Analytics and O.R. in the US:

Analytics and O.R. in the US:

Making the Connection

Don N. Kleinmuntz, Ph.D.

Principal, Kleinmuntz Associates LLC

President, INFORMS Section on Analytics

Developments

in Advanced Analytics and Big Data 2014

London, 30 April 2014

Analytics

“The scientific process of transforming data into insight for making better decisions”As defined by:

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Relative Search Volumes via Google Trends

Source: http://www.google.com/trends/explore#q=analytics%2C%20big%20data%2C%20operations%20research&cmpt=q

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Relative Search Volumes via Google Trends

Source: http://www.google.com/trends/explore#q=analytics%2C%20big%20data%2C%20operations%20research&cmpt=q

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Source: IDC

Analytics Market

Size

(US$ Billion)

Hardware & Services

Software

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BUSINESS ANALYTICS

BUSINESS INTELLIGENCE

DATAWAREHOUSE

DECISIONSUPPORT

BIG DATA

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BIG DATA

Happening NOWNot just another way to say “Analytics”New challenges in data management and analysis require new approachesCan’t just buy more storage and bigger database servers

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SAS Institute’s BI & Analytics Hierarchy

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Intelligence / Sophistication

Competitive Advantage

Prescriptive

Predictive

Descriptive

But Where is the Rest of Operations Research?

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Healthcare Business Analytics – Lessons Learned

Founded: 1996 by Drs. Catherine and Don KleinmuntzHeadquarters: Chicago, ILEmployees: Approximately 110Client Base: About 1,000 hospitalsPortfolio: Software-as-a-Service solutions for financial analytics and decision support in healthcare providers

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c

National Client Base…

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Where is Strata Decision Now?

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Operational Strategic

Descriptive Predictive prescriptive

DSS – Cost Analytics

DSS – Contract Analytics

Service Line Analytics

Productivity Reporting

Management Reporting

RollingForecasting

Capital Tracking

Equipment Replacement

OperatingBudgeting

Capital Budgeting

Strategic Planning / LRFP

HC Reform

Modeling

Data-InformedForecasting and Risk Analysis

Value-Focused Thinking& Optimization-Enabled Decision and Resource Allocation Models

Opportunities for Advanced Analytics

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Operational Strategic

Descriptive Predictive prescriptive

DSS – Cost Analytics

DSS – Contract Analytics

Service Line Analytics

Productivity Reporting

Management Reporting

RollingForecasting

Capital Tracking

Equipment Replacement

OperatingBudgeting

Capital Budgeting

Strategic Planning / LRFP

HC Reform

Modeling

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Why invest in

advanced analytics?Companies that invest in advanced analytical capabilities outperform the S&P 500 by an average of64%

What is preventing investment?Companies listing “inadequate staffing or skills” as the top barrier for implementing big data and analytics:46%

Research Sept 2013

Two Propositions

“Analytics doesn’t take anything away from Operations Research (OR). Outside our community, OR

is seen as a toolkit but Analytics is seen as a process.” -Anne Robinson Director, Supply Chain Analytics Strategy Verizon Wireless Past President of INFORMS

Analytics practice can benefit from OR knowledge and experienceOR can benefit from interest and enthusiasm for Analytics

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About INFORMS

Largest membership association in the world for advanced analytics professionalsMission: lead in the development, dissemination and implementation of knowledge, basic and applied research and technologies in operations research, the management sciences, and related methods of improving operational processes, decision-making, and management. 11,000 members Primarily (but not exclusively) academic: 50% academic, 30% practitioner, 20% studentHighly educated: 51% doctorate, 96% earned or pursuing Masters or higherGlobal: 79% North America, 10% Europe, 7% AsiaGrowing both in number and diversityPublisher of 13 scholarly journalsAnnual conference with around 4,000 participantsNumerous interest-focused subdivisionswww.informs.org

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Analytics Initiatives at INFORMS

Explicit strategic focusUse Analytics as lever for increased engagement with individuals and organizations in industry and governmentExisting:Annual Conference on Business Analytics and Operations Research Formerly Conference on OR PracticeBoston, 30 March to 2 April 2014Analytics Magazine – bimonthly web publicationSection on AnalyticsCertified Analytics Professional (CAP) credentialIn development:Conference on the Business of Big DataSan Jose, 22 to 24 June 2014Continuing Education Course offeringsAnalytics Maturity Model

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Section on Analytics

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Section Objectives

OUTREACH BEYOND INFORMSReach the vast and growing community of analytics professionals outside INFORMS Help them understand the tremendous value provided by OR/MSOUTREACH WITHIN INFORMSCommunicate about analytics with fellow INFORMS membersExplain how analytics can advance the use of OR/MS tools and techniquesNETWORK AND DEVELOPDevelop a portfolio of Analytics Section member servicesAttract a growing community of like-minded professionals for networking and professional growth

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Certified Analytics Professional (CAP®)

Certification ObjectivesAdvance use of analytics by introducing standards of qualityIdentify individuals with appropriate breadth of knowledgeEncourage continued competencyBe software and vendor neutralBe available to all who are eligibleMeet accreditation standards(ISO/IEC 17024 & NCCA)

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Analytics Professional Job Task Analysis

Certification requirements are based on a delineation of common or typical tasks performed and knowledge applied by Analytics ProfessionalsDeveloped by 12 subject matter experts selected to be:Highly regarded Diverse in geography, sector (public-private), organization type and size, and application area (e.g., finance, logistics, software, consumer goods, etc.)Representing descriptive, predictive, and prescriptive segments of analyticsExam designed to test across a variety of domains

DomainDescriptionWeightIBusiness Problem (Question) Framing15%IIAnalytics Problem Framing17%IIIData22%IVMethodology (Approach) Selection15%VModel Building16%VIDeployment9%VIILife Cycle Management6%  100%

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5 E’s: Components of CAP® Certification

Education: Experience:Exam: Tests skills and knowledge in the 7 domains of the Job Task AnalysisEffectiveness: “Soft” skills confirmed by employer or clientEthics: Must agree to a Code of EthicsSee: www.INFORMS.org/Certification

Degree LevelDegree AreaExperienceMS/MA or higherRelated Area3 yearsBS/BARelated Area5 yearsBS/BANon-Related Area7 years

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Analytics Certification Board

Scott Nestler, CAP, US Army (Chair)Polly Mitchell-Guthrie, SAS (Vice Chair)Tom Davenport, Babson CollegeBill Franks, TeradataJeanne Harris, AccentureTerry Harrison, CAP, Penn State UniversityLisa Kart, CAP, GartnerKathy Kilmer, DisneyDon Kleinmuntz, Kleinmuntz AssociatesJack Levis, UPSPaul Messinger, CAP, University of AlbertaJonathan Owen, General MotorsMelissa Moore, INFORMS Exec. Director

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Maintaining the CAP® Designation

Certification requires that knowledge be kept current Recertification every 3 years Based on earning at least 30 hours of professional development or equivalent1 Professional Development Unit (PDU) = 1 hour of activity PDUs can be maintained online at INFORMS

PDU Category PDUs AllowedEducation/Training programs1 PDU/hour of activity: must earn 8 Self-directed learning1 PDU/hour of activity:maximum of 10 Creating new analytics knowledge1 PDU/hour of activity:maximum of 10 Volunteer service 1 PDU/hour of activity:maximum of 10Analytics professional work experience5 PDUs/year of employment

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Test Available Worldwide (1 May 2014)via Computer-Based Administration

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For More Information

INFORMS:

www.informs.orgINFORMS Analytics Section: www.informs.org/Community/AnalyticsBecoming a Certified Analytics Professional:www.informs.org/applyforcertification My email: Don@KleinmuntzAssociates.com

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