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In today’s world, everything is connected to everything. This hyperconnectivity leads to a lot of grey swan events: events that have a low probability of happening, but which fortunately you can also see coming and thus prepare for. The condition is that you observe well and that you are able to translate those observations into the necessary action. The use of analytics and AI is indispensable here.

The coronavirus outbreak was a typical black swan event: a highly unlikely confluence of circumstances with a gigantic impact on society. Currently, however, there are a lot of grey swans coming at organizations: disrupted supply chains, hyperinflation due to soaring energy prices, a high urgency for sustainability efforts, a labor shortage, and the geopolitical situation. 

Many executives and senior management are asking the same fundamental questions: How can their organizations meet these major challenges? How can they turn these grey swans into opportunities? And how can analytics and AI help organizations do that? Bryan Harris, executive vice president and chief technology officer, at analytics vendor SAS, explains.

Tough times create opportunities

“Strong relationships are almost always formed during difficult times – not when everyone is making big gains. Customers feel disoriented from the many disruptions they are experiencing. Now is the time to partner with customers and help them become stronger with analytics and AI so they can make the best decisions based on that data.”

To do that, you need to scale human observation and decision making, Harris believes. “This is only possible if you use analytics and AI because the human brain alone is not capable of processing the volume of information organizations face each day.”

Cloud & reliable AI

The scale that is then needed can only be achieved by using the cloud. The cloud offers a flexible and resilient architecture that can move with the increasing amount of data and the vast amount of AI models that companies are using.

According to Harris, the choice of the cloud is because of the resilience and agility it offers businesses. “It’s an environment that can handle the increasing quantity of data and therefore scale human observation and decision-making.”

Scaling AI requires AI to be reliable. Organizations must be able to apply appropriate analysis and modeling techniques, so decisions are transparent and explainable. Harris: “Because AI doesn’t understand our human values, AI doesn’t make ethical trade-offs. That’s what humans have to add. This is partly why it’s so important for models to be transparent. If you’re working with a black box and employees don’t know how a decision came about, they can’t correct a model.” Especially in the healthcare and social domain, responsible AI is crucial.

Steps to success

What steps should companies take to do this successfully? Harris believes in the following three steps: “First, it is important to engage an analytics partner: A party that can help you transition to the cloud and implement AI. Choose an experienced partner who understands how to bring hundreds of models into production. A second important step is a solid and long-term data and analytics strategy. And the third step is to scale your decision-making. Challenge your organization to take on bold challenges. By continuously learning and improving in this way, you can prepare your organization for the next disruption or grey swan.”

Those who put this advice into practice are more likely to see grey swans coming and can also decide earlier on the best way to respond. Harris says this is important “because the hyperconnectivity that underlies many grey swans is not going away. Whether it’s a war, a new pandemic or a natural disaster, grey swans will continue to happen. And you must be prepared for that.”

This article was submitted by SAS.