UPS, the world’s largest package delivery service, gathers an endless stream of data from its fleet of more than 100,000 vehicles so it can optimize tens of thousands of delivery routes based on real-time information.
The company, which delivered 4.9 billion packages and documents last year worldwide, uses GPS tracking equipment, vehicle sensors, and other on-board data-gathering technology, along with drivers’ handheld mobile devices, to capture data on everything from vehicle routes to engine temperature, time idling—even whether a driver is wearing a seat belt, according to UPS.
“They even know when the driver backs up and can tell when the driver has not been efficient,” says Sawyer Business School Professor Ken Hung, chair of the Information Systems and Operations Management Department and director of the school’s new Master of Science in Business Analytics program. “You think of Big Brother, but from a business point of view, to have that visibility is a gold mine for process improvement.”
Indeed. UPS says its proprietary algorithm-based ORION route-optimization system saves the company about 100 million miles per year, reduces fuel consumed by 10 million gallons, and cuts carbon emissions by about 100,000 metric tons. A reduction of just one mile per driver per route each day can save the company up to $50 million a year.
The UPS example is reflective of the explosive growth of data and the quest by businesses, healthcare, government, and other entities to harness it to their advantage. An estimated 269 billion emails are sent every day worldwide. Google is searched 40,000 times per second, amounting to 1.2 trillion searches per year, according to Forbes. And that data proliferation is just getting started. Annual data production is predicted to increase 4,300 percent by 2020.
That exponential growth is driving insatiable demand for business analytics, Hung says. Companies are transforming their operations to leverage data for decision making.
“Currently there are not enough people to meet that need,” Hung says. “If schools were keeping up with this demand there wouldn’t be such a shortage.”
Enter Suffolk’s Sawyer Business School, which is introducing a master of science in business analytics, or MSBA, program in fall 2017 in response to the enormous and growing demand for professionals with big-data skills. The MSBA may be completed in one year of full-time study or up to two years of part-time course work.
The Business School also will offer an undergraduate major in big data and business analytics beginning in fall 2017. The undergraduate major combines courses in statistics, information technology, and business to help students build strong business decision-making skills. They will learn how to use business data to improve efficiency, solve problems, and identify new opportunities.
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McKinsey Global Institute predicts an unmet need of as many as 190,000 professionals with deep analytical skills and 1.5 million data and analytics managers by 2018, the year that the first full-time graduates of Suffolk’s master’s program will be ready to enter the field.
One reason for the explosion in data, Hung says, is that technology has made it much easier to gather information. There has been a dramatic shift since the day when focus groups were a primary source of information for marketers looking to understand consumers, he says. As consumers buy things online or via mobile devices they leave an endless trail of digital data.
Hung says business intelligence has shifted from being periodic to instant. He points to airlines, hotel operators and online retailers that are using dynamic pricing to increase sales, based on real-time information.
“When you buy an airline ticket, you suddenly realize the price today and yesterday are different,” Hung says. “An online store may offer you a coupon if they sense you are going to abandon your cart. So these are real-time decision-making processes.”
That instant decision making capability helps marketers reach the right consumer and set the right price. In finance it helps fund managers know where to invest. It’s helping accountants identify irregularities and fraud. Governments and hospital networks are all embracing business analytics and fueling the data surge, Hung says.
Netflix, which produces its own shows, is gathering data on what consumers are watching, when they skip over segments, what words they use to search for programs. “They no longer have to rely on Nielsen ratings to call consumers and ask what they watch,” Hung says.
The sheer volume of transactions can overwhelm any human being, so using technology is critical.
Students in the MSBA program apply analytical functions to the fields of marketing, operations, accounting, finance, and innovation. They learn to analyze data in order to make high-level, data-driven decisions across a wide range of industries.
“The vision,” Hung says “is to provide a transformative experience for our students so they can help companies make decisions better, quicker, and cheaper.”