Bernardo M. Villegas
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The Rise of Business Analytics (Part 1)

          In a recent Industry-Academe Business Analytics Conference held at the University of Asia and the Pacific, I was asked to address the topic of “Developing the Business Analytic Talent.”  A feeling of dejavu brought me back to the 1950s when I was pursuing a career in accountancy by taking the course in accounting at the School of Commerce at the then De La Salle College in tandem with a humanities degree under the LIA-COM program that since then has produced many top business professionals for the Philippines.  At that time, accounting was the preferred specialization of top high school graduates.  I belonged to the generation of accounting graduates that eventually rose to the top of Philippine industrial, commercial and financial enterprises—not only in the Philippines but all over Southeast Asia, especially in Indonesia, Singapore, Malaysia and Hong Kong.  It is a well-known fact that the leading accounting firm of the Philippines—SGV—created the accounting industry in Indonesia and to a lesser extent in some other Southeast Asian countries.  Filipino accountants then and now are still among the most appreciated professionals in our neighboring countries.

         In the second decade of the Third Millennium, we are now witnessing the rise of another specialization in business that is attracting some of the best and brightest high school graduates.  One of the speakers in the conference at UA&P, Dr. Brenda Quismorio who heads the BSBA Business Analytics specialization program of UA&P, clarified that the graduates of this innovative program are deemed to be the analytical semi-professionals who will “apply the models and algorithms developed by the analytical professionals on behalf of the rest of the business.  They may be sophisticated quants in their own right and may develop straightforward applications on occasion, but their primary role is to apply analytics to business problems for routine or specialized decision making” (quoted from Davenport and Harris, “Analytics at Work:  Smarter Decisions, Better Results, 2010).

         Mr. Benedict Hernandez, Managing Director and Service Delivery Operations Lead for Accenture Operations in the Philippines, identified some of the areas in which business analytics can be applied to business problems.  In his Keynote address entitled “The Future Rebuilt”, he stressed that analytics is the fuel of the digital world.  With the explosion of data that have been made available through digital technology, data analysis has acquired greater prominence than mere financial accounting that used to be the basis for financial analysis.  As Mr. Hernandez mentioned in his talk:  “With smart technologies providing granular insights about consumers, business analytics can unleash opportunities for us to redesign human experiences and create services that can change people’s lives.  Increasingly, business analytics is changing healthcare, government, transportation, education and other industries and sectors.”  These changes are creating opportunities for Filipino professionals who are specializing in this new field of business analytics.

         Business analytics should be distinguished from business analysis which is defined in Wikipedia as “a research discipline of identifying business needs and determining solutions to business problems.  Solutions often include a software-system development component, but may also consist of process improvement, organizational change or strategic planning and policy development.  The person who carries out this task is called a business analyst or BA.”    The responsibilities of business analysts can generally fall into the following categories:

         --To investigate business systems, taking a holistic view of the situation.  This may include examining elements of the organizational structures and staff development issues as well as current processes and IT systems.

         --To evaluate actions to improve the operation of a business system.  Again, this may require an examination of organizational structures and staff development needs, to ensure that they are in line with any process redesign and IT system development.

         --To document the business requirements for the IT system support using appropriate documentation standards.

    We can conclude that the core business analyst role may be defined as an internal consultancy role that has the responsibility for investigating business situations, identifying and evaluating options for improving business systems, defining requirements and ensuring the effective use of information systems in meeting the needs of the business. Business analysis as a discipline includes requirements analysis, sometimes also called requirements engineering.  It focuses on ensuring that the changes made to an organization are aligned with its strategic goals.  These changes include the modification of strategies, policies, business rules, processes, and information systems.

         In contrast, business analytics is defined as the practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis.  Business analytics is used by companies committed to data-driven decision making. It is a branch of data analytics in general, which is the science of examining raw data with the purpose of drawing conclusions about that information.  Data analytics is used in many industries to allow companies and organizations to make better decisions and in the sciences to verify or disprove existing models or theories.  In short, business analytics is data analytics applied to business.

         It is very important that those who will be designing the curricula and training programs for the future practitioners of business analytics do not commit the same mistake of the accounting or CPA programs of the  last century.  From the very beginning, it should be kept in mind that the business analyst in the two senses defined above cannot have a narrow training in tools and techniques.  He or she must be exposed to, not only all the business functions of marketing, finance, production management, people management, etc., but also to the other human disciplines of economics, political science, sociology, anthropology, philosophy etc., that have a lot to say about organizational structures, strategic planning, risk analysis, requirements engineering, scoping and defining new business opportunities, etc.  The undergraduate curriculum should not be overloaded with technical subjects but should have a great deal of liberal arts content, very much like the LIA-COM program of De La Salle.  I still remember being involved in a management development program conducted in-house at SGV in the 1970s in which the accountants—who were too tool-oriented in their undergraduate education—were exposed to Homer, Dante, Shakespeare, Aristotle, Aquinas, etc. as well as to other philosophy, literature, history and other liberal arts subjects to broaden their minds and to help them interrelate the various sciences and arts to one another.  (To be continued).