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The View From Here: Nate Silver Knows Baseball, Politics — and BI

January 7, 2009

Nate Silver originally was known as the developer of a statistical model used to make sense of the ocean of statistics created during a major league baseball season.

Silver’s greatest fame, however, came from the site he created that to predict the outcome of the presidential election. He used a formula similar to the one used for baseball. He was wildly successful, calling the popular vote to within one percentage point. The site, FiveThirtyEight.com, said that Obama would win, 52.3 to 46.2 percent. The final tally was 52.9 to 45.7 percent. His Electoral College predictions were similarly accurate.

In an interview in CIO Insight conducted by Edward Cone, Silver makes the important point that numbers alone are not sufficient to make important decisions:

Sometimes, if you depend purely on the numbers, there’s a kind of inverse selection at work. That applies to things like site selection for a business. A site might look great on paper for retail space, but maybe there’s a porn store across the street, or a murder happened there two years ago. There are negative outliers you have to be very careful of.

The point can be expanded to state that any business intelligence undertaking must be based on as comprehensive an exchange of information between everyone involved. The folks who procure, plan, roll out, manage and upgrade the BI tools must have a deep and broad understanding of precisely what the users want to get out of the project.

The conversation must be ongoing and must continually strive to get beyond the superficial: The BI people must truly understand the goals of the consumers of the BI data and those users must understand the real limits of the BI tools. Realizing the full potential of business intelligence software is as much art as it is science–and includes the human element as much as the bits and bytes.

Posted by Carl · Filed Under Business Intelligence 

Comments

One Response to “The View From Here: Nate Silver Knows Baseball, Politics — and BI”

  1. John Ingram on January 15th, 2009 1:12 pm

    Carl …

    You hit this nail on the head!

    I work with varouis clinets and have noticed that if both the business and technical groups are not working together very early in the project cycle, the full ROI on a project will not be recognized.

    In order to be successful, both groups need to fully understand each others goals, and limitations.

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