Analytics Magazine Jan Feb2015

h t t p : / / w w w. a n a ly t i c s - m a g a z i n e .
O R G
Driving Better Business Decisions
january / february 2015

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Whats next: Seeing is believing
Realization: Big picture of big data
ALSO INSIDE:
2015: Predictions for predictive analytics
Small analytics company takes on Ebola
Case study: Why cloud analytics works
Executive Edge
Bill Gossman, head
of ASA Corp., on
why leadership is
the real gamechanger for using
data analytics
Ins ide story
Prediction: Big year for analytics

Happy New Year! Tis the season to be
making predictions about what the future
holds for the analytics profession, and who
better to do that than a trio of experts in predictive analytics who contributed their insights to this issue of Analytics magazine?
Glenn Wegryn, president of the
Analytics Section of INFORMS and principal at Analytic Impact LLC, is the first to
look into the crystal ball for his column,
Top 5 analytics predictions for 2015.
Wegryn sees another winning year for
the profession as the demand for analytics skills continues to grow. Wegryn expects analytics programs to continue to
pop up at business schools throughout
the United States in response to the demand, and that the INFORMS Certified
Analytics Professional program will increase in importance as a certification of
skills and experience.
Wegryn also expects the analytics
community to move closer to a common
definition of analytics, bridging the gap
between the data-centric definition (What
can the data tell us?) and the decisioncentric version (What is the problem were
trying to solve?).
Next, Andrew Jennings, chief analytics
officer at FICO, offers Five more predictions for 2015. Jennings starts by noting
that since the hype around big data has
2
a n a ly t i c s - m a g a z i n e . o r g
finally crested, big data and analytics will

become business as usual and more
companies will cultivate in-house analytic
competencies and many will embrace analytics as an important part of their company cultures.
Our third prognosticator, independent
consultant and business advisor Rajib
Ghosh, focuses on the healthcare industry in his column, What to expect in
2015. Ghosh predicts a great year for
healthcare analytics professionals, and
that providers, not payers, will drive the
market for analytics.
Gaining market share has become
the new mantra for the insurance companies, Ghosh writes. They are also busy
trying to find new business models for the
future. Big providers are under immense
pressure to improve their bottom line in
the new world of the Affordable Care Act
and government-driven payment reform.
As for me, Ill pass on making any
predictions about what the future holds
for analytics, both the profession and
the online magazine youre now reading.
Instead, Ill quote another scientist you
might have heard of:
I never think of the future, it comes
soon enough. Albert Einstein
Peter Horner, editor

peter.horner@ mail.informs.org
w w w. i n f o r m s . o r g
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C o n t e n t s
DRIVING BETTER BUSINESS DECISIONS
january/february 2015
Brought to you by
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44
38
Leadership: the real game changer

Leaders who take a proactive initiative to data analytics set
the stage for successful, actionable use of information.
By Bill Gossman
44
The future of data visualization

Nextgen technologies and evolving cognitive frameworks
move data visualization from art to science.
By Will Towler
52
Data visualization: Big picture of big data

Realizing how quickly we understand what we see
makes data visualization a key component of better
decision-making.
By Nana S. Banerjee
60
Analytics helps contain Ebola

How one small data science and analytics company found a
way to help contain the spread of the deadly virus.
By Douglas A. Samuelson and Brian Umana
60
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Analy ze T h i s !
Thoughts on collaboration
and communication
There seems to be
violent agreement
about the value of
collaboration and
communication, and
yet we too often give
it little more than lip
service.
By Vijay Mehrotra
Item: I recently spent an afternoon visiting the Bay

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in activities that involve 3D printing, a world that has
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that has been largely empty for decades (the bottom
floor was converted into a strip mall sometime in the
1980s), the BAAM hub features a variety of firms, including developers of 3D scanners, 3D design firms,
companies specializing in material procurement and
recycling, a 3D design software training firm, and a full
service production house for complex physical items.
The lead company in this hub is Type A Machines,
a company whose specialty is the development and
deployment of 3D printers. Type A Machines CEO Espen Sivertsen gave me a very interesting take on the
benefits of this type of co-location, both for his company and for its partners. Perhaps the most obvious
source of synergy: In addition to selling its hardware,
Type A also runs a server farm that enables other
companies within the hub to manage high-demand
periods by doing some or all of their 3D printing literally right down the hall (not only without any shipping
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Analy ze T h i s !
costs but also without acquiring additional

hardware that would likely sit idle during
slower times).
In addition, by being physically close
to innovators who are using its products,
Type A receives constant feedback on
where the reliability problems are with
their leading-edge machines, what these
customers are doing with 3D printing, and
what their future needs might be. Similarly, by being in close proximity to Type A,
the other hub companies have an awareness of its product direction, an opportunity to get access to early models of new
printers, and the chance to collaboratively
solve problems as they arise.
For example, Sivertsen shared an interesting story of a partner who needed
to print something that was officially too
big for Type As Series 1 printer. Through
hallway discussions, the two companies
came up with the idea of rotating the design by 45 degrees, after which they managed to successfully print a very valuable
prototype for the partner right there in
Type As server farm.
I had originally gone to BAAM looking
for an analytics story about capturing and
analyzing data to support improved product reliability, an area where I had done
some research [1] in the past. However,
for an industry in the very early stages of
maturation, more of this type of data is
clearly being transmitted in analog rather
10
than digital format, between people who

are deeply knowledgeable and passionate about their adjacent/overlapping areas of expertise.
Item: After a long career as an operations research leader at P&G [2], Glenn
Wegryn is currently a principal at Analytics Impact LLC, as well as president of the
Analytics Section of INFORMS. Though
I have only met him briefly once, I have
been a huge fan of his for a long time.
As one of the 1,000-plus members of the
Analytics Section, I am thrilled to have
someone of his experience and stature
leading us. Given his strong track record
of successful project outcomes, I definitely listen when he speaks [3].
Anyway, I recently came across an
email from INFORMS containing Wegryns Top 5 Analytics Predictions for
2015 (see page 14). While the whole list
was interesting, No. 4 was the one that
caught my eye: Collaboration and Communication(aka the soft skills) will emerge
as the difference-maker.
Item: During the last week or so, I have
seen a couple of interesting blog posts
from Vincent Granville, the creator of Data
Science Central (www.datasciencecentral.com), billed as the leading social network for big data, business analytics and
data science practitioners. Granville is an
active and innovative data scientist with

a lot of interesting ideas, and I definitely
pay attention to what he has to say.
In the first of these blog posts [4], Granvilles suggests that if you were trained as
a statistician in the classical sense [as he
was], very little of what you have learned
is actually all that useful if you are trying
to make a living as a data scientist (for the
O.R. fans reading this, note that he does
state that data science uses some operations research). Despite its intentionally
provocative title (Data science without

statistics is possible, even desirable),
this was actually a very thoughtful piece
that argued for a less dogmatic and more
utilitarian approach to tackling data. The
crux of his intellectual objection is most
clearly stated near the bottom of the article when he writes that, old statistics
use a top-down approach, from model
and theory to data, while new statistics or
data science use a bottom-up approach,
from data to model or algorithm.
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a na l y t i c s
j a n u a r y / f e b r u a r y 2 015
11
Analy ze T h i s !
The second of these posts [5], featured a list of 10 data science predictions
for 2015 originally created by the Institute
for Advanced Analytics (http://iianalytics.
com). This list also had a heavy emphasis on collaboration and communication.
commoditized quickly. Lest you imagine

otherwise, take note of the last two predictions for 2015 on the IIA list:
Analytics, machine learning, and
cognitive computing will increasingly take
over the jobs of knowledge workers.
Automated decision-making will
So what? There seems to be violent come of age in 2015.
agreement about the value of collaboration and communication, and yet we too
In other words, innovate or die, my
often give it little more than lip service. friends. And good luck trying to do it sucEven the term soft skills is inherently pe- cessfully in isolation.
jorative, the modifier essentially mocking
Vijay Mehrotra (vmehrotra@usfca.edu) is a
the noun to which it is attached.
professor in the Department of Business Analytics
I would suggest looking at things a
and Information Systems at the University of San
Franciscos School of Management. He is also a
bit differently. Like Sivertsen and his collongtime member of INFORMS.
leagues at Type A Machines, we as analytics professionals are constantly trying
REFERENCES
to gain acceptance for new technologies
from people with different skills and capa1. Mehrotra, V., Grossman, T. A., O.R. Process
Skills Transform an Out of Control Call Center
bilities than the ones who created them.
into a Strategic Asset, Interfaces, Vol. 39, No. 4,
July-August 2009, pp. 346-352.
To do this successfully, we must culti2. See http://www.cbsnews.com/news/howvate our ability to see the world through
operations-research-drives-success-at-pg/ for
an excellent overview of Wegryns work at P&G.
their eyes and to help them realize how
3. For example, check out his excellent
presentation from the Spring 2012 INFORMS
we might be able to help enable them to
Analytics Conference entitled Driving
be successful. These are skills, with no
Competitive Advantage with O.R. at https://
www.informs.org/Community/Analytics/Videos/
modifier needed.
Analytics-Process-Presentations.
4. http://www.datasciencecentral.com/profiles/
But if I was required to add an adjecblogs/data-science-without-statistics-is-possibleeven-desirable
tive for these skills, the word that comes to
5. http://www.datasciencecentral.com/profiles/
mind is survival. Because we will always
blogs/10-data-science-predictions-for-2015
need to be innovating in collaboration with
our allies and customers, for in the age of
software we can expect solutions to be
12
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a na l y t i c s
13
Wh at s t r e nd i ng
Top 5 analytics
predictions for 2015
Glenn Wegryn, president of the Analytics Section of INFORMS and principal
at Analytic Impact LLC, offers his top five analytics trends for 2015.
A middle ground needs

to be found between the
data-centric definition
of analytics (What can
the data tell us?) and the
decision-centric version
(What is the problem were
trying to solve?).
BY Glenn Wegryn, CAP
14
2014 proved to be a winning year for analytics.

Going by the number of conferences devoted to
the topic of analytics and attendance, including this
years record-breaking INFORMS Annual Meeting in
San Francisco, all indications are that it will continue
to prosper. Here I present five of the most important
predictions regarding analytics capabilities for 2015.
1. Whats in a name?There will be continued effort, albeit not fully resolved in 2015, to converge on
a common definition of what analytics is. INFORMS
official definition is ... the scientific process of transforming data into insight for making better decisions.
There are numerous other definitions or positions on
what analytics is, but amiddle ground needs to be
found between the data-centric definition of analytics
(What can the data tell us?) and the decision-centric
version (What is the problem were trying to solve?).
Indeed, I view analytics as a bridge to converge
the two in peaceful co-existence. Most importantly,
it provides an easier point of entry for decision-makers to embrace, organize around, pay for and ultimately benefit from all of the tools in the shed.The
2015
more we play in the same sandbox, the

bigger the castle we can build together.
2. Business analytics programs
will continue to grow. There are now
more than 100 business schools in the
United States that have, or have committed to launch, curriculum at the undergraduate and graduate levels with
degrees or certificates in business analytics [1]. No doubt there will be more in
2015. Clearly the B-Schools have heard
the call from McKinsey [2] and others
[3] on the significant gap projected between the supply and demand for talent
in the analytics space, particularly in the
a na l y t i c s
predict-and-decide advanced analytics skills. In 2015, the more established

programs will dig deeper and continue
to fine-tune the curriculum while newer
programs will close the gap quickly. The
more successful programs will leverage the breadth of academic disciplines
(computer science, operations research,
engineering, math and statistics, marketing, finance and others) to strengthen
their programs.
3. Fraud and security. With the number of security breaches on major corporations being reported almost weekly,
such as at Target, The Home Depot and
15
Wh at s t r e nd i ng
more recently at Sony Pictures, there will

be a significant increase in investment
across the board in safeguarding commerce and privacy on the Internet. The
importance of applying analytics methods
from using decision analysis to guide investment choices, to statistical methods,
to detect-and-anticipate breaches and
optimization models, to improve infrastructure design for safety, reliability and
performance will accelerate and continue to grow in 2015.
Communication includes effective use

of visual capabilities from Tufte-proud
graphics to interactive, data-rich, drilldown tools as a means, and not an end,
to a better decision.
5. The INFORMS Certified Analytics Professional (CAP) program will

continue to increase in importance
as a qualification of skills and experience. Longer term, as the supply of
analytic talent catches up to demand,
the CAP program will be recognized as
4. Collaboration and communica- an important differentiator for employtion(aka, the soft skills) will emerge as ment. Currently, the numbers who are
the difference-maker not only in getting either certified or are signed up to take
the best talent hired into the most coveted the exam exceeds the rate of the Projroles, but also in enabling more recogni- ect Management Professional (PMP)
tion and value to organizations that uti- certification, over the same period [4].
lize analytics. Soft skills are important to To that end, INFORMS should begin
educate, sell the value of, and, ultimately, a campaign targeted to the buyer of
transform the culture within departments analytics to grow awareness of this cerand organizations. But more importantly, tification in their hiring decisions.
these soft skills are essential to clearly
To hear a podcast of Glenn Wegryn talking about
convey the context of the problem and to
his predictions, visit https://www.informs.org/podcast
recommend a course of action for a deREFERENCES
cision-maker to take. That can span from
1. Research from INFORMS Masters in Analytics
intelligent bots interacting effectively with
Committee, presented at the 2014 INFORMS
Annual Meeting.
users in an online application, to indepen2. McKinsey Institute, Big Data: The next
dent practitioners seeking to build repeat
frontier for innovation, competition and
productivity, May 2011.
business with a client, to boardroom ana3. InformationWeek Reports, Big Data Widens
lysts able to think on their feet and able
Analytics Talent Gap.
4. Presentation, meeting of INFORMS Board of
to describe in plain language the options
Directors, Nov. 9, 2014.
available and facilitate a decision.
16
Five more predictions for 2015

Dr. Andrew Jennings, chief analytics
3. Automation of modeling as well as
officer at FICO, sees a post-big-data world
the related reporting will be a priority.
in 2015. Predictive analytics and the big
The continued expansion of analytics is
data that fuels it become
predicated on making the process as sim-
deeply and broadly em-
ple as possible and codifying the steps that
bedded in business and
many analytic experts take for granted.
society no longer a
This is not without some danger, but I
phenomenon but widely
believe we will see significant investment in
accepted as part of the
this area.
foundation. Here are a

few of his predictions for the coming year:
4. The unstructured shall inherit the

Earth. Analysis of unstructured data is
coming of age, particularly in customer ser-
1. Big data and analytics are busi-
vice. Every tweet, chat session, call center
ness as usual. The hype around big data
conversation, and customer support email
has finally crested. Big data will always be
is going to be analyzed to accelerate
with us, and it will keep getting bigger. But
problem resolution, optimize scripts for
business users have come to the realiza-
sales people, enhance shopping experi-
tion that analytics is the key to unlocking
ences, make products less confusing, and
value from big data. In 2015, more compa-
increase compliance.
nies will cultivate in-house analytic competencies and many will embrace analytics as
5. The causation vs. correlation
an important part of their company cultures.
debate is becoming pass. In most cases

whether the underlying relationship is causal
2. Predictive security will become an
or correlative is irrelevant. In business circles,
important tool in the effort to stop cyber
people want to make better decisions. They
criminals. With cybercrime and cyber ter-
need to know what business levers to pull
rorism on the rise, the good guys are finally
to get closer to the desired result; the why
moving beyond their reactive approach to
is secondary. Overall the important issue is
security. In 2015, police, military and in-
to gather good data and trust it. As famed
telligence agencies will employ analytics
statistician Bradley Efron said, Those
to predict when, where and how the next
who ignore statistics are condemned to
attack will occur so such attacks can be
re-invent it.
thwarted before damage is done.
a na l y t i c s
17
healt h car e a na ly t i c s
What to expect in 2015

Four predictions for the healthcare analytics industry in the year ahead.
The demand for health
informatics workers will
increase at twice the
rate of employment, yet
the nation already faces
a shortage of qualified
candidates.
By Rajib Ghosh
18
In my last article I reviewed the key achievements,

opportunities and challenges facing the healthcare
analytics industry in 2014. In this first article of 2015,
I will share some of the anticipated developments in
the marketplace that will impact the nascent industry.
1. Great year for healthcare analytics
professionals
As the demand for healthcare analytics increases, the demand for professionals with analytics experience will also grow. Health Catalyst, a healthcare
analytics product and consulting company, found in a
survey that healthcare analytics is the highest priority IT investment in the healthcare industry followed
by population health and ICD-10. A recent report
published by Burning Glass Technologies stated the
demand for health informatics workers will increase
at twice the rate of employment, yet the nation already faces a shortage of qualified candidates. This
is good news for health informatics professionals
with experience in new business models such as
pay-for-performance or value-based purchasing. If
you have a blend of those skills and experiences,
you will be a hot commodity in 2015.
2. Interoperability will be a key focus area for
health IT vendors and the government
Interoperability is still a hot topic within the Office of the National Coordinator for Health Information Technology (ONC). In an updated release of the
interoperability roadmap, ONC described

one of its key criteria by 2017 is to enable
providers to send, receive, find and use a
basic set of essential health information.
By 2020, the roadmap projects, granular
health information will be available to the
providers. Interoperability, or lack thereof,
is a key obstacle in creating a longitudinal
view of a patient and deployment of population level analytics.
Patients can move from one health
system to another during a course of 12
to 18 months. Meanwhile, patients medical records get locked in a fragmented
manner inside multiple electronic systems that do not talk to each other. Releasing data from such silos is the key to
deriving benefits from the use of healthcare analytics. Until now, providers,
pundits and politicians have blamed electronic health record (EHR) companies for
their product strategy of keeping patient
data locked into their own proprietary
databases. Epic, the leader in market
share among EHR companies, recently
announced that it has hired a lobbyist
firm to fix its image on Capitol Hill. Epic
argues that its product can connect with
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19
healt h car e a na ly t i c s
Gaining market share has

become the new mantra for
the insurance companies.
They are also busy trying
to find new business
models for the future.
20
many other systems including health information

exchanges (HIEs).
Opposition groups argue that Epic can only
interoperate with other Epic users; for everyone
else there is a steep cost for interoperability. While
some argue that fixing their product strategy is a
better solution than following a PR strategy, the
fact that Epic is doing this suggests that interoperability will be the topmost agenda for electronic
health record companies in 2015.
EHR industry heavyweights including Epic are
behind the recent launch of the Argonaut Project.
It is aimed at delivering some standard proposals
around the utility of the new Health Level 7 (HL7)
Fast Healthcare Interoperability Resources (FHIR)
technology that has the promise of sharing healthcare data on the Internet. The real impact of this project remains to be seen, but it is an encouraging sign.
3. Providers not payers will drive market
for analytics
For a long time payers were considered to be
the growth driver of healthcare analytics because
they have the total cost of care data. Payers can
force network providers to share encounter data,
which they use to triangulate with cost data to create meaningful analytics for predictive and preemptive population health management. But that
perception is changing.
The insurance market in recent times has seen
many twists and turns. Opening state- and federallevel insurance exchanges provided opportunities
for payers in the form of government business, but
it also brought fierce competition. Gaining market
share has become the new mantra for the insurance
companies. They are also busy trying to

find new business models for the future.
Big providers are under immense
pressure to improve their bottom line
in the new world of the Affordable Care
Act (ACA) and government-driven payment reform. They have to work hard to
improve their quality ratings and emergency room readmissions to avoid Medicare penalties charged by the Center
for Medicare and Medicaid (CMS). One
estimate suggests that readmission penalties will cost hospitals $428 million in
2015, up from $227 million in 2014. For
hospitals, large and medium, analytics
will be their survival strategy. They will
drive growth in the healthcare analytics
market in 2015, not payers.
4. Care delivery transformation
will increase demand for analytics
Healthcare delivery organizations
are undergoing rapid vertical and horizontal integrations. Health systems are
merging, and various care delivery settings such as home health and wellness
providers are increasingly brought under
the umbrella of hospital systems. Care
delivery will continue to undergo decentralization and transformation. The key
to holding such multiple entities together
will be the ability to use data and analytics to drive decision process. This trend
will continue in 2015 and beyond, creating opportunities for analytics product
a na l y t i c s
companies, along with technology and

business consulting service providers.
Many argue that the political landscape
change in the November election will halt
this transformation in healthcare. I disagree.
The train has left the station. Healthcare organizations have already spent hundreds
of millions of dollars buying new technology, investing in their workforce, offering
incentives and restructuring their organizations in response to the ACA. Millions of
people now have obtained insurance and
have gotten used to the freedom of buying
insurance from a marketplace where insurance companies compete. It will be hard, if
not impossible, to take all that away.
Im going to stop worrying about the
what-if scenario, which may never materialize, and focus on fixing our broken
healthcare system and plugging the
loopholes. This is my resolution for 2015.
Whats yours?
Rajib Ghosh (rghosh@hotmail.com) is an
independent consultant and business advisor
with 20 years of technology experience in various
industry verticals where he had senior-level
management roles in software engineering, program
management, product management and business
and strategy development. Ghosh spent a decade
in the U.S. healthcare industry as part of a global
ecosystem of medical device manufacturers, medical
software companies and telehealth and telemedicine
solution providers. Hes held senior positions at
Hill-Rom, Solta Medical and Bosch Healthcare. His
recent work interest includes public health and the
field of IT-enabled sustainable healthcare delivery
in the United States as well as emerging nations.
Follow Ghosh on twitter @ghosh_r.
21
vie w poin t
Cloud analytics
works for me
Using the public
cloud practically
eliminates the time
lapse on infrastructure
procurement.
When you have an ad hoc analytical project,

internal IT dependency usually comes your way.
Until a few years back, we had to accommodate and
account for it in our delivery timelines. In todays
world, we can avoid this altogether by opting for
public cloud analytics.
The Problem
By Ganesh Moorthy
22
Lets assume that you are asked to analyze a significantly large data set and provide insights. Based
on the data size, you determine that youd require a
clustered and distributed environment to be able to
run the analysis within the pre-decided timeline. You
ask your manager for help and he says to raise a request with IT. You raise the request in the ticketing
system and check with IT. They answer that they dont
have it ready and will need to procure the system first.
You comply and ask how long will the process take?
The IT personnel responds, Four weeks provided
you get the budget approval from your department.
Your timelines have just run amok!
If the above scenario is true in your case, then the
situation is similar to what I have heard from several
other analysts in different organizations.

While the IT department centrally manages all infrastructure, they mostly focus
on normal operational efficiency goals.
Project specific ad hoc requirements
usually do not fall under the preview of
IT supply and demand hence is looked
upon as ad-hoc. This is the norm in every
service industry today. The 30,000-foot
question is: What do we do?
Cloud Analytics to the Rescue
The obvious answer comes in the
form of using public cloud infrastructure
for your analytical needs. Using public

cloud practically eliminates the time lapse
on infrastructure procurement. In addition,
analytics on public cloud comes in three
different flavors:
1. The black-box approach allows you
to consume already trained models as
services;
2. The white box approach allows
you to use the public cloud infrastructure
for data storage, deploy analytical tools
for performing descriptive or predictive
needs and a visualization platform for reporting insights; and
BE A PART OF THE ANALYTICS REVOLUTION!
Join the World of

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Professionals (CAP)
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a na l y t i c s
23
vie w poin t
3. The grey box approach allows you to

create an ensemble of models using statistical techniques such as decision trees
and infer underlying rules for relationships.
In this case, while the actual implementation of statistical technique is black
boxed, you still have control in determining the right path and relationships
by varying the factors required for rules
determination. All you need is to make a
choice of determining which approach to
take based on the problem definition.
Based on the infrastructure requirement, we looked into public cloud providers options and decided to go with
Amazon Web Services. It took us just a
couple of days (includes internal approval
process) to get three large capacity nodes
with Linux pre-installed. We wanted a
clean system as we were building a custom natural language processing system
to process the tweets.
It took us one week to deploy Apache
Hadoop, Druid, R statistical tool, Zero
MQ, Python and Java and two weeks to
Custom Analytics on
run through performance benchmark testPublic Cloud
ing and an optimization exercise. In parAs part of an R&D engagement for allel, we also developed and deployed a
one of our clients, we needed to perform custom HTML5 based visualization tool
sentiment analysis on tweets in order for insights.
to determine the problem context, keyAll in all, the entire exercise took a
words, sentiments and topics. The main month and a half from start to finish for
objective of this exercise was to deter- the initial proof of concept. The NLP algomine service-related issues and result- rithm development journey is still undering sentiment of customers. This being a way and being constantly optimized for
social media analytics exercise, the solu- accuracy and performance.
tion was to incorporate aspects of realWhat could have easily been a three
time sentiment complex event processing months exercise if we had waited for
along with data aggregation and historical internal infrastructure procurement, took
descriptive analytics.
only half the time to deliver. We also
We determined that using a Twitter have both data ingestion and insights
streaming service would be the best op- visualization on the public cloud along
tion. This would require constantly listen- with backend processing components
ing to the streaming service and would not to mention, we did not make any
result in collecting and analyzing up to depreciating investments, hence keeping
2,000 tweets a minute.
the bottom line intact.
24
Conclusion
Cloud-based analytics or cloud
analytics is an evolution in the making.
We are seeing traditional BI vendors providing cloud-based SAAS-BI services on
one hand, while the others are providing specific niche services in social media analytics using third-party sourced
data. In between, we have big cloud infrastructure providers, providing both infrastructure and analytical platform. On
the most crucial aspects of data security,
most of them have ironclad service-level
ontinuing
ducation
INTRODUCTION TO MONTE CARLO

AND DISCRETE-EVENT SIMULATION
Learn the basics of Monte Carlo and
discrete-event simulation, how to identify

real-world problem types appropriate for
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simulation techniques.
agreements and adhere to them. Based

on our own experience and listening from
other engagements, I can confidently say,
Cloud analytics works for me, provided
you know how to make it work for you.
Ganesh Moorthy is an associate director at
Mu Sigma, where he serves as program manager/
senior solution architect for R&D engagements.
Moorthy has more than 16 years of experience
in leading enterprise solution development for
Fortune 500 clients. He is currently involved in
building industrial Internet, augment reality and
analytics and visualization platforms for both
descriptive and predictive analytics.
COURSES FOR
ANALYTICS
PROFESSIONALS
FOUNDATIONS OF MODERN
PREDICTIVE ANALYTICS
Learn data mining techniques and
tools that will allow you to make the

link between business needs and
your technical skills.
April 15-16, 2015 - Huntington Beach, CA
May 28-29, 2015 - Washington D.C.
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DATA EXPLORATION
AND VISUALIZATION
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Learn practical frameworks and systematic
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February 26-27, 2015 - San Jose, CA
a na l y t i c s
Learn methodologies, processes and
Visit the Website for the

latest course schedule:
informs.org/continuinged
INFORMS Continuing
Education program offers
intensive, two-day in-person
courses providing analytics
professionals with key skills,
tools, and methods that can
be implemented immediately
in their work environment.
These courses will give
participants hands-on
practice in handling real
data types, real business
problems and practical
methods for delivering
business-useful results.
visualizing data in order to derive

insights and knowledge.
March 19-20, 2015 - Dallas, TX
25
forum
CAP: How to become a

modern-day analytics
journeyman
The practice of
analytics is a craft,
requiring special skills
in its execution.
Certification has roots in medieval craft guilds,

which established standards, set ethical guidelines
for practice and functioned as professional associations. The Institute for Operations Research and the
Management Sciences (INFORMS) is the largest professional society in the world for analytics, operations
research and management science. INFORMS Certified Analytics Professional (CAP) Program is an effort
to establish standards and set guidelines. Certainly
the practice of analytics is a craft, requiring special
skills in its execution. Let me explain, and maybe by
the end youll be interested in getting certified yourself.
Practicing Your Craft in the Middle Ages
By Polly MitchellGuthrie
26
In the high Middle Ages, learning a craft began

with apprenticeship, whereby teenage boys worked
for a master craftsman in exchange for room, board
and training. Apprentices could only practice their
craft in their masters workshop until they became
journeymen, which required several years of experience and the production of a high-quality piece of
work in that craft. However, once reaching journeyman status, skills became portable, an journeymen
were granted letters or certificates that allowed them
to travel to other towns to practice their

craft, earn wages and learn from other
masters.
After more years of practice and production of a masterpiece the journeyman becomes a master, if other masters
agreed. The new master was then free to
set up his own workshop. Guilds promoted their craft, set its norms or standards,
and maintained a code of ethics related to
its practice. They offered practitioners a
portable credential that could signal their
skills to those who wanted to do more
than just take their word. The travels of

the journeymen had the added effect of
disseminating new ways of practice, since
they brought their accumulated knowledge to each new location and workshop.
INFORMS, a Modern-Day Guild?
INFORMS is certainly not a medieval
guild, but it is a global organization of
11,000 members, of whom 50 percent
are academics, 30 percent practitioners
and 20 percent students. Members are
highly educated 96 percent have or
Winner: Identifying Risks and Mitigating

Disruptions in the Automotive Supply Chain
Project Portfolio Planning at Intel Corporation
Airline Crew Augmentation,
Decades of Improvements from Sabre
Vaccine Prioritization for Eective
Pandemic Response
Statistical and Optimization Techniques for
Laundry Portfolio Optimization at P&G
2014 Wagner Prize winners Oleg Gusikhin (L) and David

Simchi-Levi (R) with Wagner Prize Chair Allen Butler (C).
Gerrymandering for Justice: Redistricting U.S. Liver Allocation
Videos of 2014 Wagner Prize presentations are now available at:
http://livewebcast.net/INFORMS_AM_Wagner_Prize_2014/pres1/
a na l y t i c s
27
for um
are earning an advanced degree, and

51 percent have Ph.D.s. INFORMS has
taken on the championing of analytics in
many ways, including establishing continuing education programs; an analytics maturity model; engagement with
industry, government and academia; and
certification.
The Institutes decision to establish a
certification program shares goals with
the guilds: to advance the craft by introducing standards of quality, identify individuals with breadth of knowledge and
encourage continued competency. While
guilds were quasi-governmental in requiring membership to practice that craft
(akin to governments requiring licenses
for certain professions today), certification is a voluntary credential granted by a
non-governmental body.
INFORMS conducted a job task analysis study by a panel of subject matter experts to define the knowledge, skills and
abilities necessary to effectively practice
analytics. They identified seven domains:
business problem framing, analytics
problem framing, data, methodology selection, model building, deployment, and
model lifecycle management.
education, experience, exam, effectiveness and ethics. The education and

analytics-related work experience combination required is three years for those
with a masters degree (any guess where
that term originated?) in a related discipline (e.g., statistics, mathematics, computer science, etc.), five years with a
bachelors degree in a related discipline
and seven years with a degree in an unrelated discipline (waivers of the educational
eligibility requirements will be considered
on a case by case basis). The exam tests
skills and knowledge in the seven JTA domains with 100 multiple-choice questions
that must be completed in three hours or
less. Computer-based testing is available
at 700+ locations worldwide.
Analytics requires more than technical
skills and knowledge, so a confirmation
of effectiveness in the area of soft skills
by an employer or client is required. And,
CAP requires agreement with the code of
ethics. For more details on applying see
the CAP Candidate Handbook and the
Complete CAP Study Guide.
Why Get Certified?
The target group is early to mid-career

professionals, or apprentices seeking to
What is Required for
become journeymen, although thankCertification?
fully today apprentices are paid! Those
There are five Es of the Certified advanced in their careers may have a reAnalytics Professional (CAP) program: sume whose mastery stands on its own,
28
but early career professionals may find

the differentiation offered by a portable,
independent, third-party validation of
knowledge of certain standards helpful.
Not unlike the journeyman certificate or
letter, in this era of increasing demand
for analytics professionals certification
attests to knowledge and skills beyond
a persons own word. It demonstrates
commitment to career and to craft and
adherence to accepted standards. It can
increase earnings potential and provide
the personal satisfaction of achieving a
milestone. INFORMS and CAP benefits
Introducing the
will endure for years to come.

For more on the CAP program,
click here.
Polly Mitchell-Guthrie (Polly.Mitchell-Guthrie@
sas.com) is the senior manager of the Advanced
Analytics Customer Liaison Group in SAS
Research and Development Division, where
her team serves as a bridge between R&D and
external customers and internal SAS divisions.
She serves as vice chair of the INFORMS
Analytics Certification Board and has an MBA
from the Kenan-Flagler Business School at the
University of North Carolina at Chapel Hill. She
is a member of INFORMS.
A version of this article appeared in the
December 2014 issue of Swiss Analytics
Magazine. Reprinted with permission.
ANALYTICS MATURITY MODEL
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a na l y t i c s
29
INFO RMS ini t i at i ve s
Edelman Award,
continuing education,
IAA finalists
INFORMS announces six finalists for the 2015 Edelman Award
Widely considered
the Super Bowl of
operations research,
as well as INFORMS
highest organizational
honor, the Edelman Award
acknowledges the best
application of high-end
analytics.
30
INFORMS recently announced six finalists representing a diverse collection of applied analytics and
advanced operations research projects that will compete for the 2015 Franz Edelman Award in a series
of judged presentations at the INFORMS Conference
on Business Analytics & Operations Research in Huntington Beach, Calif., in April.
Widely considered the Super Bowl of operations research, as well as INFORMS highest organizational honor, the Edelman acknowledges the best
application of high-end analytics. The winner will
be announced at an evening Edelman Gala held in
conjunction with the conference.
The finalists and their presentations include:
IBM for Predictive Cloud Computing with Big
Data: Professional Golf and Tennis Forecasting
Ingram Micro for End-to-End Business Analytics
and Optimization in Ingram Micros Two-Tier Distribution Business
LMI/Defense Logistics Agency for

Peak and Next Gen: Effective Inventory Control for Items with Infrequent or
Frequent, Highly Variable Demand
Saudi Arabia Ministry of Municipal
and Rural Affairs for A Pilgrim Scheduling Approach to Increase Public Safety
during Hajj
Syngenta for Good Growth through
Advanced Analytics
U.S. Army/Sandia National Laboratories for The Capability Portfolio Analysis Tool (CPAT): A Fleet Management and
Decision Analysis Tool
Now in its 44th year, the Franz Edelman Prize competition honors outstanding examples of analytics and operations
research projects that transform companies, entire industries and peoples lives.
Using innovative advanced analytics
methods, the nominated teams were instrumental in helping their respective institutes make better decisions, providing
a disciplined way to which management
can improve organizational performance
in a wide variety of situations and across
both public and private organizations.
For more information, click here.
2015 schedule of continuing ed
analytics courses
INFORMS continuing education program is designed specifically for those
in the field of analytics and operations
a na l y t i c s
research. INFORMS, the worlds largest

organization for advanced analytics professionals, produces and disseminates
data analytics and operations research
information, training courses, certification, and best-in-class resources for our
members and the industry at large.
Four upcoming intensive handson courses provide real take-away
value. You will leave these courses with
the skills, tools and methods that you
can implement immediately in your work.
Included are two of the newest courses:
Introduction to Monte Carlo and DiscreteEvent Simulation and Foundations of
Modern Predictive Analytics. Following
are the dates and locations for the 2015
February through May courses:
Essential Practice Skills for Analytics Professionals, Feb. 26-27, San
Jose, Calif.
Learn how to integrate and apply your
analytical skills to real-world problemsolving for businesses and other organizations. This course provides approaches
that you can apply immediately to a wide
variety of settings, whether within your
own organization or for an external client.
Data Exploration & Visualization,
March 19-20, Dallas
Hands-on training that focuses on the
critical steps in the process of analyzing data: accessing and extracting data,
cleaning and preparing data, exploring
31
INFO RMS ini t i at i ve s
and visualizing data. This course uses

several of the most popular software tools
intensively, and provides an overview of
the range of available software options.
Foundations of Modern Predictive
Analytics, April 15-16, Huntington Beach,
Calif.
Learn data mining techniques and
tools that will allow you to make the link
between business needs and your technical skills. This course gives you hands-on
practice in handling real data types, real
business problems and practical methods
for delivering business-useful results.
Introduction to Monte Carlo and
Discrete-Event Simulation, May 28-29,
Washington, D.C.
Identify real-world problem types appropriate for simulation, and develop skills
and intuition for applying Monte Carlo and
discrete-event simulation techniques. Via
hands-on interactive sessions, you will
investigate the use of Monte Carlo simulation in decision-making and the use of
discrete-event simulation to solve mathematically intractable problems in stochastic modeling.
Dont miss out on these courses.
For detailed course information on all
INFORMS courses and to register,
visit www.informs.org/continuinged or
contact Thedra White at thedra.white@
informs.org or 443-757-3570.
32
Innovative Applications in
Analytics Award finalists
The Analytics Section of INFORMS
has named three finalists for its Innovative
Applications in Analytics (IAA) Award. The
Sections flagship prize, the IAA recognizes creative and unique developments,
applications or combinations of analytical
techniques used in practice.
The three finalists, chosen by a panel
of judges following a two-month verification process, will present their work at
the INFORMS Conference on Business
Analytics and Operations Research in
Huntington Beach, Calif., in April 2015,
where the winner will be announced.
The three finalists include:
Simulation Approach for Aircraft
Spare Engines & Engine Part Planning,
Jose A. Ramirez-Hernandez, Steven
Oakley, Mei Zhang, Alejandro Scalise,
American Airlines
Intelligent Surgical Scheduling
System, Narges Hosseini, Kalyan
Pasupathy, Yariv Marmor, Thomas
Rohleder, Jeanne Huddleston, Paul
Huddleston, Mayo Clinic Rochester
Fusion Analytics for Public Transport Event Response, IBM Research
and the Land Transport Authority of
Singapore
For more about the competition,
click here.
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ne w s m ak e r s
Lumina, Chevron earn

DA honors
Like many environmental
decisions, the question
of how to decommission
Californias offshore oil
platforms started out as
highly controversial.
But, remarkably, almost
all stakeholders, including
oil companies and
environmentalists, ended
up supporting the same
solution.
INFORMS society names Rigs to reefs

top solution
Lumina Decision Systems, led by CEO Max
Henrion, won the 2014 Decision Analysis Practice Award co-sponsored by the Decision Analysis
Society of INFORMS and the Society of Decision
Professionals for the project titled A Multi-attribute
Decision Analysis for Decommissioning Californias
Offshore Oil Platforms. Co-authored by Brock Bernstein and Syya Swamy, Henrion delivered the awardwinning presentation at the 2014 INFORMS Annual
Meeting in San Francisco in November.
The award recognizes outstanding applications of
decision analysis to significant decisions. It considers
the quality of the analysis, its impact on the decision,
and the importance and benefit of that decision.
This was a great demonstration of how decision
analysis can bring together parties with significantly different points of view and objectives to find a win-win solution, says Frank Koch, chair of the award committee.
Like many environmental decisions, the question of how to decommission Californias offshore oil
platforms started out as highly controversial. But, remarkably, almost all stakeholders, including oil companies and environmentalists, ended up supporting
the same solution. The original leases required the
oil companies to remove the entire rigs at the end
34
of their productive life. Some are up to

1,200 feet deep, making removal very
costly with substantial environmental
impacts. These rigs have developed
their own rich ecosystems, with commercially and ecologically important rockfish
species, making them popular with sea
lions, recreational divers and other marine life forms.
An interdisciplinary team created
a decision tool in Luminas Analytica
software to explore and evaluate decommissioning options to assist the
California Ocean Science Trust. The two
main options examined were complete

removal, as required by the original leases, and conversion to an artificial reef,
by cutting structures at 85 feet below the
water line to prevent interference with
shipping. Partial removal reduces costs
by up to $500 million and helps to preserve marine ecosystems. Eventually the
stakeholders reached near consensus
on the rigs to reefs policy option. California lawmakers almost unanimously
passed enabling legislation, signed into
law by then-Gov. Arnold Schwarzenegger in 2010.
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ne w s m ak e r s
By clearly identifying the

a gala celebration markissues, synthesizing the best
ing the 50th anniversary of
multi-disciplinary science,
decision analysis. The celdaylighting the uncertainty
ebration, which included
and providing unbiased rean afternoon program on
view, the tool was successthe history and future of
ful in distilling the rhetoric
decision analysis followed
to meaningful discussion of
by an evening dinner gala,
trade offs and values, says
was held Nov. 8 in San
This decision
Skyli McAfee, director of CaliFrancisco in conjunction
fornia Ocean Science Trust.
with the 2014 INFORMS
analysis was one
Further, the tool was made
Annual Meeting.
of the most
available to the public; its
The award recognizes
challenging and,
assumptions and approach
consistent and sustained
in the end,
were transparent. Constituexcellence in decisionsatisfying
ents had the opportunity to
making throughout an
projects I have
import various scenarios and
organization.
learn the best approach. With
Chevron was cited for
worked on.
this tool, sound legislation
its unique and long-term
Max Henrion
was passed that will serve
commitment to making deCalifornia and our marine
cision quality an organiresources well.
zational competency contributing to the
This decision analysis was one of companys outperforming its peer group
the most challenging and, in the end, in total shareholder return for both the last
satisfying projects I have worked on, five- and 10-year periods. Chevron began
adds Henrion. It is truly an honor to have its decision analysis initiative more than
our work recognized in this way.
15 years ago. Today, more than 25,000
employees have been trained in the disChevron receives inaugural
cipline. Decision analysis is the discipline
Raiffa-Howard Award
incorporating decision theory, methodThe Society of Decision Profession- ology and professional practice guiding
als (SDP) presented the inaugural Raiffa- decision-making under uncertainty.
Howard Award for Organizational Decision
The awards namesakes ProfesQuality to the Chevron Corporation during sor Howard Raiffa of Harvard University
36
and Professor Ronald Howard of Stanford University are widely considered

co-founders of the discipline of decision
analysis, which crystallized with key
contributions from Raiffa and Howard
in 1964. Both were on hand for the celebration, along with more than 300 other
decision analysis luminaries and guests.
While elements of decision analysis
have existed for hundreds of years, it was
the work of [Raiffa and Howard] beginning
in 1964 that brought it into mainstream
use by giving us a logical and systematic
set of principles to enhance our clarity of
thought and enable us to act with confidence in the face of uncertainty, says Bill
Klimack, president of the SDP, an association of professional practitioners. Corporations and government entities now have
the tools to make complex decisions.
Decision analysis has by now helped
many thousands of decision-makers,
and has created many billions of dollars
of value for the economy through better
business decisions and better government policies, adds Jeff Keisler, president of the Decision Analysis Society
(DAS), a subdivision of INFORMS.
The Society of Decision Professionals is delighted to honor professors
Howard and Raiffa for their work that has
made an indelible impression on our field
and our lives, adds Jack Kloeber, vice
president of SDP.
a na l y t i c s
Klimack, Keisler and Kloeber are active members of INFORMS as well as

SDP. INFORMS was a sponsor of the
gala celebration along with DAS.
Decision analysis emerged as a distinct academic field in 1964, building on
developments in statistical decision theory and game theory by Raiffa and dynamic probabilistic systems by Howard.
In that year, Raiffa began teaching the
first university course in decision analysis within the Economics Department at
Harvard and began preparing material
for his 1968 book, Decision Analysis.
Also in 1964, but independently,
Howard conducted the first professional
application of the field he called decision analysis, which he described in his
1966 paper, Decision Analysis: Applied
Decision Theory. Since then, major corporations have adopted decision analysis to improve multibillion-dollar capital
decisions.
Source: Raiffa-Howard Award Program
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37
EXECUTIVE E D GE
Leadership: The real

game changer for using
data analytics
By Bill Gossman
mall- and medium-size
businesses (SMBs) are no
different than their larger
counterparts in recognizing
the growing importance of data analytics. Some view the cost as prohibitive
because data analytics, and specifically
predictive analytics, is rooted in statistics
and sophisticated mathematics that require special skills or expensive outsourcing. Others are reluctant to embrace data
analytics because they question whether
38
data can be strategically analyzed to

create actionable responses rather than
fishing expeditions that may or may not
yield anything of value.
The business reality is that these positions have very little to do with data, data
science or technology. It is a lack of executive guidance and direction in other
words, a people problem. With strong
corporate leadership and managerial
judgment, an effective analytics strategy
is likely to emerge.
The Analytics Quandary for

Leaders
An analytical focus can be an ultimate
game changer for companies, which is
why the concentration should be on established objectives rather than amassing data that may or may not be relevant.
It is at this point that leadership finds itself
at a crossroads of two conflicting scenarios, both of which have drawbacks.
One scenario takes the form of a wait
and see approach before deciding if investment in analytics offers an acceptable
return on investment a risky approach.
Delays can impact marketplace positioning and create an edge for competitors.
The second scenario focuses on the here
and now of tactical day-to-day operations
in lieu of a broader business strategy that
leverages data.
An underlying assumption on the part
of upper management that applies to both
scenarios is erroneous. The assumption:
Analytics is only possible with big and
costly infrastructures that require significant management and resource commitments. The truth is significantly different.
While data is certainly a huge entity, size in
this case is not as important as determining relevance. The idea is to keep matters
manageable. The best way to do that is to
focus on the low-hanging fruit of analytics
the data that is most easily accessible and
valuable for establishing achievable goals.
a na l y t i c s
The best-known example of this type

of leadership is graphically displayed in the
film Moneyball. Analyzing data about ballplayer skills that other general managers
overlooked enabled Oaklands Billy Beane
to become one of the first baseball executives to leverage its value in a much more
stringent, scientific way a classic example of motivational leadership in analytics.
Leaderships Data Usability
Cost has and always will be a factor in
analytics decision-making, but thanks to
decades of technological advancements,
data analytics are now available at prices
that small and medium-sized businesses
should be willing to consider for the most
obvious and important reason: positive impact on the bottom line. A report
published by The Economist describes
a strong link between a companys financial success and its use of analytics.
A survey released by the publication noted that 53 percent of respondents in its
strategic group reported a higher financial success rate than their peers who
did not take advantage of strategic data
management (Briody, 2011). The report
indicated that what it called data collectors (those who do not fully leverage the
data at their disposal) and data wasters
(under-users of collected data) are at risk
of coming out on the short end financially.
There is, however, one other obstacle
39
EXECUTIVE E D GE
Even limited analysis of

minimal levels of data
can make a significant
difference to the bottom
line, especially when
leadership clearly
establishes goals
beforehand.
that is not so readily apparent. The biggest barrier is the assumption that analytics is a data science and technology problem when its really a
leadership and managerial problem, says Florian
Zettelmeyer, director of the data analytics program
at the Kellogg School of Management, Northwestern University. The managerial class has to understand the problems that need to be solved and
how analytics can help solve them.
When leadership fails to implement a decision
management strategy and convey its importance
throughout the company, it unwittingly bypasses
a major growth opportunity. Data constantly flows
into and around an organization. Leveraging its
specific components requires analytical execution
and deployment in areas of maximum benefit by
a committed staff. This is the essence of opportunity management. Effective decision management uses analytics to achieve better outcomes
from customer interactions. The value, of course,
depends on how well all these factors are applied.
Recognize the Unrecognizable

Even limited analysis of minimal levels of data
can make a significant difference to the bottom
line, especially when leadership clearly establishes
goals beforehand. The objective for data analytics is not quantity of data but quality of outcomes:
e.g., solving business problems, generating customer information or analyzing market conditions.
Results should be sustainable, which means placing the emphasis on strategic instead of tactical.
Analytical approaches tend to vary depending upon
40
the size of the company. Larger corporations generally engage statisticians in addition to a business intelligence team as
part of their overall strategy. Most SMBs
cannot afford to contract with statisticians,
but have other avenues to maximize business intelligence, most notably automated
programs. Some add BI expertise to their
staffs, but are uncertain what their next big
step should be. At this stage, leadership
has to be prepared to resolve inevitable
internal conflicts about analytical direction.
What is needed is a strategy to integrate analytics into decision management beginning with two very simple and
achievable practices: focus and common
sense. You must have a long-term plan
and a strategy that works with it, says
David Hufnagel, chief operations officer
and vice president of Congressional Federal Credit Union (CFCU). If you dont
work in concert with the plan, it becomes
inoperable with no results. The credit
union has relied on automated analytics
for the last three years to drive a proactive outreach to its 45,000 members. Its
not about being unique with each individual, Hufnagel says. Its about identifying
what is relevant to our members.
The CFCU experience is an example
of focus and common sense for maximizing the value of data analytics through
technological innovation. The idea is to
have the technology focus on data that
a na l y t i c s
directly relates to company goals. There is

no reason to go data fishing in the hopes
of snagging information that may be vital
someday. This isnt to suggest that such
effort has no value. Rather, its more about
priority, available time and resources.
Clarify ROI and Analytical
Options
Sometimes return on investment from
automated analytical software is difficult
to establish, which is why it can be the
biggest barrier to a go/no-go decision.
Nonetheless, analytics success stories
are everywhere. Leslie Deich, a professional financial services specialist, says
she found the technology to be extremely effective in detecting consumer fraud,
which helped protect GE Consumer
Capital, Genworth Financial and Fannie
Mae from what could have been significant losses. We needed to find fraud
patterns in the data and this made everything easier because it was able to locate
the patterns in very quick fashion, Deich
says. If you dont know the data or are
unfamiliar with it, this will help you see
the relationships.
CFCUs David Hufnagel relies on opportunity management to get a 360-degree
view of its membership. Its meant better
targeting (and) now were seeing greater
acceptance of offers, he says. It allows
for greater efficiency with each campaign.
41
EXECUTIVE E D GE
Leaders who take a

strategic and proactive
initiative when it comes
to data analytics set the
stage for the successful
and actionable use of
information.
These experiences demonstrate the ability

of companies to achieve their desired outcomes
through programs that maximize qualitative and
quantitative analytics without having to worry about
programming and algorithms. Analytics are not disembodied truth, says Northwesterns Zettelmeyer.
They answer those questions managers are most
concerned about.
Pathway to Opportunity
Leaders who take a strategic and proactive initiative when it comes to data analytics set the stage
for the successful and actionable use of information. The starting point for this type of initiative is a
focus on management and oversight.
Analytics may be among the most powerful tools
for executive decision-making and business management. They are at their best when flexible, focused
and applied in tandem with decision management
best practices that can be augmented and enhanced
as needed. Executives and managers have a pathway to opportunity management regardless of corporate size and the ability to streamline business flow to
improve growth opportunities and increase profitability if they are willing to take advantage of it.
Bill Gossman (bill.gossman@asacorp.com) is president of
Advanced Software Applications (ASA Corp.) in Pittsburgh,
Pa. ASA provides analytical and decision solutions that help
businesses grow revenue, improve efficiencies and mitigate risks.
REFERENCES
Briody, Dan, 2011, Big data: Harnessing a game-changing
asset, a report by the Economist Intelligence Unit,
sponsored by SAS.
42
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data v is ua li z at i o n
The future of data

visualization
By Will Towler
ata visualization is entering a new era. Emerging

sources of intelligence,
theoretical developments
and advances in multidimensional imaging are reshaping the potential value that
analytics and insights can provide, with
visualization playing a key role. The principles of effective data visualization wont
change. However, nextgen technologies and evolving cognitive frameworks
are opening new horizons, moving data
visualization from art to science.
44
Looking back, much attention has

been given to the principles of effective
data visualization, such as substance,
context and actionability. As timeless tenets that will continue to be important,
regardless of medium or format, a brief
review seems in order:
As with any form of communication,
effectively conveying a message with data
requires that it be substantive. And while
creative visuals can enhance interest and
memory, embellishment cant make up
for lack of substance. According to purist
Figure 1: Billion Dollar OGram.

Edward Tufte, Every single pixel should
testify directly to content. Learn more.
Visualization should be accurate
and contextual. David McCandlesss Billion Dollar OGram provides an example
of how greater meaning can be added by
incorporating the bigger picture. According to McCandless, Absolute figures in a
connected world dont give you the whole
picture. Theyre not as true as they could
be. We need relative figures that are connected to other data so that we can see a
fuller picture. Learn more.
More than anything else, data visualization should facilitate decision-making, a goal that is difficult to achieve for
many. According to a recent KPMG study,
while data and analytics are deemed
a na l y t i c s
Source: David McCandless

http://informationisbeautiful.net
increasingly important to organizations,

generating actionable insights remains a
top challenge. Learn more.
Looking forward, nextgen technologies and evolving cognitive frameworks
will boost the role that data visualization
can play in organizations and society.
Consider the Internet of Things, Network and Complexity Theories, and recent developments in multidimensional
visualization:
The Internet has transformed the way
we visualize information through a better
understanding of networks and an explosion in profile, behavioral and attitudinal
data. Sociograms, for example, have
gone from relatively simple graphs to multifaceted relational maps, as illustrated
45
in Figure 2 and Figure 3, courtesy of

the Journal of Social Structure and the
Leadership Learning Community.
The Internet of Things is expected
to have a similar impact, with billions of
connected devices capturing human and
machine activity. Fully capitalizing on the
data generated will require further advances in our ability to synthesize and
display spatiotemporal activities.
Network Theory has been in use for decades, with its earliest applications largely
in social structure analysis. More recently,
Figure 2:
Pre-Internet
sociogram.
Source:
Journal
of Social
Structure
Figure 3:
Internet-age
sociogram.
Source: Leadership
Learning Community
46
Figure 4: Global spread of infectious diseases.
Network Theory is being applied to understand relationships and interactions

in a variety of domains, such as crime
prevention and disease management.
Dirk Brockmann and Dirk Helblings work
modeling the spread of infectious diseases provides an example of the power that
Network Theory holds.
In their article, The Hidden Geometry
of Complex, Network-Driven Contagion
Phenomena, in Science magazine, the
authors wrote:
The global spread of epidemics, rumors, opinions, and innovations are complex, network-driven dynamic processes.
The combined multiscale nature and intrinsic heterogeneity of the underlying
networks make it difficult to develop an
a na l y t i c s
Source: Science (http://www.uvm.edu/~cdanfort/

csc-reading-group/brockmann-science-2013.pdf)
intuitive understanding of these processes, to distinguish relevant from peripheral

factors, to predict their time course, and
to locate their origin. However, we show
that complex spatiotemporal patterns can
be reduced to surprisingly simple, homogeneous wave propagation patterns.
By providing insight into the workings
of dynamic systems with interdependent
elements, Complexity Theory can help
us identify trends that might lead to unexpected tipping points such as environmental disasters. Complexity Theory can also
support the decoding of intricate structural dependencies such as economic and
market forces. In The Atlas Of Economic Complexity, for example, the work of
Cesar Hidalgo, Ricardo Hausmann and
47
Figure 5: Depiction of economic complexity.

project members illustrates how understanding the composition of a countrys
cumulative industrial knowledge can explain economic development in ways not
possible through more traditional linear
econometric frameworks.
48
Source: The Observatory of Economic

Complexity; http://atlas.media.mit.edu/atlas/
The vast majority of data visualizations today are two-dimensional. However, thats changing with creative use of
color and size, combination of space and
time, and advanced computer graphics.
For instance, neuroscientists Emmanuelle
The Internet of Things
Tens of billions of devices will be connected to the Internet in the next decade.
From smart appliances and wearables to automobile sensors and environmental
monitors, the Internet of Things will provide unprecedented insight into whats
happening around us. High-throughput, interconnected data streams will help us
improve safety, drive operational efficiencies and better understand consumer
demand.
In the words of Kevin Ashton, who first coined the term the Internet of Things
in his seminal 2009 RFID Journal article, The Internet of Things has the potential
to change the world, just as the Internet did. Maybe even more so.
Network Theory
Network Theory builds on Graph Theory, which applies algorithms to understand and model pair-wise relationships between objects. Network Theory
examines relationship symmetry, with the existence of asymmetric relationships providing grounds to predict the likely spread of information (social network analysis), dissect complex disorders (biological network analysis), find
the shortest path between two points (network optimization) and identify target
objects based on their behavior (link analysis).
Complexity Theory
Complexity Theory posits that many systems are characterized by complex,

non-linear interactions that evolve dynamically and often unpredictably. Known as
the butterfly effect, small perturbations in one state (here) can result in large
repercussions in a seemingly unrelated state (there). According to Complexity
Theory, its impossible to predict with certainty a future state, but it is possible to
understand the structure and potential states of complex systems.
a na l y t i c s
49
Figure 6: The 5-D colorimetric technique.
Tognoli and Scott Kelso developed a

five-dimensional model known as the
5-D colorimetric technique, that provides
a dynamic and comprehensive view of
brain activity through spatiotemporal display and color coding. Another example
is Microsofts Holograph, an interactive
3-D platform that can render static and
Source: Florida Atlantic University, Center

for Complex Systems and Brain Sciences;
http://www.ccs.fau.edu/hbbl3/?p=1013
dynamic images above or below a plane

for more natural exploration and manipulation of complex data. And commentary
from team members Curtis Wong and
David Brown posted on Microsoft News
suggests that Holograph may one day allow users to actually reach inside a visual
and interact with it.
Multidimensional Visualization
The adage a picture is worth a thousand words gained credence from our
ability to process visuals more easily than text. Visualization has also been shown
to improve learning and recall, and can portray complex concepts and relationships more easily than can text. Recent developments in computer graphics are
making possible visualizations that enable the integration, manipulation and exploration of dynamic multidimensional data sets. Multidimensional visualizations
allow users to not only examine data from new perspectives but also interact with
it more effectively.
50
Figure 7: Microsofts Holograph, an interactive 3-D platform.

Source: Microsoft; http://microsoft-news.com/microsoft-research-talks-about-holograph-aninteractive-3-d-data-visualization-research-platform/
As the world becomes increasingly interconnected and interdependent, opportunities to generate value through data
visualization will only increase. The Internet of Things will have a profound effect
on the role that data visualization can play
in organizations and society, improving
our ability to understand how humans and
machines interact with each other and the
environment. Application of evolving cognitive frameworks, such as Network and
Complexity Theories, will help us better

reflect dynamic and intricate structural
dependencies. And advances in multidimensional visualization will allow us to
more effectively synthesize and explore
spatiotemporal conditions.
Will Towler (wjtowler@hotmail.com) is an analytics
and insights specialist. The views expressed in
this article are those of the author and do not
necessarily represent the views of an employer or
business partners.
Request a no-obligation INFORMS Member Benefits Packet

For more information, visit: http://www.informs.org/Membership
a na l y t i c s
51
Data visualization:
The big picture
of big data
By Nana S. Banerjee
he 1977 film Powers of

Ten portrays the universe
as an arena of both continuity and change. The short
documentary, selected by the Library of
Congress as being culturally, historically or aesthetically significant, and
written and directed by Charles and Ray
Eames, begins with a 1-meter distant
shot of a man laying by a picnic setting
and steadily moves out until it reveals the
very edge of the known universe. Then,
at a rate of 10-to-the-tenth meters per
52
second, the film rushes us back toward

Earth to the reclined mans hand and further down to the level of a carbon atom
on his skin. That fascinating journey into
the macro and then micro demonstrates
visually the importance of scale and, in
a metaphysical sense, the importance of
visualization itself.
The importance of data visualization
becomes more obvious when viewed
within the context of how the human brain
works. Much has been written in recent
years about how the processes of the
Figure 1: Natural log

of relative operating
speeds.
Source: The User Illusion: Cutting Consciousness Down to Size, by Tor Nrretranders (Penguin Press Science)
brain and how understanding those processes can provide profound insights.
In his best-selling 2012 book Thinking,
Fast and Slow, Nobel laureate Daniel
Kahneman introduces the terms System
1 and System 2. The terms differentiate
between the information processing that
occurs in the human subconscious and
conscious minds. System 1 addresses
the functions that are uncontrolled and
effortless. System 2 comprises functions that are controlled and require
effort to engage. In action, System 1
allows us to instantaneously recognize
facial expressions visual processing.
In contrast, System 2 allows us to make
complex decisions or apply reason.
A little more than a decade before
the release of Kahnemans book, Danish
a na l y t i c s
physicist Tor Nrretranders, in his book

The User Illusion: Cutting Consciousness
Down to Size, converts the bandwidth
of human senses to computer terms. He
explains just why data visualization (a
manifestation of System 1) is perhaps the
most powerful form of data interpretation.
Nrretranders demonstrates that when
assessing the language of the mind,
the sense of sight simply operates at an
order of magnitude faster than the sense
of touch (similar to the bandwidth associated with a network of computers), which
in itself operates at an order of magnitude
faster than the sense of smell. As such,
the sense of smell operates at an order
of magnitude faster than the sense of
taste (which has a bandwidth similar to a
calculator)!
53
Realizing how quickly we

understand and internalize
what we see is at the
foundation of what makes
data visualization such an
important aspect of how
we analyze information
and make better decisions.
Realizing how quickly we understand and internalize what we see is at the foundation of what
makes data visualization such an important aspect of how we analyze information and make
better decisions. That said, the mechanisms behind data visualization create a powerful tool to
design effective visualizations to suit any context
whether that tool is a simple, static bar chart or
something vastly more complex, multidimensional
and interactive. As such, the science behind data
visualization ranges from the fundamentals of how
we literally see to the complexities of cognitive
psychology.
Combining the science with the art how best
to portray the intent of any particular visualization
winds up somewhere on a curve between presentation and exploration. The difference between
presentation and exploration can be described as
the difference between presenting a known story
in a data set using analysis and exploring a notyet-understood data set using a visual examination. Henry David Thoreau said, Its not what you
look at that matters, its what you see. With data
visualization, the significance of the quote is quite
literal. Its a fully formed discipline that requires
multiple skills among them, the knowledge of
statistics, ideas of space, design and topography,
and a deep subject matter expertise in the sector
being served.
From Theory to Practice
Currently, for any company that deals with a
titanic amount of data, data visualization is and
will remain an absolutely fundamental tool. Verisk
54
Analytics is a prime example collecting

and maintaining highly granular data on
several billions of insurance policies and
claims, credit card and debit card transactions, real estate, health services, government and human resources. While
many consumer-centric firms have long
been skilled in collecting information, they
now generate and acquire exponentially
growing, disparate and complex quantities of data and depend on that data in
many ways for their very survival in todays marketplace.
Much of the talk today about data
management and analysis and its effect
on how business gets done targets the
science of analytical modeling. In that
pursuit, many firms indeed have come far,
and yet they still have farther to go. Large,
well-capitalized firms (such as banks, insurers, retailers) spend considerable resources and energy collecting and storing
data, not just because they produce a lot
of it but more likely because the regulatory
environment mandates storing much of it.
These firms havent spent nearly enough
effort aggregating their data across functional silos, integrating internal data with
third-party data, analyzing the data, and
distributing the resulting insights to people who can take action on it.
As an example from the retail sector, imagine that a retailer is looking to
assess the effectiveness of a particular
a na l y t i c s
promotional campaign at its retail stores

through the holiday season. The management team at the retailer would invariably want to know: Do we know the
baseline sales at our stores and our competitor stores before the promotional period? Lets say maybe. Do we know how
shoppers at our stores respond to promotional offers in the regular season? Thats
another maybe. Do we know what the
weather was like and if it played a role
in affecting shopper turnout at our stores
during the campaign period? Thats one
more maybe. Would all those pieces of
information come together at the same
time and be presented to management in
a manner thats easy to analyze? Thats
highly unlikely. And thats a great example of where visualization becomes so
helpful.
As consumers of information, were
all demanding visualization in our own
way. Weve started to reject the culture of
sound bites and nonsynthesized statistics
that agenda-driven interest groups have
inundated us with in the last two decades.
Visualization allows us to map the information in a way that leads to better decision-making easier and faster. The 2012
InformationWeek Business Intelligence,
Analytics and Information Management
Survey, conducted in late 2011, indicated
nearly half (45 percent) of the 414 respondents cited ease-of-use challenges with
55
Figure 2: A detailed inundation map of the New England coastline depicted in Figure
2 shows the surge footprint of Hurricane Sandy in blue. The orange circles represent
clustered locations by actual number, with the largest circles containing the most individual locations. Where the blue and orange overlap, the map illustrates where Sandy
had the greatest impact. Such maps help companies determine the extent of floods
and resulting losses.
Source: AIR Touchstone zoomed-in surge
complex software/less-technically savvy

employees as the second-biggest barrier
to adopting business intelligence/analytics
products fractionally behind the biggest
barrier, data quality problems, cited by
46 percent of respondents.
Mother Natures Infographics
Catastrophe risk management has
come a long way in its 25-year history, and
the sophistication of those analytics goes
well beyond the numbers in a database.
The end result has been fast, intuitive
56
insight into what drives risk.

Looking back to Superstorm Sandy,
healthcare officials in New York City, in advance of the storm, were trying to decide
whether to evacuate hospitals. In the end,
many chose not to move patients before
the storm. Unfortunately, numerous hospitals were then catastrophically flooded,
and patients had to be moved during the
worst of the deluge.
Certainly, myriad factors go into assessing a situation like that, but as analytics and their visualization become
increasingly sophisticated, theyll be able

to help risk-bearing organizations, including insurers and local authorities, develop
appropriate prescriptions for mitigating
risk by providing the contextual detail
for better-informed decisions.
Todays advanced climate models are
capable of effectively projecting the impact
of storms as they get closer to coastlines
or geographic regions. Such models can
assess the total number of homeowners
expected to be affected, when an event is
expected to worsen, and when it will be
safe for insurance personnel to move into
the area. The visualization models enable
the decision-maker or assessor to evaluate locations at the individual building
level. That capability facilitates a preplanning process and allows companies to
communicate proactively with policyholders so they can take certain loss control
measures such as boarding windows,
reducing chance of fire, and so on to
mitigate damage. Such models are also
allowing insurers to readily project and visualize the impact of fallen trees on power lines serving a group of policyholders.
Given the complexity associated with
climate change and the inherent difficulty
in the assimilation of evolving and interdependent data, our dependence on a
sophisticated and constantly improving
visualization capability is far too great to
be denied.
a na l y t i c s
The Sight in Business Insight

Unquestionably, the tried-and-true
bar, line and pie charts have served us
well. But when the complexities of relationships are more nuanced and the
data becomes more unstructured, visual
analytics need to become more dynamic,
multidimensional and customized.
For lenders and insurers, visualization can help identify a range of data
issues quickly from a high-level view
of exposure location to exposure composition and completeness, including
breakdowns by profile of the entities
at risk (customers, businesses, properties, vehicles and so on). Visual link
analysis technology helps discover
critical, previously hidden connections
within data. Seeing those connections
within proprietary data, in data from
external sources or through a combination of sources provides insight
and knowledge to make decisions. The
technology finds all data elements applicable to a question and draws a picture of the connections among those
elements, revealing previously invisible
relationships. The contextual approach
provides a multidimensional understanding of profitability, customer behavior, and industry trends.
Data integrity can be a significant
problem for large organizations, especially where multiple, complex databases are
57
involved. Mapping techniques often find

thousands of errors in a fraction of the normal time. Mapping also finds red flags in
claims data. Fraud investigators at financial institutions often use visual link analysis to assist in their inquiries. For example,
a money-laundering investigator monitors
each check, credit card or ATM withdrawal
over a specific threshold, and the technology helps in instantly flagging irregular patterns, revealing potential sources of fraud
or money laundering. Seeing those connections within company data, in data
from external sources or through a combination of sources can give claims investigators insight and knowledge to help make
better decisions.
Visualization is useful in insurance for
commercial fleet and personal auto policyholders. Telematics programs use sensors to determine factors as simple as
distance (vehicle miles traveled) and as
sophisticated as camera-based recording. Devices transmit and store the resultant collection for immediate or deferred
analysis, meaningful interpretation and
visualization. Although the use of telematics data and visualization is in its early
stages, the usage-based insurance (UBI)

opt-in rate is expected to increase to 20
percent over the next five years, according to one recent industry poll. Other polls
consistently show that two-thirds of consumers are open to telematics-based insurance policies, especially if theres the
potential for premium discounts. Among
newer consumers of vehicle insurance
the Gen Ys and the Millennials the use
of telematics and visualization technology
is almost expected.
While throughout history and in the
present day there is always that rare breed
with the unique and innate ability to quickly
make sense of disparate sources of information and data, the mortals among us
are blessed to be living at a time replete
with the data and tools to make those connections for us in a fraction enabling us
not only to make better business decisions
but maybe even allow us to see the as yet
unforeseen.
Dr. Nana Banerjee is a group executive of Verisk
Analytics. He serves as president of Argus Information
and Advisory Services and as chief analytics officer of
Verisk Analytics.
Join the Analytics Section of INFORMS
For more information, visit:

http://www.informs.org/Community/Analytics/Membership
58
Is the largest association for analytics in the

center of your professional network?
It should be.
Certification for Analytics Professionals

A FREE Community Membership
to join online visit

http://join.informs.org
Continuing Ed courses for Analytics Professionals

Online access to the latest in operations research
and advanced analytics techniques
Unsurpassed Networking Opportunities available
in INFORMS Communities and at Meetings
Subscriptions to online and print INFORMS Publications
INFORMS Career Center - the industrys leading job board
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Analy tic s i n Ac t i o n
How analytics helps

contain Ebola
By Douglas A. Samuelson and
Brian Umana (l-r)
he outbreak of Ebola disease

in West Africa, with some
cases spreading elsewhere,
has been a source of concern and frustration throughout the world.
This is the story about how a small data
science and analytics company found a
way to help contain the spread of the virus.
In September 2014, Brian Umana, a
consultant at Illumina Consulting Group
60
(ICG), had a conversation with company CEO David Waldrop about the Ebola
epidemic. They each expressed concern
about the scale of the human suffering,
but also about facets of security and public health that could limit the spread of
the epidemic. Given the nature of their
earlier work in real-time streaming data
analytics, they eventually began speaking
about various ways one might apply data
science and analytics to the problem.

They were not the first to do this, nor in
any way did they take the most dramatic
or significant action. However, within days
of the conversation, ICG began to make
a small contribution to safety in the U.S.
response to the maritime vector of the
Ebola virus.
Waldrop built a new-use case for
LUX software, ICGs principal product,
a high-volume data streaming and pattern recognition tool. What Waldrop had
noticed was that detection and prevention measures for potential maritime- and
port-based spread of the Ebola virus appeared less rigorous than corresponding
detection and prevention measures used
in air travel. No one would dispute that
it is essential to monitor airports where
passengers are arriving from Ebolastricken countries as a measure for containing the spread of the disease. West
African seaports and merchant shipping,
however, are another potential means for
spreading the disease abroad, a topic
that has drawn far less attention.
Waldrop used the software to draw
an area of interest off the coast of West
Africa, enclosed by a second area of interest encompassing all the water outside of the first area but still inside of a
specific radius of the West African coast.
Waldrop instructed LUX that any time a
boat crossed from Area 1 (the port area)
a na l y t i c s
to Area 2 (farther from the coast) and

then exited Area 2 to create a map-based
alert of the boats location, satellite data,
name, flag, stated destinations and other
information. He then implemented more
sophisticated versions of this model. The
result was additional notice to ports, and
to authorities outside of the specific ports
in question, about boats that should receive specific attention. Waldrops experiment worked, and he promptly donated
the results to a federal agency.
Owing to the highly contagious nature
of Ebola and the close quarters onboard
ships, theres a high risk of an outbreak
rapidly affecting an entire crew. Such a
ship entering port would pose a grave
health threat to persons in the port and
surrounding area. U.S. authorities and
shippers are aware of the Ebola Maritime
Vector threat, but detection and prevention measures appear less rigorous than
those in the air travel sector. The rules
in effect for maritime traffic were and are
that ships must file a notice of arrival 96
hours prior to U.S. landfall, and those notices must include declaring visits made to
any Ebola risk ports during the ships last
five port visits. In addition, ship captains
or owners are required to self-report any
communicable disease onboard during
the 15-day period prior to entering port.
If such a report is filed, the appropriate
U.S. authorities are notified and the ship
61
trackin g e bo la
The scenario created

compelling incentives
for non-compliance with
disease reporting, as
ship owners face major
commercial revenue
losses if their ships are
quarantined.
may be boarded, inspected and possibly quarantined. This scenario created compelling incentives for non-compliance with disease reporting,
as ship owners face major commercial revenue
losses if their ships are quarantined, or if contract
conditions are not met owing to delays, or if the
ship is diverted and fails to reach the port specified in a bill of lading. Taking this situation into
account, Waldrops experiment with LUX helped
address some issues of public safety in ports.
Two federal agencies looked at the information. It brought the maritime aspect of the
problem to their attention and demonstrated a
relatively easy way to pay attention to it. They
asked about the data sources and began monitoring them. The ships were monitored on the
LUX watch dashboard. This procedure provided
several days of advance warning about any ship
that had visited West Africa and was headed to
a U.S. port.
Ebola Maritime Vector Threat
To mitigate the Ebola threat, LUX uses two
real-time data streams to perform analysis. The
first is data streamed from internationally mandated [1] automatic identification system (AIS)
reporting. AIS, installed on all merchant ships
in the world, is especially relevant to monitoring
ships traveling to and from West Africa ports. The
second source is data generated by the Global
Data on Events, Location and Tone (GDELT)
project [2].
The LUX Ebola Maritime Vector monitoring
methodology works as follows:
62
Figure 1: Illustration of the LUX user interface. The outer AOI provides alerts on
arrivals and departures from the zone of concern. The inner AOI monitors activity in
and around port areas.
A user defines geographic areas of

interest (AOI). In this case, two such areas are displayed on the map as shown
in Figure 1.
The user then writes rules instructing the software to generate alerts on
any inbound or outbound ship crossing
the boundaries of the AOIs.
When an alert is first received on
an inbound or outbound ship, AIS data
is used to determine the ships name, its
AIS unique identifier number and other
data such as course, speed, flag, declared destination port and cargo embedded in the AIS reporting.
Once the ship is identified, the user
a na l y t i c s
writes another rule containing the ships

name and AIS identifier instructing the
software to track and generate alerts on
its location and activity.
LUX tracks the ship to its next port
(declared or not) and sends the user
alerts based on rules and geographic areas of interest related to that port. A useful tool in this regard is the dynamic area
of interest (DAOI). The DAOI is centered
on the ship itself and moves with it. A
DAOI of any radius may be established.
For example, an alert could be generated
anytime a ship is within 50 nautical miles
of land, providing warning of a pending
port visit.
63
trackin g e bo la
The user then instructs the software

to generate alerts on information collected by GDELT that matches the users
rule parameters such as reports of Ebola
cases, quarantining of ships, illness
among ship crew members, etc. This is
a potential source for discovering Ebolas
spread through the maritime vector.
LUX also provides the means to detect abnormal behavior, such as a ship
deviating from course, diverting to a port
other than its declared port destination,
or, particularly, cessation of its AIS reporting stream.
If a ships AIS reporting were to
cease, the softwares forecasting analytics would still provide an estimated track
and the ships progress along it.
To facilitate monitoring of multiple
ships (thousands), rules alerts can be
sent to a user-established watch board.
The watch board displays, as color-coded cells, aggregates of AIS alert reporting
on as many individual ships as desired.
It also monitors and displays GDELT
alerts. In this way a user may be relieved
of constantly monitoring activity for situational awareness and let LUX take up
that task 24/7. When the number or type
of alerts reaches a user specified threshold, the watch board changes the color of
the appropriate watch item cells as a visual notification. An audible tone may be
added as an additional notification aid.
64
What this story highlights is the vast

amount of information available at the
fingertips of everyone in the analytics
community, the ability to act quickly on
that information when it is properly applied and brought to the right peoples attention, and the potential benefit of such
analysis and action.
Doug Samuelson (samuelsondoug@yahoo.com)
is president and chief scientist of InfoLogix, Inc., in
Annandale, Va., and a senior operations research
analyst with Group W, Inc., in Merrifield and
Triangle, Va., supporting the Marine Corps Combat
Development Command (MCCDC). He is a longtime
member of INFORMS.
Brian Umana (brian.umana@icgsolutions.com),
a consultant at Illumina Consulting Group, has
workedin software analytics, political analytics
and media.
REFERENCES
1. International Maritime Organizations
International Convention for the Safety of
Life at Sea
2. GDELT is the largest, most comprehensive
and highest resolution open source database of
human society ever created. GDELT monitors
and analyzes the worlds news media from nearly
every corner of every country in print, broadcast
and web formats, in over 100 languages, every
moment of every day.
Subscribe to Analytics
Its fast, its easy and its FREE!
Just visit: http://analytics.informs.org/
ting
n
e
v
n
i
e
R alue
V
INFORMS third conference on the health sector brings

together researchers and stakeholders around the
most current work in healthcare operations research,
systems engineering, and analytics in one
highly-focused conference.
Cross-cultural view of healthcare systems and
analysis of operational impacts.
Structured networking opportunities, including
birds-of-a-feather discussion groups and facilitated
networking over lunch.
Collegial, small-scale setting in a vibrant location
in one of the fastest growing cities in the U.S.
HEALTHCARE 2015
NASHVILLE TENNESSEE
Abstract Submissions Now Open!
http://meetings.informs.org/healthcare2015/abstract-submission
INFORMS Healthcare 2015 invites submissions on research and
applications in the healthcare arena. We welcome submissions in
either oral or poster formats, which will be reviewed by the
Committee. There is a limit of one oral presentation per
presenting/lead author. Authors may present a poster as
well as one oral presentation.
JULY 29-31
OMNI HOTEL
GENERAL CHAIRS
Robert Dittus, Vanderbilt University
M. Eric Johnson, Vanderbilt University
PROGRAM CHAIR
Vikram Tiwari, Vanderbilt University
INVITED SESSIONS CHAIR
Eva Lee, Georgia Institute of Technology
DEADLINE FOR SELECTED PRESENTATIONS

March 1, 2015
SPONSORED SESSIONS CHAIR

Mehmet Begen, Western University, Canada
DEADLINE FOR POSTER PRESENTATIONS

March 15, 2015
HAS STUDENT PAPER COMPETITION CHAIRS

Anita Tucker, Brandeis University
Baris Ata, University of Chicago
http://meetings.informs.org/healthcare2015
ADVISORY COMMITTEE
Dr. Warren Sandberg, Vanderbilt University
R. Lawrence Van Horn, Vanderbilt University
co n fer e n c e p r e v i e w
Business Analytics and

O.R. Conference set
for Huntington Beach
The conference will
celebrate the best in the
profession, headlined
by the prestigious
Franz Edelman Award
competition and the Franz
Edelman Gala.
By Manoj Chari
66
INFORMS will return to Huntington Beach, Calif.,

for the 2015 INFORMS Conference on Business
Analytics and Operations Research, which will be
held April 12-14 at the Hyatt Regency Resort & Spa.
The conference, with the breadth of its coverage and
the depth and quality of its presentations, should be
of great interest to practitioners ofanalytics and operations research, whether they work in the public sector or private industry. It will also appeal to academics
who are training future analytics practitioners or have
research interests that would benefit from exposure
to cutting-edge work in industry and government.
The conference will run from Sunday to Tuesday,
with the main conference program held on Monday
and Tuesday. The Sunday sessions focus on vendor
technology workshops, the INFORMS Professional
colloquium and the UPS George D. Smith finalist presentations. Plenaries from industry luminaries and
thought leaders [such as keynote speaker William
Ruh, VP of GE Software; see accompanying sidebar]
headline the main conference program.
The conference will celebrate the best in the profession, headlined by the prestigious Franz Edelman
Award competition and the Franz Edelman Gala, both
Huntington Beach, Calif., will provide the backdrop for

the INFORMS Conference on Business Analytics and
Operations Research in April.
of which will be held on Monday. There

will also be an invited session over two
days that will feature presentations by
finalists and winners of various other
INFORMS prizes such as the Daniel
H. Wagner Prize, the INFORMS Prize,
the Analytics Innovation Prize and UPS
George D. Smith Prize.
The main program will cover a wide
range of topics in analytics and operations research practice with tracks on
marketing analytics, unstructured data
analytics, real-time decision systems,
supply chain and logistics, revenue management and pricing, managing risk and
decision analysis. Attendees typically
have a choice of at least eight parallel,
a na l y t i c s
high-quality presentations to choose

from among these areas and can tailor
their conference itinerary to their professional interests.
Additionally, software tutorials from
vendor sponsors run parallel to the main
sessions, allowing attendees an opportunity to hone their skills in that arena.
Poster sessions on both days offer further
possibilities for attendees to present their
work to their peers in an informal setting.
Conference receptions, meals, breaks
and other events are designed to offer
plenty of networking opportunities.
In summary, analytics and O.R. professionals who attend this conference
will hear about the latest and greatest
67
co n fer e n c e p r e v i e w
in practice, learn new ideas and best

practices, expand their professional and
personal networks and celebrate their
profession. Local area students are particularly encouraged to attend and take
advantage of the reduced conference
registration and professional exposure
afforded by this conference.
Look for announcements and updates

on the INFORMS website and the conference website for up to date information
about the conference.
Manoj Chari is chair of the 2015 INFORMS
Conference on Business Analytics and Operations
Research.
GEs Ruh to deliver conference keynote

William Ruh, vice president of
GE Software, will deliver the keynote address at the 2015 INFORMS
Conference on Business Analytics and
Operations Research set for April 1214 in Huntington Beach, Calif.
Ruh joined GE in 2011
to lead a renewed focus on
software and analytics and
to drive the global strategy, direction, operations
and portfolio of softwarebased services that harness streams of customized
performance data for reaching new
levels of productivity. As part of this
charter, GE Software is creating an
ecosystem of strategic partnerships
and investments, developing a common software platform (PredixTM) for
powering industrial Internet offerings,
68
and establishing a portfolio of shared

services including cyber security, data
science, user experience, cloud and
agile development for building more
sustainable and safe products.
Prior to joining GE,
Ruh was vice president at
Cisco, where he held global
responsibility for developing advanced services and
solutions. He has more
than 30 years of industry
experience in enterprise
application integration and
object-oriented technology.
Ruh is an accomplished author and
a frequent speaker on such topics as
emerging business models, cloud computing, analytics, mobile computing, agile development, large-scale distributed
systems and M2M communications.
Are you spending significant resources collecting and

integrating disparate data sources rather than focusing
on the analytics that drive business value?
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Five - M in u t e A na lyst
Battleship
The research
question is: How
can we tell if
another player is
being dishonest?
By Harrison
Schramm, CAP
70
I had the opportunity to play Battleship with two

boys in my family. For those who may not be familiar, Battleship is a board game played in two stages.
First, each player places their fleet of five ships covering a total of 17 squares on a 10x10 grid without their
opponent seeing. Ships may be placed along rows or
columns but not diagonals. Then, players call out grid
squares to shoot at, and the other player reports if
it is a hit or a miss. It is presumed that the players
are honest. The research question is: How can we
tell if another player is being dishonest? (Note: this
project was much more fun than I expected it to be!)
The basics: When there are no hits on the board,
17/100 = 17 percent of the spaces are occupied. A
first approximation or nave plan would say that the
expected number of shots until the first hit is 1/.17 =
5.8. This is slightly inaccurate, because the shots are
not independent. A finite population adjustment shows
that the expected number of shots is approximately
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Figure 1: A scheme for covering the Battleship board in 33 shots. There are similar
schemes for covering the board in 50 and 20 shots.
5.3. This is a minor but noticeable difference in the number of times to first hit. I
would begin to seriously suspect (95 percent confidence) that my opponent was
cheating if I did not score a hit in the first
15 attempts, and would be almost certain
(99 percent confidence) he was cheating
if I did not score a hit in the first 22 shots.
Can we do better? Yes! Each ship is
rectangular, and can only inhabit squares
that are along ranks or files (like rooks
in chess). The way to handle this is to
pick shots along diagonals (like bishops
in chess). If we have already shot and

missed in a particular square, say, A1,
then we dont have to shoot at A2 or B1.
For example, if we are most interested in
hitting ships three or more lengths in size
submarine, cruiser, battleship and carrier then we may skip two and cover
the board in 33 shots (see Figure 1).
We can think of this as superimposing a couple of different games on top
of each other; for example, in the carrier
case (skip four), it would look something
like this:
Figure 2: Picture of the superimposed Battleship game. Conceptually, the carrier

is occupying one square and is playing on the 20-square board (left), while the rest
of the fleet are occupying their respective sizes on the 100 square board. Each shot
removes one square off the respective boards.
a na l y t i c s
71
Five- M in u t e A n a lyst
The general method for determining

the probability of hit in the next round,
given no hits in the preceding rounds, is
to determine the probability of hit for each
ship type, and the key intuition is that for
ships that are three or larger, the scheme
shown in Figure 1 effectively covers
three spaces on the board after the
first shot, which always covers just one
(why?). The general formula is:
possibility of missing the two-square corvette ship, but will certainly hit all the others. This is an area ripe for further analysis.
Defending along the rows: What does
it mean to be maximally random? There
are different interpretations, but one way
might be to make the groupings along
the rows and columns of the board fit a
Poisson distribution with =1.7. A perfect
fit is not possible because at least one of
the rows or columns will have a 5 due
to the carrier, which only has a .3 probThe formulae for the other spacing are
ability of occurrence. This turns out to be
similar.
an optimization problem that exceeds the
We can compare these approaches,
bounds of the Five-Minute Analyst. This
and see that they all perform remarkably
problem is very similar to solving Sudoku
similar; the five-space approach is slightly
with optimization. Below is a candidate
better for achieving the first hit.
solution and its performance measured
by the Poisson metric.
In conclusion, this piece has brought
up more areas for analysis on this topic
than presented answers. Hopefully you
will think differently about Battleship next
time you play.
Bonus: If you dont have your computer handy while you are figuring out
Figure 3: Performance of various skipwhich strategy has the greatest rate of
ping schemes for scoring the first hit in
improvement, you can appeal to calculus.
Battleship.
The proposed strategies are of the form
We have only considered the time until
the first hit. While beyond the bounds of
. Differentiate, yielding
this analysis, my sense is that skip two,
as depicted in Figure 1, is the optimum
and evaluate at a convenient
game playing strategy. This strategy has a place, say, n = 1 .
72
1
1
1
1
1
1
1
1
1
1
Figure 4: A possible laydown of Battleship. This was developed using a spreadsheet to

sum the rows and columns and generate the histogram shown in Figure 5.
Figure 5: Performance of the laydown shown in Figure 4. The ideal distribution

is shown in gray, with the row and column distributions shown in blue
and orange, respectively.
Harrison Schramm (harrison.schramm@gmail.com) is an operations research

professional in the Washington, D.C., area. He is a member of INFORMS and a
Certified Analytics Professional (CAP).
a na l y t i c s
73
Thin k in g A na ly t i ca lly
Electrifying
Figure 1: Where to place substations?
By John Toczek
John Toczek is the senior director
of Decision Support and Analytics for
ARAMARK Corporation in the Global
Operational Excellence group. He
earned a bachelor of science degree
in chemical engineering at Drexel
University (1996) and a masters
degree in operations research from
Virginia Commonwealth University
(2005). He is a member of INFORMS.
74
A new city is being built that will include

20 distinct neighborhoods as shown by the
house icons in the map. As part of the planning
process, electricity needs to be connected to
each of the neighborhoods.
The city has been allocated funds to put in
three electrical substations to service the electrical needs of the neighborhoods. The substations are represented by the three electrical
box icons to the right of the map. Because laying electrical line to each neighborhood is expensive, the placement of the substations on
the map requires careful consideration.
A neighborhood will be serviced by the
nearest electrical substation. A neighborhood
may only be connected to one substation. The
substations may be placed in any cell (including the same cell as an existing neighborhood). The cost of electrical wiring is $1 million
per kilometer. Distances are measured using a
direct line between cells, which are each one
kilometer apart. For example, the distance between cell A1 and B2 is 1.41 kilometers.
Question: What is the minimum cost
required to connect all neighborhoods to
electricity?
Send your answer to puzzlor@gmail.
com by March 15. The winner, chosen randomly from correct answers, will receive a
$25 Amazon.com Gift Card. Past questions
can be found at puzzlor.com.
OPTIMIZATION
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The General Algebraic Modeling System (GAMS) is a high-level
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adapted quickly to new situations. Models are fully portable from
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State-of-the-Art Solvers
GAMS incorporates all major commercial and academic state-of-
GAMS Integrated Developer Environment for editing,

debugging, solving models, and viewing data.
the-art solution technologies for a broad range of problem types.
West Point Academy Scheduler

Since 1802 the United States Military Academy (USMA) at West Point
has trained cadets to become Army officers. Every year USMA schedules
more than 250 courses and examinations for 4,000+ cadets. Each cadet
is given a careful balance of academic, military, and physical education.
Student-centric planning, unique requirements, and a vast catalog of
business rules makes course and examination scheduling a very unusual and challenging problem. Since 2001 USMA has used GAMS webbased models to support their complex scheduling process. Originally
developed on-site by GAMS experts, a GAMS application is now part
of West Points academy management system. This application assigns
courses to students based on a variety of constraints, identifies conflicts, and suggests schedules for each students term-end examinations.
Combined with human intervention, the GAMS application has reduced
a previous scheduling process which required several weeks to the work
of a few hours.
For further information please

contact David Monroe David.Monroe@usma.edu
sales@gams.com
www.gams.com

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Driving Better Business Decisions

january / february 2015

Ins ide story

Prediction: Big year for analytics

finally crested, big data and analytics will

Peter Horner, editor

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BY Glenn Wegryn, CAP

2014 proved to be a winning year for analytics.

more we play in the same sandbox, the

predict-and-decide advanced analytics skills. In 2015, the more established

more recently at Sony Pictures, there will

Communication includes effective use

5. The INFORMS Certified Analytics Professional (CAP) program will

Five more predictions for 2015

3. Automation of modeling as well as

officer at FICO, sees a post-big-data world

the related reporting will be a priority.

in 2015. Predictive analytics and the big

The continued expansion of analytics is