TESA i Tea PVE a + ANALYTICS JOURNEY: Descriptive, predictive, prescriptive analytics TRS) ane ee eee eat Br Sagi ee eT PETRI) SAA Cea eee De ene CL + PREDICTIVE ANALYTICS: Practical ways to drive customer field service BDAC Cn a Lee eRe ed ck...NOW Cm eC Ter ied | insive story Tsetse MUN eS Eat, Edit, Learn GU oi Na ‘nt 2007 book, “Compe on _itligence and other ters ad Antics The Now Sconce of Wr- tone ofthe anit ade can bo & fing” Tam Osvonpat and deme daunting task Hovis capared or many be power —-Anavon Qh publication youre orale eres prio agent row ood, notte sence hat a “ans win 3 corpetiveadanage. te online mapaane ts mane) woe ‘Tetook’ ie cle anavicsa"now” launched in 208 nao cach a Ho sence, bu concepts and ams sche anavcs wavebutae oper 15 “Wsinoss analycr™ and “sk and ber orpower wil aes ess iigonce™ ae bck doce. ing mary of he sues motioned fre AMS ene a anaes 7 era a Fen ye es A Ae es pn, rod sen cents toacroore wots athe te was ngewe sca aeton rca of the emergence of fe wort anaitin and asa Yop ‘ees enn ws yan . ‘masse ond easly mined meuntans erm an lotr anc share su Suetram cpstie hs dapsiccome ary cancoojcy (of ala nese o fod thom. Toy, cosas, fares and lesan eared” ‘ton sauna ee pt tm a ae ‘Rank ot at data ae spiel Ta eave mas compen of ‘edrmare emake arse cL BA, BL cur yea den wah re wee lndaterpeestons "anes im gunn ou nutba of sitstbrs fom {sbrades sree ar paterily afte Zo © mere than 6,00 and ataced Seoorgs of ay ecomeutar nth» on merge aba 250 one rade "annua To yor ne not an pen oe {hoje enol yar woe caput yor toe por uve. Le te proceso (Of couse, having 002066 to is sae chek Ml of howe’ so + enw + conor + 108 ‘game-changng too is nol the ra, “whatetiod ston” and at 1 Ghsoa, Dio a] fame thing 28 krowing how to use _ least one ~ Viny Meo “Arayz0 2 hosee nes "or evoun conc ‘Merightoolormepresem athand. The” odie on page 7 that ones .* + sr + Se thmgrconon “Seling’ anaytesw stl somewnat at tetoses asap sues Sus sepia! cxporate consumes (at dn tye adlesors eared feast in same cores) can aio be AS says, commons are wel problems especal inthe exo. comed 1 er alums.com/myFreeheademicticonse Independent constant Just dein 'ng"burnessanaijtes "business PETER HORNER, EDITOR hernrlonktpub com son i a~ Analytics FEATURES yr Lng. endo Dich Che olan ord ‘ChtinperOnton 20. FVE MYTHS OF QUANT CONSUTING Dard goer 1 Sct Brom Alan Bo an en Worth 31 COUECTIONS ANALTICS 1y Viol Anjo ond PSS Maury Rot errands to bel! actors oe 35 AOUTY wes 1, Devoe A. SamueonDEPARTMENTS 1 nde Story = nett i ny| Peorir CentER Keeping analytics professionals ‘THE TYPICAL REWARD STRUCTURE WITHIN BUSINESS ISNT ALIGNED ‘WITH THE REWARD STRUCTURE THAT -MOTIVATES ANALYTICS PROFESSIONALS. THIS DICHOTOMY IS A FREQUENT SOURCE OF PROBLEMS. YE, ANDREW BOYD In the last “Profit Center| took 2 lok of hing analytics profes for the purpose of starting for expending an analytes team. The po ass of ninng is important, but t's ony part. othe equation. Once good peooie are on the team, poopie who have demonstrated both tel tecnicl and persona stl Important to weep thom Who this i tue otal proteeione, tere ae some epecial Consiceratons that arise inthe case of an= sites potessionale Peinaos te Key aference between an- ayes and ater pressions shat anay- Iceprofersionals tendto enjoy working with numbers and matrematics. Once they get Interoated ina prabion, ie not surpriing toting them at het desks ata hour lost In thoi work. Solving an intresting prob- lam is tke discovering the secrete behind Rubik's cube, There's a joy inthe process 1 prosiem solving. ana joy i ating at Just a6 Important 26 solving Interest- Ing problems is recevng recognition for 15 as ens and i's FREE ust VIS: MMpanays fos.) folvng them. This doesnt necessatly ‘axing time tistan to wnat has been cone and ofering praise and constructive ent- tiem. Anslyes professionals need an op portunty to be bath creative ond to shore thai ereatty with their pours, something that sete them apat fem people im many ater fide. Unlotunatay, businesses trequenty rent sutured around intresting prob loms and peer recognton. They stuc- tured around geting the Job done, thon rewarding people with nigher sslaries and Increased monageral reponebites. The than forcing a square peg Into Tate remrd structure for a Sonals - 9 reward structure bosed on tombintion of echnical ecorplshments snd how these accomplishments serve the bsiness,(Sohving on open problon ih number theory is eave ut i probably ‘of ite relevance to a tucking company.) “es ine Anaiyt |. Anaiyst 2 Senior Ano- Iyst | and Senior Anaiyst 2 can be used for promotions, and these tiles can be scheved without advancing in the mens: Geral merarehy The goal isto ef were senior team members respect they have eared without forcing Fesponsibities upon them that they may ot want of be good at. Much ite part rere a law firm he sericr members of ‘on analytic team should be expected (0 ‘navate personel and arofeelonal nade ‘hp, important. they can be roied upon to direct technical acts by jnie team members without atuly having the ie For members report to them though the managerial chain of command. Ths stu ture also provides aettonal exit, a lowing members of the ansiyties team to move rely trom project o project based ‘on their technical eapebities, not on who they report fo. Very senior membere can te rewarded with the freedom 10 under take “bue say" iiiaves ~ acbvites wih the potent or igh value, long-term ben tt inat arent being driven by acompany’s Ofcourse ence ananaiy ch ‘tual manageral etuctue in place. Peo Bie need fo report fo a manager whe wil Coordinate their activins and make ealary ‘and bonus decisions. Furnes. tome ana Ijtes professionals ere atraced to an: ‘gerent and wil grow fusratod without Imanageria! opportunites. By separating Imanagerial ites and responsibites trom techmes! capabilites and achieverentn, its posse to etfectvely satis those who ‘0 and dont want tobe manage| Perit CeNTER BUSINESSES SOLVE For example, avery Snir manor of the monies rher Neto 10 team wih no Ges to manage met hla ne Solve Not srobiens Se Sener Analyst whl lege senor mer- SEY Want To cowe, D8 mn management responsbites might univtice renns riar_ Pole We Senge Anaiat 2 ond Decor of LOSE sci OF rw isk ADO Seriya bo wove THEE FUTURE Grip echnical accompistment, wth the recognized soreunat moe Mah. The ihe ‘aus riding he adnate Drectr of ‘nates woud aso be recognizes fr and traluates upon, his her performace as 2 Prope stuctring an anaes loam isn Imeotan! fourdaten fr srofessiona recaps ton, bu # cant guarnten tht a anaes professional il aways have hteresng prob lees to wort on. Susnesses save robes "may noed 1 solve. nat proiems they want © ‘ote Ais teams tat ase sg fie Ie us SET feeeodiorig eee epee Pea ge kek Me enc ceca’ sn anys eam tan have some ponent Une ect ‘hat bars the rest fhe peape acigned to work on lt And what may not be of ar to one person maybe of grat ares 10 INFORMS is the foremost association teeter Trough ond resource management inating the np of sen eam member ‘of O.R. and analytics experts. Our members egret tg ee literally wrote the book on how analytics and 1 goed tacon ofthe work ners the principles of operations research are used ‘Aalytes professionals should be encour ‘to improve corporate or governmental sgedtogve prosatationsonnar work nt ust decision making, ‘hon he tam bt of rasa suderces 31 Anaivncsmaoazine com http://www.informs.org| PRorit CENTER SOME COMPANIES SHY within te company. Ts provides way foe [AWAY FROM SENDING anaytes professionals to be recognized ac INES OF estes oven a aus be ANALYTICS TEAM TO '684eam Brings tothe company. | rorEsiGnt’ | CONFERENCES FEARING "© SUPPOM attendance Bt professinal conte FORESIGHT. vhariney ws cance @heee ping prosentaions when appropriate. Cinbin steers oy G2ed onaltes professions want keep v ‘wth he atest acts nar profession an EHIED Away From Wh eee ting Ccompenons. However, “MEMCNERPORI FOR A WELLFUN mgmpers of ther analy team to cone ANAWTICS TEM THE ghegs, fearing that they wit share coroary (OPPOSITE OCCURS. aerator be ted away by competitors How ‘er forawelirnanaiec teary the oppose torre Atendees lem wha corn inthe pro fesson oe dong, hey cover ere wo ef were they ae, and ey mest capable peeve wh might be ooking to move away tm ess least stusions 'AS I ue ofa prtesions, people who workin anaes stay where they are because there hapey. Slay and bones ae good they enor he poopie thoy work wi, te om pany hea cpportantis fr care” growth on roe. es important to renembor. however, that n addon, ray god anaes profes Sonals lve what they. lnlorastrg wor eer rocogniton athe opsatanty tbe tate are an mpotart measure fo ststoc- ton. Companies that understand ts wil be abe todo a much beter job of Keep ther best people.| Anauyze THis Classic mistakes doom promising startup ‘COMPANY'S TARGETING TECHNOLOGY PROMISED SIGNIFICANT INCREASES IN ONLINE sates VOWMES AND REVENUES FOR ITS CUSTOMERS, [NOT SURPRISINGIY, MOST ‘COMPANIES CHOSE 10, [EXAMINE THS CLAIM ‘VERY CAREFUL DY VUAY MEHROTRA Avout 10 days ogo, got word that a good frend ical hin Hira had bow in tor thea te i i.e enockes had spoken with him afew mons r= ar, jst atere ne was hres ata startup tat "ea Fast Company (FC). The company, he explained tome, had sore powerful pat~ ntpending sigottmsto help deny wien ‘nine offer shoul be presatod ona given Web page 1 © gan Web sure. FC wa targetng large rational rea chons, and thas to 4 song marketing and wales or ganzaton K had won contets wih sev al mpressive customers. “This 2 great chance ferme, iam sad athe tne. "The company jut raised $12 mien in VC mon 1p ayo growing rely qu, and they want me to come in a decor of analy, in there's a eaty interesting markt op- portinty hare, alot of upade” Hiram haben an Undergraduate math- females major and \aer completed an MEA (tat degrees are trom terte senoo). He also arrived at FC wih years of experience Inenabingcompanes lo successulydepoy Tr ot etn ands FREE tv Mipsannys informe rg) ‘matnematealy based software soutons and In lesang custorer-‘acng teams. He's the find of quy that amt any analytes com: pany woud be smar to he, expeca uch 9s FC that sought © eeste group 10 clan cores tear tothe sclntie esearch team and to entre thatthe cove tchnoiogy was succettly deployed with the compa his customers. nal been pleased that he od foun oo that thu 80 wel ana sco ‘hereater he cepted thet ofr to jon the ‘A ecant four mone Inter, ne had beon | sa Ham a few hous aftr he laos had been announced (oun 25 fhe com anys 100 employees had bean gien the Pine sip, ncuing rans entre grt) ana furprangy he stared move raved than ‘stesso. Dude, wastoaly crazy” ne con- cod. "You cannes beieve te pce tat od tough wie wae in thre FC's targoing tactclegy promised ag ritcantincteaeae In onine tals voUes nd venues forte customars, Not Rp Ingy mot companies cnoe io examine this claim very caret. typieal by conde Ing a stareorward contotes experment now inthe onine marketing word as an "NB Tes” which some percenage of Wed tote recoved clos bosed on recommen atone from FC's analyte angie while the remaining Wsers wore bead a6 a contol run. Whenever FC's techoiogy ted Yo ‘show a statistically sgnicart impact on 2 lant sales ~ and accocaing 10 Hear ts happened suprising often ~tne company's ‘executive teams feared very hard on every- ‘ne involved to find a way to make te nan ore look good forthe cnt nthe abeonce cf ele diogestc tools to systoratealy ‘analyze system performance 0” 0 earnest ‘enre to understand the rth ti sho teem focus iad to many hay concowed and Undocumented scare enanges. As Hiram ‘eta recaled, “Alto ha-baked st aot ‘cropped into preducton” “The tory gets wore. Like many machine: learning pitlorms, FC recommendation ‘engine hada number of configuration para ‘re nd these “enobs’ hada big mpact on the system's performance. Yet. Serpe the ‘tet thatthe core technology had been e- ployed for more than two yeas at reveal these paareters, nor were here any n> tema guidelines on how to 9 hom n proc ‘Granted, the lack of knowdge man ‘agement f'8 commen robe wih startup ‘companies, aspecaly thore buit around ‘natyien based tecbrooges However at FC tere were a wie varety of conounaing factors tat Mod created a far worse stu tion than uel. rt the scene develop: rent am was located in a sopaate ofice ‘2 rounand miles ewey from compeny head ‘quarter, and the tance wae psychologh ai a8 wal os physical. Second. geting| Anauyze THis THERE 1S NO RELIABLE. 80d understanding of he system's logic to understand what was realy happening brainpower of her siests into fre and TortBock ON HOW TO MAS Made more aifcut 35 2 reSuE of te Mal shor a Umelrame” nobody waned 2 fortune fo th TouNGers and funders. For Nant ie hencuenovs constant coge macicatons nat wereimle- heart ‘ese esorng anaiics exreprneurs, Dinner tom cazmnve Mertedon the fy whch aso produced. lot There are some imporiant lessons to ranis sad story about his xperences at FC eee eee EAN otecronyns and buzewords tat only added loan om FC, a promising analytics startup cearty poms out many classic mistakes to MvectsctuLanawrrics, !@tMe ternal contusion. Finaly.and perhaps tat woke up ore doy to find isl in wer avod along the way ANAQTICS ott of al the mombors of the company's us thancel Wouble. There 18 Mo tlle rg me Cent sices team had bean hired for their textbook on how to make the treacherous uaendiacraiemscrtayan fae Felatoneio management sil, without any_joumey fom creative anayies concept to Serna um aS real regard to ther anaivic background of success analytes company. Tough Mott vunylSeavrsmotassaaas Som, ptt. Hiram was shocked a ascove that ofter nally a a great may such at- there was rot a single cient services per-slyics companies are launched eval yer. son who understood the significance of the each wth ts own hopes of using smart Configuration setings and tat mary cd nt gortms encoded in sofware to hanne! he fren know hal these songs even existe ‘uring the lst saveral weeks of Ho time werkng et FC, he was a the contr of 3 uta AB tet wth an portant cent When then est produce ony bed news fot FC Peete LS ees ‘member of he execuve team jumped 10 personal lead the covoany/s flo wth Ins Cents Wot se. He wert ro miter mode” Hiram reccuned. We made endoss late of loots, ausgned owners and were erred 16 repot back nto him every fou hous, coven faye 2 week Meanwhie, there wer =e of random voles ching tom all sides. anda temo wasn energy.” Wen Hirsm pushed dack nard on tne doa of racking ost rsults every four hours “he samp szes were defray fo small Ws fost ond its eos! Vist: Mp anys infers og Mt SYSTAT introduces a dramatic r| Forum Expanding your organization's analytic bandwidth AsTRATEOIC APPROACH TO AnauvTics staers wath exEcuTIVe RECOGNITION THAT ANALYTICS, LKE DATA ‘SHOULD BE TREATED AS ‘STRATEGIC ASSEL By ANNE MLLEY (ABOVE) AND AIMAN ZEDD (BELOW) Anat tlt can become your high-p- fermance sect weapon. When tating 2 sr tage aporoacn to arts, executes are ang new ways to aact and etn analyte talent which is scarce ply. More ard more, oganatons ae fermng competency Contre and canter of excolence to ache beat practices for ansyics and increase the Danawith of exsing ana tant ' strategie approach Yo analytes stars wth executive recognitanthatanaytes, tke ata, shou be veate asa atopic asset Taking sueh an approsen requires tat you anaitcaly align along the four key oa rizalonal dmensions of people, process, tectnology and tur. People comprise the ‘most impovtant of thse four dnensons. AS Compare grappla with whare toy noes 10 beat focus and use thee ara esourone, we are increasingly nearing abeut compa- ries dong more to beter craze the ana ye talent tey nave and cutvat a cuture {hat value learning, In his raw book, “The New Know” (xa wiey.comMflieyCDAMieyTiinaraductod: A70s8:7:3 um), Thorton May exebats ‘anayttlet and describes the network ore Intonehip takes oreaize he aun rom aries across the organization. He encour 2905 people seok out quanttve modelers Inner organaatons wlan more abou me valve they are repr to create ade pos- liter domo. ‘When taking tragic appr00ch, ana les isa cosedicep proces, Anlyes can be viewed aba process in and of iso (s- ential the sant metnod). The process fans with vewing dala as measurement ‘re you maasurng what matters? Oo you have te data you need to arass te issue at hand? Next you exlore the possibiiies hom to Best mode he problem, sytem ‘You are not ater "te best mada” an an end Point Rater, you are looking to sale beter fecsiene seroas the organization, 10 cose tne loop and accelerate te process of core truous tearing and improvement all Inaword wrerteraytes of data a hie to evry salesperson and ne ct-busness ‘manager, many cand tha own analy. Ba tre potanta er game grows wih ara! Pertao ~ at mile ves, Siren the right telance between encouraging users whe have acces to daa todo more anys and, en, roving raring and guidance fo ensure ney ‘2 sing tbe els ht bes compet tha ‘levi ance rba where Arye Ca tore of Excolence can el. By empowerng rd enotenging ober 10 do anal a th Sele gher-endano}ytcattalertcanfocus ther ation on he more chalergng sees. “This wil lmatey help you retain aler gh- end naua's wid ereatve pediera0tng an enity portant qustons that nave yet {0 be asked are hart ng trea he com Binaton flog creat an in demain ‘nowledge Pat lad to new and ote btir ways of ong tings Creativity is also necessary to ty new ‘mings. to experement = to sometimes fi — ‘2s let-rain dominant, we think of someone ‘such a8 Leonard Nnoy's character, Speck in "Star Tek The tah st that tere are many out there who are anaytcaly sewy with we-dovoloped,lefbain functions whe ‘0 have wel-developed. rights fun tions #0 they can mate creative analogs ‘and approaene to fermulale aa prolamin Innovative new ways, “The Thetnon May dock dso touches one fact tat many amen the aatytcaly savy tnd tobe invoverted and dom fot the 92- ‘omplahments 20 oars nthe organization ‘Se often unaware ol he anal tent ey ave. As a vsult such taint is suboptinaly ‘located wit the organizaten “Too often, analy talent found within various pockets of me organization, but Is not placed igh up enough inthe 1g ization to have the wy and impact to ‘2chiove higher levels of performance. As 3 tesut becomes a calonge forthe ona ical thintare to span ergunzatonl bound ‘tes and fake @ wholeprocess view. By