University of Pittsburgh

Exploring the Genetics of Consumption

The digital age has given rise to vast volumes of data on all manner of things. From search engine histories and Internet forms to point-of-sale counters and credit card purchases, records are kept in innumerable ways.

Taken individually, the information has little value. But through a technique called data mining, the raw information is grouped, aggregated, and analyzed for patterns in behavior. Industries from law enforcement to retailers have used the results, for they can yield remarkable insight into human behavior and predispositions.

Alexis Bagurskas (MBA '02, MIS '02) is the founder and director of DataLab Consulting, a software and data mining company in Montevideo, Uruguay. During an October business trip to the United States, he stopped by his alma mater to give a special presentation to Katz Graduate School of Business students.

"My company uses powerful data mining tools to explain the past, understand the present, and forecast the future," Bagurskas told the students. "We aim to discover the hidden patterns of customer behavior."

DataLab Consulting performs data and customer analytics for clients in the retail, finance, telecommunications, health care, and services industries. The business intelligence comes in many forms, including credit scoring, churn analysis, customer behavior segmentation, cross selling, and up selling. The real-time data is presented in a software program that allows companies to compare different components.

Bagurskas told Katz students that segmentation is a hot topic within analytics. For example, his firm previously worked with a health care company and predicted with accuracy greater than 85 percent the customers who would leave the company. This kind of knowledge allows a company to target its best customers and improves their processes to reduce churn rate.

"The best- in-class companies use diversified data to segment their customers and transactional data to get to know their customers," Bagurskas said.

Data mining is a growing and relatively young field in computer science, and advances in technology have propelled it forward.

"Businesses are only starting to realize the potential value here. For years, lots of data has been collected, but not enough has been made of the results," said Richard Franklin, a Pitt Business professor in the decision, operations, and information technology (IT) area.

Franklin introduced Bagurskas to the Katz students before his presentation.

Prior to founding his business, Bagurskas worked for FedEx Corp. as an IT analyst and marketing manager. He also worked as a commercial manager at Top Systems, a computer software company in Uruguay.

Bagurskas told Katz students not to be deterred by the economic downturn. He recalled how as a Katz student, he struggled in his statistics course, but didn't let that stop him from pursuing an IT career.

"I was in your shoes not that long ago, and now I'm running my own business," Bagurskas said.