The Hindu Business Line : Analytics, the next big field in biz studies

While it is true that intuition gives chief executive officers (CEOs) and managers direction to manage challenges in a business environment, it is analytics that will help them create new business models that would differentiate them from the others.

In the post-recession phase, corporates have to rethink and formulate new business models to recover and emerge successful, says Prof. Dipak C. Jain, Dean, the Kellogg School of Management, US.

Business analytics, especially risk analytics, is set to emerge as a big area in the near future. Already, IBM is investing in a big way in this field, said Prof. Jain, who is on the board of over a dozen Fortune 100 companies globally.

According to him, a number of big companies are inefficient because they have a lot of dots (centres) that are not well connected. For example, a global corporate that has many offices across geographies will not be successful unless all its dots (centres) are well connected and efficient.

Very often corporates have a lot of data that is not optimally used, he said in an interaction with The New Manager.

Prof. Jain cited the example of the ‘frequent flyer’ scheme to highlight the inadequate exploitation of data. Though American Airlines first introduced the ‘frequent flyer’ scheme back in 1981, even today, no airline had made the best use of the data generated on travellers. This was where analytics could be crucial, he added.

Marketing analytics

The early 1980s also saw the beginning of marketing analytics with the use of scanner technology, especially in the supermarket chains. The technology was used in grocery stores to collect data on customer preferences and behaviour.

Even today, as members of the boards of leading corporates, we would like to hear from the CEOs what’s going on in the mind of the customer. Customer insight, customer centricity and marketing insight are becoming very important. Marketing analytics would definitely be helpful, said Prof. Jain, who has been with Kellogg for over a dozen years.

The future is to go for ‘niche areas’ that will be difficult to copy. Kellogg started offering a certificate programme in ‘Management Analytics’ two years ago, he said.

Interestingly, in recent times, more and more students from technical backgrounds (engineering, science) with analytical minds were being drawn to b-schools. Therefore, the curricula could well be moved towards the use of analytics, he felt.

Management students, especially MBAs, don’t understand risk, which is not just financial. There is risk in marketing, in managing people, and a bigger risk in understanding Gen X (kids born after 1980), who have grown up in a different environment, he said. He felt b-schools should also lay emphasis on managing risk in non-marketing areas as well. For example, managing risks from advocacy groups, political parties, Governments and social interest groups was becoming crucial as globalisation spreads. Prof. Jain said he would be actively involved in the development of curricula in niche areas for ISB’s second campus at Mohali.

He was in Hyderabad along with Prof. Donald P. Jacobs, Dean Emeritus, Kellogg School of Management, to interact with DenuoSource (which specialises in business analytics) and students of the Indian School of Business, Hyderabad.