Geeks Make A Difference

I’m on my way home from the INFORMS Practice Conference in Orlando. A subtitle for it might be “Geeks who make a difference.” The meeting is a celebration of operations research (OR) and its application to organizations and decisions. If you’re not familiar with OR, it’s probably one of the oldest forms of analytics, although its practitioners are generally not big on marketing their work. Its primary tools are optimization, simulation, and other decision-focused tools such as decision trees and game theory. There are many types of OR applications, but logistical optimization, revenue management, and forecasting are typical.

It’s a great conference if you want evidence that analytics matter to performance. There are literally dozens of examples of the use of OR in business and government. Every year at the conference a prize is awarded to the most outstanding example of OR practice; this year the winner was Indeval, a Mexico-based securities settlement processor. The highlight for me of the awards dinner was sitting next to Tom Cook, who not only pioneered a lot of OR work in the airline industry, but also realized the need to market OR and led the campaign called “The Science of Better.”

Some other themes of the conference included:

  • Soft skills and communications: there was a pre-conference workshop on soft skills, and some of the smartest OR practitioners at companies like Intel and Schneider gave presentations on communications-oriented analytical approaches. While there were some sessions like “Stochastic Forecasting of New Product Diffusion with Adherence to Historical Data,” many of these quants are focused on how to engage non-quants in their findings.

  • Big analytics groups: HP has 800 at its analytics shared services center in Bangalore. Disney has 160 in its Revenue Management and Analytics practice. IBM had people all over the conference between its software, services, and research groups that address analytics.

  • Is OR analytics, and vice-versa?: Though OR has typically addressed only a fraction of analytical approaches, it’s clearly important, and INFORMS is clearly one of the more influential analytical associations. Members are wondering how they relate to the surge of interest in analytics. The association has engaged a consultant to assess the market for analytics. Tom Cook said he thinks that instead of using the “OR” label, the association should expand its focus to “analytics,” and I agree.

  • Most prominent organizations: There are several organizations that are Practice Conference perennials, including Boeing, Chevron, Intel, P&G, Schneider, and UPS. But you had to be impressed this year with the OR activities at Disney. SVP of Revenue Management and Analytics Mark Shafer gave a keynote address, and the company is clearly doing impressive analytical work. We’ll do an IIA Leading Practice Brief soon on Disney’s revenue management work. Other Disney presentations addressed storytelling through simulation, golf course revenue optimization, restaurant inventory optimization, and the use of online search terms to predict demand. Shafer said that his analysts are all over the company, although the smallest number is in the theatrical business unit. Someday I suspect there will be an INFORMS Practice Conference presentation by Disney on successful prediction of movie revenues before the movies are made.

If you know or care about OR techniques and their application, you need to attend this conference. And INFORMS is a very useful organization. I hope it expands its mission to encompass analytics in general.