McKinsey Article

[John T. Maloney (Skype: jheuristic)]

McKinsey article on future technology trends points directly prediction markets. For some skeptics, this is important.

http://www.mckinseyquarterly.com/Information_Technology/Applications/Eight_business_technology_trends_to_watch_2080

-j

 

[excerpt]

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Eight business technology trends to watch

Eight emerging trends are transforming many markets and businesses. Executives should learn to shape the outcome rather than just react to it.

James M. Manyika, Roger P. Roberts, and Kara L. Sprague

December 2007

7. Putting more science into management

Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.

Leading players are exploiting this information explosion with a diverse set of management techniques. Google fosters innovation through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time. Intel integrates a “prediction market” with regular short-term forecasting processes to build more accurate and less volatile estimates of demand. The cement manufacturer Cemex optimizes loads and routes by combining complex analytics with a wireless tracking and communications network for its trucks.

The amount of information and a manager’s ability to use it have increased explosively not only for internal processes but also for the engagement of customers. The more a company knows about them, the better able it is to create offerings they want, to target them with messages that get a response, and to extract the value that an offering gives them. The holy grail of deep customer insight—more granular segmentation, low-cost experimentation, and mass customization—becomes increasingly accessible through technological innovations in data collection and processing and in manufacturing.

[Nigel Eccles]

Interesting article. I recently left McKinsey so I know they have conducted some client work in prediction markets. There are certainly some consultants there who are very positive about them. In fact, a project on prediction markets won an internal innovation competition a couple of years ago.

 

Nigel

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