The Disconnect: Big Data and Business Strategy

January 9, 2017

Imagine that: Big Data may not have a direct impact on business strategy.

I read “Why Big Data and Algorithms Won’t Improve Business Strategy.” I learned that Big Data learns by playing algorithmic chess. The “moves” can be converted to patterns. The problem is that no one knows what the game is.

The write up points out:

White’s control panel is just a shadow of the landscape and the sequence of presses lacks any positional information or consistent understanding of movement on the board. When faced with a player who does understand the environment then no amount of large scale data analysis on combinations of sequences of presses through the control panel or application of artificial intelligence or algorithms that is going to help you.

The idea is that a disconnect occurs.

Data does not equal strategy for the game of “real” chess.

The write up includes an analysis of a famous battle. An accurate map may be more useful than an MBA analysis of a situationally ignorant analysis. Okay, I understand.

The write up points out:

In the game of Chess above, yes you can use large scale data analytics, AI and algorithms to discover new patterns in the sequences of presses and certainly this will help you against equally blind competitors. Such techniques will also help you in business improve your supply chain or understand user behavior or marketing or loyalty programs or operational performance or any number of areas in which we have some understanding of the environment.

The author adds:

But this won’t help you in strategy against the player with better situational awareness. Most business strategy itself operates in a near vacuum of situational awareness. For the vast majority then I’ve yet to see any real evidence to suggest that big data is going to improve this. There are a few and rare exceptions but in general, the key is first to understand the landscape and that a landscape exists.

The write up leaves me with an opportunity to hire the author. What’s clear is that content marketing and business strategy do connect. That’s reassuring. No analysis needed. No map either.

Stephen E Arnold, January 9, 2017


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