18 December 2019 - To most of us, statistics is as exciting as watching paint dry. But as TRG CEO Rick Yvanovich demonstrated to nearly 300 RMIT students in a guest lecture last Wednesday, statistical applications in business can be both practical and intriguing.
The lecture – “Business Statistics: Useful Regression Analytics” – aims at providing first-year students with basic knowledge of regression and how data analysis can be helpful in decision making in the real-world context.
The importance of statistics in business
While technologies like machine learning, big data, and data analytics keep getting talked about among experts and laymen alike, the statistical concepts that underpin those applications are considered dull and difficult by most students.
While statistics is indeed a challenging subject, the biggest hurdle most lecturers face is how to engage the students and increase their interest in statistical courses.
To get around this problem, Rick intends to stay away from mathematical formulas and models as much as possible and instead to focus more on why regression matters in the business context.
As Rick pointed out during the lecture, we are drowning in data but starving for insights. IDC estimates that 175 zettabytes (ZB) of data will be generated annually by 2025. In case you didn’t know, one zettabyte is approximately equal to a billion terabytes (TB).
Such a staggering amount of data means we can hardly see the wood for the trees. Regression is one of the major statistical techniques used to help us make sense of data. Regression analysis also forms the backbone of machine learning, whose importance is ever-increasing due to the rise of big data in recent years.
In addition to that, Rick also highlighted the promising career prospect of those who work with data and statistical applications. Data scientists and machine learning engineers, in general, can earn a lucrative salary.
The median annual compensation for these careers in the U.S. is as high as $120,000. In a developing country like China, being good at number and statistics can help you bring home $41,310 per year.
Furthermore, while 91% of businesses consider data-driven decision making is important, only 57% actually are using data to make business decisions. Such discrepancy is another reason why jobs in data science and machine learning are among the most sought after.
Regression analytics in the business context
The key part of the lecture is the practical applications of regression analysis, especially in the business context.
In essence, regression analysis has three main uses:
1. Measure strength of effect
Regression analysis is used to determine the impact of an independent (predictor) variable on a dependent (outcome) variable.
This definition led to a lively discussion among students about what can be considered a predictor of the revenue of an F&B outlet. Location, menu items, promotion, service quality, and staff attitude are some of the predictors brainstormed during this discussion.
More important, this exercise helps the students understand regression analysis is not just an abstract statistical concept but has real applications in a business context.
2. Forecast effects / impacts of changes
In addition to providing descriptive analysis, regression models can also predict the impact of change in a predictor on the outcome. For instance, would the revenue increase, and by how much, if the marketing budget went up by 10%?
3. Measure strength of multiple effects of multiple predictors
While more complex, this model better resembles real-life situations where the outcome is usually affected by more than one variables.
A partnership spanning two decades
RMIT International University Vietnam and TRG International have engaged in a successful partnership for almost 20 years. Since RMIT opened its first campus in Vietnam, TRG has offered internship opportunities which serve as a direct pathway into the IT industry to RMIT students.
Over the years, TRG appears to have been one of the largest employers of RMIT students and many of the interns have risen through TRG to become senior managers or full-time staff. Many more have continued their career journey beyond TRG and now hold senior positions at many other IT companies and some even returned to RMIT as faculty.
TRG CEO Rick Yvanovich is a regular guest speaker and guest lecturer at RMIT Vietnam covering a wide range of topics. Rick is currently the Chairman of the Industry Advisory Committee, RMIT Vietnam and a member of the School Advisory Committee for the School of Business IT and Logistics, RMIT Melbourne. TRG regularly engages with both projects and authentic assessments too.