Sunday 5 July 2009

The future of BI? It has nothing to do with business…

I've been reading and re-reading Stuart Sutherland's excellent book Irrationality for several weeks (review to come - promise). One of the things he talks about is "making the wrong connections". His point is that humans can't mentally evaluate evidence and make connections. We focus on the elements that are unusual or different and we massively over value our initial guesses.

That really resonates with me. After all that's what Business Intelligence is about, right? We provide factual, numeric, and clean data in a format that allows the user to make reasonable, rational decisions. We lambast the BI nay-sayers who operate on "gut instinct" and rightly so. But we leave that hyper-rational approach at the office door and conduct the rest of our lives in our normal irrational way.

In truth we conduct 95% of our working lives that way as well. The minute-to-minute stuff that business is *really* made of is unrecorded, unanalysed and (of course) irrational. All those conversations, relationships, emails, phone calls and meaningful looks are dealt with by instinct.

Outside the office we're seeing an explosion in personal monitoring and self surveillance. Devices like the iPhone can track every interaction, accessories like Nike+ allow us to track every step we take, software like RescueTime continuously monitors our computer usage. Even Facebook is a way to monitor your relationships, something that seemed completely intangible a few years ago. Etc, etc, etc.

This is the future of BI: Rational Augmentation. Using tracking data to make faster, better and more rational decisions about everything in our lives. It's about dealing with huge volumes of hyper-personal data and finding the patterns that matter. It lives outside the office and outside the corporation. It's a dash of text-mining, a pinch of regression, a dollop of aggregation and spoonful advanced analytics and a heap of basic statistics.

Many people will feel uncomfortable about this but the young will adopt it without question and those who adopt it will do better. Let's face it, it's a sub-optimal world out there and an edge in rationality could be a very big edge indeed.

As a final thought, this has the makings of a classic innovators dilemma for the current BI players. Rational Augmentation (I'm loving this phrase but call it what you like…) is going to need to deal with large data volumes very cheaply and very locally. It will probably be service based. It will probably be free for at least some users. But ultimately it will be a huge market, dwarfing the current BI market. The current players may have the skills to take this on but they've been swallowed by the corporate quicksand and they will sit and watch it pass them by. C'est la vie.

1 comment:

  1. I tend to agree with this. In a way it's in line with Nassim Taleb's Black Swan philosophy. We simply "don't know" yet we make 95% of our decisions based on gut feeling and assumptions. I'm not sure that BI as we know it could have averted the recent deconstruction of US business as we know it. After all, even BI foresaw Madoff but since no one would listen or care, it didnt matter. In that sense you're foreseeing a form of BI that can actually change human nature or its propensity to act out in the dark. I hope you're on to something there :)


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