To illuminate further, here’s an excerpt from our curated article: “Models Will Run the World” from the Wall Street Journal (requires registration):
“Today most industry-leading companies are software companies, and not all started out as such. Aptiv and Domino’s Pizza, for instance are longstanding leaders in their sectors that have adopted software to maintain or extend their competitive dominance.
“There is no shortage of hype about artificial intelligence and big data, but models are the source of the real power behind these tools. A model is a decision framework in which the logic is derived by algorithm from data, rather than explicitly programmed by a developer or implicitly conveyed via a person’s intuition. The output is a prediction on which a decision can be made. Once created, a model can learn from its successes and failures with speed and sophistication that humans usually cannot match.
“A model-driven business, then, uses models to power the key decisions in its business process, creating revenue streams or cost efficiencies. Building this system requires a mechanism (often software-based) to collect data, processes to create models from the data, the models themselves, and a mechanism (also often software based) to deliver or act on the suggestions from those models.
“A model-driven business is something beyond a data-driven business. A data-driven business collects and analyzes data to help humans make better business decisions. A model-driven business creates a system built around continuously improving models that define the business. In a data-driven business, the data helps the business; in a model-driven business, the models are the business.” (Read the rest in our briefcase and check out some of their examples. They’ll get you thinking.)
You can’t have better business models without your business data.
(P.S. All the above may sound “pie-in-the-sky” to those of us who are still struggling to get a good grip on inventory: read the ‘briefcase’ articles “How AI will revolutionize inventory management” and “Brains Meet Brawn in Retail & Supply Chain” for some insight.)