THE BLOG
24/02/2015 04:21 GMT | Updated 25/04/2015 06:59 BST

The Age of the Algorithm

While it didn't win Best Picture at this year's Academy Awards, The Imitation Game has certainly garnered many accolades and a great deal of attention. The film portraying Alan Turing's successful quest to break the German Enigma code has cast a spotlight on computing. However, one thing that the film didn't show is that Turing used algorithms as part of his method to crack the code. Perhaps this isn't so surprising when you realise that by and large, algorithms go unnoticed in our daily lives.

Yet algorithms actually power much of our everyday lives, from deciding the results of internet searches, to predicting the weather and even fixing loan rates. At one time the recipe for Coca-Cola was famously one of the most closely guarded corporate secrets, but this has surely now been overtaken by Google's search algorithm, one tweak of which can massively enhance a company's opportunity for success thanks to its search rankings.

Algorithms give us unprecedented analytical and prediction abilities. Using them, we are able to determine trends in human behaviour, changes in the output of machines and the occurrence of natural phenomena, to name just a few possibilities.

Their time has come

Cisco predicts that about 50 billion devices should be connected to the internet by the end of 2020. This increasingly widespread adoption of The Internet of Things will make algorithms even more powerful. Connected devices will be able to talk to each other and take action based on information derived from algorithms. We are already starting to see such systems of intelligence today, self-driving cars that analyse their surroundings and automatically adjust speed and direction to avoid accidents is just one example.

Algorithmic interpretation of the data from connected objects will also give brands significantly more knowledge about how customers use their products. Based on correlations and patterns that we just couldn't see previously, we will have new insights into consumer preferences and be better able to act upon those insights. In the past companies relied upon systems of record and then systems of engagement to manage customers interactions - now as we move to systems of intelligence, companies will really understand their individual customers, often knowing what they will want or choose in advance. The additional purchase suggestions on Amazon and other e-commerce sites are a basic version of this.

Responding to this trend, organisations will need to change the balance of skills they employ. As data science plays an increasingly important role in the customer experience, it is likely that more coders - expert at creating the required algorithms - will be hired, as will more data analysts. Decision-making will become more transparent too.

It's time for the un-sung algorithm to step into the limelight: it's going to play a transformative role in the next few years, for businesses, for consumers, for employees, and even for all humanity; and this is something we need to be ready for. Maybe algorithms will be the real winners this awards season after all!