INFORMS Annual Conference  

INFORMS Annual Meeting 2012, Phoenix, AZ, October 14-17

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Opportunity for Business Analytics

by Guillaume Roels on October 15th, 2012

Although there hasn’t been much discussion on the blog about the conference theme this year, besides John Angelis’s blog about visualizing Informatics, I believe many of us share the opinion that Informs is facing a great opportunity for making an impact on business analytics. Business analytics is there. (See for instance The Wall Street Journal  piece a few weeks ago on the importance of big data for hiring decisions in large call centers.) It is up to us, academics, to seize that opportunity.

This opportunity is especially important for those of us who are affiliated with business schools. In fact, a recent article from The Economist highlights the importance for MBA programs to offer courses in business analytics. Dimitris Bertsimas mentioned to me today that MIT Sloan students expressed a strong interest in this area, even (or especially) at the executive level. Of course, MIT students may be more analytically driven than most other MBA students. But that example at least challenges the assumption that students are not interested in quantitative methods.

Following the lead of MIT, proper implementation of such a course would require us to repackage our traditional modeling courses, perhaps putting less emphasis on our bread-and-butter mathematical programming models to give more room for data mining and data analysis, or even for problem framing (as has been done at Stanford).

More importantly, the focus would need to be on strategic decisions, despite the traditional focus of OR/OM on operational problems. And the emphasis would need to be on making money (isn’t that “the Goal” after all?) rather than on cutting costs. (In fact, the big success of Revenue Management in the last decade may be attributed to the fact that it speaks the right language.) As an example of this kind of strategic project, Jun Li and Serguei Netessine presented today a study in which they identify clusters of competitors in the hotel industry in Manhattan, based on clickstream data. Their research niftily identifies competitors of a particular hotelier by looking at which other hotels are considered by prospective customers before they book a hotel room, thereby giving precise information to hoteliers about who their actual competitors are.

Most innovations in operations management in the last 30 years originated from industry: Total Quality Management (Toyota), Business Process Reengineering (Hammer), Enterprise Resource Planning (SAP), Customer Relationship Management (Siebel, This Business Analytics could be the time for OR/OM academicians to make a large-scale impact on industry while reinforcing the importance of our profession in business schools. Would we let this opportunity go? Feel free to share your best practices for developing courses on that topic.

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