OVERRELIANCE ON DATA MAY DRIVE YOU INTO A DITCH

The new presidential administration is promoting “evidence-based” decision making.  Fair enough.  Companies often use “data driven” models to make critical business decisions.  Data is mined, sliced, diced, shredded and re-packaged to fit a host of analytical needs, whether in procurement and contracting or in other operations.  Precisely because it is good to know where you’re going, though, it is imperative to know that data has its limits.  As Texas Tech economics professor Andrew William Salter recently said in The Wall Street Journal, “Data doesn’t interpret itself.”  Further, people cannot “just let the data speak for itself.”  A set of the same figures can be, and often is, interpreted differently by people with differing perspectives, preferences, or agendas.  This is nothing new, either.  Mark Twain is famous for his 19th century line, “There are lies, damn lies, and then there are statistics.”  Compiling and analyzing data can be an important component of decision making, but it should not substitute for the ability of experienced, educated people to make their own final decisions.  People using the tools must be adept at it and, in our own Ikea experiences, some are just better than others in so doing.  Blindly going where you think the data are directing you may, like a GPS system, result in your going over a cliff.  Users of data need to understand its limitations and that, ultimately, there must be sound interpretation of the data, and other inputs, before decisions are made.  Contractors may have to make this point on procurement policy multiple times over the next four years.  Be prepared.