPI`s board. The call to action will be set up with specific dates to the involved team according to the activity plan; an execution cycle will be defined according to the business case and its key question; and a continuous process starting in the first step will iterate under the technology and human surveillance to correct the expected entropy business case fluctuation. From the first through the fourth steps, the cycle might work indefinitely and in parallel with the fifth step while maintaining the desired equilibrium represented by the answer to the key question definition.
About Global Software Solutions Group - GSSG
GSSG is a business and technology company that offers market and customer centric solutions through insights discovery, data value, advanced analytics and data science.
For further information or if you want to understand how the PPPC model applies to your business case write us to info@gssg.com.co
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Footnotes
Price elasticity is the understanding of supply and demand changes when the product or service price changes.↩︎