Algorithms Have Become Critical Assets
Algorithms, those pieces of code that use data to improve a business process or create insights, have become critical assets just like factories, corporate headquarters, and human capital.
Here are four ways to elevate algorithms to the strategic level:
Use algorithms to disrupt the industry before competitors do it for you
Algorithms are already a necessity in some industries. Stock-trading firms, for example, have adopted analytics to assess market conditions and to guide computer-assisted trading.
Increase customers’ willingness to pay
Online shoppers deliver signals beyond their purchases: how long they spend on a page, what they click on, or what they put in a cart only to abandon it before completing a purchase. These are all useful data points that, when fed into algorithms, can help retailers manage promotions, offers, and prices.
Improve strategic planning
When you’re asking questions about future investments, the right algorithm, with good data and a model that takes possible market swings into account, can score the relative probability of success of several different moves.
Algorithms are only as good as the goals you define
Use key performance indicators (KPIs) to judge the success of your algorithm strategy. Grow revenue. Increase yield from agricultural fields. Elevate market capitalization. KPI data and historical results will tell you what’s going on.
To learn more about how algorithms can improve business results, read the in-depth report Algorithms: The New Means of Production.