Teo Chung Piaw National University of Singapore. Copyright 2010, SAS Institute Inc. All rights reserved.

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1 Teo Chung Piaw National University of Singapore

2 The Business Analytics Movement: Implications for Research and Education

3 The Emergence of Business Analytics MODEL DATA STATISTICS CMPUTER SCIENCE OPERATIONS RESEARCH

4 Business Analytics in Singapore Singapore, with its collection of industry clusters and advanced information system, is an ideal playground for BA

5 Creating Value from Data: Huge Market Potential Ashok Charan, NUS Formerly from Nielson, Asia Pacific Delphi Decision Support System Portal provides an interface to combine different data sources for analysis Datamine supports tools and techniques to analyze disaggregate consumer level data Connect provides a powerful mechanism to filter consumers based on their demographic profile Analytics supports promotions and advertising evaluation Destiny is a market simulation game that imparts the experience of marketing of consumer goods

6 Business Analytics: Is it Science or Art? Simple analytical tools are amazingly effective in some instances. Why? To continue to attract new talents to join the field, we need to challenge the mind turning BA from arts to science How to find challenging new problems? How to make research in BA relevant to industry?

7 Where is the P in Business Analytics? P = PEOPLE Pennsylvania Number Games (3D) SMALL NUMBER PHENOMENON

8 If numbers in 3D are chosen with equal probability, then either all are hot numbers, or zero hot number in the game For different level of sales, only a very small narrow interval for the cut-off, outside of which either all or no hot numbers

9 Where is the P in Business Analytics? Human involvement in the generation of data People matters Choices are revelation of preferences most human are rational and hence predictable Science (Feb 2010): Limits of predictability in human mobility More than nine times out of ten, the location of any single person at a certain time of day could be correctly guessed

10 Business Analytics: Is it Science or Art? Simple analytical tools are amazingly effective in some instances. Why? To continue to attract new talents to join the field, we need to challenge the mind turning BA from arts to science How to find challenging new problems? How to make research in BA relevant to industry?

11 Challenging BA Problem comes from new sources of data The Queue Inference Engine: Deducing Queue Statistics from Transactional Data. Richard C. Larson Management Science, Vol. 36, No. 5 (May, 1990), pp From the time stamps in the machine, can you Infer the number of customers waiting to use the machine?

12 Challenging BA problem comes from integrating People into Model Optimization: Algorithm, Stochastic Modeling Approximation algorithms, Queuing, Inventory Economics: Game Theory, Comparative Static Ambiguity: Robust Planning, Risk Management Empirical: Revealed preference, Data Mining Psychology: Cognitive biases, Decision Theory Contract Theory, Principal-Agent Nash Equilibrium Robust Optimization, CVaR, coherent risk measures Likelihood estimation, Discrete Choice, Power law, Scale free Prospect Theory, Bounded Rationality, Quantal Response Equilibirum Page 12 New and improved theories have given rise to more accurate and powerful predictive models for BA

13 Theory shows the number picked by players follows Benford s Law 216 Block 2 level 16 or 21 st of June Benford s Law and Number Selection in Fixed-Odds Numbers Games, with M Chou, QX Kong, ZZ Wang and H Zheng. Journal of Gambling Studies, 2009.

14 Human involvement makes hot number management viable The choice of the cut-off is not sensitive to sales volume

15 Challenging BA Problem comes from connecting the needs of industry with the brains in research The BA industry is fun and challenging attraction for young talents to join the field

16 Business Analytics in NUS Department of Statistics and Applied Probability School of Computing Statistics Consulting Center Workforce Development Agency Building a model for its profiling test etc. Database Data mining, Data Warehousing NUS Business School Operations Research Marketing Research Financial, Risk Management Business Administration Curriculum now includes Business Analytics

17 Thank You Teo Chung Piaw National University of Singapore