Mastering Business Analytics: morph IT "expenses" into corporate "assets"

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Has high-school "Shirts vs. Skins" morphed into "Suits vs. Geeks"?

Late addendum: Given the times, for companies in demonstrably serious "trouble," we'll donate our time and requisite materials. However, YOU must absorb our out-of-pocket costs and provide an appropriate meeting venue with suitable AV equipment. For firms in an "in between" financial condition, we'll work out something. Contact us here.

The normal corporate group daily rate is $500/head and we tailor session content to your industry. If you provide venue, we'll conform appropriate session content to your firm's specific management reporting format. No charge for headcount above 30; max 50.

Premise 1: Your CS/IT staff members (staff) are strong analytical thinkers; they are comfortable with intellectual abstraction; they have proven quantitative skills; they are self-disciplined and self-motivated. Moreover, they don't mind hard work because they've learned that nothing worth having is ever "easy" ... or they wouldn't have chosen CS/IT in the first place.

Premise 2: They aspire to stable careers with substantial future prospects commensurate with their intellectual abilities.

Premise 3: They've heard such terms as income statement, cashflow, earnings, liquidity, asset, expense but don't really know what each means. They've a vague notion of what budgeting and planning are but would be hard-pressed to explain them in the context of corporate strategy and/or strategic marketing.

Worse, as for actually going about doing target costing or putting together a financially compelling presentation (NOT PowerPoint!), well, they'd certainly opt to "pass." "Passing" would be a pity. Because, the surest route for realizing their career ambition is via mastery of premise #3, business analytics; it's the "low-hanging fruit" for your staff ... and you.

Business analytics is about solving business problems. Business problems universally exhibit three traits: 1) They are embedded "word problems." 2) Their "scope" is cross-functional. 3) They are analytics-intensive.

Ergo, to solve them, one must simultaneously command a firm grasp of business language (accounting-ese), a business perspective both vertical and horizontal, and analytical skills both wide and deep.

Of the three, the third constitutes the highest hurdle for most would-be business analysts. "Quants" are a distinctly separate genus.

Conjecture: Simply put, the problem is one of communication stemming from two distinct learning needs. First, there is the fundamental Suits vs. Geeks problem that each group "speaks" a different language, with the "suits" (and most employees) speaking some dialect of accounting-ese (with varying degrees of proficiency) and your staff speaking various dialects of techno-speak. Second, the "suits" are trying to solve business problems entailing business complexities beyond the understanding of your staff ... and, quite often, the "suits."

Complicating the problem, the "suits" believe that they're doing a stunning job of "communicating" the problem, when, in fact, such is seldom the case. Worse, the situation all too often tends to be that the requester (i.e., the suit) has a less than perfectly framed command of the concepts at play. Sadly, the Geeks have all the analytical and technical horsepower most problems require but cannot bring that power to bear. Never mind, guess who gets blamed when the project tanks?

Non-Solution: The knee-jerk "solution" of opting for an MBA to address the communication "problem" fails for several reasons.

First, MBA programs (with three notable exceptions) are not designed for quants; they, in fact, cater to non-quant students. So, quants get short shrift via a dumbed-down curriculum which plays away from their strengths. (Among the exceptions, "solutions" typically entail Mathematica, MatLAB, SAS, SPSS, et cetera. Which of those do you support on the desktop?)

Second, MBA programs don't merely fail to "ignite" quant student interest, the programs alienate quants by virtue of frustrating them. Quants intuitively know that there are better methods available (think: Lagrange) but are unable to pursue the alternatives on their own.

Third, MBA programs are drawn-out affairs, largely because the non-quant (majority) students have difficulty "getting" what little analytics the curriculum presents. Not surprisingly, quants end up feeling stifled, frustrated, and left-out. At best, they attain some degree of "fluency" in "suit-speak," however, they fall grossly short of achieving their full potential ... and even these modest "gains" require several years!

Finally, MBA programs, including Harvard's, are anything but sure-fire.

Yes, things were different back in the 1960's/70's. The calculus prerequisite (among others) went out when the "Student Evaluation" process came in. That's progress for you....

Solution: Either join us in Orlando or have us conduct the seminars at your choice of locale. The first of the 5-day sessions makes a good start at eliminating the Premise 3 stumbling block. The second and concluding 5-day session completes the process.

How can so much material be absorbed in so little time? Think: Pareto.

Easily 80% of the useful MBA material constitutes far less than 20% of the typical MBA class time. Further, in a conventional MBA program, much of each semester is spent reviewing crucial material from other courses. This is a fixture in silo-centric curricula.

In contrast , our approach is strategy-centric, eliminating all of the repetition plaguing silo-centric programs; material need be presented only once. That is, all material is integrated (cross-functional) and new learning is presented JIT. It's all immediately incorporated into student knowledge by applying the new concepts in solving relevant, realistic (typically cross-functional mini-cases) business problems of the moment.

Solution discussion is also couched in strategy-centric terms. Our students fully appreciate a given solution's import in terms of corporate specifics and are able to address them in both analyses and communication.

Moreover, because CS/IT-types don't suffer math-phobia, far more demanding problems are routinely solved than are typically ever attempted in conventional MBA programs. Result: Students rapidly accumulate a portfolio of useful, real-world models upon which to later draw.

Broad strokes : Students learn everything of value from the typical MBA core: Economics, Accounting, Finance, Marketing, Operations, Statistics, and Quantitative Methods. They do NOT get concentration- level coverage of any given functional area (e.g., Finance) in these, our two foundation (ISA core), modules. They will, however, delve far deeper into the computational analytics than they would in any MBA program.

Aside: "Concentration" material is covered with equal dispatch and rigor in our functional (finance, marketing, operations) modules. Baby-calc — calculus semesters I through IV — is covered JIT in the basic functional modules as necessary.

Each of the advanced functional modules goes far beyond traditional MBA material; probability, PDE, vector analysis, linear algebra, and OOP are prerequisites. For instance, the advanced financial functional module incorporates much from traditional MS/Computational Finance programs.

Further, as students are immersed in the (senior management) strategy-centric perspective, students appreciate why what they are learning is important and how it "fits" into the business "picture" both broad and narrow. (No MBA program of which we are aware attempts that perspective; they are all silo-centric.)

Our students learn everything within the corporate-wide context of how businesses are actually managed. So, they rapidly become able to communicate intelligently with managers and executives at any level with observations predicated upon the strategy, tactics, metrics-triad common to all properly run organizations. Typical MBA's cannot.

Specifics: The first 5-day module addresses deterministic methods and optimization of complex, deterministic systems, e.g., constrained, non-linear optimization of financial operating systems. The second 5-day module addresses probabilistic methods and optimization of complex, dynamic systems, e.g., applied Monte Carlo simulation of competitive marketing models.

All modeling is undertaken within Windows/Excel, because that is the global corporate norm. Students learn to effectively use Excel as the preferred communication platform, too.

FYI: The key to making this "work" lies in the effective use of dynamic graphics and real-time, "What-if" VBA perturbation/optimization. In a group presentation context, "solutions" become group solutions with de facto buy-in gently assuring conflict-free consensus building.

Format: Sessions feature a mix of lecture (~20%), seminar (~30%), and team-based, in-class, lab work. There is limited class preparatory reading (.pdf) and there is homework in the form of concise problems/ mini-cases for the teams to prepare for each next-day's class. There are several "carryover"* cases which are revisited as learning progresses from ISA-1 to ISA-2 ... and beyond, for that matter.

There are NO protracted readings. There is no mystery as to how the various bits and pieces fit. There is no busy work; there is no fluff. There is no separating wheat from chaff; there is NO chaff. If students arrive prepared to learn, then learn they shall — guaranteed. If students decide as a group post-class that a given class "failed," there is no charge for that class, period. To date, no one has exercised that option.

Presentations are made in Excel 2003/Win 2003 and appropriate software is provided as necessary. Students MUST have the Excel Solver (or substitute) loaded when they arrive, as they will be using it extensively. MS "Query" along with all the other (non-default) install "options" should be loaded, too. Software is typically loaded for ISA-1 and is ALWAYS required for ISA-2; students need appropriate "privileges."

Finally: You'll find a lot more detail here and throughout the broader site, should you want it. The FREE 5-day seminar mentioned on the SlashDot pages is closed, so, that's not an option. You can reach us here.

Postscript: Business management is largely a matter of recognizing and resolving business problem. Few employees command a broad understanding of business and a broad array of analytical tools. Therefore, most business "solutions" are fragmentary, piecemeal, and, ultimately, unsatisfactory. To be most effective, business management cannot simply recognize and resolve (react) but must be proactive and anticipate business issues long before they mature into problems. The ISA approach is to imbue each student with the requisite knowledge to be able to function effectively on all three levels: anticipation, recognition, resolution. Doing so entails students acquiring our integrated strategic framework (STM) and its related analytical framework (ISA). The ISA core sequence constitutes the initial steps.

*Some of these "carryforwards" are loosely based upon extremely well-known and widely-used B'School classic cases. Amusingly, we've heard from former students that they've "devastated" colleagues (said, "Suits") with MBA's from august institutions while "discussing" our solutions to these "classics."