Analytics Packs a Punch

In the good old days – say 15 minutes ago – many so-called “savvy” corporate CEOs and other assorted head honchos in the public and private sector routinely made critical decisions by the seat of their pants. That is, they relied on their experience, their intuition, their “gut” to determine a course of action that could make or break the organization. Sometimes they were right, sometimes they were wrong, and sometimes the organization went down the drain as a result.

Today, more and more of these C-level decision-makers are turning to analytics for help in the decision-making process. The stakes are just too high and the competition is just too fierce to rely on a “gut” instinct. Instead of shouting,“show me the money,” savvy CEOs are now shouting,“show me the data and the mathematical analysis first . . . and then I’ll show our shareholders the money.”

The trend toward data-based decision-making is being driven, of course, by astronomical increases in data, mathematical modeling capabilities and computing power. Thomas Davenport and Jeanne Harris crystallized this phenomena in their recent book,“Competing on Analytics: The New Science of Winning” (2007, Harvard Business School Press). Davenport and Harris define analytics as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions.” That sounds pretty good to us. It certainly encompasses the work of hundreds of thousands if not millions of “analysts”of all stripes around the world. It also sounds a lot like operations research.

With that in mind, INFORMS, in conjunction with Lionheart Publishing, recently launched an online publication called Analytics (www.analytics-digital.com/analytics/current). Most of the articles in the debut issue and the soon-to-be released second issue were drawn from OR/MS Today. Likewise, this column is largely based on a column I wrote for Analytics. Synergy is a beautiful thing.

As a member of INFORMS, you should have received an invitation to subscribe to Analytics. However, Analytics’ primary target is nonmembers of INFORMS – unaffiliated analysts thirsting for a forum to share successes, failures and lessons learned. Analytics is also a marketing tool, designed to attract non-members to INFORMS conferences and to expose them to the benefits of INFORMS membership. Needless to say, we encourage INFORMS members to send their non-member, analytical colleagues, co-workers and cohorts a link to Analytics.

The last time we checked, nearly one thousand analysts had already signed up for a subscription to Analytics. Best of all, about two-thirds of them are non-members of INFORMS, meaning we have now captured more than 650 potential new members of INFORMS or future attendees at INFORMS conferences.And that’s just the beginning. Thanks to the power of the Internet and the cooperation of the initiated, the numbers could easily multiply several times in the not-so-distant future.

INFORMS officially promotes the “operations research” and “management science” professions, but its members represent a galaxy of job titles,scientific fields,technical methodologies and special interest groups: supply chain management, revenue management, decision analysis, etc. The problems analysts encounter, the methodologies they use, the job titles they sport and the departments they reside in may be different, but they all now have one thing in common: Analytics.