Manufacturers and businesses, like elections, have for too long
relied on an expert’s voice to guide decisions and predict how the winds
would shift in their favor. There was an allowance for expert driven
decisions because every business operated this way. That meant every
business could tolerate a certain number of poor decisions and continue
to survive. But as big data is taking hold and decisions are being
predicted based on information,
the number of poor choices a business can make is quickly dropping. The
analysis and subsequent decisions that used to be acceptable is leading
to increasingly poorer performance relative to their competitors.
Businesses that guess cannot survive in this analytical marketplace.
Not a believer yet? Consider this . . .
Prior to the 2012 presidential election, there were countless heated
debates against data scientists in the political domain. The poster
child of the election data scientist is Nate Silver from the New York
Times’ blogsite Five Thirty Eight. Unfortunately, for the pundits who
decried Silver’s pragmatic approach, he could not have been much more
accurate. His predictions on the US presidential race were accurate. Silver predicted every state correctly; 50 out of 50; 100% right.
His successful analysis doesn’t stop there, Silver continued to be
spot-on in his predictions for nearly every US Senate contest. Silver’s
success should also have a profound impact on how businesses leverage
data analysis.
It provides clear evidence that the business world needs to rely on
measured performance and projection over opinion and spur-of-the-moment
inspirations. Organizations should reject the so-called expert’s
opinion, that is based on instinct and outdated metrics, as a viable
path to set the direction for decision making. This new era, based on
more complex data models, has the potential to permeate into many areas
of life.
Of course, this data driven approach is being fuelled by advancements in technology and software, such as SyteLine ERP. Our datasets have expanded faster than our ability to count them, processing capability has exploded through the use of the cloud, and outlets to display data have multiplied to include tablets, phones,
and many more platforms. We are at the prefect intersection of tools
and capability to deliver upon this possibility. We have the processing
power and capability to deliver on it here and now.
There is another driving force that is just starting to gain momentum
in the business space. Organizations are becoming aware that seemingly
unpredictable events can be broken down and presented in a meaningful
ways to project outcomes, and therefore impact decisions. As this
concept gains more momentum, businesses of all types will need to find
new ways to embrace predictive analytics. Organizations will need the
tools and talent to identify patterns of behavior that, if left
unchecked, could prove to be fatal to the health of the company. The
stage is set for future success: businesses that know -verses-
businesses that guess.
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