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Posts Tagged ‘mathematics’

old-man

In the new normal, data has become the Holy Grail for making business decisions.  Everywhere you look the importance of data comes to the surface.  Marketing programs, websites, hiring practices, social media, finance, sourcing, and manufacturing, to name just a few, all rely heavily on data as a feedstock for decision-making.  Throw this data in to a computer and ‘presto,’ you have your answer.

As the world moves to the age of data scientists, data engineers, data analysts and data architects, I reflect on something I experienced many years ago that I believe remains true today.

I took a course at Massachusetts Institute of Technology in computer simulation of business strategies.  Part of the course was a three-day forecasting competition using the data of a real business.  We set up four groups.  Each group developed their own business strategies and entered the data into the computer system each night.  The next day we reviewed the results and decided on new input for the next run.  It was a financial simulation model that involved using random number generators and distribution functions that mirrored historic company data and performance.  At that time, this type of simulation modeling was very sophisticated.  It was like the data analytics of today.

One group who corralled at the back end of the class room, included an older gentleman (old man).  He didn’t say much but when he did, his questions and comments were measured and well thought-out.  On the final day, when we were comparing our results, he spoke up.  Out of the back of the room came, “It won’t work.”  What?  “Your models won’t work.  I just cut off your raw material supply.”  Silence.  Game over.  Using his 40 plus years of business experience, intuition, and knowledge of the industry, he made a human decision that trumped our models.  It didn’t matter what the data was saying.  I never forgot this experience.

I have built many financial simulation models in my business career and realize that in every fancy algorithm, there is an old man.  I believe he also exists in today’s data analytics.  –  Beware of the old man.

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Math 2

Recently, I was having a conversation with a young manager about what the future would look like fifty years from now.  I was surprised by the “certainty” of his perspective.  He delved into everything from computer technology, medicine, manufacturing, education and communication.  Each of his projections was based off of what is happening today.  They were logical and made sense.  Why wouldn’t you expect these things to happen?  It made me think of ‘numbers.’

Over forty years ago, my first math course in college was called Modern Math.  The course was about binary mathematics and set theory.  Pretty cool stuff, huh.  Yeah, that is what I also thought.  But, who would ever use this crazy stuff?

For those of you who are a little rusty on your math, binary mathematics is the world of 0’s and 1’s.  Ah, you are getting the picture.  In today’s digital world, 0’s and 1’s rule.  Simply put, we would not have computers today without binary math.  In my wildest dreams back in that class, I could have never imagined the impact binary math would have on our society fifty years later.  Neither can this young manager project with confidence what the world will be like in fifty years.

Let me put this into perspective.  Back in my class we were doing binary math problems by hand.  Next, in the late 1970’s, I started using the ‘new’ personal computers, which seemed like magic at the time.  Now, Intel (Visit their website: “Guide to the Internet of Things”), estimates by 2020, over 200 billion devices will be connected through the Internet creating in excess of 500 trillion gigabytes of data each year.  Think about it; a gigabyte = 1 billion bytes, a byte = 8 bits, and a bit is either a 0 or 1. They are saying over 500 trillion ‘gigabytes’ of data. – That is a lot of 0’s and 1’s.

Trying to imagine a future world fifty years out is fun, but unrealistic.  What is important is to be keenly aware of the technological advances taking place today, and thinking about where they might be headed a few years out.  While you may be right sometimes, most often you will be surprised at what surfaces.  Most important, however, is that you will start to see patterns; which are the early images of things to come.

I will leave you with one of the projections I made about five years ago.  Nano technology → Medicine → med-bots, or robots → in my blood stream → my “in-house” doctor.  I think the holdup is that they can’t figure out how to bill me.

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