Those who are all day with data in hand say that these are the new oil of the 21st century , to cite one of the metaphors that are expressed when talking about this new manna that is feeding the machines so that algorithms analyze and be able to predict, chart trends or create solutions that transform, for example, the photos taken by a neophyte into a work of art thanks to artificial intelligence (AI).
Today I want to recommend a book, which I have not read yet, but whose review has fallen into my hands and which, as its title indicates, is about the ‘Alchemy’ that involves putting the vast amounts of data that exist today in a basket to convert them into something useful for medicine, nature, commerce, politics … and also to make or provoke some not very positive things like fake news, to name just a few.
Yes, data is the new gold for insurance companies, self-driving car manufacturers, mutual funds, football and basketball teams, tourism companies and politicians. They all have something in common: “they increasingly consider that data and scientists who know how to analyze it are a central element in their decision-making “.
It is not a fad, it is business evolution
Even the small neighborhood stores, and this is something that AliExpress also told us yesterday at the presentation of the new business unit that aims to attract Spanish businesses and companies that want to digitize and sell inside and outside of Spain, they will need analyze the transactions they carry out and the profile of their clients to survive. Data science is not a fad, but the next step in business evolution , and every organization is poised to undergo a digital transformation.
For sample, a button. AliExpress, the ecommerce store of the Chinese giant Alibaba, has already digitized one million of these neighborhood stores in China, out of the six million that exist, also increasing their profitability by more than 30 percent.
As explained in the book, by analyzing the data and taking it as a guide to make better decisions and expand knowledge about their current and potential customers, many organizations have managed to improve their processes. The authors of the book, Juan Manuel López Zafra and Ricardo A. Queralt, say that “ Alquimia delves into the business aspects of statistical, ethical and political, legal and technological data, and opens the door to the new avatar of our species: Homo algorithmus “.
Alibaba’s example
A space in the book is, what a coincidence, dedicated to Alibaba. The authors title this chapter as “Open Sesamo”, recalling the cave of the aforementioned. And he literally tells that “the Chinese« Amazon »created by Jack Ma in 1999, initially born as a business-to-business portal, has evolved dramatically until today forming a business conglomerate of around twenty companies, from commerce to individuals (Aliexpress) to means of payment (Alipay), investment funds (Youebao, the world’s largest monetary fund by volume of assets managed, more than 170,000 million dollars) or second-hand sales (Taobao, «the Chinese eBay ‘).
Similar to Amazon, data scientists at Alibaba have used collaborative filtering as one of the main recommendation algorithms. The main difference with the analysis of the shopping cart lies in the generation of personalized recommendations versus the establishment of general association rules. Lets go from “If A buys Z, then Y will also want” to “Based on your preferences, we have the following recommendation for you”. Rather than looking for common combinations, collaborative filtering looks for frequent combinations between baskets that contain at least one of the items, regardless of the number of baskets.
And while the basket analysis does a retrospective investigation, “looking” inside each of them in the sales history, the collaborative filtering is completely dynamic and updates “live” with each customer recommendation. Like Netflix, the champion of the method with movies and series, Alibaba uses it consistently to improve the sales propensity of its customers.
We will undoubtedly read this book, and talk to its authors, but I dare to tell you from these lines that they have forgotten to talk in it about one of the areas that in the present and future will manage more data so that, in addition, machines help journalists do their jobs better. Yes, I am talking about automated journalism. But that book, I’ll write it one day.
