This is the fourth story in our series on MISB Bocconi. We spent time in conversation with Professor Maurizio Poli. Prof. Poli is a faculty in the area of Quantitative Techniques with SDA Bocconi in a number of programmes, including their full-time MBA. His expertise and areas of interest range from Modelling, Simulation Techniques, Forecasting Analysis, Business Intelligence, Project Management and Data Analysis to Quantitative Instruments for financial planning and valuation. He is also the director of the global executive MBA programme. We spoke to Prof. Maurizio about a number of topics - ranging from the importance of statistical techniques in modern-day business, to the steps that students should follow to make a successful career in analytics. Below are the excerpts of the conversation...
How is the experience of teaching students from different nationalities, and imparting teaching in different countries? What differences did you observe?
It’s really incredible. I started teaching when I was very young, around Europe – Eastern Europe. Then I went to the US, and now I am the director of the Global Executive MBA and I am part of the faculty here – it’s an incredible experience. The classes are multicultural and I personally learnt several things during these classes. For e.g. – Indian students are really very very committed. For a professor that’s a big opportunity because you can give them a lot of work and they will do it completely. US students are much more focused on problem solving – if they can solve the problem in a short way, they will.
Sometimes you have to learn and adapt. In undergrad, usually statistics is not the favourite subject for anyone. So to make it more interesting and interactive I used to cold-call people. In some cases you have fun because they are not able to answer, in some cases they give brilliant answers. In one case I was taking a class and I cold-called this girl from South Korea and she started crying, immediately. I was feeling so embarrassed. In the end she came to me saying that she was embarrassed because this was the first time she was the centre of attention of more than a hundred students. There I understood the differences in culture. For a European and an American and an Indian, when you ask a class of international MBA students, you will get an answer from US and Indian students. There are some cultures that don’t like to show themselves. Cold call in that case is very dangerous.
What are the traits you would like to see in a good student? What skills would you like to impart (and like the student to imbibe) from your courses?
Willingness to learn and curiosity – these two traits can summarize everything required in a good student. All the other traits are secondary and linked to this. If you are curious and willing to learn, you can pass any difficulty you have. You are poor in communication? If you want to learn, you will have a course in communication, and the same holds for your technical skills. If you want to learn and you are curious, as a professor I will definitely see the difference.
I would like to my students to imbibe the idea that numbers are important, and analysing numbers is important for your business. In 2014, a manager cannot be effective without a good comfort level with numbers. I am not expecting that they become a Ph.D in statistics. I am expecting enough knowledge to interpret results. You cannot always put yourself in the hands of others, in the hands of a consultant – you need critical thinking skills.
How do you think the higher education industry will evolve in response to technological advances like MOOCs from Coursera?
MOOCs are a reality – we started 2 courses as a partner with Coursera. I recently read an article titled ‘Why Most Business Schools Will be Dead in 2020’. I also do not agree to this view. I believe that both MOOCs and business schools must evolve - and I'll tell you the reason why -
I was talking with participants in Los Angeles for our executive program. We meet once every two months, and they were of the opinion that this experience of meeting face-to-face cannot be replaced by a MOOC. Of course, what the MOOC can do is it can give you the basic knowledge you need before you come to class. That’s why I say the B Schools must change – they must change the way they deliver content. The basics should be delivered by a cheaper online course.
Do you think data mining, machine learning and statistical artificial intelligence techniques will eliminate jobs?
Definitely not. I don’t think that machine learning and AI techniques are going to eliminate jobs. Of course, technological support and technologists are very important in analysing data, especially because now you have to be very fast in analysing data, but I strongly believe that the contribution of know-how from the people will absolutely make the difference, so I believe in the exact opposite – technology will suggest the right people to hire, the right know how to buy, but in itself it is not going to eliminate jobs. Companies like IBM and Infosys may have said that they are going to hire fewer people because they have built some software, but on the other hand, more and more people are going to be doing the work of analysing data – so if you can’t work for IBM, you can work for some other company in data analysis, you could be working for a company that 2 years ago was not thinking about having a person doing data analysis.
In which industries do you think statistical techniques and Big Data will be most useful (i.e. which industries can students look forward to gain employment)?
Big Data – the immediate association is web-based B2C companies. But even in B2B, there is a huge need for data analysis, probably not necessarily Big Data, but a large amount of data. Every company has a lot of data to analyse, but I don’t think all of them are analyse them effectively. The most likely companies for using statistical techniques are web-based like Google and Amazon, but even small start ups in Italy are ramping up – I just received many emails from my ex-students in the last year – they are working in these startups – asking if you have any students who are good with analytical skills. The B2C companies probably feel the need immediately, B2B do not see the need immediately, but the data is there and it needs to be analysed.
Please don’t think that the only way out and the only way to have a fantastic career is starting with finance. Let’s stop with the myth that Finance as the end of every MBA. There are many careers you can start without starting with finance. The feeling in our B school – the full time MBA at SDA Bocconi is that everybody wants to end up in London and work in finance. Do you think this is a long term decision by students? Do you think private equity and investment banking can pay high level of salaries to everyone for a very long period? Is this a good choice in the long run?
What are the benefits and pitfalls of using the statistical and modelling techniques to solve problems in marketing, finance (valuation etc)? How can the pitfalls be avoided?
You cannot avoid the problems completely. The real goal of a model is not to give you one number. It is to give you more understanding of the problem. E.g. for a capital budgeting model, the objective is not to get the NPV. The goal is to find out which is the most important variable influencing the NPV. What is the level of uncertainty regarding the NPV. If you interpret statistics and modelling this way, modelling is useful. Otherwise you will go with the saying “Lies, Damned Lies and Statistics”.
What does a company need to do to ensure that its Big Data or Analytics Initiative turns into a success and does not turn out to be an expensive waste?
I think the decision they have to make is to include this initiative as part of their strategic plan. In many cases companies think that analysing data is an activity that comes on the side. There is the business, and there is the analysis of data. And so they invest, in technology and in people, - they have nice tools, but they don’t achieve great success. But if you start your data analysis division and let it be a part of your company rather than being an offshoot, and let it be part of your strategy. You can use your iPhone for having fun, or you can do your iPhone for doing work – this is also the same.
What is your advice to an MBA grad wanting to make a career in analytics? Do you think an MBA is necessary to make a career in analytics?
It’s a complicated answer. The first step to starting a career in analytics is to strengthen your fundamentals – choose a good Masters in Business Analytics. I strongly believe in having a strong background in both technical and the business side. I have been a data analyst, but I have a degree in Economics. I have always invested in this side of my education - the business side, and not just data analysis. Even if you want to start a career in business analytics, you need to have a way to get a 360-degree view of the business. Otherwise you will just be a geek crunching numbers. If you don’t understand the problem, the real reason why a company is doing something, then you will find things difficult.
A huge part of my career has been based around the fact that I was a software programmer, I was writing code, but I had a degree in economy. I was able to talk to those who had a problem, and I was able to talk with the ones who were going to solve the technical problem – that was my career. If you are a business analyst and you have a Ph.D in statistics, but you don’t understand why people are doing this analysis – financial analysis or marketing analysis, then the final result will be poorer than if you do. You remain a number cruncher, I don’t think you are going to do a brilliant career in business analytics, because it is no longer data analysis, its business analysis.
Companies are hiring experts who can analyse data, but what they want to build is businesses. In my opinion, you need both. You can start with an MBA – a general management course, and then make an investment in data analysis skills. You can do the reverse as well. That’s why we have good success with our executive MBA (specially in Italy) as well as the global executive MBA. They are attended by a lot of engineers, technical experts – who after 5,6,7 years realize that they need a broader perspective.
What are the main objectives of the statistics course in India by MISB Bocconi?
The graduates are going to be managers. And in 2014, you cannot be an effective manager if you don’t understand a bit of data. None of them will become a Ph.D in statistics with this course. But you can’t be fully dependent on others for analysing data. The young manager of 2014 should be able to (when I started to work, all managers had a secretary – to write letters for them etc). Now – people are using word processors and powerpoint to make their own letters. You cannot be a manager without being comfortable with numbers.
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Comments
Kunal
Kozhikode - How does an NPV analysis benefit us here. That the NPV is positive over a lifetime is no justification of a high fee. Look into any education system in the world and into any discipline the lifetime NPV is bound to be positive. Infact even if the fees were 1 crore the NPV would still be positive. Does it mean the fees could be hiked to 1 crore? I firmly believe that cost should be the firm driver behind fees. If the IIMs believe that they need to charge higher because they think it will help them pay their faculty more and retai top professors then bingo - go for it. But we really need to see if this is happening. I don't think it is happening. I understand that higher fees has given the IIMs more autonomy as govt subsidy has come down but people ( and by people I don't mean the participants here) should really file an RTI and find out the expenditure and then how much revenue is being obtained out of the fees. I still feel the IIMs could lower the fees by 20% - an personal opinion though given that i have read one RTi filed which came an IIM some headroom for reduction. Thanks, Kunal
5 Aug 2012, 01.36 PM
Rohit Kumar
By making an argument only looking at ROI, the team from IIM Kozhikode has taken a very myopic view. Comparing ROI vis-a-vis Schools like Harvard etc. is not a great comparison because there is a lot more that BSchools like Harvard and Stanford offer in terms of quality of faculty, network, long term brand value etc. I am sorry IIM Kozhikode you are on your way out. I'll be shocked if you qualify with this argument. Also, we havent seen your counterpunch yet!
5 Aug 2012, 02.03 PM
Amit
Against-One of the major flaw of the analysis is they are determining individual returns, not totally wrong but is not it against the over all economic effect. We need to see what value addition these courses do and how they contribute to the economy as a whole, an angle totally overlooked. We do compare with foreign B-schools but do not see the way the education is financed, many a times they are government sponsored and many a times company sponsored, the reason being they look for value addition to the company in particular and the economy in general. But in India its mostly guided by individual ambition, so the comparison does not really make sense. On the other hand, if we consider the executive MBAs they are more costly, owing to the fact that they make more sense in the value addition to the economy. Probably by charging more the intention is to give better quality facilities to aid the value addition process, which is the service a B-school provides.
5 Aug 2012, 02.06 PM
Obu
Against : I am making a little radical suggestions but these points are valid I guess....I question the entire concept of Indian B Schools...They are more like placement agencies...remove placements from the Program and ask the students to fight it in the open job market..!! And see how much students would be wiling to pay for the flagship program. And if the courses are market priced and if students can choose and pay lets say from 100 courses offered in IIM's,how much would they be willing to pay? The point I am trying to make is students are forced to pay and its not a democratic process where students determine the value of the course he/she is taking. Comparing median salaries I don't think is appropriate for the guy with lowest salary still pays the same amount of fees. Making a quantitative return calculation I think is as people said myopic to determine the fees.Also for such a person if ROI is considered, its negative. He forgoes two years of salary, burdened with 7 years of loan and after EMI will definitely be getting lesser than if he had continued with his earlier job. So MBA from India is not for short term gain at all.For a few, the returns are huge, but not for all for at-least a decade.
5 Aug 2012, 03.07 PM
Saurabh
As a former IIM Kozhikode Placements Committee member, I have to say the assumptions taken here are simplistic to the extreme... With such an exponential increase in batch sizes and no. of IIMs themselves, an average salary of 12 Lakhs(not even getting into the in hand components here) for the thousand or so IIM(and XL, FMS, ISB) grads passing out each year in the current job market is big assumption... taking into account the rising course fee....which a few years back was not even half of current levels(the salaries haven't doubled since those days)...a student taking an education loan even getting the 12L salary is not at a better lifestyle level compared to his/her pre mba days...someone with an education loan might be paying around 30k+ just for the loan which will last for years... In simplistic terms...just compare the no. of IIMs, the no. of students in each IIM(and XLRI, FMS etc.) the course fee and the salary levels year on year from 2007 onwards and you can notice there is no rise in salary levels to compensate for the other factors... My assumptions might be wrong since its been a few years since I passed out and the placement scenario might be back to as good as in PGP10 days..
5 Aug 2012, 03.10 PM
gaurav
An NPV analysis does not work right because if u look at he cost of living in a city like Mumbai where it is impossible to own a house except somewhere far in the suburbs. You need to look at the NPV in times of high inflation today..!!
6 Aug 2012, 12.32 AM
1yrmbaprograminindia
A lot of B schools offer only one year MBA programs. Almost all the European MBA programs are one year programs. These programs are designed for people with work-experience, and hence, are compact programs. Often, they do not have the mandatory industry internship. Since these programs have traditionally been one year programs, the curriculum is designed accordingly. As a result, students gain complete benefit out of the program including placement opportunities. Some of the top European B schools which offer only one-year MBA programs areOxford, Cambidge, IE, IESE, INSEAD, etc.
7 Aug 2012, 01.15 PM
Gaurav
To be precise, the arguments (& counter-arguments) presented by both the sides is at best juvenile with regards to the pedigree of the institutions. These are some glaring flaws: 1. Surprisingly, nobody pointed out the obvious flaw in the NPV analysis. One needs to consider only "incremental gains" due to an MBA degree & not the entire 12L i.e.. a graduate without a B-school degree isn't going to earn Rs. 0/year Many Graduates reach similar packages (with IIMs) with 2 yrs work experience. (Again these are not any graduates but those worthy of being in IIMs) 2. B-school degree costs tuition fee + opportunity costs of 2 years labor + psychological costs for studying - benefits of Fun.... 3. The returns are: Salary + positive externalities to economy (subsidized by Govt.) + returns due to enhanced macro-economic outlook (which leads to promotion to senior mgmt.) + personal growth (personality/ self-esteem/ better marriage prospects? if you will) So yes, stamping an NPV tag on an MBA degree is not such a meek task. 4. The comparison with foreign B-schools & median salary figures is disappointing. Its like comparing 2nd rate B-schools with IIMs. 5. we also have to keep in mind that the costs for MBA’s abroad are generally 3-10 times higher than those in India ??? Even by their naive "Ratio" arguments, none of the ratios are even twice. What about PPP? If we use WHO-2010 figures 1$ = Rs.20 @PPP. That would put their MBA costs in perspective. (Infact, the salaries of developing countries are fast-approaching their developed counterparts in accordance to the "theory of convergence" of connected economies) 6.. All said, the counter-arguments by IIM-Indore are juvenile. The contempt & haughtiness, which is easily palpable in their statements, are not those suiting an MBA grad of any lineage. 7. Instead of countering the mathematical arguments by delineating the flaws in the NPV analysis, IIM-Indore chose to resort to tactics of intimidation by calling the opponents arguments "laughable, ridiculous & harking upon". (There's a difference between a GD and a written debate) 8. The only valid point in IIM-Indore's argument was regarding the foreign B-school comparison. The rest of the counter-argument is based on disparaging the opponent's argument without elaborating on their own thoughts. Also, MBA from abroad becomes more affordable due to the 20-year (under 5% interest) payback period. 9. NO. The executive-PGP program from any B-school (even IIM-A) doesn't carry as much weight as the corresponding PGP program + 4 years work exp. Care to speak to any e-PGP programmer & you'd know. 10. By this judgment, it is obvious that if the cost of the flagship programme were made lesser, they would derive even more value from it ??? How can price-reduction in isolation enhance value? Value remains constant. Net benefit increases. 11. The counter-argument doesn't present a "broad-picture" (as claimed) at all. The envy of Facebook packages at NIT/IITs & regret of PGP program is evident in the counter-argument. Now you should ask me, "what's my stand?" It's simple: 1. Taking the macro-economic view in mind, these MBA degrees are highly over-priced considering the incremental value the nation would derive by enhancing indigenous skill-sets. Greater managerial talent (along with general Human resource talent) assists private & public policies, national development, better governance, inflow of FDI & FII & other positive externalities that benefit the country as a whole. Hence, the govt. should cap these fees as they are fairly over-charged (Premium market charges even for hostel & IT facilities). 2. From an individual perspective, the degree is neither over-priced nor under-priced. It is the fallacy of the students to exhibit a herd-mentality & follow their friends into an MBA program without any concrete objective or fore-thought. Even an NPV analysis has no relevance for complex heuristic decisions. So, if the market is behaving irrationally & you don't have reasons enough to be in a B-school Campus, you most likely shouldn't be. Still if you find yourself in such an unholy mess, stop crying over spilled milk & make the most outta an unenviable situation! ^ And That's how a sensible argument is made.
7 Aug 2012, 11.33 PM