Out Front on Analytics

FALL 2018 | DIVIDENDS

Out Front on Analytics

By Kirsten Shaw

We live in a data-centric world. Information is generated in hundreds of ways, from smart phones to the Internet of Things. In 2017, 2.5 quintillion bytes of data were generated every single day, according to software company Domo – with 90 percent of all data having been generated during the two previous years.

“The seemingly endless flow of data from the software ingrained in nearly every facet of today’s society and business can be easily overlooked,” remarks 2017 finance alumnus Austin Lewis, who began his career as a Portfolio Analyst at CBRE in Memphis. “However, neglecting this resource in today’s age is putting your business at an enormous disadvantage. Many insights and discoveries are made possible by leveraging the vast amount of data we transmit daily.”

Indeed, technology now enables consideration of all relevant incoming data to make business decisions, rather than having to rely on select information provided by reports, focus groups or sampling. Companies may use data analysis to suggest solutions to specific issues, reveal problems or enhance understanding of particular subjects or behaviors.

Yet there is a snag. While technologies exist to analyze these large volumes of information, the human factor is still catching up.

“There’s a gap,” observes Dr. Stephen France, Assistant Professor of Quantitative Analysis. “There are a lot of professionals with business skills but limited quantitative skills – and a lot of good technical experts, like computer scientists, who don’t have business skills. Companies need people with both.”

One area where companies visibly use data analysis is in marketing. Customers can be grouped into segments that may be targeted for promotions. Consumer data is consulted in product design. Recommendations are delivered to individuals based on their demographics and personal shopping histories.

The need for data analysts exists in every area of business. In accounting, analytics can be used to discover patterns in data, to predict whether a company will be a going concern or to find instances of fraud. In human resources, analytics help in evaluating which employees are suited for which job and offer training or performance metrics. Supply chain coordinators are becoming increasingly dependent on data analytics.

“Managers take costs out of supply chains and improve customer service by making better estimates of where and when their customers will need the things they purchase, and in what quantity,” comments Dr. Frank Adams, Associate Professor of Marketing and Director of the College’s Supply Chain program. “In a similar manner, understanding which supply risks to hedge and which to tolerate helps managers have what they need to serve their customers without overbuying expensive inventories.”

Responding to the marketplace, the College of Business has introduced new initiatives to prepare students to meet the demand for analytics-savvy professionals.

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One of those initiatives is a Business Analytics minor that aims to equip business majors with more technological skills and students from technical majors with more business skills. It is available to students in any discipline campus-wide, with certain prerequisites. Courses are taught by professors of Quantitative Analysis, Business Information Systems, Economics, Accounting and Marketing. Some accounting graduate students were the first to sign up for the minor last spring, and this fall the program expanded to enroll undergraduate and graduate students of various degree programs.

“The minor is something we strongly recommend to our Supply Chain program students, to help them build the tools that will make them more competitive,” says Adams. “I see those kinds of skills as being an area of expertise that will move from ‘that’s extra-valuable to have’ to ‘you’re obsolete without it’.”

France teaches forecasting techniques to students in his Business Forecasting and Predictive Analytics class.

photo by Beth Wynn

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MISSISSIPPI STATE UNIVERSITY | COLLEGE OF BUSINESS

“The minor is practical in nature,” states France. “It focuses on both acquiring skills and applying them.”

Skills include business or economic forecasting, database systems and decision analysis. Students may choose to study applications in areas such as transportation, accounting, marketing research and supply

They are using the same commercial tools that many businesses employ – ones that are free and widely utilized, such as Tableau, R and SQL Database. Examples of core classes are Business Database Systems, which introduces database applications, and Business Decision Analysis, which teaches techniques such as optimization modeling to solve decision problems that may arise in areas such as supply chain and production planning.

France teaches Business Forecasting and Predictive Analytics, in which students learn a wide range of forecasting techniques for business prediction. One challenge he assigns is for students to use a real-world dataset to perform some prediction challenge. An accounting student might use financial data to predict fraudulent transactions; a marketing student may predict response to a promotion and a supply chain student could predict future inventory. For all of these tasks, students must apply and tune prediction techniques to optimize forecasting performance.

“I learned how to approach business problems from a quantitative perspective,” says Lewis, who graduated before the minor was established but took several analytics courses from France. “Taking data and analyzing it provides a better understanding of relationships that would otherwise remain hidden or ambiguous.”

Accounting alumnus Geoffrey Taylor, now employed with KPMG, was among the first to complete the minor.

“I had changed my major from computer science to accounting after my freshman year

DIVIDENDS | FALL 2018

FALL 2018 | DIVIDENDS

because I was drawn toward a career path where I could explore the business world,” he explains. “That being said, my passion for software and technology never went away. The new Business Analytics minor seemed like the perfect way to incorporate my enthusiasm for technology into my accounting education.”

He continues, “The minor gave my résumé a competitive edge and helped me catch the attention of the KPMG Memphis Advisory team. I started work in early August and consistently find myself referring back to the lessons and techniques I learned in my Business Analytics courses. Thanks to professors like Dr. [Mark] Lehman and Dr. [Robert] Otondo, who created engaging classroom environments through critical thinking and open discussion, my transition into the working world has been very smooth.”

The accounting profession is among those most impacted by the new analytics technologies, and this has led the College of Business to another initiative: The Richard C. Adkerson School of Accountancy (ASAC) has incorporated data analytics throughout its curricula.

“In accounting, analytics is useful in maintaining the integrity of financial reporting, detecting fraud and ensuring compliance,” says ASAC Director Dr. Shawn Mauldin. “The goal of our curriculum changes is to ensure that Mississippi State accounting graduates have the technology skill set to make strategic, data-centric decisions in a complex and rapidly changing professional environment.”

The School has integrated analytics into its existing structure. For instance, Accounting Systems I and II, which have long been required of all accounting undergraduates, now have a data analytics focus. A graduate level elective fraud course was restructured as Fraud Examination and Data Analysis and is now a required course.

One example of what students are learning is seen in a case study from the fraud course, taught by Dr. Brad Trinkle. In the study, they take on the role of internal auditors for a major university. Using data analytics techniques, they assess the information provided to discover fraudulent P-Card transactions (a P-Card being a credit card used by department personnel to make small, routine purchases).

ASAC’s curriculum shift emanated from discussions of the School’s Advisory Council, a group of practitioners and employers who keep the School apprised of needs within the profession.

“From the firm’s perspective, we are trying to think proactively about our clients’ needs,” says Council member John Scott, a HORNE LLP Partner and 1982 alumnus. “Similarly, we want to equip our people with every tool to succeed. Our clients’ desire for insights into big data, and what their data actually means to their decision making, is the central matter. We have a number of available tools to help with this process, but unless our employees can use the tools and interpret the data, we haven’t helped the client.”

He continues, “The curriculum changes within the Adkerson School of Accountancy were designed to give MSU students a leg up in this rapidly developing field. We discussed these in detail at the Advisory Council, and Dr. Mauldin and his team made it happen. One of the best features, in my opinion, is the flexibility in design. As things change, we will be able to adjust and tweak the courses without a wholesale revision. Best of all, our MSU accounting students will be better prepared than many of their peers from other schools as they enter the workforce.”

The same can be said of all MSU students who receive analytics instruction through the College of Business. They will be eagerly welcomed into today’s technology-filled marketplace and begin their careers on a strong foundation.

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