Successful companies can separate themselves by embracing technology-driven supply chain disruption and finding ways to transform human intuition into usable algorithms, James Chung, president of Reach Advisors, said during his keynote presentation at the 2020 ProSales 100 Conference in Arlington, Texas. Chung said heuristics, shortcuts discovered through experience and trial and error to help make decisions in complex situations, can be a stepping stone to finding algorithms—a way to test assumptions to see if they are correct.
“We are in the era of algorithms and it is so important to think about how you need to take really good human instinct and organizational heuristics and figure out how to put them on steroids,” Chung said during his presentation “Tap Into the Value of Business Analytics and Data.”
Chung shared examples of global brands that embraced technology-driven supply chain disruption to the benefit of the company at the expense of competitors from the recent past. The companies used algorithms to inform which of their heuristics worked and which did not and helped make decisions to keep them ahead of their competitors. While many within the construction industry believe the industry is not susceptible to technological disruption, Chung said that is not the case.
“I realize there is a lot people [in the construction industry] who say there is not that much that computers and algorithms can do for me,” Chung said. “But I’m hoping there are a few who will see that there is really good instincts in their organization, that their organization is building good heuristics, and that there is one more step that can take significant advantage of those. There are paths to drive a 25% advantage [over competitors] because you can move from intuition to algorithms to be a more valuable partner to your customers.”
Chung said advancements in technology and data typically start poorly but can scale rather quickly. The more data that can be leveraged can lead to more advantages and realizable benefits for companies. While the relationship between data and output is not linear or 1:1, it is imperative to invest because of the benefits that can be experienced by companies.
“More data leads to more advancement,” Chung said. “I think it’s safe to bet that if you are a business owner or a business head in this industry and are not planning on being around at the end of the decade, you don’t have to worry about [data]. If you want to be profitable, you have no choice but to confront this.”
In industries such as construction, particularly building materials supply, it may be difficult to utilize data because of the customizable nature of products and services. Industries with more standardized products are more suitable for collecting data for utilization, Chung said.
“The most valuable data is often not data as it’s currently viewed, it’s unstructured data,” Chung said. “It’s things that aren’t viewed as data but are still very valuable. If you operate with a CRM, there’s a lot of data around that that is unstructured that can become very valuable.”
