There is no shortage of data in the business world. According to IDC's most recent report on the digital universe, the amount of information created and replicated will surpass 1.8 zettabytes, or 1.8 trillion gigabytes, in 2011. Since 2005, the report notes, enterprises have spent $4 trillion on hardware, software, services and staff to "to create, manage, and store -- and derive revenues from -- the digital universe." But as the report notes, "In an information society, information is money. The trick is to generate value by extracting the right information from the digital universe..."
Sorting through that information and using it to grow businesses is the objective of a new two-year dual-degree master's program at the University of Tennessee. Students will graduate with both an MBA and a master's degree in business analytics.
Dr. Ken Gilbert, head of UT's Department of Statistics, Operations and Management Science, cites ambitious goals for the program. "The reason you do analytics is not just to get interesting insights or figure out how to shave costs," he says. "It is to look for breakthrough opportunities to grow your business."
Students in the dual-degree program will take MBA classes in areas such as finance, marketing, supply chain, communication and leadership. The business analytics curriculum will help them apply the tools of data mining, statistical analysis, business process optimization and business intelligence to problems such as choosing the optimal mix of products or understanding the costs of outsourcing decisions.
Gilbert noted businesses ranging from retailers to credit card firms are using analytics to create customer loyalty programs, predict the most profitable customers and understand internal operational constraints. He said manufacturers can use analytics to speed up their product development processes and to determine if they are focused on the most profitable products. "A lot of companies keep launching new products and think it is a good thing. But it may be that the new products are competing for manufacturing capacity or supply chain capacity or shelf space with products that are much more profitable," he pointed out.
"Practically every transaction that happens in business gets stored as a record. That gives you a tremendous opportunity to base decisions on what really happened rather than what some expert tells you," said Gilbert. A company can launch a promotion, he noted, and see how customers actually responded to it, rather than rely on analysis from an expert or even a survey of customers.
Gilbert acknowledged that with the huge amounts of data being collected, the first challenge "is understanding what is important and useful and get to the essence of the problem." Companies need to spend time determining what their goals or problems are and then develop dashboards that focus on those specific issues, added Julie Ferrara-Brown, a lecturer in the program.
Gilbert wants to be sure that graduates of the program not only do the analysis of data but are capable of communicating its import. He points to a quote of UT alumnus Dave Clark, vice president, North American Fulfillment at Amazon.com: "People who can do high level math are practically a commodity. People who can figure out which problem is the right one to solve and then apply high level math are both expensive and elusive. Those who can communicate effectively the answer in such a way managers can understand, priceless."
