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Moneyball – Using Data to Change the Game

In 2003 Michael Lewis wrote a book called Moneyball: The Art of Winning an Unfair Game, which recounts how Billy Beane, the general manager of the Oakland Athletics baseball team, changed the sport with data analytics.

Beane hypothesised that the traditional methods for analysing players and the collective wisdom of baseball insiders was flawed.

He suggested that the measures they typically used to gauge the qualities of players wasn’t relevant to the game in the present day. As expected this wasn’t a popular idea as it flew in the face of decades of practice, and many teams and coaches relied on the experience and intuition of scouts to help them select new players.

Performance Indicators

Another driving factor for Beane’s new approach was that Oakland were a fairly modest team and could not compete with some of the bigger teams when it came to buying players.

Instead of using typical statistics and gauges to analyse players, Beane used rigorous statistical analysis of different key performance indicators which were cheaper to obtain.

This allowed him to acquire players which the bigger teams undervalued, but he rated very highly with his new system.

By using this new approach Oakland Athletics were able to compete with some of the larger teams, such as the New York Yankies, despite their budget for player salaries being significantly less.

The new system proved very successful, enabling Oakland to reach the playoffs in 2002 and 2003.

Moneyball had such an impact on professional baseball that now many of the major teams employ individuals whole full time job is analytics, and the term Moneyball entered the sporting vernacular.

Business Intelligence Software

Moneyball is now a term being applied to business and some are equating the data analytics used in professional baseball with business intelligence software.

More specifically Moneyball has become a shorthand for re-evaluating which key performance indicators are being monitored. Are you analysing certain KPIs for traditional reasons?

Are they actually the best measurements for your business? When was the last time you re-evaluated your KPI Software?

Data analytics allowed a relatively small baseball team to compete against much bigger teams and beat them. In business an SME cannot compete on price in the long term against a large competitor.

However, there are other ways to attract customers away from the bigger brands, build loyalty, and even change the industry through innovation and approaching the status quo from a new direction.

Dashboard reporting software can provide businesses with unique insight by translating large amounts of data into something manageable, it can help them to monitor important KPIs, and inform decision makers, helping them to be more efficient and responsive to change.

Written by Ken