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Defining An Action

September 2016

Algorithms are rapidly evolving as the core of automating operations for many businesses

Traditional industries globally are waking up to a force of disruption – as has been rightly highlighted, the world’s largest taxi company, Uber, owns no taxis, WhatsApp delivering billions of messages and enabling calls over the phone has no telecom infrastructure, Alibaba, the Chinese e-commerce company making waves worldwide owns no inventory. What is common to all of these is the adoption of algorithms at the core of operations.

Welcome to the world of Algorithmic Business. A concept introduced to the world by Gartner Inc. With worldwide IT spending forecast to surpass USD 3.6 trillion in 2016, Gartner believes interconnections, relationships, and algorithms would defining the future of business. As Peter Sondergaard, Senior VP at Gartner and Global Head of Research has outlined, “Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it. Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

Businesses, world over, are generating vast amounts of data across various fields. As they procure the same, it is essential for them to turn to proprietary algorithms which will determine the impact an organization can achieve by way of the data garnered. Some of the industries that can be highlighted as model examples of utilizing algorithmic business include:


Stock Trading
Developed as a theory in itself, Algo trading has garnered its fair share of attention amongst stock traders worldwide over the last few years. The coming together of complex mathematical formulas and high speed computer programs has resulted in the development of various investment & trading strategies.

E-commerce websites are increasingly becoming the order of the day for shoppers worldwide. As mentioned earlier, the adoption of algorithmic business model remains centric to this business – from pricing to managing inventory and seller matching and order delivery, almost all facets of this business is algo driven.

City commuting is becoming easier by the day given the influx of taxi services. Using smart algorithms these services enable bridging the gap between the passenger and driver at the click of a button.

The numerous examples witnessed in today’s life is testimony to the fact that Algorithms would continue to evolve as the core of operations. The speed and scale is one that cannot be easily matched by the human workforce. It is bound to remain the focus area aiding overcoming of business challenges and improve operational efficiency. The chart outlines 4 essential steps suggested by experts in guiding businesses towards automating their business model by way of algorithmic adoption.

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