The world around us is changing so rapidly, that even the hype big data is already outdated. Big data is nothing new any more and by now we all know that more data is coming our way, rapidly.
But in big data itself is no value at all. We can all generate massive amounts of data after all. By itself, big data is not transformative. Not even big data analytics is driving the change, after all any company can hire analysts to provide insights into your data. Where the real value lies is in algorithms. Algorithms define action and dynamic algorithms are at the core of future businesses. Welcome to the Algorithmic Business.
The Algorithmic Business
The algorithmic business is a company build around smart algorithms. Algorithms that define company processes, that deliver customer services, that take action when necessary and as such define the way the world works. During the latest Gartner ITXpo, Gartner predicted the rise of the algorithmic business to forever change how we do business.
In order to understand all the data coming our way, algorithms will be required. In the digital era ahead of us, algorithms will be able to operate independently. These algorithms will be able to understand customer behavior, learn from devices and perform the right action accordingly. Algorithms will optimize your supply-chain, they will drive your cars, they will monitor your robots and they will even determine the right marketing message.
Expect to see large algorithm marketplaces, where developers can download, purchase or license small pieces of software that offer a very specific, smart solution. Expect to see smart algorithms that are capable of creating new improved versions of itself as well as creating completely new algorithms. And expect to see a new industry that will regulate all these algorithms to ensure that they do what they say they do. The algorithmic business is going to have dramatic impact on organizations and the world around us.
7 Ways Algorithms Will Change Your Business
According to Gartner, these algorithms will change the way we work and will have a dramatic impact on employees in a wide variety of industries and departments. During a trend prediction session at the Gartner ITExpo, Gartner predicted among others the following:
By 2018, 20% of all business content will be authorized by machines, which means a hiring freeze on copywriters in favor of robowriting algorithms;
By 2020, autonomous software agents, or algorithms, outside human control, will participate in 5% off all economic transactions, thanks to, among others, blockchain. On the other hand, we will need pattern-matching algorithms to detect robot thieves.
By 2018, more than 3 million workers globally will be supervised by a "roboboss". These algorithms will determine what work you would need to do.
By 2018, 50% of the fastest growing companies will have fewer employees than smart machines. Companies will become smaller due to expanding presence of algorithms.
By 2018, customer digital assistants will recognize individuals by face and voice across channels and partners. Although this will benefit the customer, organizations should prevent the creepiness-factor.
By 2018, 2 millions employees will be required to wear health and fitness tracking devices. The data generated from these devices, will be monitored by algorithms, which will inform management on any actions to be taken.
By 2020, smart agents will facilitate 40% of mobile transactions, and the post-app era will begin to dominate, where algorithms in the cloud guide us through our daily tasks without the need for individual apps.
Algorithms: the Oil for the Internet of Things
Algorithms will also significantly influence the Internet of Things. Without them, the IoT will not even become possible! Gartner predicts that by 2020 150 new devices will be connected to the Internet, every second! All these devices will be connected to business processes as well as billions of smartphones.
This will generate massive amounts of data that need to be analyzed to understand what’s going on. This can only be achieved with algorithms, which can take automatic action at the right moment.
The Internet of Things is all about actions taken by algorithms based on the data that is generated by the connected devices; For example, you have a connected thermostat and your car knows that you are driving home, your car knows that the temperature is low in your house and tells the thermostat to turn up the heating. When you arrive home, it is nice warm and cozy inside.
Of course, what an algorithm can do for your home, can also be done on a large scale in your business. As Senior VP at Gartner Peter Sondergaard explains: “algorithms define action” and “by 2020, smart agents will facilitate 40% of interactions”.
Algorithms will also be able to take into account the context. Context that is so important, and required, to truly understand what is going on within a particular process, business or device. With sufficient data sources, that each tell their side of the story, algorithms will be able to determine the right action based on a myriad of data points.
In essence, algorithms will be able to find the right business moments, make meaningful connections and predict all kinds of behavior. The algorithmic business will be the business of the future and it will change society as we know it.