O.R. In the News

Convincing decision makers to use the results can be as difficult as getting them to go along with the project in the first place, because the predictions may be the exact opposite of what their business intuition tells them, says Anne Robinson, president-elect for the Institute for Operations Research and the Management Sciences (Informs) the professional society for business analytics. "As you get more involved with analytics it becomes counter-intuitive. But it's those deviations from what you're doing that bring the rewards, because when the results are intuitive you find that most people are already doing them."

Andy Boyd relishes cross-disciplinary work. Between earning an undergraduate degree at Oberlin and a PhD from MIT's Operations Research Center, he has studied mathematics, computer science, economics, philosophy, and management studies. These diverse interests have helped Boyd thrive as a professor, as chief scientist of a successful software company, and in his avocation as a radio broadcaster.

Intel (INTC) is the largest chip company that still designs and manufactures its own products. Semiconductor plants cost about $5 billion each, and some of the equipment has to be ordered three years in advance. Guessing wrong about future demand is very expensive: Being overly optimistic can lead to hundreds of millions of dollars in idle machinery, while underestimating means billions in lost revenue. The chipmaker’s in-house [operations researcher], Karl Kempf, realized that trying to improve predictive models was no use. Forecasting is “the hardest problem in math,” he says.

So Kempf started writing equations. He designed a financial contract giving Intel the option to buy a specific piece of machinery at a specific time. The company pays its suppliers a modest amount of money upfront for the contract. If it ends up not needing the machine, the chipmaker loses the money or the supplier can find another buyer. But the contract ensures Intel has access to the equipment it needs when it’s needed.

Recruiters posted more than 18,000 online job ads for data analysts in January of 2012, growing 35% versus 2011, according to WANTED Analytics™.

During January 2012, more than 18,000 job ads were posted online that required data analysis skills, according to WANTED Analytics™ (http://www.wantedanalytics.com), the leading source of real-time business intelligence for the talent marketplace. With the amount of data generated by businesses growing every year, hiring demand for employees to analyze and utilize this information is increasing across business functions. Overall, the volume of job ads in January 2012 increased 35% compared to January 2011 and about 75% versus the same month in 2010.

Computer Systems Analysts, Management Analysts, and Market Research Analysts were the three occupations that most commonly required this critical skill set. Computer Systems Analysts saw the most job ads with data analysis requirements – more than 3,600 jobs were posted online during January at a 45% year-over-year increase. Other positions with high-demand for analytical skills were Software Engineers, Industrial Engineers, and Operations Research Analysts. All of these occupations experienced an increase in hiring demand when compared to January 2011.

Metropolitan areas with the highest volume of job listings for in-depth analytical skills during January 2012 were New York (New York), Washington (DC), San Francisco (California), Los Angeles (California), and Boston (Massachusetts).

[Eva K.] Lee says users can enter different parameters into the system, which analyzes “what-if” scenarios and “runs in seconds” before returning results. Data is input into the system manually as well as received in real-time feeds, she says.

“RealOpt has been used in hundreds of drills and dispensing events, including anthrax preparedness events and seasonal flu/H1N1 vaccination events, and has accurately predicted staffing needs and dispensing operations,’’ wrote Lee, in a summary on the technology, which was a finalist for the INFORMS 2012 Franz Edelman Award for Achievement in Operations Research and the Management Sciences.

The latest research from Techaisle shows the almost shocking speed with which the midmarket is seizing on business analytics as an essential enterprise solution. That doesn't mean, of course, that no obstacles stand in the way of wider and faster adoption.

A survey of 800 small to midsized businesses already engaged with business intelligence tools revealed that over a third were already interested in automated ways of tackling very large quantities of data, including unstructured data. Admittedly, this is a very small sample of the US midtier, but taken together with other trends -- like the surge in data management adoption by large and medium corporations -- it is suggestive of a tangible trend.

CIO's increasingly see technologies such as analytics/business intelligence, mobility, cloud and social in combination rather than isolation to address business priorities. Changing the customer experience requires changing the way the company interacts externally rather than operates internally.

Analytics/business intelligence was the top-ranked technology for 2012 ... as CIOs are combining analytics with other technologies to create new capabilities. For example, analytics plus supply chain for process management and improvement, analytics plus mobility for field sales and operations, and analytics plus social for customer engagement and acquisition.

The new year will bring plenty of splashy stories about iPads and IPOs. There is a more important theme gathering around us: How analytics harvested from massive databases will begin to inform our day-to-day business decisions. Call it Big Data, analytics, or decision science. Over time, this will change your world more than the iPad 3.

Computer systems are now becoming powerful enough, and subtle enough, to help us reduce human biases from our decision-making. And this is a key: They can do it in real-time. Inevitably, that "objective observer" will be a kind of organic, evolving database.

In this second joint MIT Sloan Management Review and IBM Institute for Business Value study, we see a growing divide between those companies that, on one side, see the value of business analytics and are transforming themselves to take advantage of these newfound opportunities, and, on the other, that have yet to embrace them. Using insights gathered from more than 4,500 managers and executives, Analytics: The Widening Divide identifies three key competencies that enable organizations to build competitive advantage using analytics. Further, the study identifies two distinct paths that organizations travel while gaining analytic sophistication, and provides recommendations to accelerate organizations on their own paths to analytic transformation.

Tis the season for "year's best" lists — and even, this year, for "decade's best" lists — and who are we to resist the urge? A few of us HBR editors (Gardiner Morse and Steve Prokesch helped especially) took the opportunity to look back on the past ten years of management thinking and are ready to declare our choices for the — well, why not say it — most influential management ideas of the millennium (so far)...

Competing on Analytics. Decades of investment in systems capturing transactions and feedback finally yielded a toolkit for turning all that data into intelligence. Operations research types, long consigned to engineering realms like manufacturing scheduling, got involved in marketing decisions. Managers started learning from experiments that were worthy of the name.

(Hear an INFORMS Science of Better podcast with Tom Davenport, author of Competing on Analytics)

An important guide for those settling on a career in operations research from the U.S. Bureau of Labor Statistics.

O*Net succeeds the Dictionary of Occupational Titles, an important resource for job seekers.