A Master of Business Administration (MBA) is highly regarded as an essential qualification for executive managers and entrepreneurs. It has developed over time to provide a deep understanding of core business functions such as finance, operations and strategy. But what about data-driven leadership? With most of the data in the world created in the last few years, most MBA courses are yet to catch up and incorporate data science in their studies.
Meanwhile, many large organisations are hiring teams of data analysts and data scientists at an unprecedented rate. To manage these teams and apply their potential to business strategies, today’s business leaders need an MBA qualification with a data analytics focus.
Why is data-driven leadership important?
Executives across all areas of business have access to more data than any of their predecessors ever had, which is very good news. In our modern, low-growth economies, a data-driven business strategy can give us a much-needed edge over our competitors.
One company employing a data-driven business strategy is TransUnion - an international credit reporting company that provides personalised credit monitoring to over 12 million customers on a monthly subscription. Working with a team of data scientists, Chief Marketing Officer Ken Chaplin has found that he can show one less advertisement to each customer while retaining a 95 per cent conversion rate. That might be good news for the customer, but it’s even better news for TransUnion who were able to reduce ad spend by 12 per cent.
Mr Chaplin points out that the real power in data is in analysing specific audience segments to work out where and when to spend each additional dollar. He’s used the insights from this analysis and worked with his team to identify the most effective method of communication in each segment. From there he can determine how to apply his investments so they will get the highest returns.
Telstra is another company using big data as part of a data-driven business strategy to identify network issues before they occur. Rather than the traditional method of responding to an outage, real-time network data is compared against baselines built on historical data. Chief Technical Officer Vish Nandlall explains that the warnings triggered by lower network performance improve their technical response as well as their customer response in the call centre.
Telstra is the market leader in Australian digital communications, but as businesses like Kodak and Nokia have shown us, market leaders are never immune from competitors. With Mr Nandlall’s data-driven business strategy Telstra is taking active steps to maintain its position at the top of the pile.
Traditional MBA vs MBA with a data analytics focus
The MBA has long been accepted as a prerequisite for executive management and business leadership roles. It’s the formal study of business and built on core business functions such as management, finance, marketing, HR, strategy and operations. As a benchmark for executives, many traditional MBA courses are quite similar in their content, approach and outcomes.
In contrast, the MBA Global at JCU has a data analytics focus that capitalises on the potential that big data offers in business leadership. It’s the MBA that enables us to make more effective data-driven decisions. While covering the traditional core business functions, it also has specific courses in data analysis and modelling. These provide skills in interpreting business statistics and building decision making models. Like TransUnion’s CMO, we can gain insights and decision-making tools to create effective business outcomes.
The traditional core business functions are providing ever-increasing amounts of data and information. An MBA with a data analytics focus provides leaders with an understanding of the technologies and analytics to use this data effectively in a data-driven business strategy.
Benefits of an MBA with a data analytics focus
All businesses have a goal, even if it’s simply to make more money this quarter than we did last quarter. Traditionally, data in the form of Profit and Loss, among other accounting statements, has been used to measure success against those goals. In the age of big data, detailed knowledge of total revenue, profit and costs are no longer enough to make effective business decisions. With so much more data available today, it’s possible to make very specific and much more improved business decisions.
An MBA with a data analytics focus gives executives the ability to get very detailed in goal performance measurements. In the same way that TransUnion’s CMO found cost savings by serving up one less ad to each customer, we have the potential to use specific data to identify unique opportunities within our business. When used successfully, big data can provide an overview with trends and predictions, then enable us to dial into segments and niches to identify small actions that can stack up into great results.
One of the key motivators for MBA study is a desire to develop high-performance business strategies. Being able to take an aerial view of core business functions, with a deep understanding of their strategic importance, is essential for senior business executives.
Those who gain an MBA with a data analytics focus will be able to go much further in developing a data-driven business strategy – a strategy that ranges from high-level goals, right down to individual processes and product features.
Another key benefit of an MBA with a data analytics focus is timeliness. Rather than reviewing strategy after the event, data can actually be used in real-time to compare performance to baselines and predict outcomes. Like Telstra’s CTO we can implement strategies that use data to alert us to variances in performance – before they cause problems. How we respond to those inconsistencies also provides data, which can be fed back into the data-driven business strategy for further refinement.
The future proof MBA
There are currently about 33 zettabytes (ZB) of data in the world (a zettabyte is equal to a trillion gigabytes). By 2025 the amount of global data is predicted to increase to 175 ZB. A lot of that growth is expected to come from devices connected to the Internet of Things (IoT) and provide even more real-time data. In fact, each of us can expect to have 5000 digital interactions per day in 2025, compared to the paltry 500-800 that we experience daily in 2019.
What this data tells us is that data-driven business strategies will become the new norm. So, an MBA with a data analytics focus is a future-proof qualification.
Learn more about JCU’s MBA Global - Get in touch with our Enrolment team on 1300 535 919.