You can be driven to wrong conclusions if you just follow the data blindly
Technological advances are bringing a new complexity to strategic decisions with more data collected and available than ever before. Add to that sophisticated artificial intelligence that can make predictions about future trends and the picture becomes even more intricate.
In a world where digital technology is disrupting the traditional order and creating new opportunities, CEOs are under pressure to constantly adapt to change. Many CEOs also display scepticism towards the numbers put in front of them, with more than half saying they prefer historic information to predictive analytics.
Trust is the central issue, with CEOs wanting to understand where the data has come from so they can work out for themselves how reliable it is likely to be. Information that comes directly from consumers, often via social media, is deemed more helpful than data from reports or government research.
Prominent sources of Data:
Knowing which numbers to trust in decision making process is vital and most important. Whereas clouds are susceptible to capture data’s freely available with social media and traditional media, reliability will always be a concern in comparison to data available with Govt agencies and commodity exchange. Such protected data is certain not to find place freely in the clouds.
Striking a balance between machine learning and human learning
KPMG surveyed 1300 CEOs across 11 economies between January and February 2018-
- Eight out of 10 CEOs across US relied on their perception than data while making decisions
- Executives in Japan, UK & Australia also tend to rely on their intuition
- More than half (59%) said agility was extremely important, and that without fast innovation they feared going bankrupt.
The survey revealed that while information and technology can form the basis of a decision, they aren’t necessarily a replacement for innate knowledge and experience.
Patricia Kampling, chief executive of Alliant Energy told the survey the key is focusing on the high-quality information, rather than getting overwhelmed by the amount available.
“Nothing is more valuable than having constant communications with employees, customers and technology partners,” Kampling said. “My decision-making is a combination of data-driven information, input from many and decades of experience.”
How we help
Success of Fourth Industrial Revolution lies in how best data’s are being analysed for economic growth of economies.
Ability to capture real time relevant data even from reliable sources requires economic reasoning skill. Moreover, in absence of abilities to read operational economic fine prints allow Diseconomies of Scale to prevail increasing production cost while reducing profit.
Automation and robotics is gaining momentum ever since 2000 and each machine is being gradually technically upgraded through passage of time creating much space for business development. Organizations need to capitalize the opportunity up-skilling talents.
There exists an extra ordinary connection between the economy and investment results. Business Leaders who ignore the economy are liable to fail, while those who understand the economy’s stress point fair the best.
Moreover, with no knowledge of operational economic fine prints, some questions still haunt CEOs:
- Why savings reported across functions, clocks-off, leaving Business Leaders wonder where all the money gone !!
- Why profit does not commensurate change in sales volume?
- How to address Law of Diminishing Margin?
- How to neutralize macroeconomic implications at the micro level of operation on real time basis?
- Why profit when put under economic scale represents poor performance and how to address?
- Why Average Total variable cost is not same across days, weeks, months & years? How to address the variation?
Mere deploying Cyber Physical Asset is not sufficient. Economic Analysis of data is equally important building major Characteristic of IR 4.0 of Economic Value Engineering is mandatory. Does your talent have the required skill?
Even though Organization/s seeks candidates with VA / VE skill, but it is never practiced across organizations. With Four Decades of experience through diverse industry exposure, I say this with conviction.
For Economic Value Addition across operation through rational thinking at margin and weighing decisions against real time cost we offer UNIQUE & EXCLUSIVE highly specialized two days educative discourse Economic Engineering & Econometrics for productivity analysis and efficiency building exponential core competency economic model.
Our expertise has been retained by International Economics Consulting Ltd of Mauritius. IECL have been assigned the job by Govt of UK & EU to develop industries across African & ASEAN countries facilitating trade & investment.
We are based out at India. We may be contacted at firstname.lastname@example.org. For discussion, please contact us at (91) 9433013863, OR, Skype us at manojkumar.trivedi1