 "By analysing data, companies are in better position to face the future: Prof. Maurizio Poli")
There is a wisecrack in business schools: “If there is no uncertainty and volatility, there is no need for business schools”. Given the lightning speed with which changes are taking place, corporates have very little time to react. Hence, managers have to be adapted at reading the trends to strategise growth. In this situation, data can shed light on these changes, providing vital clues to the companies to be better prepared for the future. However, managers are finding it difficult to decipher the message from billions of data that is generated every day across the world.
Today’s manager need critical thinking skills and should be comfortable with numbers to be effective, says Maurizio Poli, Professor of Quantitative Methods and Director Global Executive MBA at SDA Bocconi, Milan, Italy. While managers are not expected to become a Ph. D in statistics, they are expected to have enough knowledge to interpret results.
An expert on simulation techniques, forecasting analysis, business intelligence, quantitative methods, project management, data analysis, etc, Prof. Poli is the faculty member of Quantitative Methods for a number of SDA Bocconi programmes.
In conversation with Rakesh Rao, Prof. Maurizio Poli emphasises on the importance of combining latest technology (hardware and software) with people having expertise in data analysis for companies to take right strategic decisions.
Is the European economy out of woods? Can we expect to see much better growth in 2014 and beyond?
I think European economy is restarting to grow. There has been a jump in demand for our executive programmes globally, hence I believe that market is moving back to normalcy. Though uncertainty remains in Europe, things are looking up. I am very optimistic about the future.
What are the advantages offered by India to overseas company?
Companies intend to bring know-how and technologies into India, since the cost of manufacturing is low in this country compared to the developed markets. India also has large pool of skilled, English-speaking man-power, which is a driving force for many of the overseas companies to establish their base in the country. It is cost-effective to produce in India, than to import.
However, infrastructure is probably one of the major hindrances in the growth of manufacturing industries in India.
Are European investors and companies more optimistic about India now with the new government in place?
There is a lot of optimism and trust around the new government. There are lot of expectations from the government, which has to take steps to drive the growth in the country.
Today, we are living in highly uncertain times. Given this, how important is for companies to use data to prepare for better forecasting and business plans?
At present, there is lot of volatility and uncertainty in the market. Of course,data can be a valuable tool for companies to take informed decision. More the volatility, less precise will be your forecast. Nevertheless, by analysing data, companies are in better position to understand market conditions, and are well prepared to undertake strategic decisions.
Changes are taking place at lightning speed. With high volatility, the review cycles for companies have drastically reduced. As a result of globalisation, an adverse event in one part of the world can have cascading effect on the business, that too very fast, leaving corporates very little time to react. To prepare for this scenario, the companies have to be equipped with tools for analysing data that can facilitate fast-decision making.
Some experts say that data is not just facts and figures, but it is the lifeblood of the business. Do you agree?
I fully agree. Data are really the way to check, describe and analyse the situation. Many a times, managers or entrepreneurs take decision without analysing the data, which can prove to be wrong. Especially, in the present uncertain market conditions, managers have to dissect and analyse data to take a right decision, otherwise it could be disastrous for the company.
Data is not a solution, but analysing it and using it to make strategically right choices can help companies to improve their business performances. Companies are now more inclined to take decisions based on data, hence they are putting in systems and processes which can enable accurate data capture and analysis.
Companies need to invest not just in technology but, also train employees to use it for optimum results.
Analysis of data is more dependent on ‘quality’, than ‘quantity’. Does that mean companies have to really work hard on getting ‘quality’ data to get their strategies right?
In this era of Big Data, quantity is not an issue, quality has to be good. It is not about having data, but how do you store and link it. What is the use of big data if you are not able to link it properly and put to use for your business operations. Hence, companies have to link internal and external data systematically and put in place processes which can use these data to take right strategic decisions.
How important is the role of technology for companies to solve data challenges and emerge winner?
Technology has been a change agent. Traditionally, CIO was responsible for technology and internal infrastructure. Now we need different approach. We require people to manage technology not only to address internal infrastructure but also to handle and use data.Technology can be a tool to link your internal data (i.e., ERP or SAP system) with external data and analyse it for devising strategies for improving business performances. Also, technology can help collect and analysis data in real-time, thus fasten the decision making process of the company. So, technology can be a game changer for companies.
Are the skill-sets (especially, for handling data) required for executives joining workforce today different than what it was required, say, a decade-ago?
Especially in the areas of sales, marketing, finance, etc. corporates look for people who are adept at data analysis. Many companies are yet to realise the importance of good data analysis process. Those who have realised this have an edge over their competitors since they are in better position to comprehend the situation and make changes or fine-tune their strategies to meet the requirements of changed market circumstances.
While data is available at the click of the button, what is missing is the quality analysis. Good analysis can be achieved by combining latest technology (hardware and software) and people having expertise in data analysis.
What are the challenges faced by companies when they want to use big data to draw future growth plans and strategies? How can they solve these problems?
By investing in right technology and people you can get faster results. Even, in case of blunders, these companies will be in better position to rectify these mistakes and limit the damage.
Most of the people believe that the impact of online medium (web, social media, etc) is only restricted to business-to-consumer (B2C) transaction, but, I believe, even business-to-business (B2B) segment cannot afford to ignore this medium. If some company wants to connect with a supplier, they first check it on Internet. Hence, B2B companies have to understand the importance of online medium and also data mining because the businesses have become globalised.
Innovation is the buzz word. Can data analysis aid innovation?
Data mining and analysis are important for innovation in two ways. First, it can support companies to decipher consumer behaviour and new requirements in the market, based on which they can initiate product innovation. Second, data analysis can also help them understand the feedback of the consumers for their new products and tweak the product specification or feature accordingly. Hence, data analysis is important not just for identifying areas to invest in innovations, but also to make incremental changes in the existing products.
With innovation cycles getting reduced, companies have to keep on churning data to gather useful information for product invention to keep pace with the changing needs of the market.
There is also this whole debate on use of data and individual privacy in the context of digital data. Where do you stand on this ethical argument?
It is a big issue, but also a strange problem. People say they are concerned about privacy, but millions use social networking sites to communicate, update, etc. their personal information. With the number of social media users increasing at a rapid pace due to rise in digitalisation, this is an unavoidable problem. Social media companies are realising it and are taking steps to guard against the misuse of the personal data on their websites. But, this is a complex issue with no clear-cut solution in site right now.
What is the future of data analysis?
Need for quality data analysis is only going to increase with the kind of data explosion happening in the online world. Reports suggest that requirements for data analysts will increase manifold in the next five years. As discussed, it is not just about investing in technologies, but also in employees who can decipher data for companies to use it for devising successful growth strategy.
Today’s manager need critical thinking skills and should be comfortable with numbers to be effective, says Maurizio Poli, Professor of Quantitative Methods and Director Global Executive MBA at SDA Bocconi, Milan, Italy. While managers are not expected to become a Ph. D in statistics, they are expected to have enough knowledge to interpret results.
An expert on simulation techniques, forecasting analysis, business intelligence, quantitative methods, project management, data analysis, etc, Prof. Poli is the faculty member of Quantitative Methods for a number of SDA Bocconi programmes.
In conversation with Rakesh Rao, Prof. Maurizio Poli emphasises on the importance of combining latest technology (hardware and software) with people having expertise in data analysis for companies to take right strategic decisions.
Is the European economy out of woods? Can we expect to see much better growth in 2014 and beyond?
I think European economy is restarting to grow. There has been a jump in demand for our executive programmes globally, hence I believe that market is moving back to normalcy. Though uncertainty remains in Europe, things are looking up. I am very optimistic about the future.
What are the advantages offered by India to overseas company?
Companies intend to bring know-how and technologies into India, since the cost of manufacturing is low in this country compared to the developed markets. India also has large pool of skilled, English-speaking man-power, which is a driving force for many of the overseas companies to establish their base in the country. It is cost-effective to produce in India, than to import.
However, infrastructure is probably one of the major hindrances in the growth of manufacturing industries in India.
Are European investors and companies more optimistic about India now with the new government in place?
There is a lot of optimism and trust around the new government. There are lot of expectations from the government, which has to take steps to drive the growth in the country.
Today, we are living in highly uncertain times. Given this, how important is for companies to use data to prepare for better forecasting and business plans?
At present, there is lot of volatility and uncertainty in the market. Of course,data can be a valuable tool for companies to take informed decision. More the volatility, less precise will be your forecast. Nevertheless, by analysing data, companies are in better position to understand market conditions, and are well prepared to undertake strategic decisions.
Changes are taking place at lightning speed. With high volatility, the review cycles for companies have drastically reduced. As a result of globalisation, an adverse event in one part of the world can have cascading effect on the business, that too very fast, leaving corporates very little time to react. To prepare for this scenario, the companies have to be equipped with tools for analysing data that can facilitate fast-decision making.
Some experts say that data is not just facts and figures, but it is the lifeblood of the business. Do you agree?
I fully agree. Data are really the way to check, describe and analyse the situation. Many a times, managers or entrepreneurs take decision without analysing the data, which can prove to be wrong. Especially, in the present uncertain market conditions, managers have to dissect and analyse data to take a right decision, otherwise it could be disastrous for the company.
Data is not a solution, but analysing it and using it to make strategically right choices can help companies to improve their business performances. Companies are now more inclined to take decisions based on data, hence they are putting in systems and processes which can enable accurate data capture and analysis.
Companies need to invest not just in technology but, also train employees to use it for optimum results.
Analysis of data is more dependent on ‘quality’, than ‘quantity’. Does that mean companies have to really work hard on getting ‘quality’ data to get their strategies right?
In this era of Big Data, quantity is not an issue, quality has to be good. It is not about having data, but how do you store and link it. What is the use of big data if you are not able to link it properly and put to use for your business operations. Hence, companies have to link internal and external data systematically and put in place processes which can use these data to take right strategic decisions.
How important is the role of technology for companies to solve data challenges and emerge winner?
Technology has been a change agent. Traditionally, CIO was responsible for technology and internal infrastructure. Now we need different approach. We require people to manage technology not only to address internal infrastructure but also to handle and use data.Technology can be a tool to link your internal data (i.e., ERP or SAP system) with external data and analyse it for devising strategies for improving business performances. Also, technology can help collect and analysis data in real-time, thus fasten the decision making process of the company. So, technology can be a game changer for companies.
Are the skill-sets (especially, for handling data) required for executives joining workforce today different than what it was required, say, a decade-ago?
Especially in the areas of sales, marketing, finance, etc. corporates look for people who are adept at data analysis. Many companies are yet to realise the importance of good data analysis process. Those who have realised this have an edge over their competitors since they are in better position to comprehend the situation and make changes or fine-tune their strategies to meet the requirements of changed market circumstances.
While data is available at the click of the button, what is missing is the quality analysis. Good analysis can be achieved by combining latest technology (hardware and software) and people having expertise in data analysis.
What are the challenges faced by companies when they want to use big data to draw future growth plans and strategies? How can they solve these problems?
By investing in right technology and people you can get faster results. Even, in case of blunders, these companies will be in better position to rectify these mistakes and limit the damage.
Most of the people believe that the impact of online medium (web, social media, etc) is only restricted to business-to-consumer (B2C) transaction, but, I believe, even business-to-business (B2B) segment cannot afford to ignore this medium. If some company wants to connect with a supplier, they first check it on Internet. Hence, B2B companies have to understand the importance of online medium and also data mining because the businesses have become globalised.
Innovation is the buzz word. Can data analysis aid innovation?
Data mining and analysis are important for innovation in two ways. First, it can support companies to decipher consumer behaviour and new requirements in the market, based on which they can initiate product innovation. Second, data analysis can also help them understand the feedback of the consumers for their new products and tweak the product specification or feature accordingly. Hence, data analysis is important not just for identifying areas to invest in innovations, but also to make incremental changes in the existing products.
With innovation cycles getting reduced, companies have to keep on churning data to gather useful information for product invention to keep pace with the changing needs of the market.
There is also this whole debate on use of data and individual privacy in the context of digital data. Where do you stand on this ethical argument?
It is a big issue, but also a strange problem. People say they are concerned about privacy, but millions use social networking sites to communicate, update, etc. their personal information. With the number of social media users increasing at a rapid pace due to rise in digitalisation, this is an unavoidable problem. Social media companies are realising it and are taking steps to guard against the misuse of the personal data on their websites. But, this is a complex issue with no clear-cut solution in site right now.
What is the future of data analysis?
Need for quality data analysis is only going to increase with the kind of data explosion happening in the online world. Reports suggest that requirements for data analysts will increase manifold in the next five years. As discussed, it is not just about investing in technologies, but also in employees who can decipher data for companies to use it for devising successful growth strategy.