Dr. Rama Ramakrishnan, Ph.D is Chief Scientist, Oracle Retail and Vice President, Analytics. Rama is responsible for developing analytic techniques that have a significant impact on retailers' businesses and incorporating them into Oracle's products and services. Prior to Oracle, Rama played a similar role at retail profit optimization software firm ProfitLogic. ProfitLogic was acquired by Oracle in July 2005.
Prior to joining ProfitLogic, Rama was the founder and principal of Profit Sciences, an analytics consulting firm, where he advised clients on the design of optimization algorithms to solve complex resource allocation problems. Before that, Rama was co-founder and vice president of product development at Redwood Investment Systems, a software company that built one of the first web/wireless portfolio management systems for quantitative investment managers.

In addition, Rama was a Portfolio Manager at CIBC Oppenheimer, developing quantitative investment strategies, and Engagement Manager at McKinsey & Company, advising Global 2000 senior managers on solving strategic and operational problems using analytical techniques. Rama began his career with the Decision Technologies group of American Airlines, where he worked on building model-based solutions for a variety of airline problems.

Rama holds a B.S. in Engineering from the Indian Institute of Technology, Madras and M.S. and Ph.D. degrees in Operations Research from the Massachusetts Institute of Technology.

Your undergraduate was in Chemical Engineering. What made you shift gears and move into the area of Analytics?

During my time at IIT I realized that I really liked applied mathematics.  To put it somewhat crudely, Operations research (OR) essentially is using the power of math to make more money. After my undergraduate I applied only to OR graduate programs and came to MIT to do my PhD. After completing my masters, I realized that I did not want to go into academia just yet and hence decided to get a “real” job.

My first job was with American Airlines. I was part of the Decision Technologies group. The Airline industry was the first to apply OR to make smarter decisions about scheduling, pricing etc. and American Airlines considered our group their secret weapon. We used math to make numerous, frequently decisions slightly better. The delta was probably not much more than 5% but since the revenue base was large it would translate to millions of dollars of cost saving or revenue increases.  It was my first experience at using the power of math to help a business make more money.

The airline industry did not hold your interest for long. You came back for a very theoretical PhD and then took up a job with McKinsey. What motivated you to take that decision?

After two years with American Airlines I felt a need to come back to school and pursue my PhD. I liked the intellectual challenge and decided to do a theoretical PhD as I felt that this would be my last chance to enjoy the ivory tower. I had my first big stroke of luck when I met my adviser Dr. Michel Goemans, currently a professor in MIT’s Math Dept and one of the smartest people I know. Thanks to him, I was able to finish my PhD work in under two years. 

My passion always has been at the intersection of business, math and technology, and either one by itself leaves me feeling dissatisfied.  Since I was not ready to narrow my focus to any one industry, I decided to interview with Mckinsey. It is funny – during the interview, I was asked about the practical value of my PhD work. Since my work really had no practical relevance, I responded to the question with an anecdote involving the great Michael Faraday. It is said that when he discovered electromagnetism and presented it to the Royal Physical Society, he was asked “Pray, of what use is this discovery?” to which he replied “Pray, of what use is a new born baby”? I don’t know if invoking Faraday helped or not, but I got the job!

Working at McKinsey was a great experience. I was able to address a wide range of business problems, and was trained to cultivate a CEO’s “big picture” perspective. I was also taught to be a crisp and clear communicator, a skill that has been of immense value as I have led teams.

You left that position to join CIBC Oppenheimer. Why?

The travel in my Mckinsey job was way too much. We were having our first child and hence I decided to move on to a position that did not require travel. At that time Punita Kumar Sinha at Oppenheimer was building a team to manage The India Fund and I was hired as a portfolio manager. It was felt that for that fund, a hybrid approach using both quantitative and fundamental analysis approach would be best. My strong quantitative skills were a real value-add for the team and I am pleased to say that the fund did extremely well.

Later you co-founded Redwood Investment Systems, a software company that built one of the first web/wireless portfolio management systems for quantitative investment managers. Was that a shift for you?

During my time at Oppenheimer I felt that it would be interesting to be part of a startup to help build software for quantitative portfolio managers. At that time there were very few products in this space and none of them were very good.

I met Shekhar Shastri who had founded Redwood Risk Management. Together we co-founded Redwood Investment Systems to create a quant Portfolio Manager’s workstation that would run in a web browser. That was unusual for that time. Redwood was later acquired by Verilytics Inc. which wanted to include an analytically oriented offering to their product line. I did not join the new company. Unfortunately Verilytics also did not survive much longer. Timing was wrong and living in a bubble was not helpful.

In retrospect, is there something that you could have done differently to have lived through the bubble?

The problem with bubbles is that when you are in the bubble, you never see the bubble. There have been people who have been through three bubbles and they always rationalize as to why it is different each time.  If we were aware we could have done things differently. We could have decided to raise money sooner rather than later. In retrospect, I think it would have been useful to have an advisor who was emotionally and financially unconnected to the bubble.

Based on that experience what advice do you have for others who may not be successful with their ventures?

The first thing is to realize that failure is much more common that you think. Even icons like Desh Deshpande didn’t make it big the very first time they tried. If your family situation allows you to try again, you must do so.  Second, connecting with fellow entrepreneurs is extremely useful and inspiring. Boston has a great community of successful entrepreneurs who are very generous with their time and people would do well to make use of it. 

Can you describe the path that led to the very successful company ProfitLogic?

After Redwood, I still wanted to work on a product startup. Since I didn’t have a great idea ready to be pursued full-time, I decided to do consulting. Consulting exposes you to a wide variety of problems and can be a great way to find unaddressed market gaps. I started a company called Profit Sciences and started to consult for SABRE since I knew a lot about the Airline industry. We worked on algorithms for SABRE for two years – in fact, one of the scheduling algorithms we developed ended up being sold to the TSA and it is being used to schedule personnel at nearly 250 airports. Whenever I am waiting at an airport security line, I remember this! More seriously, using analytics to solve a business problem is always interesting and this was a great example of just that.

A couple of years into Profit Sciences, I met a gentleman named Michael Levy who had started a retail analytics consulting firm called TSI in the mid 80s. The firm employed a handful of physics/math post-docs from Harvard and MIT and consulted to retailers to provide data-driven insight into different aspects of their business. Later, Scott Friend, a marketing whiz, also joined the firm. They raised VC, changed the name to ProfitLogic and brought in a new CEO Tom Ebling. Michael, Scott and Tom felt that my combination of business, math and tech savvy would help them productize the analytics and effectively evangelize the value to skeptical retailers. They convinced me to shut down my consulting business and join them.

I did and it turned out to be the best thing I ever did. ProfitLogic ended up doing for retail what SABRE did to the airline industry, which was using data to make better decisions.  Next time you go into Banana Republic and find a sweater marked 30% off, you now know who to blame!
The company was extremely successful and we had numerous well-known retailers using our analytics software to optimize various decisions. This success led to Oracle making a very attractive offer to buy the company in August 2005 and hence we now are part of Oracle.

You are now Chief Scientist Oracle Retail and Vice President, Analytics. Could you describe this experience?

Oracle had bought another company called Retek a few months before they bought ProfitLogic. Retek had a market-leading retail ERP system and Oracle bought ProfitLogic to layer industry-leading analytics to Retek’s ERP foundation.  These two companies were combined to create Oracle’s Retail Global Business Unit.

By the way, the battle in enterprise software is moving away from ERP to applications like analytics that sit on and add value to ERP.  After the merger, Oracle created two R & D groups – one for Analytics and one for Transactions (i.e. ERP). I am the VP of the Analytics R&D group and manage this global organization from Cambridge.

The acquisition has been very beneficial for Oracle. Analytic applications tend to drive tangible and quick financial value to retailers and hence there’s a lot of demand for these products. And since these products rely on databases and middleware, every analytic sale “drags along” database and middleware sales as well.

Mergers tend to have teething troubles and fusing the Retek and ProfitLogic cultures and organizations has been a challenging but ultimately rewarding experience.  I had to work hard to create a cultural shift by painting a compelling vision for analytics and its role in the broader Oracle. The experience taught me that technical problem solving is necessary but far from sufficient.  Cultural problem solving is as important if not more so.

Do you have tips for managers who are trying to lead teams?

Communicating clearly, candidly and passionately all the time is all important. Candor is really key for leaders.  I have a mantra in my team “Candid but courteous”. Without candor, the quality of debate and decision making tends to spiral down and before you know it, you end up with a “playing the violin while Rome burns” situation. Empathy with employees is another important component of leadership.

The harsh truth is that it is easy to be a jerk and deliver the goods, or to be empathetic and nice but not deliver. To be honest and empathetic while still delivering world-class performance is THE challenge and a good leader is one who can accomplish that.

A great insight for me through everything I have been is that while problem solving is important (particularly early in your career), opportunity identification is even more important. In some ways, the person who is the first to identify a problem/opportunity and convince others that it is an important problem to solve is the real winner. This trait is core to being a successful entrepreneur or manager.

Finally, I would add that energy is at least as important as intelligence when it comes to getting things done. I didn’t appreciate the importance of this early in my career but with every passing day, my conviction about this goes up even more. When you are hiring people, trying to get a sense for not just their smarts but also their energy level is really important.

What do you attribute your success to?

While it is not often given much credit, I think luck plays a huge role in everyone’s success and mine is no exception. I was lucky that my interests, my educational background and my work experience are in a field that is hot in my lifetime.  If I had been born fifty years ago, I am not sure it would have been the same.

Apart from luck, going above and beyond what’s expected of you consistently gets you noticed, opens doors, and inspires people around you.

What advice do you have for youngsters who are getting ready to start on their career path?

I would strongly advise them to pursue things they are passionate about. If you are passionate about something, then you will think about it all the time, and you will become increasingly very good at it. This may sound extreme but I think if you aren’t obsessed with whatever you are pursuing, you will never be as good as someone who is obsessed. This is the only way to become world class.

Often your passion is for things that come to you rather effortlessly. I would encourage youngsters to really understand what comes to them easily and try to align their interests in that direction.  To become world-class, you need to operate at the highest levels and that is unlikely to happen if you aren’t a “natural” at it.

The dilemma comes when what you are passionate about or what you are good at is not really “hot” i.e. not valued by the outside world. In this situation, I would suggest that instead of lamenting your lot in life, you still pursue your passion with gusto but spend some of your cycles evangelizing the reasons for your passion to the outside world.

You are an unusual entrepreneur in that your wife also has had a very successful career. What advice do you have for two career couples which is beginning to become the norm?

The secret is to work hard in the early years and excel at what you do so that by the time you have children, your value at work is so high that you will be given some breathing room.  I think of it as a “reputation bank account”: you need to make numerous deposits into this account early in your career. Later on, as you start to juggle kids and spouse etc., you will be able to withdraw from this account to balance your life.

All this said, managing a dual-career family is not easy. Planning carefully helps. Ben Zander of the New England Conservatory has a great saying in his book The Art of Possibility: “There’s no such thing as bad weather. There is only inappropriate clothing.” So planning can certainly make a big difference.
Give-and-take is required of both partners. When my wife went to Sloan to get her MBA, I had to scale down my travel and juggle my schedule and activities to support her schedule. By the same token, she adjusted her schedules when I needed her support.  Fundamentally, I don’t feel it is fair to ask one’s spouse to curb their ambitions so that you can pursue yours.

Thanks so much for your time.

Thank you

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