business news in context, analysis with attitude

by Michael Sansolo

Truth be told, I’m not entirely certain what to think of Big Data largely because I still have a lot to learn. Certainly it has the ability to let every type of business know more things about more things then ever. Yet, while knowledge can be power, two questions nag at me:

• Can anyone manage all this information properly?

• Can data driven decisions go awry?

I’m thinking the answer is yes to both of these questions, but it’s going to require the same magic ingredient technology and data have always needed: smart humans who know the difference between data and information.

Since that day in the 1970s when the first pack of gum was scanned by the first checkout, the world of data changed forever. Suddenly we could know more about inventory management, product location, shopping patterns, pricing sensitivity and more.

Yet what drove the improved use of that data was the most human of conditions: competition and the need to keep up. And truth be told, decades into the data movement there are still many things businesses don’t know, there is still too much inventory in the system and there are still mysteries in everything we do.

I’ve had the great experience of swimming in oceans of acronyms from DPP (direct product profit) to ABC (activity based costing) to…well it just keeps coming. In the meantime we’ve all gotten more connected, exchanged more information and still the need for improvement goes on.

In other words we’ve learned more and more yet still have a long way to go to get as smart as we need be.

Which is why the human element behind good decisions will never, ever go away.

There’s an interesting data story playing out right now in the culture of professional tennis. Rafael Nadal, the incomparable Spanish star who recently romped to another French Open title, provides a great study in what happens when data trumps wisdom.

Nadal recently sat out for a few months to recover from injuries. On his return, he immediately returned to the form that has made him one of the most successful players in history.

Yet the computer rankings didn’t include his history, his injury or even his return to championship form. It simply measured numbers and determined that Nadal’s ranking should drop because of the all the time he missed, even though his skill didn’t diminish. (Ironically, the player he beat in France jumped over him in the rankings.)

Given that the rankings impact the draw at the next big tennis event - Wimbledon - and that the rankings are used to ensure the best possible match-ups, the tennis world on line is pitching a fit. The rest of us can just consider the lesson in data management.

Because in truth, the computer is both right and wrong and that happens in business too. Business decisions need understanding of the complexities and realities of the real world to explain why some products are less profitable than others, yet remain essential on the shelf. Similar challenges can arise in almost every aspect of business.

Data - especially Big Data - can measure a lot of things; but intelligence isn’t limited to understanding the data. Big Data becomes Big Understanding only if we take the time to learn what it’s telling us and what it cannot.

And then again, we might have to learn that the unbiased computer at times will see things that our human eyes cannot. Nadal was eliminated from the tournament yesterday in his first round match. Wimbledon’s grass courts haven’t always been kind to him, and this is the second consecutive year he’s failed to get to the finals, much less win a championship.

Maybe the computer knew something all along.

Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
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