Infobright Blog

On Sept 23 the new movie "Moneyball" opens throughout the US. As those who follow baseball know, it is the story of how the general manager of the Oakland A's, Billy Beane, used analytics to help his team compete against the teams who could afford to spend far more on players (such as the Red Sox, the Dodgers, and my beloved Yankees.)

Of course it is true that statistics have been a major part of baseball going back over a hundred years. According to a reference in Wikipedia, "The practice of keeping records of player achievements was started in the 19th century by Henry Chadwick." Baseball general managers and scouts have long used player statistics as a basis for establishing a player's value, and to determine the make-up of their teams.

What Beane and the Oakland front office demonstrated in 2002 was that much of the conventional baseball wisdom as to how to determine a player's value was inaccurate. They were the first to use rigorous statistical analysis to determine how to more accurately assess value, and thus they were able to compete effectively against richer teams.

The competitive advantage they gained could not last of course. Other teams caught on and began to invest heavily in this new Sabermetric approach. Today, many teams have full time Sabermetric analysts on board and the number of statistics being kept and the type of analysis being done is incredible.

Some interesting lessons come from this story. The most obvious one is that analytics can provide a strong basis for competitive advantage. The second is that after a bit of time, you can expect your competition to use the same analysis to even the playing field.

The other one that strikes me is that you can generate lots of statistics that turn out to be less important that you think – and the hardest part of the search for truth is to figure out what to ignore. Through the process of investigative analysis, with the ability to quickly drill down into masses of data, you may just find what you didn't know you were looking for.