Communications of the ACM

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. 4

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 impact revenue.

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. 7 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 as “controlling.”

Survey Methodology

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 m?doid=3274277&picked=formats.

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. 20

The HR function is primarily responsible for managing and rationalizing employment relationships through talent management1 and designing and overseeing performance appraisals. 2 Major companies (such as Capital One and Dow Chemical)