Fall 2018: Data & Analytics

Data and analytics aren’t the future of business—they’re the present. Baylor University and the Hankamer School of Business are adapting to ensure our students learn the skills necessary to meet the needs of an ever-changing business world. In fact, Baylor University President Linda A. Livingstone announced a new academic strategic plan called Illuminate earlier this year, which includes five signature academic initiatives. Data sciences is one of those five initiatives.

While we’ll be an active part of the data sciences initiative, we’ve been including analytics in our curriculum at the Business School for years—and we’re continuing to grow this part of our course and program offerings. We launched the new certificate in business analytics this year, the goal of which is to make students in business majors more attractive in the marketplace by providing the skills necessary to understand and interpret big data and business analytics. In addition, the Hankamer School of Business joined the KPMG Master of Accounting with Data and Analytics Program this semester, a one-of-a-kind initiative that audit, tax and advisory firm KPMG LLP developed to prepare Accounting students for the digital marketplace.

In light of our focus on analytics in the classroom, this issue of the Baylor Business Review also is focused on data and analytics. From cyber security to the evolution of online ticket sales, this issue explores how Baylor Business alumni, faculty and students are changing the way we incorporate data and analytics into business.

Mark your calendar! Our annual Homecoming Reception at the Paul L. Foster Campus for Business and Innovation will be held Friday, Nov. 2. Please click here for more details.

Terry S. Maness
Dean
Hankamer School of Business

Baylor Business Review, Fall 2018

By Eric Krell

Are all companies now technology companies?

It seemed that way this spring as a variety of companies scrambled to comply with the European Union’s General Data Protection Regulation (GDPR).

The sweeping privacy law equips Europeans with more control over their personal data while significantly altering how companies collect and manage personal data and imposing steep fines – as much as 4 percent of global revenue — on violators. The companies that appeared to suffer most from GDPR compliance – an effort that also happens to cost U.S. companies 4 percent of their global revenue, according to Capgemini – were not Google, Facebook or other tech giants. Instead, business leaders within insurers, airlines and restaurants were more apt to grumble about the millions of dollars and months of work that their GDPR compliance efforts have devoured. The co-founder of a reservation service vented in The Wall Street Journal that 1) “Restaurants are not tech companies;” and 2) Restaurants are now being asked to manage data as if they were tech companies.

His second point is certainly accurate, but the first one will not hold water for much longer. “Every company is a technology company, no matter what product or service it provides,” asserts M+W CIO Americas Stephenie Stone on Forbes.com. “The companies that embrace this fact are the ones that shape our world.”

Put another way: if non-tech companies want to survive in the data-driven world, they better rapidly develop data management capabilities on par with Amazon, Google and other Silicon Valley giants already circling, or invading, their industries. This also holds true on a more personal level. Take a glimpse at a manager, director or vice president opening in almost any organizational function – finance and accounting, human resources (HR), sales and marketing, internal audit, risk and compliance, even tax – and you’ll be hard-pressed to find a single set of specifications that does not emphasize the need for data analysis, management and/or governance expertise.

Not every business professional will need to run a SQL query or create a Python script, but professionals should be well-aware of the ways that data analytics and digital transformation are reshaping companies in ways that extend beyond technology capabilities. Addressing the following questions can help clarify this transformation while highlighting increasingly valuable skills:

1. How will companies protect their data? When information security professionals speak candidly, their concerns are jaw-dropping. Staggering portions of cybersecurity gaps exist in organizations due to failures to apply basic, readily available software patches. Employees still getting hoodwinked by old-fashioned phishing emails, and many fail to perform the most rudimentary cybersecurity steps (e.g., avoiding unprotected public wireless networks). “We still have machines whose vulnerabilities should have been patched back in the 1990s,” CSO columnist Roger Grimes noted in 2016. It is impossible to protect all data, but it is imperative to protect the most valuable data. Part of everyone’s job should include understanding which data in their domain has the greatest impact on organizational risk. “An alarming number of companies appear unable to confidently identify or locate their most valuable data assets,” Protiviti’s most recent security and privacy report indicates. “Protecting these ‘crown jewels’ requires a data classification scheme supported by effective policies in place and adhered to throughout the enterprise.”
2. How will partners protect your company’s data? As more companies invest in cloud technology, more data and information assets are stored externally. As a result, organizational cybersecurity effectiveness also hinges on vendors’ (or their vendors’ vendors’) security capabilities. Increasing digital collaboration also extends network access to more external partners. “Enterprises now have an expanding attack surface because of the vast number of third parties that have some degree of access to their network and/or their data,” says Marsh Risk Consulting Managing Director Thomas Fuhrman. These risks are reshaping traditional vendor risk management (VRM) programs, which until recently, largely consisted of manual activities, such as having vendors fill out self-assessments or visiting the sites of key vendors. Those types of assessments remain necessary, but they are being enhanced by the addition of real-time monitoring of third parties.
3. How will your company’s data be regulated? Global companies are having trouble keeping pace with new laws and regulatory changes related to data privacy and security. PwC Global Cybersecurity and Privacy Co-Leader Grant Waterfall describes the recent surge in cybersecurity laws – including GDPR, New York Department of Financial Service’ cybersecurity regulation and China’s complex Cyber Security Law (CSL) – as “a bit of a regulatory tsunami, especially for global companies.” Organizations, he adds, “are being hit left right and center by these things…” Compliance functions within companies will need to work closely with their colleagues in risk, information security and information technology (IT) functions to understand new requirements and address them in an integrated manner, since different rules cover many of the same processes and internal controls.
4. How will companies manage tax data, and how will data be taxed? Global tax rules are undergoing changes that rival the magnitude of the digital transformations occurring inside companies. These dramatic shifts include The Tax Cuts and Jobs Act of 2017 (TCJA) and the European Commission’s value added tax (VAT) proposal (“the biggest reform of EU tax rules in a quarter of a century,” according to the commission), separate efforts by the EU and the Organization for Economic Cooperation and Development (OECD) to revamp how digital transactions are taxed, as well as dozens of country-specific “real-time” taxation submission requirements. Combined, these new tax policies are greatly increasing the amount of tax and transactional data that companies need to gather, protect and share with tax authorities. Some proposals have suggested that companies should pay a tax on data assets in countries where they collect that customer data. This ongoing global tax rules upheaval is elevating tax considerations to a strategic issue while making chief tax officers increasingly important participants in strategic planning activities.
5. How will your company access data management skills? Access to data analytics and cybersecurity skills marks a growing challenge for most companies. This is especially the case at increasingly digital companies outside of the tech industry, notes Stefan Deutscher, a cybersecurity and IT risk management expert with The Boston Consulting Group, “but few of them have the scale or the brand to attract and retain top cyber security [sic] professionals.” This talent need will require more human resources functions to develop innovative approaches and partnerships to sourcing talent at a time when U.S. universities are struggling to attract enough educators to groom future data scientists.

All companies may not be tech companies, at least not yet. But all businesses and professionals should be prepared to address the ways that data analytics and digital transformation are reshaping their companies and their careers.

Baylor Business Review, Fall 2018

Positively Violet

By Becca Broaddus

Violet Sullivan “can find the pony in a pile of horse manure,” or so her mom says.

“I’ve always been optimistic,” she laughed as she explained the saying. “I was given an uplifting spirit, so I can uplift others. I like to bring positivity and purpose into work. No matter what job I’ve been through, I’ve always had a passion for working.”

It’s a good thing she loves it because Sullivan is a busy woman. Meetings, client calls, childbirth classes and business trips clutter her calendar. As she looked over her schedule, she admitted during particularly hectic weeks, she sends electronic calendar invites to her husband to ensure they spend quality time together.

“I find such purpose in work—in learning and achievement,” Sullivan said. “Even when I was waiting tables, interning or volunteering as a law clerk, I’ve always loved working. I never considered quitting when we decided to start our family. I want to be a great mom. A great wife. Those aren’t mutually exclusive.”

She works from home as a cybersecurity and privacy attorney, which means she helps companies prepare for data breaches from a legal, compliance and regulatory perspective. Sullivan regularly simulates breaches for clients, a fire drill of sorts, to prepare organizations to respond quickly and effectively to cyber incidents.

She credits her passion for learning (and a bit of luck) for her timely entrance into the cybersecurity industry. Just months after Sullivan entered the space, she worked on the response team for some of the largest and most notable data breaches involving Home Depot, Sony and Anthem. Since then, for better or worse, business is booming.

Prior to her move into the burgeoning industry, Sullivan worked as a criminal defense attorney and then as an oil and gas attorney in Pittsburgh, Pennsylvania. She admitted the move from relying on her law degree to a more business-minded position in cybersecurity has been a welcome use of her MBA.

“[My job is] sometimes more operations-focused than legal-focused,” Sullivan, who graduated from the joint JD/MBA program, said. “Although I love the legal aspects of what I do, I find myself being drawn more to the business and technical side of the work.”

Starting a family isn’t slowing down Sullivan’s overachiever streak. In September, she began work as an adjunct professor for Baylor Law School. She teaches in the new online Master of Laws (LLM) program the law school launched this year. Sullivan’s course draws on her experience with corporate clients and cyber incidents to inform students on the relevance and necessity of cybersecurity within litigation management.

As a third generation Baylor Bear with three Baylor degrees and three siblings who also attended Baylor, Sullivan is thrilled to add teaching at her alma mater to her résumé and her family’s legacy.

“Baylor provided me with such a strong growth experience, and it’s been a fun environment to come back to,” she said. “I’ve only missed one Homecoming ever—that’s 31 years of Homecoming. My husband was told he was ‘baptized in Baylor’ at Homecoming last year, and our baby girl is definitely going to be wearing green and gold.”

And yes, Homecoming weekend is on her calendar. After all, her daughter can’t miss her first Baylor Homecoming. Busy or not.

Baylor Business Review, Fall 2018

Vision + Values: Tag-Team Success in Data Collection

By Kurt Knapton, BBA ’89 and John Rothwell, BBA ‘87

We go way back. Back about 30 years, although not quite to our time at Baylor. We were two years apart at Baylor and never met on campus, but we found out later we had mutual friends and were both presidents of Mortar Board. We first met at Andersen Consulting (now Accenture) in Dallas in 1989. We got to know each other playing pick-up basketball after work. Little did we know then that we would end up building a global business together.

That’s how we met. It’s a story that almost didn’t happen because we both left Accenture to pursue separate careers. John went on to work at Booz-Allen and then The Dallas Symphony. Kurt pursued his MBA at Dartmouth, overlapped briefly with John at Booz-Allen, and then rejoined Accenture. Our careers were moving in different directions.

But a new business opportunity called the internet began to pull us back together. In 1999, John co-founded e-Rewards, Inc., and convinced Kurt to join the internet startup. The company’s idea was to reward people for their time viewing and responding to targeted email offers. Shortly thereafter, however, the dot-com bubble burst.

The company survived what Kurt terms a “nuclear winter” by pivoting and becoming a digital data collection company focused on the market research industry. Back then, consumer data was collected by survey telemarketers with a knack for disturbing people by phone in the middle of dinner. e-Rewards pioneered a better approach for collecting data by deploying surveys over the web and rewarding people for their time answering questions. That business change made all the difference. e-Rewards grew to be the largest company of its kind in the U.S. and then—after a European acquisition and name change to Research Now, Inc.—the largest in the world.

Both of us have moved in and out of the company during its history. Kurt returned to Research Now as chief executive officer (CEO) in 2011, and John re-joined him in 2012 as chief operating officer (COO). By the time we sold the company to a private equity firm in 2015, it had more than $300 million in annual revenue, 25 offices around the world, 1,400 employees, and more than 3,000 clients.

Throughout the ups and downs of the business, we always seemed to bring out the best in each other. Our takeaways from shared success are: 1) build on a common foundation, 2) work with good people and 3) remain flexible.

Foundation We built Research Now on a bedrock of shared values and ethical practices informed by our faith. Our Baylor heritage was a foundational element for both our business dealings and friendship. With that foundation, we found success. Our results were achieved the right way. The online data industry has some questionable practices. At Research Now, we put ‘permission-based’ in our mission statement and remained true to guiding principles such as respondent privacy and a fair value exchange for respondents. People One of the first things Kurt did as CEO was call John and say, ‘Let’s get the band back together.’ We’ve each reported to the other during our careers, and we are OK with that. We work well together because our strengths are complementary. We both believe that people make the difference in the success of an organization. We’ve all had people we enjoyed working with and people we didn’t. The key is going back to the ones you enjoy working with. Always try to work with good people you trust—who you value on a personal and professional level. Flexibility After the dot-com crash, we were running out of money. We went from 40 employees down to two. Our shift to market research saved us. It was forced adaptation. Failure isn’t always fatal, but failure to change is usually fatal. Change creates opportunity, and flexibility is required to seize the opportunity.

What have we been up to these days?

Now, we’re independently advising and investing in the entrepreneurial ventures of others instead of starting them. We work with organizations in both the for-profit and not-for-profit space. We are co-advisers and investors in several startups together, including a few sourced through the Baylor Angel Network (BAN). It’s rewarding and fun to help other entrepreneurs avoid mistakes and find their own way to success.

Baylor Business Review, Fall 2018

Leap of Grace

By Becca Broaddus

With a deep breath and a leap of faith, Grace Zheng boarded a plane headed to the other side of the world. She traveled more than 10,000 miles from Tianjin, China to Waco, Texas to attend Baylor University—without having ever visited.

Growing up in China, she attended traditional Chinese school through middle school, and then switched to an international school in high school. Zheng preferred a Western education, so when she started looking at colleges, she looked to the U.S.

“I grew up in a Christian family in China, and my parents wanted me to go to a Christian-environment college,” she said. “I chose Baylor because the culture is one of the best I could ever experience. I hadn’t been to Baylor yet, but the international student office was so helpful. I feel like at Baylor everybody cares about the students. They want each one of us to succeed.”

So, she made the judgment call and went to Baylor. At Baylor, she became a student tutor, volunteered with the Prison Entrepreneurship Program and landed two internships with Big Four companies (KPMG LLP and PricewaterhouseCoopers (PwC) LLP). Four and a half years later, she left with a BBA and a master’s degree in Information Systems (programs that traditionally take five or more years to complete) and headed to the PwC New York office to begin a new journey—her career.

“When I attended school, and work too, I tend to do more than is asked for,” Zheng said. “If I can have the opportunity to give advice to incoming students, I’d always tell them to do more than is asked, for then, you’ll always get a lot more than is asked for. And, remember to be thankful for everything that has been offered.”

Initially hired on as an intern doing risk assurance at PwC after graduation, she was promoted to full-time with the advisory side of the practice in February, where she helps build information risk management policies.

“In Advisory, we provide suggestions and help [clients] step-by-step build the plan and enact it,” Zheng said. “We can actually see our recommendations come to real life. That’s a really exciting moment.”

She hopes to stay in the U.S. working for PwC, learning as much as possible and soaking up the city. Zheng’s to-do list right now includes studying for her CISA (certified information systems auditor) certification and seeing as many Broadway shows as possible.

“A pathway for me is to learn everything I can, so I can better know what I want to do later,” she said. “I’ve never lived in a city like New York before. I want to stay in New York to learn and experience everything.”

Undaunted, Zheng is ready to face whatever the Big Apple and the world have to offer.

“I’m a warrior,” she added seriously. “If the time comes, don’t worry, I’ll handle it. Whatever it is. With passion, courage and perseverance, I believe a bright future awaits!”

Baylor Business Review, Fall 2018

By Becca Broaddus

Sports fans are good at waiting. Waiting for the season to start. Waiting for that championship title. Waiting in line for tickets… well, not anymore. Thanks to the internet, the days of waiting in line at the ticket office are gone.

“Buying behavior has changed,” Kirk Wakefield, Edwin W. Streetman Professor of Retail Marketing and executive director of the Center for Sports Strategy & Sales (S3), said. “It used to be that you got tickets by directly contacting the team or walking up to the box office the day of the game. Now, everybody is online and what was the secondary market, like StubHub, is now the primary market. To generate ticket sales, you must understand your customers and the data. The best sellers, if you will, are the ones that have access to the best data and know what to do with it.”

In addition to tracking attendance, sports teams track how often fans attend, when they attend, where they prefer to sit, their social media habits, concession spending, income level and more. Armed with data, sales and marketing teams tailor efforts to find fans, retain ticket buyers and, ultimately, increase revenue.

“Growth in sports jobs in data analytics has grown around 10-fold,” Wakefield said. “It’s still in its infancy. This industry won’t do anything but grow.”

Baylor S3 has taught the data and digital sales side of sports marketing since 2011, when they added a third major track, CRM & Analytics—now called the data strategy track. (The other tracks are brand strategy and sales leadership.) The coursework includes customer relationship management (CRM) software training, data visualization, database management, reporting, and statistical and predictive modeling. In fact, graduates of the data strategy track simultaneously complete the requirements for the new business analytics certificate offered in the Hankamer School of Business.

The job placement rate for S3 data strategy graduates is 100 percent, and the three tracks combined have a 95 percent placement rate, according to Wakefield. Most of those employers are professional sports teams, including the New York Yankees, Miami Dolphins, Madison Square Garden, Dallas Mavericks, Texas Rangers, Houston Texans, Houston Dynamo and Houston Astros, in addition to other professional teams, corporations and ad agencies.

“We take a 3-D approach to assess demand for a program,” Wakefield said. “First, we look at industry demand. Then, we match that with where we think there will be interest or demand from students. Then, lastly, we assess faculty demand or capacity to fill the need.”

So where is industry demand shifting now? eSports.

eSports is, essentially, the professional, competitive playing of video games, and it is becoming a lucrative business. According to the Global eSports Market Report of 2017 by Newzoo, the eSports economy grew to $696 million in 2017, which was an increase of 41.3 percent compared to 2016.

eSports is gaining such popularity that in January, a joint venture between the NBA and Take Two Interactive, publishers of video game NBA 2K, created a professional eSports league. The NBA 2K League’s inaugural season began with 17 professional NBA teams publicly and financially backing their virtual counterparts. In March, S3 hosted its first NBA 2K tournament and had 40 Baylor student participants. Mavs Gaming, the Dallas Mavericks NBA 2K team, and Microsoft sponsored the event. The center is planning another tournament this year, and they anticipate a bigger turnout.

“Every other major I know that connects to eSports is on the game development side,” Wakefield said. “We’re getting in on the making money side. That’s why we’ve always been unique. We’re figuring out how you monetize it.”

Baylor Business Review, Fall 2018