have used sophisticated simulation to
better understand what will be required in terms of talent.
1 Created during World War I, the “merit rating” system—tracking past performance
through numerical scores—was developed to identify poor performers and
used by 60% of U.S. companies by the
start of World War II, a number that
was closer to 90% in the 1960s.
2 HR systems have traditionally used information concerning workers who are employed (as well as those not hired),
hours worked, pay collected, and worker performance. More recent examples
of HR analytics include workforce forecasting, human capital-investment
analysis, and talent-value modeling.
Operational priorities are often defined in terms of cost (such as productivity, capacity utilization, and inventory
reduction), quality (such as reliability,
durability, and serviceability), delivery
time, and flexibility.
18 Analytics is widely employed in the operations function;
for example, anomaly analysis and proactive notifications can help avoid service outages; quick search across structured and unstructured data can help
improve mean time to repair; supply-chain network optimization can help
identify supply chain bottlenecks and
support route and truckload optimization; and demand planning can help
analyze customer segments in terms of
channels, brands, and products down
to the stock-keeping-unit level to develop models that shape demand and
In summary, various analytics applications are finding increasing use in a
variety of business functions. In order
to understand the current and future
use of analytics in these functions, the
next section defines managerial work
in each function consistently.
In managerial work. Managerial
work in business functions is often
conceived as being multi-dimensional.
6, 7 One characterization of managerial work differentiates among planning, organizing, and controlling.
Preventing managers from “
uncritically extending the present trends into
the future,” and “planning”—the first
dimension—refers to integrating what
the business is, what it will be, and
what it should be. The “implementing”
dimension refers to day-to-day organizing and daily “programming” activities. Over half of a manager’s time
is spent on this dimension, making it
central to managerial work.
8, 13 Finally,
the process of work needs to be controlled, implying controls need to be
embedded with respect to such aspects
of performance as quality and efficiency; this dimension is often referred to
Within each business function, we
identified corresponding managerial
tasks in three dimensions of managerial work: planning, implementing,
and controlling. For example, to “
develop product and market forecasts” is
a planning-related task in the marketing function. We asked one manager
in each function—finance, marketing,
HR, and operations—to validate the
managerial tasks for comprehensiveness. All managerial tasks we identified
in the four functions are outlined in the
online appendix “Managerial Work in
Four Functions,” dl.acm.org/citation.cf
For each managerial task, the survey
respondent—a finance, marketing, HR,
or operations manager—could choose
one or more of the following types of
analytics applications currently in use
for conducting that task: none, static
reports/interactive dashboards, descriptive analytics, predictive analytics,
prescriptive analytics, and big data analytics. None indicated analytics was not
used for that managerial task. They also
indicated their future use of the various
analytics applications for each task.
A total of 197 individuals responded
to the survey from the four functions;
49 HR, 49 finance, 49 operations, and
50 marketing. Respondents had, on
average, 7. 9 years of work experience
in their current position and 15. 3 years
forms and analyze financial targets.
Finally, financial forecasting and modeling rely on advanced analytics, as in,
say, profit-optimization capabilities
that can help gauge profitability of different strategies. A 2011 research article from http://www.cfo.com/ reported
deficiencies in current uses of analytics
in finance, with approximately half of
231 companies surveyed in the U.S. reporting being less than “very effective”
at incorporating information for strategic and operational decision making.
The marketing function has a long
history of systematic use of data;
for example, A.C. Nielsen measured
product sales as early as the 1930s,
geo-demographic data has been used
since the 1970s, scanner panel data
emerged in the 1980s, CRM software
systems have been used since the
1990s, and user-generated content
(such as online product reviews and
blogs) in the 2000s produced large volumes of data.
19 In 2004, Facebook pioneered an era of social network data,
while smartphones with GPS capabilities (in 2007) prompted a flood of con-sumer-location data. With granular
data, the marketing function increasingly employs analytics to develop and
maintain customer relationships, personalize products and services, and
automate marketing processes in real
time, as through, say, recommendation systems and search marketing.
More recently, images have been analyzed to classify facial features of models in advertisements.
The HR function is primarily responsible for managing and rationalizing employment relationships
through talent management1 and designing and overseeing performance
2 Major companies (such
as Capital One and Dow Chemical)
Table 1. Survey respondents ranked by organization revenue.
Large-size organization More than $10 billion 34 36%
$5 billion–$10 billion 10
$1 billion–$5 billion 26
Medium-size organization $500 million–$1 billion 17 38%
$100 million–$500 million 21
$50 million–$100 million 15
$10 million– 50 million 22
Small-size organization Less than $10 million 43 22%
Do not know 9 5%