How Analytics makes Operations Research the next big thing

Engineers enjoy laughing at buzzwords that they don’t sell. Despite that, some buzzwords represent important paradigm-shifts. They might not propose any technical novelty but they do contribute to empower our methodologies by valuating the presence of certain skilled specialists in large scale projects. Analytics is one of them: it represents the application of IT to support business decision processes. This post aims at showing that its existence can help leveraging O.R. practice in the industry.

The O.R. filet: there is no such thing as a free lunch!

Who did not wondered about that dream job in which all you have to do is what you do for fun? Suppose that you are an O.R. analyst hired by a company which provides you perfect data and a well-defined problem that you know how to tackle. And that’s not all: they do not underestimate the amount of effort that the project will demand from you and your co-workers. In such a perfect world, you just pick that traveling salesman or bin packing problem with that idealistic instances and expend some time experimenting your favorite techniques until you get satisfied with the results. You would probably finish your work very early and have the rest of the day to share a beer and French fries with your friends at the bar (if that happens in São Paulo).

Back to real life realm: from problem solver to problem finder

Unfortunately, there is a huge gap from being hired until possessing that well-defined problem and that perfect data. That is, if you manage to reach that point. If companies had already all of that figured, they would probably have gone beyond with an in-house approach to their decision problems. In such case, the benefit of an external OR consultant work would be often quite shy. Hence, one must mind that the work is not only about solving an optimization problem but rather helping the company to understand what the problem is and how to collect data to properly solve it.

Some interesting discussions about those issues have been recently raised by a couple of OR professionals called Patricia and Robert Randall on their blog Reflections on Operations Research. They have a blog post about data cleanup and two other posts about understanding what is the right solution for the client’s problem (by the way, I’m waiting for the promised sequel – check the first and the second posts).

And then the O.R. team becomes the Analytics division…

What I exposed before reflects the change that is going on in industry, including my workplace. The O.R. team is no longer called once someone “magically” finds an optimization problem that must be tackled within an IT project. By “magic”, I mean that someone working in a project knew about O.R. by chance and decided to invite an O.R. analyst to check it. Instead of that, new projects are supposed to pass through a preliminary assessment of the need of an O.R. approach. The analytics professional comes into scene to complement the team of software architects, software engineers, data modelers, project managers and stakeholders of any non-ordinary project. The role of that professional is to understand how the system can be used to support business decision-making and define whether statistics, data mining or operations research tools are required to accomplish that. Such assessment avoids that something pass uncaught or misunderstood and, of course, creates lots of interesting opportunities for O.R. professionals both at the assessment and later at the project development phase. As a matter of fact, we have plenty of people ready for the job, as I told last month in a post about O.R. job market in Brazil.

A gain-gain scenario: let’s spread the word about Analytics to empower O.R.!

An Analytics assessment of strategic projects would endorse a broader application of Operations Research, what usually means maximizing profit and reducing costs. Moreover, there is a huge workforce available to the demand that such paradigm-shift would incurs, including me and probably you. So let’s make that happen!

This post is my contribution to the INFORMS’ blog challenge of May: O.R. and Analytics. The INFORMS’ blog challenge consists of a monthly topic about O.R. that is proposed at the INFORMS’ blog. If you happen to write about the topic of the month, send an e-mail to them to get your post mentioned.

Brazilian IT (and OR) salaries, and our rickshaw-like cars

Contemporary economy and the rickshaw-like cars

The first elected president after the military dictatorship in Brazil was quite a controversial figure. He was responsible for the first steps towards opening our economy to free trade. By that time, he argued that the Brazilian cars were like rickshaws. Still, two decades after, I bought a brand new car from FIAT whose floor gets wet inside when it rains. Nevertheless, things have been changing quite a lot due to what he and his successors did.

IT demand and IT paycheck

Due to a number of favorable conditions, our economy is growing faster now. That implies a greater demand for qualified workers, what includes IT experts. However, both Brazilian and foreign companies are reacting as if a free lunch was still possible: they complain about the scarcity of high skilled workers but also say that the available professionals are asking too much to be hired, as told on a report of Info magazine. It might be true that many people are earning more than their technical skills deserve, but that only happens if the recruitment process is scant. Besides, such higher salaries only exist because some employers sensed that IT has a great value in their business. Such conclusion became crystal clear to me when I saw a debate among three professionals in a class of optimization in finance at IME-USP. Two of them were agreeing on that common-place complaint when they were interrupted by the third, which has just arrived in Brazil to start a branch of his investment firm. In his opinion, technical skills are not as valued in Brazil as interpersonal skills are, which means that a salesperson earns a lot more than those that make things work behind the scenes.

What about OR?

I wish I could say that things are better for OR analysts here, but that is not often the case. Albeit the fact that our profession demands higher academic degrees and the availability of technical resources is not so generous when compared to what is offered to software development, the relation between workforce offer and market demand is smaller. In São Paulo state, I would guess that there are as many specialized consulting firms to work in as there are good degree programs involving OR, which means that those firms can bargain salaries very easily. Instead, I think that it is better to be an OR specialist outside such consulting firms, moving towards the end user or bigger software houses. Doing that, you can be considered as an IT professional that is specialist in strategic software, which alone means a better paycheck. Of course, there is yet another option: starting your own consulting firm.

Is it the end of “rickshaw-like salaries”?

For the good of our profession and all those which are very specialized, things have been changing a lot. Brazilian companies like Petrobras and Vale have been investing a lot in research institutes as well as on hiring and valuating high skilled professionals. Besides, foreign companies like DuPont, GE and IBM have decided to create research units here, whilst other companies like Google are developing their products here (as opposed to simply adapting them as global manufactures have been doing for ages). I read somewhere that there are two times more PhDs working outside than inside the universities in the USA. According to a report of Estado, our balance in Brazil is quite the opposite right now but there is a clear trend that this is changing. I hope that those companies used to how things were in the old times starting considering a new approach for their own good. With a higher demand and better recruiting, it seems that unfair “rickshaw-like salaries” in Brazil might be about to end.