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Analytics Magazine

Analyze This!: Let’s get this analytics party hopping

May/June 2011

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Vijay MehrotraBy Vijay Mehrotra

In my ongoing quest to figure out what’s going on in the world of analytics, I’ve recently been to the Predictive Analytics World (PAW) conference and the INFORMS Business Analytics and Operations Research conference in Chicago. I have seen dozens of presentations, heard scores of panel discussions and had a million or so conversations. In no particular order, here are some of my impressions.

Big numbers: Attendance at both conferences was way up this year. PAW attracted 550 people, up 78 percent from the previous year. PAW was one of several workshops and conferences (along with Marketing Optimization Summit, Conversion Conference and Google Analytics Users’ Great Event) bundled into Data Driven Business Week, which drew more than 1,300 attendees.

Meanwhile, the INFORMS conference drew 623 registrants, or 52 percent more than 2010. The event’s new title obviously resonated more deeply than the old one (“INFORMS Practice Conference”) with many first-time attendees. Moreover, conference organizers clearly achieved their objective of engaging folks from outside the traditional INFORMS community; I bumped into several people who had never had any interaction with the organization before, and many non-members delivered compelling presentations.

Other numbers that caught my attention: 1,000+ (number of analytics professionals working at consulting firm Mu Sigma www.mu-sigma.com, probably the largest company of its kind in the world) and 2,000+ (the number of SAS licensees within Wells Fargo).

Groundhog Day. At lunch in Chicago one day, someone pointed out that one of the Edelman Award finalists’ projects was an intelligent way to re-position empty shipping containers, something we had talked about ad nauseam in the early 1990s when consulting with Sea-Land. Other old-timers reported similar moments of déjà vu. What’s different now? Two decades later, the data is now just a lot better. Sigh.

Whose party is this anyway? Many people from the Knowledge Discovery and Data Mining (KDD) community attended PAW. While some were heavy-duty statistics folks, one could sense a strong vibe that this conference was about something other than statistics. Indeed, at one session, a very technical speaker confessed that he had never taken a statistics class and knew only what he had needed to learn for a couple of consulting projects.

Of course, the INFORMS conference was attended by lots of us operations research and industrial engineering types, though not near enough folks from other classical analytics disciplines such as business intelligence and machine learning. INFORMS has just launched a new Section on Analytics. A big shout out to founding officers Michael Gorman (president), Zahir Balaporia (president-elect), Warren Lieberman (treasurer) and Doug Mohr (secretary) for making this happen, and for keeping their eyes and minds open for opportunities to collaborate with the KDD community and other professional groups. We’re all on the same side, and we all have lots to learn.

Data Hopelessness: Despite the many inspiring success stories at both conferences and the many instructive presentations about “the mainstreaming of analytics,” I also had several dark coffee and cocktail conversations about some old familiar struggles. Kudos to Sam Eldersveld for his treatise on a (still) common disease. “Data hopelessness,” he explains, is what happens when an analyst has no hope of ever getting data in time to possibly answer anything but the most short-term business questions. In its most common form, getting useful data requires its own Herculean and unsustainable effort. In its strong form, even data obtained under great duress is hopelessly incomplete/insufficient to answer the questions that are being asked with any level of confidence ? and those questions are inevitably the wrong ones.

On the plus side for those dealing with data hopelessness, 25 employers participated at the informal job fair in Chicago and many potential employers trolled the hallways at both PAW and INFORMS. Clearly, the professional opportunities are out there, but beware: the data may not be any cleaner on the other side.

Whose party is this anyway? (Part 2): The two major sponsors for both of these events were SAS and IBM. These companies are the two biggest players in this space, but they could hardly be less alike: SAS is a privately held firm that has been focused on this business since its founding in 1976, while IBM is a publicly traded global behemoth that has spent more than $14 billion on analytics acquisitions such as ILOG, SPSS and Netezza over the past four years. After visiting with folks from both of these companies, it is clear to me that each is grappling with serious challenges. For SAS, its growing on-demand business requires them to learn to operate data centers, manage service level agreements and track clients’ data flows, a far cry from their roots as a tools vendor. In addition, bigger data sets and smarter algorithms continue to put pressure on the SAS folks to get smarter about how their software utilizes the capability of modern hardware platforms. For IBM, the success of its acquisition strategy depends heavily on its ability to integrate these capabilities into its global services organization and communicate to customers how these pieces can be leveraged. It, too, has a long road ahead.

Certainly it is terrific that these two companies are supporting these conferences and others like them. We also saw a ton of small entrepreneurial companies (consulting firms, software vendors, data aggregators, executive recruiters) at both conferences. But it sure would be nice to see some more big players bring their resources to the analytics space. Is anyone listening over there at SAP, Oracle, salesforce.com? We would all love to see you at the next conference … because this party is really just getting started.

Vijay Mehrotra (vmehrotra@usfca.edu) is an associate professor, Department of Finance and Quantitative Analytics, School of Business and Professional Studies, University of San Francisco. He is also an experienced analytics consultant and entrepreneur and an angel investor in several successful analytics companies.

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