Moneyball is Business Intelligence

I finally got around to seeing Moneyball this weekend. I didn’t know too much about the film. I knew it was about baseball, had some actors that I like and had something to do with statistics. As a big fan of stats I was interested to see what all the fuss was about. I thought the movie was good. I think the fact that Hollywood spent $50 million on an advertisement for the power of business intelligence is pretty interesting.

The movie follows a baseball general manager (GM) as he tries to rebuild a team that has been ravaged by trades and buyouts. As a small market (baseball wise) team their budget is low but aspirations high (sound like anyone’s business?). He starts, where he’s always started, with scouts and gut feel. He quickly meets a person with some statistics background, a Yale econ graduate, who explains that baseball is not about pretty swings and home runs, but about on-base percentage. The logic is that if a baseball team wants wins it has to score runs, to score runs they have to get on base. The outcome of all of the stats crunching is that many factors lead to on base percentage, but that on-base percentage is the culmination of the rest and leads to the outcome of a win. The movie goes on to show how others are skeptical and that these two manage to turn the skeptics on their heads by winning an amazing number of games. In the end the skeptics aren’t convinced, but future World Series teams (Red Sox) are.

While not 100% accurate from a business intelligence perspective (it is rarely one data point that rules them all), the idea is very sound. You could replace baseball with business and play out the story in nearly any company throughout the world. The importance of separating outcomes (wins/profits) from the things that go into that outcome (on-base percentage/sales conversion as an example) is a critical step in taking your business to the next level. We work with companies that are sitting on mountains of data but still making decisions by gut feel; once the conversion is made to harnessing the power of the data, companies start playing a whole new ballgame.

If you want to max out your company’s on-base percentage and really drive growth and profits contact us to setup a game plan.