What is the Value of Experimentation and Measurement?

• Main Authors: C. H. Bryan Liu, Benjamin Paul Chamberlain, Emma J. McCoy
• Format: Article
• Language: English
• Published: SpringerOpen 2020-05-01
• Series: Data Science and Engineering
• Subjects: Experimentation; Measurement; Controlled experiment; A/B testing; Ranking under uncertainty; Valuation
• Online Access: https://doi.org/10.1007/s41019-020-00121-5

Abstract Experimentation and Measurement (E&M) capabilities allow organizations to accurately assess the impact of new propositions and to experiment with many variants of existing products. However, until now, the question of measuring the measurer, or valuing the contribution of an E&M capability to organizational success has not been addressed. We tackle this problem by analyzing how, by decreasing estimation uncertainty, E&M platforms allow for better prioritization. We quantify this benefit in terms of expected relative improvement in the performance of all new propositions and provide guidance for how much an E&M capability is worth and when organizations should invest in one.