OnAnalytics Fall 2012
OnAnalytics, IBA's online magazine, is designed to communicate Kelley faculty research to a broad audience of business leaders, students, consultants, and other academics interested in analytics. Each article illustrates the use of analytics to better understand and improve decision capabilities in a variety of contexts.
Using Context to Improve Fraud Tests
Joseph Cheriathundam, StoneTurn
Business analytics is increasingly employed in identifying abuses and minimizing losses that result from fraud. One of the challenges in fraud detection, however, is the prevalence of false positives, which can lead to fruitless and disruptive investigations. Joseph Cheriathundam of the StoneTurn financial consulting group outlines a strategy for creating more meaningful fraud detection tests by developing a thorough understanding of the context in which transactions occur.
A Superior Strategy for Predicting Earnings and Picking Stocks
James M. Wahlen
Motivated by skepticism about analysts’ consensus recommendations,researchers set out to craft a superior investment strategy derived from financial statement data. They used a six-signal scoring system to predict future earnings increases and tested their model against consensus recommendations. The researchers’ strategy significantly outperformed consensus recommendations, suggesting that analysts are not making full use of the information available when they create consensus recommendations for investors.
Applied Analytics in the Health Care System
Anwer Khan, Aditya Sane, Vik Wadhwani, and Mark Zozulia, Deloitte Consulting
The enormous amounts of data related to health care in the United States encompass not only direct patient care information but also the activities of health insurance payers, life science organizations, and public health agencies. Anwer Khan, Aditya Sane, Vik Wadhwani, and Mark Zozulia of Deloitte Consulting describe some of the emerging business analytics strategies and applications for traversing through this maze of data to increase efficiencies and patient outcomes.
Unblocking Patient Flow
Kurt M. Bretthauer
The efficient flow of hospital patients between different units of care is not only a crucial element of effective treatment but also an important consideration in conserving resources and managing revenue. This study considers the “blocking” problem that occurs when at-capacity units cannot accommodate patients, causing some patients to remain in a higher unit of care than they require and others to be turned away from the hospital. By creating a simplified and highly accurate model of patient flow, the researchers provide a tool for determining the optimal mix of beds within a hospital's budget constraints and specified management objectives.
Leveraging Data in the Public Sector
Tom Preston, Booz Allen
With annual expenditures of more than $3 trillion, the federal government stands to benefit enormously from the descriptive, diagnostic, and predictive capabilities of business analytics. Tom Preston leads Booz Allen’s Enterprise Resource Planning (ERP) Advisory Services and works on a number of high-level U.S. government projects. Here, he describes some of ways in which the public sector presently implements business analytics, as well as the promising new technologies that offer opportunities to improve government efficiency and effectiveness.
Vehicle Replacement in Humanitarian Operations
Alfonso J. Pedraza-Martinez
Ground transportation is among the most critical factors in delivering international humanitarian aid. In developing their vehicle replacement policies, however, organizations like the International Committee of the Red Cross have relied on manufacturer’s recommendations derived from commercial-sector data. With this study, the researchers examine data on vehicle purchase, use, and sale in the context of humanitarian operations in Afghanistan, Ethiopia, Georgia, and Sudan. Their optimization model reveals that what works for commercial fleets does not necessarily apply to vehicles delivering humanitarian aid.
Digital Analytics: Driven by Search and Social Media
Vaibhav Gardé, FedEx
The field of Web analytics has grown and evolved so rapidly that it has already taken on a new identity as “digital analytics,” emphasizing not only traditional website interactions but also the widespread use of mobile devices and social media. Vaibhav Gardé, a marketing principal in the Interactive Marketing practice at FedEx, describes the current trends in digital business analytics and the exciting new career opportunities they present.
Estimating Consumer Search Costs in Online Markets
Babur De los Santos and Matthijs R. Wildenbeest
The massive amount of data generated by e-commerce offers an unprecedented opportunity to test theoretical models of consumer search behavior. Using data on Internet bookstore browsing and transactions, the researchers discover that the sequential search model favored in the literature does not fit with observed online shopping activity. Searches themselves are in fact rare, as customers tend to visit only one store before making a purchase. When they do browse, the fixed sample size model provides a better fit for their search behavior.