Why Becoming ‘BIG BROTHER’ is the Future of Business

If the great mathematician Euclid and author George Orwell were lab partners today, they would probably formulate the modern-day algorithm.

While the term ‘algorithm’ can be traced back to the 9th century, more than a thousand years earlier Euclid created processes and rules for calculations used to solve mathematical problems.

Today, algorithms are tiny cubes of such mathematics hidden in every corner of the modern world. These algorithms add up to create a ‘Big Brother’ – like that seen in George Orwell’s 1984 – which watches us and our surroundings.

This intrusive approach can be frightening for regular citizens, but for business leaders it is a land of opportunity. Algorithms and ‘big data’ collected from Internet of Things devices pave the yellow brick road to sustained competitive advantages, forward-thinking strategies and innovative operational and business models. The intelligent technologies that make up the ‘all seeing’ formulae are instrumental to keeping enterprises ahead of the curve in their industry. Knowledge is power.

Let’s look at how algorithms have been the foundation of business success in recent times.

1.      ALGORITHMS MADE GOOGLE FAMOUS

Google’s PageRank algorithm was the key to its success. Before Google invented it, internet surfers had to pan through pages and pages of searches to find what they were after.

PageRank essentially combined key pages with other pages that linked to them. Based on this premise, Google could display the most relevant items at the top of a search, making it the ultimate differentiator that set Google on the path to becoming the half-trillion-dollar company it is today.

2.      MONEYBALL!

Many of us watched Brad Pitt and Jonah Hill in the film Moneyball and witnessed how the Oakland Athletics used a technique called Sabermetrics (named after SABR – Society of Baseball Research) to become a top contender. Data, analytics and algorithms were used to create a formula for success for Billy Beane’s A’s.

 Today, almost every sports team has adopted a similar approach, using algorithms and analysis of data to do everything from recruiting players to predicting penalty shots. Not only that, but SAP’s HANA database delivers ‘real-time’ statistical analysis for sports fans across the globe to get into the live action and gain the same insight shared by their favorite team’s managers. This is all made possible by SAP’s cloud abilities – and ironically, cloud computing would not have been possible, without algorithms!

3.      ALGORITHMS IN THE CLOUD

According to Gartner, big data is completely useless without algorithms, and the same is true in reverse. But what are the best algorithms, what is the best big data, and how do you best combine them? Let’s use SAP and IBM as examples. 76% of the world’s business transactions touch an SAP system, and IBM Watson is one of the most intelligent computers ever created. The partnership between the data of SAP Ariba’s largest global business-to-business network and the machine-learning algorithms of IBM Watson is a big data dream-come-true for procurement organizations.

SAP’s latest partnership with Adobe and Microsoft – the Open Data Initiative - aims to deliver a strong source of truth from data for clients. The focus is on using quality data to generate quality outcomes through algorithmic and intelligent analysis. The initiative aims to eliminate siloed data and support integration of system data across enterprises to offer a singular and complete view of customers.

Get with it or get out of its way...

The next wave of disruption will be decided by data, algorithms and intelligent technologies.

As the age of intelligence looms, prepare yourself for a world of IoT devices humming away in every nook and cranny, with 2.5 quintillion bytes of data being created every day. Sophisticated machine learning and other algorithms will use the vast amount of data generated by these devices to create the best insights and foresights for enterprises that best adopt this tsunami of technology.