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30 billion things are connected and 3 billion people have smartphones. Until recently, CERN was the largest data source (it produces 25 million gigabytes every year) but it has now been overtaken by telephone traffic. The advent of smartphones and ability to take pictures had resulted in smartphones becoming the biggest data source in the world.
With the Internet of Things taking off; smart phones; driverless cars; connected devices, there is so much information that can be tapped into. But where Excel spread sheets and simple systems used to suffice, the sheer volume of this data now requires a different solution to enable businesses to draw insights from their data.
But if you are still just talking about big data then you are missing the point, both conceptually and in terms of the opportunities.The time of the generic industry talk about big data is over.Everyone has big data, but data on its own provides no value. The value comes from what you do with that data – this is where algorithms come into play.
Big data requires algorithms to make sense of it. Otherwise you are just looking at meaningless statistics. Only through algorithms can you collate actionable insights. It allows you to use the data so it is ready to create operational efficiencies; to predict outcomes and make decisions based on this; to differentiate your brand and to stay ahead of the competition.
Only by applying algorithms will people find transformative value from their data. Algorithms help organisations put their data to work, providing predictive analytics and automated decisions. Algorithms create action; without action you achieve very little.
According to Gartner, 2016 will be ‘the year of the algorithm’, stating that ‘Companies will be valued not just on their big data, but on the algorithms that turn that data into actions and impact customers.’
These algorithms have in fact existed for a long time at research institutes such as CERN and in the scientific community since the 80s. Big data itself has also been in businesses for well over five years- it’s only now that companies are clear on how to take advantage of it and which technologies (machine learning algorithms) are needed.
The NeuroBayes algorithm that I developed at CERN to filter out the uninteresting particle collisions in the predecessor to the Large Hadron Collider, is now the basis for solutions being used by retailers to predict demand, for replenishment, customer targeting, and price optimisation.
It also enables automation to be introduced in the business, allowing managers and members of staff to drive operational efficiencies and focus on customer service instead of spending time on admin and making decisions based on a gut feel. For example, retailers can now replenish their stock automatically based on data such as weather, holidays and customer purchasing trends in individual stores.This ensures that stores never over stock, leading to waste, or run out of stock, leaving customers disgruntled after being faced with empty shelves and unable to get the item they want.
Retailers can also optimise their pricing by analysing how much customers are prepared to pay for certain items at different times of the year.. This ensures that retailers keep a healthy bottom line but don’t price themselves out of the market, whilst retaining the best margins possible to remain in business.
The obvious commerce uses of algorithms are already in play, and have been for many years, but it’s only today that people are beginning to understand the true power of data science and algorithms.
Gartner also predicts that it won’t be until 2020’s that algorithms will step up a level to become smart by learning from experience – but this is already happening. Blue Yonder’s algorithms are also machine-learning too, meaning the more data you feed into them, the better and more accurate the predictions are.
Those businesses that have not yet started talking in algorithmic terms face a bleak future. Becoming a digital business is vital for any business hoping to succeed and have any kind of longevity in today’s market place. Being digital and using algorithms go hand in hand. If you want to launch new digital initiatives or explore the realm of the Internet of Things or put the customer first, then algorithms are a key component.
This is just one example of technology that has come out of the physics community at CERN being used and making an impact in the real world today. CERN is home to some incredible minds and data scientists, so why not harness it for commercial purposes?