Wednesday, October 07, 2015

Knowing When To Use Big Data

Interesting talk at NBA Open Court. Former NBA legends are chatting at the beginning of the video about basketball stats and what it means. They are discussing about “the Player Impact Estimate”. The player impact estimate ambition to encompass all the different statistics of one player in order to evaluate its impact on the game, beyond the simple number of points it scores. 

Here is how it is calculated:
"PIE measures a player's overall statistical contribution against the total statistics in games they play in. PIE yields results which are comparable to other advanced statistics (e.g. PER) using a simple formula.(PTS + FGM + FTM - FGA - FTA + DREB + (.5 * OREB) + AST + STL + (.5 * BLK) - PF - TO) / (GmPTS + GmFGM + GmFTM - GmFGA - GmFTA + GmDREB + (.5 * GmOREB) + GmAST + GmSTL + (.5 * GmBLK) - GmPF - GmTO)"

We see more and more data being used in order to prepare basketball players to perform, & make the right decisions. Same things for coach and general managers, using data to understand which trade would make the more sense, and how it will affect the overal team. This is how the Houston Rockets is managing their team, with complex data analytics. The Kellogg University recently published an article about it: Daryl Morey loves good data, and lots of it. As general manager of the Houston Rockets, the Northwestern graduate has made a name for himself with his devotion to using data analytics to make team decisions—everything from where to shoot from on the floor to whom to acquire in a mid-season trade.

In the business world, nowadays, we are submerged by data, thanks to big data, storage capabilities, and analysis tools. But as Reggie Miller points out, especially in retailing, entrepreneur mindset, personal instinct are key to make the right decisions.

It is important not to overate data in order to make decisions. Indeed, making decisions by itself creates more value than the analysis by itself. And understanding customers by the numbers sometimes don't matter more that understanding them with a down to earth conversation.

Personal interactions will always been key in business.