Check out 10 predictions for analytic decision support by 2015, written by Dhiraj Rajaram, Founder, CEO and Chairman, Mu Sigma Inc., By 2015, companies will increasingly blend math, technology and decision sciences, employing user-generated data to infuse analyses with behavioral and social-network insights.

1. 2015:TenPredictionsforDecisionSciences WhitePaper
MuSigma
Author:DhirajRajaram
August2010
www.mu-sigma.com

2. 2015:TenPredictionsforDecisionSciences WhitePaper
Withmostbusinessesacrossindustryverticalsstillreelingundertheimpactof
theeconomicslowdown,anincreasingnumberofthemarefocusingon
analyticsdrivendecisionsupportacrossallfacetsofbusinesswhereexperts
havetotakedecisionsbasedonbitsofinformation.Severalplayershave
definedtheircompetitiveedgeonthefoundationsofdatadrivendecision
makingwhileothersarestrugglingtoplaycatchup.
MMuSigmaisthelargestpureplayanalyticsserviceproviderwithaglobal
deliverymodel.Wehavereleasedalistof10predictionsthatwebelievewill
havethegreatestimpactontheindustryby2015.Thesetrendswillchallenge
conventionalbusinesswisdom,drivetheemergenceofnewbusinessmodels
andalloworganizationstodifferentiatethemselvestocompeteanddrive
growth.
TheDIPP™IndexasdefinedbyMuSigmainvolvesthefollowing.
1.1.DforDescriptiveAnalytics–Whathappenedinthebusiness(using
reportsanddashboards)?
2.IforInquisitiveAnalytics–Whysomethinghappenedinthebusiness
(usinganalyses)?
3.PforPredictiveAnalytics–Whatwillhappeninthebusiness(using
predictivemodeling)?
4.PforPrescriptiveAnalytics–theSoWhat,NowWhat?
WWhileconventionsuggeststhatorganizationsneedtoevolvefromDescriptive
AnalyticstoPredictiveAnalytics,aconcurrentuseofMath,Businessand
TechnologyacrosstheDIPPindexisessentialatanypointintimetoeffectively
drivedatadrivendecisionmaking.
AAscompaniesadoptanalyticsasthenewscienceofwinning,thefutureof
analyticswillnotjustbebasedonappliedmath,businessandtechnology,asit
istoday.Inthefuture,decisionscienceswillhaveMath+Business+Technology
+BehavioralEconomics.
BasedonourBasedonourexperienceworkingwithmultipleindustriesandacrossawide
spectrumofbusinessproblemsusinganalytics,wehavesomeperspectiveson
wheretheindustryismovingandwhatkeytrendswillbeseenoverthenext
fewyears.
TThefollowingarethetop10predictions,althoughnotinanyparticularorder.
Someoftheseareobviousandsomearerelativelyobscure.Therelative
importanceofeachdependsontheuniqueneedsandbusinessdriversofyour
industryverticalandanalyticalmaturityofyourorganization:
Prediction1:HyperCompetition
EEvolutionofDecisionScienceswouldleadtoacceleratedhyper-competition.
Organizationswillengageininformationarbitragegamestoexploit
informationasymmetrywiththecompetition.Specificallyinanalyticallymature
industrysectors,informationadvantagewouldbeaswiftlymovingtargetdue
totheintensecompetition.AirlinesandFinancialServicesaretheindustries
thathavehistoricallypioneeredintheusageofanalyticsasanintegral
componentoftheirbusinessmodels.Today,manyAirlinescompaniesare
bleedingbecausetheyableedingbecausetheyarenotabletoretaintheircompetitiveedgeduetothe
Yesterday
•Business+Technologyallowsustosimplyautomate
Today
•Math+Businessallowsustomorecogentargumentsattheboard
room
•Math+Technologyallowsusoperateproactivelywithanticipation
••Math+Business+Technologyallowsustoexecutebetter
Tomorrow
•Math+Business+Technology+BehavioralEconomicswillletus
developnudges(cognitiverepairs)againstbiasesthatweashuman
beingsaregiftedwith
intensecompetition.AirlinesandFinancialServicesaretheindustriesthathave
historicallypioneeredintheusageofanalyticsasanintegralcomponentof
theirbusinessmodels.Today,manyAirlinescompaniesarebleedingbecause
theyarenotabletoretaintheircompetitiveedgeduetotheswiftlymoving
informationarbitrageinanintenselycompetitivemarketplace.Ontheother
hand,firmssuchasGoldmanSachshavegainedaformidableedgeover
competitorsinhighspeedalgorithmictradingbyexploitingcuttingedge
modelmodels.
Tounleashthetruepotentialofanalytics,companieswouldneedtomove
beyondthetraditionalfrontiersofpricing,marketingandrisk,andleverage
analyticstocompeteoninnovationandrelativelyobscureareasofthe
business.Companiesacrossverticals,beitBanking,Insurance,Retail,orAirlines
wouldhavetoinnovateinsupplychainmanagementandnewvaluecreation
orconstantlykeepcompetingonpriceandquality(valueformoney)orhave
enoughfinancialcapitaltooutlastothercompetitors.
PPrediction2:CreationVersusConsumptionofAnalytics
Creationofanalyticswillbecomemorecommoditizedwhileorganizations
competeonconsumptionofanalytics.Contextandrelevancewillbethekey
enablersforeffectiveconsumptionofanalytics.Organizationswillhavetofocus
onvariouscompetenciestogetconsumptionofanalyticsright.The
consumptioncyclewillnecessitateamorebalanceduseofrightandleft
brainedthinking.
TTherapidlyincreasinguseofnew,intuitivetechnologiessuchasvisual
analytics,interactivedash-boardinganddecisionsupportapplication
simulationtoolsindicatethegrowingdemandforconsumptionofanalytical
insightsacrosslevelsanddomainsinorganizations.Multipleapplicationssuch
asFlex,SilverlightandAjaxbasedRichInternetApplicationsarefocusingon
enrichingtheuserexperience.CompaniessuchasTableauSoftware,Tibco
SpotfireandQlikTechnologiesarepioneeringvisualanalyticsasameansto
enablebusinessusersenablebusinessuserstogainquickinsightsintodata.Itisnoteworthythat
QlikViewInc.recentlyreleasedanIPOandhasaP/Eratioof66andamarketcap
valuationofaround$1bnonrevenuesofonly~$150million!
Prediction3:Creativity&Innovation
Creativityandinnovationwouldbeassetsownedbyafew.Thepremiumfor
disruptiveinnovationwouldincreaseandwewouldobservemorecontinuous
incrementalinnovation.Typically,thespeedofinnovationisinversely
proportionaltothekindofinnovation.Disruptiveinnovationstendtotake
longertoreleaseandhavealongershelflife.Incrementalinnovationstendto
befastertocreateandcanberelativelyeasiertoreplicate.
MManycompanieswouldinvestinincrementalinnovationstrategiesusingthe
investmentstheyhavemadeintheirdataassets.Atthesametime,thetrue
disruptiveinnovatorswouldfocusoncreatingtherightmixofqualitativeand
quantitativeanalyticsbybringinginnewareassuchasbehavioraleconomics
andsocialanthropologytocreateandexecuteoninnovativeideas.
HHistorically,wehaveobservedthevaluationfordisruptivebusinessmodels
increaseexponentiallyfromHotmail(onlineemail)toYahoo(onlineportals)to
Google(searchbasedonlineadvertising)toFacebook(socialnetworking).The
uptakeinusageofdecisionscienceswillenableclientstoleveragecontinuous
innovationmoreeasilythusplacingapremiumoncreativityanddisruptive
innovation.
MuSigma

3. 2015:TenPredictionsforDecisionSciences WhitePaper
Prediction4:NewDataSources
NewdNewdataproviderswillemergefocusingonintelligentlyinterpreteddata–
especiallyforsocialmediaanalysis,locationdata,etc.MultipleScores(suchas
FICOforcredit,HICOforhealthetc.)wouldbecreatedtobetterunderstand
humanbehavior.Web2.0businessmodelsexploitingnetworkeffectswilllead
toexponentialincreaseinusergenerateddata.E.g.FourSquare,Twitteretc.
Smartphoneswillmonitorourvitalsignsandchronicconditionsyieldinga
wealthofdatafordiseasepredictionandmedicalresearch.
TThebulkofwhatwillcontributetothisexplosionofdata,accordingtoEric
Schmidt,CEOofGoogle,isusergeneratedcontent.Fromthatcontent,farmore
predictionthanwhatwe'veseentodayispossibleinthefuture."Ifwelookat
enoughofyourmessagingandyourlocation,anduseArticialIntelligence,wecan
predictwhereyouaregoingtogo."–EricSchmidt,CEOofGoogle.
WWhatthiswouldmeanforanalyticsisthatanincreasingproportionofitwould
beonunstructureddata(Text,Video).SocialMediadata(Radian6,ViralHeat
etc.)andRFIDdatawouldbemergedwithlocationinformationforsupplychain
analytics.Similarly,textminingwouldbeutilizedforsocialmediaanalytics,
customervoicedataforcustomerserviceandcallcenteranalytics,andvideo
dataofcustomers’emotionalresponsestoproducts/storelayouts,traffic
monitoringetc.forretailanalytics.
PPrediction5:EmergingRoles
TTheequivalentroleofa“ChiefAnalyticsOfficer(CAO)”willemergein
organizations.TheprimaryresponsibilityofaCAOwouldbetoover-ride
organizationalanddepartmentalboundariestobuilddatadriven
competencieswhereverdecisionsaremadeusinginformation.Theexpertiseof
professionalsfromvarieddisciplinessuchasTechnology,AppliedMath,
Anthropology,BehavioralEconomicsetc.wouldbeutilizedfordecisionmaking.
Totacklethesupplysideissuesforsuchprofessionals,globallydistributedand
loclocationagnosticteamsandpartnershipswithtalentsourceswouldbeformed.
CompaniessuchasEmsense(neurosciencebasedmarketing),QInteractive
(OnlineAdNetwork),Adenyo(MobileMarketing),EquitiesFirstHoldings
(Securitieslender)havealreadyappointedChiefAnalyticsofficersfrom
backgroundsasdiverseashumanbehavior,economics,computerscienceetc.
Goingforward,evenbusinessanalystswouldneedtomorphintocontent
engineersbyexploitingthesynergiesofleftandrightbrainthinkingto
generatemoreholisticinsights.
PPrediction6:Education
AnalyticsEducationwillbeformalized.
UniUniversityofOttawa,NorthCarolinaStateUniversity,DePaulUniversityhave
startedofferingformaldegreeprogramsinAnalytics.Ascompaniesbeginto
leverageanalyticsmoreandmore,theywillrecognizetheneedtocreateand
developtalentinthisspaceandwillprovidesupporttouniversitiestobuild
formaldegreeprogramsinanalytics.Matureorganizationswillaugmentthe
formaleducationwiththeirowncorporateanalyticsprograms,whichwillbring
indomainknowledgeandbusinesscontexttoeffectivelyuseanalyticsintheir
ororganizations.
Prediction7:ProcessAutomationWillTakeaForeFront
Certainareasofanalytics(e.g.MarketingMixModeling,Tradepromotions
analyticsetc.)willmovefromaresearch/discoveryphasetobecomemature
repeatablemethodologiesthatwillget“operationalized”withautomation
technologies.Thiswillenabletherespectiveanalyticsatagreaterlevelofdetail
andscalethanpossibleearliere.g.Marketingeffectivenessbyproduct,SKU,
channel,countryetc.However,eachcompanywillneedtoassessthe
applicabilityoftheautomationparadigmtoitsanalyticsproblemsasthereisa
popotentialdangerthatpureautomationwillsupersedethenecessaryhuman
interventionandoversight.
Prediction8:OpenSourceanalyticsplatformsand
Analytics-as-a-Service(AaaS)willgainprevalence
MoreandmoreOpenSourceanalyticsplatformswouldemergetoincrease
adoptionandbetterminethewisdomofcrowds.
Currently,theopensource“R”hasemergedasaleadingplatformforstatistical
innovationandcollaborationbothinacademicandindustrycircles.Thisis
evidencedbyanincreaseincommercialvendorsofRsuchasRevolution
AnalyticsInc.whichisfocusedonscalingtheuseoftheRcomputinglanguage.
AAlso,thereisanincreasingtrendofcollaborationbetweenproprietaryand
opensourceplatformse.g.TibcoSpotfireplatformofferingtheoptiontocallR
functionsfromwithinitsenvironmentandSASintroducingsupportforR
scripts.Thissignifiesashifttowardslooselycoupledopencomputingplatforms
inthefuture.
AAnalytics-as-a-Service(AaaS)willbecommonplaceandwilltakedifferentforms
includinganalyticsservicesproviders,analyticsfocusedSaaScompanies,
existingITservices,systemintegrationanddataprovidersmovingintovalue
addedanalyticsservicesetc.Outsourcingandglobaldeliverywillyield
significantsupplysidebenefitstotheanalyticsindustry.
BigplBigplayerssuchasIBMandAccenturehavealreadyturnedtheirattention
towardsanalytics.Theyaremakingsignificantinvestmentsintools,e.g.IBMhas
investedinacquiringCognosandSPSSInc.Itisalsoopeningseveralanalytics
centersacrosstheglobeincludingIndia,China,etc.Thereisanincreasingtrend
ofcompaniesintheFortune500toissueRFPsandfollowsystematic
proceduresforprocuringanalyticsservicesandmanagingvendors.
Software-as-a-ServiceModelsarebeingdeployedforanalyticsbymanyplayers
e.e.g.Webanalytics(Google,Omniture,etc.),MarketingAnalytics(M-factor),
HostedandOnDemandBusinessIntelligencePlatforms(Panorama,LucidEra,
etc.).
Prediction9:HumanBehavior
BehavioralEconomicsasanareaofscienceisseeingmoretractionand
applicationincorporateworld.Whileanalyticshelpsusgaininsightsandmake
decisions,thosedecisionscancreateapositiveimpactonlyifhumanbiasesare
takenintoaccountduringimplementation.Analyticsbasedinsightswill
challengemanytraditionalwaysofworking.Executivestryingtochampion
datadrivedecisionmakingwillneedtoleverageaninterdisciplinaryapproach
usingBusiness+Technology+Mathematics+BehavioralEconomics+Social
AnAnthropology.Asthisbecomesaformalpracticeincorporateoperating
proceduresandcorporatestrategies,betterunderstandingofhumanbiases
wouldhelpdevelopcognitiverepairsornudgestoensurebetterapplicationof
decisions.
Today,moreandmoreorganizationsareinvestingindedicatedconsumer
insightsteams.Theyfocusondevelopingsegmentationstrategies,
understandingCustomerLifetimeValue,marketsizingetcasindependent
initiatives.Overthenextfewyears,theywillmovetowardsaholisticapproach
tounderstandtheircustomers.
Prediction10:CollaborationusingConvergence
WWithblurringofvaluechainboundariesandemergingbusinessmodels,anew
eraofconvergenceintheuseofanalyticaltechniquesandframeworkswill
comeintoplay.Crossindustryandcrossdomainlearningwillleadtosignificant
breakthroughsinthedevelopmentanddeploymentofanalyticssolutions.
AApplicationofnewbusinessmodelsinexistingcompaniesisacceleratingthe
needforconvergenceandcollaboratione.g.MicrosoftenteringRetail,Cellular
phonenetworkprovidersenteringtheNetbookcategory,Dellmovingfrom
customconfigurationstopre-builtofferings,etc.ScottradeandYahooare
collaboratingondataandanalyticstooptimizeleadgenerationforScottrade.
HHistorically,certainanalyticaltechniqueshavebeendevelopedandutilized
mostlyinspecificdomainse.g.YieldoptimizationinAirlines,SurvivalModeling
inLifeSciences,LeanPrinciplesinManufacturing,DiversificationinFinanceetc.
However,thesetechniqueshaveastrongpotentialtobeusedacrossindustries
e.g.Yieldoptimizationmethodologiesforonlineadvertizingindustry,Survival
ModelingconceptsforFinancialRiskanalyticsandDiversificationforMarketing
andSupplyChain.
CConclusion
AnalyticsisgoingtoplayaverykeyroleinthecomingyearsinCorporate
America.Thepasttwoyears,includingthisone,havewitnessedunprecedented
economicsituation.Theworldisshiftingtoa‘newnormal’andweareseeing
adventofnewcustomerpsychepreviouslyunheardof.Institutionalizing
analyticsisnotadestinationoragoalyourcompanyshouldaspireforratherit
MuSigma

4. 2015:TenPredictionsforDecisionSciences WhitePaper
isacontinuousprocessofinternalizingandintegratinganalyticsinyour
company’sbusinessdecisionmakingprocessandthiswillbeakey
differentiatorforsuccessfulbusinesses.
AbouttheAuthor
DhirajRajaramisthefounderandCEOofMuSigma,ananalyticsservices
companythathelpsclientsinstitutionalizedata-drivendecisionmaking.Dhiraj
isresponsibleforthevision,strategicdirectionandleadershipinMuSigma.His
keystrengthslieintheareaofmanagingteams,aligningorganizational
resourcestoacustomercentricvisionanddeliveringprofitablegrowth.Hehas
builtMuSigmafromgroundupduringwhichtimeheexecutedonactivities
thatincludedraisingseedandgrowthcapitalfortheventure,securingkey
Fortune100customers,incubatinganoffshoredeliveryunitandhiringkey
leadershipmembersintothecompany.BeforeMuSigma,headvisedsenior
executivesacrossavarietyofverticalsasastrategyandoperationsconsultant
atatBoozAllenHamiltonandPricewaterhouseCoopers.
AboutMuSigma:
MuSigmahelpsclientsinstitutionalizeanalyticsintheirorganizationsusingglobaldelivery.WeareheadquarteredinChicago,USAwithadeliverycenterin
Bangalore,India.MuSigma’sscientificcommunity,whichconsistsofpractitionersfromleadingeducationalinstitutionsintheUnitedStatesandIndia,
enableustodeploycuttingedgeanalyticsforourclients.Ourbest-in-classprocessesleverageexpertiseinstatisticsandeconometricsintheareasof
marketing,riskandsupplychain.Thetechniquesourprofessionalsuserangefromconventionalstatisticalandoperationsresearchtechniquestoadvanced
artificialintelligencetechniques.
MuSigma