The Optimization Edge

A Blog for Business Executives and Advanced Analytics Practitioners

Technologies: Data Science, Big Data, Optimization, Machine Learning, Artificial Intelligence, Predictive Analytics, Forecasting

Applications: Operations, Supply Chain, Finance, Health Care, Workforce, Sales and Marketing
March 9, 2017

I’ve often heard stories from my operations research colleagues about fantastic results obtained from advanced analytics models they have built, but the models were never used in the business. Typically, the lack of acceptance of their models was due to a lack of understanding of what would be required for successful integration of those models into normal business operations.

What they missed was the need for applying organizational change management principles in order to gain broader acceptance of advanced analytics techniques that are used for decision support. I collaborated with longtime colleagues Zahir Balaporia of Schneider (now at FICO), Karl Kempf of Intel, John Milne of Clarkson University (formerly at IBM), and Rahul Saxena of Cobot Systems (formerly of Cisco)—who have decades of experience in the development and deployment of analytic methods for improved decision making—on a paper about this topic. Following is an adaptation of our paper and the related presentation I have given at INFORMS events. 

March 3, 2017

If you are an executive exploring whether or not optimization will help your company raise its level of competitive play, I don’t advise running out to sign up for a crash course in advanced mathematics. There’s no need for you to become a quant, but it would help to think a bit like one. Begin by asking a few optimization questions, such as:

  1. What are my company’s underutilized assets? For example, for a newspaper, it might be ad space; for a pharmaceutical company it might be the “face time” that sales reps spend with doctors; for an agricultural company, arable land or available seeds might be the undervalued asset; for a railroad, train capacity might qualify. Which of your assets, if tapped for optimal value, have the potential to take your organization to a significant new level?