Mapping a taxonomy to a taxonomy

In my last post, I talked about "meta-terms" which mapped a commonly used expressions to nodes in multiple trees. This concept could be taken much further. When our team built our four dimensional taxonomy, our goal was to be able to classify any business, and to find similarities between companies even though traditionally they  would be considered to be operating in different arenas. My favorite example is to look at Intuit which creates financial software for the consumer, and compare it to H.R. Block which provides a financial services for consumers. In the tax arena, they both provide help to people doing their taxes, and compete directly. Our taxonomy categorizes Intuit as a consumer software company for taxes, while H.R. Block is a consumer service company for taxes. As you see these companies overlap on what they do, and who they do it for, but not on how they do it. Interestingly enough, Intuit started offering a professional help service and H.R. Block started offer a software package.

What this brings up is that our taxonomy is complicated. Our team produces reports on Merger and Acquisition activity in a variety of segments (http://mandasoft.com), and each of these business segments like to break down using their own taxonomies specific to their domain. How do we reconcile the need for a taxonomy with nodes that can be used cross multiple domains, while needing to have easy to understand domain specific terms in a given domain?  The way I like to see this problem is that we have a vocabulary that works great when looking at the business world at the 50,000 foot level, but when we get down into trenches, the terms start to look vague and confusing at the lower altitudes. The way we solved this was by building a system to create 50 ft level simple taxonomies for specific domains (e.g. healthcare media and software). We then categorize each business using the 50,000 foot level taxonomy, and we then have rules sets that map from 50,000 ft level taxonomy to the 50 ft level taxonomy. The utility is especially noted when we create multiple domains with their own rules sets  (e.g. healthcare media and software, and  Cloud Computing) and a business which may reside in both domains, only needs to be categorized once at the 50,000 ft level taxonomy. We can create as many domains as we need and not have to reclassify companies as our domain views evolve!

Why is a multi-dimensional faceted taxonomy better for Business?

As we have seen, we can more closely describe a company and how they operate by using four different hierarchical trees to categorize their clientele, their methodologies, their solutions and their channels. This faceted taxonomy definitely gives us a better view of any particular business, but at what cost.  Our team has definitely found using this taxonomy has been challenging to categorize a given company. The taxonomist must research thoroughly a given business, and then be able to abstract that understanding into the four different dimensions. Another challenge we found in our first search tool, was that the user using the search tool needed to understand how to abstract the kinds of businesses they were looking for into the four different dimensions. These two issues makes us wonder whether it is worth it. (Currently, we are working on software algorithms to make the search more user friendly and to make suggestions from web scraping to help the categorization.) 


We find it is worth it. The reason why is that, unlike NAICS codes, our taxonomy allows us to dig into micro-market views. NAICS is good for broad markets, but not for close views of a given market segment. Looking back to the 2004 Presidential Election, we see that President Bush's team was able to efficiently direct resources by using Microtargeting. The impetus of our taxonomy is Mergers & Acquisitions, and an important part of that process is valuation. To find the potential target company of an acquisition, investment bankers search for recent comparable deals. A task that is impossible using NAICS codes.  With our taxonomy, we can do this. The reason is because we have moved away from the traditional way of viewing "Business" which is in terms of a vocabulary.  Instead, we now can view "Business" as a multi-dimensional space where we can define "Spheres of Competition" to determine "comparables". Stay tuned for more.