How to Use Algorithms for Your Business

How to Use Algorithms for Your Business

Most businesses use algorithms on a daily basis but don't realize it. The word algorithm is daunting but if you actually analyze the definition, it’s not as complicated as it sounds. The dictionary defines it as a process or a set of rules that offer a problem solving operation.

Unfortunately, most business owners, think of an algorithm as a line of code or something a software engineer works on for big business, when in reality, a simple process of appealing to emotions, a process known as emotion recognition may be your real algorithm. Yet, every company uses some type of algorithm to help run business operations. Remember it is a set of rules. A rule to contact customers, offer them a product, sell and keep the customers information for future use. This is an algorithm.

What Is an Algorithm

In a basic sense, an algorithm is a formula that allows a company to operate smarter and meet customer needs. The best algorithms are proprietary which means only your company can use it. At any rate, whatever they are called, most companies (large and small) realize that data obtained from intelligent programming and devices, social media and other sources make it the right time to create a new proprietary algorithm to help their own sales efforts.

It Is Difficult

The truth is that small companies have a hard time understanding and managing the data they obtain from their customers. Algorithms help make sense of the data and thereby help management teams make better management decisions.

It’s a Winning Situation

By implementing algorithms to help make decisions based on data companies can easily meet customer needs, sense inventory management improvements and cleanse unneeded data from the business system. This makes a company smarter, faster and more effective. It allows the company to serve customers faster and more efficiently, thereby allowing them to offer the service or product at a more affordable cost. So why don’t companies move ahead and create these needed algorithms. There are several reasons:

*No one owns an algorithm. They exist across different apps and programs that help manage business functions.

*No one analyzes where the algorithm makes the customer happy.

*No one knows how to officially implement them across the board.

*No one understands who or how to identify the algorithm.

The truth is that algorithms exist in every company. They may not use accurate data and may not even be shared across teams, so there seems to be a mismanagement issue.

Achieve Better Decisions through The Use of Appropriate Algorithms

Management teams make better decisions when they are able to analyze an algorithm of the purchasing data for a certain period of time, when they can analyze the audience buzz caused by social media, or when they can see customer usage patterns.

It Requires Change

For most companies, creating algorithms to help manage their data takes a cultural and process change. Some of the best uses of algorithms can be seen in smaller companies like Dell, UnderArmour, Li & Fung and other small companies.

How To Implement Algorithms

All companies are different and require different information. Still there are a few steps that all companies can apply to help them find an algorithm that helps them manage their data better.

Create a team with representatives from each department. Winning algorithms work across all departments. Take note of any existing algorithm or processes your management team uses to learn information about customer buying habits. After careful analysis, you may find that you already have a good start towards an algorithm that works for your team.

At a Loss

You may have everything in place and may not know how to make things happen. In this case you are missing the people that know how to identify the algorithms and bring them to light. Hire these people. They are called data-scientists and can help train your group to identify and use your algorithms more effectively.

Do Your Research

Look at the world's greatest companies. Check out companies like Dell, Colgate, Amazon and Apple. Analyze what works and what doesn’t with your competitors. Ask a data analyst to take a look and help you identify the best algorithms for your business model.

Damien Justus writes in the business, home improvement and real estate spaces, and is very passionate about health, cooking, diet plans and anything that has to do with staying fit.