There is a scene in the movie “Moneyball” — about the Oakland Athletics’ innovative plan in the early 2000s to use advanced analytics to evaluate baseball talent — where the character Peter Brand adamantly proclaims that nothing is more important in determining a player’s true worth than cold, hard statistics.
“It’s about getting things down to one number, ” Brand declares. “Using stats to reread (players), we’ll find the value that nobody else can see. People are overlooked for a variety of biased reasons and perceived flaws. Mathematics cuts straight through that.”
After some initial skepticism, the sports world now embraces performance analytics. And now the business world is following suit. Business analytics and the ability to interpret massive amounts of data have become a popular class in business schools.
The University of Alabama’s Culverhouse College of Commerce and Business Administration was one of the first to see the value in big data, offering a certificate in data management as early as 2002. Analytics has since become an integral part of Culverhouse’s degree programs, including a new online master of science degree in marketing with a specialization in marketing analytics.
Now Culverhouse is in the process of establishing a space dedicated to research in this field with the creation of a Business Analytics Lab. The new lab will allow Culverhouse students to work on real-world issues for actual industry partners, including Lockheed Martin.
“These are projects that are industry-initiated and university-executed. That’s what this is all about, ” Culverhouse Dean Michael Hardin says. “Industries have issues that they may not have time to address internally, but they’re great projects for our faculty and students to work on. It gives students experiential learning.
“Businesses can come in and meet with our faculty and students to discuss a need or problem, and we will work with them on developing a solution based on gathered data. Students will work with faculty members and pull together what they have learned across a number of different classes. That’s what the lab is supposed to facilitate.”
|
“Using software provided by North Carolina-based analytics company SAS, students will take the enormous amount of data that is available in our computerized world and crunch the numbers into a fine powder. The goal is to unearth trends and offer suggestions for how to improve business outcomes.
“Every day we capture more data. This lab will take that data and then derive some kind of business value out of it, ” Hardin says. “So a retailer can extract information about their customers to better serve them.”
Financial institutions, for example, can use the data to determine what rates they should offer customers to minimize defaults and maximize profits. Businesses can pinpoint the fluctuations of customer traffic and schedule staffing levels accordingly. There are even algorithms that can help hospitals identify the likelihood of bacterial infection outbreaks within the facility, allowing them to make changes in advance to improve patient safety and quality of care.
“The area of application is virtually unlimited, ” says Jerry Oglesby, senior director for global academic certification programs at SAS. “Almost any data that you collect, there are ways now to analyze that data effectively and use it to do a better job of being able to forecast things and take advantage of that knowledge.”
Lockheed Martin Chief Technology Officer Keoki Jackson says that is exactly why the company has partnered with the Business Analytics Lab. Jackson says the lab will provide valuable analytics capabilities that will enable Lockheed Martin to address a variety of issues.
“Workforce analytics is a good example, ” Jackson says. “We want to make sure we’re recruiting the right kinds of people and we’re having good success rates in our recruitment, and then we’re able to retain the people. One project we’re doing with (Culverhouse) this year is retention of high-caliber recruits.
“Then there is supply chain. About 70 percent of our work is in supply chain, and we literally have thousands of suppliers. We can use advanced analytics to understand where the risks may be in our supply chain, as well as integrating supplier deliveries with our production application. That will help us maintain operational excellence in our factories and deliver our products on time.”
Birmingham-based Healthcare Business Solutions also has partnered with the Business Analytics Lab. Matthew Smith, the director of marketing and business development at HBS, says the lab will be able to offer the company analytical capabilities “beyond what we have within our organization.”
“We’re looking at being able to analyze information that we use to service our customers from the perspective of health care outcomes, and then taking it to the next level, ” Smith says. “There are so many different ways that we slice and dice data now. We can use that data to assist our customers in making people healthier.
“The amount of information and data that is gathered nowadays and the accessibility of that data has made analytics a much bigger plate in the world. Just the sheer gathering capability that we have now because of a more computerized environment really furthers the possibilities of what you can do in the analytics world. Especially when you get into predictive-type analytics, things that can possibly shed some light on what the future might hold.”
It appears that advanced analytics will be an important part of that future. A Harvard Business Review story in 2012 proclaimed data scientist to be “the sexiest job of the 21st century.” But Hardin says business schools have only recently begun to truly appreciate the importance of this field of study.
“A lot of traditional statisticians who were trained in the 1970s, they thought this was just a fad that was going to go away. There was a lot of pushback, ” Hardin says. “My question to them would always be, ‘Are we collecting less data? Do you see us collecting less data in the future?’ If not, then what are we going to do with all that data, and can we get business value out of it?”
The goal of the Business Analytics Lab is to discover that value and, in the process, improve the educational offering for Culverhouse students by giving them hands-on experience.
“As an educator, we can do things in the classroom that are really important. But it’s also about what happens outside the classroom and all those intangible extras, ” Hardin says. “Our students will have an opportunity to talk to somebody from Lockheed Martin. They’ll see what real-world projects are like.
“That can be a real differentiator for them (after graduation). Our students will go out on day one with experience. That’s what we’re supposed to be about at the university: training students in the latest and greatest.”
In the long run, Hardin says the lab also will be able to benefit the state of Alabama as a whole.
“I want it to be something that contributes to the economic growth and development of the state and is a real resource to help keep very highly skilled knowledge workers here, ” Hardin says. “We need to have evidence-based business, where we’re making decisions based on and driven by data. That is the future.”
Cary Estes and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.
text by cary estes • photos by cary norton
