Tuesday, December 16, 2014

A Business School Perspective on Top 5 Analytics Predictions for 2015

INFORMS has a great new communications social networking platform for its members called INFORMS Connect and today I enjoyed the question posed by Barry List, the Communications Director of INFORMS, to Glenn Wegryn, the President of the INFORMS Analytics Section. 

Specifically, Barry asked Glenn what are the top 5 analytics predictions for 2015?
I found Glenn's answers thought-provoking and terrific so I have reprised them below along with some commentary.

The comments are timely since, just yesterday, we had our end of the semester faculty and staff meeting at the Isenberg School Management at which the strategic plan drafts, primarily from an undergrad perspective, were presented by each of the 7 departments. Clear themes emerged, based on input from industry, as to how we can be a "Destination of Choice."  The top theme and focus, based on presentations given by several of the department chairs was that of Analytics.

Top 5 Analytics Predictions for 2015
by Glenn Wegryn, President, INFORMS Analytics Section and Principal, Analytic Impact LLC 

2014 proved to be a winning year for analytics. Going by the number of conferences devoted to the topic of analytics and attendance, including this year's record-breaking INFORMS Annual Conference in San Francisco, all indications are that it will continue to prosper.  Here I present five of the most important predictions regarding analytics capabilities for 2015.

#1 What's in a name? There will be continued effort, albeit not fully resolved in 2015, to converge on a common definition of what analytics is. INFORMS' official definition is "...the scientific process of transforming data into insight for making better decisions."  There are numerous other definitions or positions on what analytics is, but a middle ground needs to be found between the data-centric definition of analytics (What can the data tell us?) and the decision-centric version (What is the problem we're trying to solve?). Indeed, I view analytics as a bridge to converge the two in peaceful co-existence. Most importantly, it provides an easier point of entry for decision-makers to embrace, organize around, pay for, and ultimately benefit from all of the tools in the shed.  The more we play in the same sandbox, the bigger the castle we can build together.

Glenn makes an excellent point here. Several of the departments, from my own, the Operations & Information Management Department, to Sports Management, to Marketing, as well as Hospitality and Information Management, noted the importance of analytics in the curriculum as well as in our MBA program. However, there are clearly different perspectives. I would expect that some of the primary tool-based courses would be taught by my department since that is where the expertise lies in terms of stats, optimization, modeling, and even on a wide spectrum of applications, etc. What is critical to emphasize is that analytics is not just about the past and forecasting the future but, as Glenn said, it is about making decisions, and I emphasize better decisions, whether it is in profit or nonprofit organizations, government, or even in your personal life!
#2 Business Analytics programs will continue to grow. There are now over 100 business schools in the U.S. that have, or have committed to launch, curriculum at the undergraduate and graduate levels with degrees or certificates in Business Analytics [1]. No doubt there will be more in 2015. Clearly the B-Schools have heard the call from McKinsey [2] and others [3] on the significant gap projected between the supply and demand for talent in the analytics space, particularly in the predict-and-decide advanced analytics skills. In 2015, the more established programs will dig deeper and continue to fine tune the curriculum while newer programs will close the gap quickly. The more successful programs will leverage the breadth of academic disciplines (computer science, operations research, engineering, math and statistics, marketing, finance, and others) to strengthen their programs.

We are on board with you, Glenn! An excellent example of a very successful program is at the School of Business at UConn, which is headed by my former PhD student at the Isenberg School, Dr. Jose M. Cruz.  Jose is the Director of the Master's program in Business Analytics and Project Management.  With Jose's degrees in computer systems engineering, math, plus an MBA with a concentration in Finance, and a PhD in Management Science, he is interdisciplinary in one body!  

I am very pleased that one of my former undergrads, Emily Covill, is now pursuing a Master's at NCState in analytics with a dream of working in sports analytics!

#3 Fraud and Security. With the number of security breaches on major corporations being reported almost weekly, such as at Target, The Home Depot and more recently at Sony Pictures, there will be a significant increase in investment across the board in safeguarding commerce and privacy on the Internet. The importance of applying analytics methods - from using decision analysis to guide investment choices, to statistical methods, to detect-and-anticipate breaches and optimization models, to improve infrastructure design for safety, reliability and performance - will accelerate and continue to grow in 2015.

Thanks for making this point, Glenn! We have benefited from 2 grants received from the Advanced Cyber Security Center (ACSC) and are continuing to research such issues. Last year, I had a fabulous time at the Boston Analytics conference and spoke on Cybersecurity and Financial Services.  Some of my latest research on the topic is in the paper,  A Multiproduct Network Economic Model of Cybercrime in Financial Services.

#4 Collaboration and Communication
 (aka the soft skills) will emerge as the difference-maker not only in getting the best talent hired into the most coveted roles, but also in enabling more recognition and value to organizations that utilize analytics. Soft skills are important to educate, sell the value of, and, ultimately transform the culture within departments and organizations. But more importantly, these soft skills are essential to clearly convey the context of the problem and to recommend a course of action for a decision-maker to take. That can span from intelligent bots interacting effectively with users in an on-line application, to independent practitioners seeking to build repeat business with a client, to boardroom analysts able to think on their feet and able to describe in plain language the options available and facilitate a decision. Communication includes effective use of visual capabilities from Tufte-proud graphics to interactive, data-rich, drill-down tools as a means, and not an end, to a better decision.

Several of the department chairs yesterday emphasized the need for more opportunities for students to enhance their communication skills, including, through additional writing and experiences. Our students have many student clubs that they engage in and do community service, all forums for building additional communication skills. Plus, several departments, including my own, have student groups taking part in a variety of regional case competitions with excellent results. 

#5 The INFORMS Certified Analytics Professional (CAP) Program will continue to increase in importance as a qualification of skills and experience. Longer term, as the supply of analytic talent catches up to demand, the CAP program will be recognized as an important differentiator for employment. Currently, the number who are either currently certified or are signed up to take the exam exceeds the rate of the Project Management Professional (PMP) certification, over the same period [4]. To that end, INFORMS should begin a campaign targeted to the "buyer" of analytics to grow awareness of this certification in their hiring decisions.

This is a marvelous initiative on INFORMS' part and for professional communities - thanks for all the hard work!

[1] Research from INFORMS Masters in Analytics Committee, presented at the 2014 INFORMS Annual Meeting (link).
[2] McKinsey Institute: Big Data: The next frontier for innovation, competition and productivity. May 2011
[3] InformationWeek Reports: Big Data Widens Analytics Talent Gap
[4] Presentation, Meeting of INFORMS Board of Directors, November 9, 2014