Blind Faith in Analytics Will Lead You Astray

(Technorati, 10 February 2012)

In Brief: Analytics can help people make decisions, but they can’t predict the future when the wrong data is considered, this writer warns. He makes his point by discussing the failure of modeling to foresee:  1) the real estate bubble and 2) the outcome of the Super Bowl.

Our View: Analytics and models may never be able to forecast with 100% accuracy, but as companies’ ability to store, access, and analyze vast amounts of information continues to increase, those that are able to convert rapidly expanding data sources into actionable business insights will enjoy a significant competitive advantage. Focus on cultivating critical-thinking skills among your employees and  developing sound analytics processes. Create scenarios and test hypotheses for customer and market trends.