The Magic of Analytics
In his book, The Art of the Long View, Peter Schwartz tells the story about ancient Egypt—at a time when pharaohs ruled that part of the world. Back then, there was a temple at what is now the northern deserts of the Sudan. The temple was positioned on the Nile, beyond its three major tributaries: the Victoria (White) Nile, the Blue Nile, and the Atbarah (Black Nile).
Each Spring, something seemingly miraculous happened that allowed the temple priests to appear very magical:
they would look at the color of the Nile and predict the future.
The agricultural economy of Egypt was greatly dependent on the flooding caused by the rain upstream. The flooding provided the much-needed irrigation to the Egyptian farmland situated on the Nile.
The Victoria (White) Nile
If the color of the Nile was clear, the temple priests knew that the predominant water flow was coming from Lake Victoria, traveling the 5,000 kilometers or 3,000 miles from Kampala to Cairo, through the Sudanese swamps. That meant that flooding would be minimal and would happen late in the growing season. Unfortunately for the people living in Egypt and the farmers that fed them, the minimal flooding and late irrigation would provide crops, but not an abundant harvest. The rains were too far away to adequately saturate the farmland along the Nile.
The Blue Nile
If the color of the Nile was dark, the predominant water flow was coming from the Blue Nile, specifically, from the nearer Lake Tana in Ethiopia. This would be great news for Pharoah and the farmers because the flooding would rise enough to saturate the fields and produce a great harvest that year.
The Black Nile
But if the color was a greenish-brown, the predominant water flow was coming from the Atbarah, which rushed down from the highlands of Ethiopia. For much of the year, the Atbarah is little more than a stream. However, during the rainy season (generally June to October), the Black Nile rises 5 meters (18 feet) above normal. The Atbarah’s path is much shorter to Egypt than the other two Niles. If the rain begins in the Ethiopian highlands before it does near the two lakes that feed the other Niles, flooding in Egypt would not only be early that year, it would be catastrophic, wiping out most of the crops planted that year.
Magical Data Analytics
Futurists like to use this story as a way to create scenarios for their strategic plans. But we can go further than that. This story actually illustrates the Magic of Data Analytics.
Data Analytics has three components: Descriptive, Predictive, and Prescriptive Analytics.
Like the color of the Nile at the temple in ancient Egypt, Descriptive Analytics are key for understanding what is happening in the country or organization at that moment. The temple priests would see the color of the water and would know exactly where the heavy rains were coming from.
At that point, the priests would use the data they had collected for centuries accurately predict the outcome of the spring floods. This is a prime example of Predictive Analytics.
The third type of data analytics, Prescriptive Analytics, is what looked like magic to Pharaoh. If the river was being fed by the Blue Nile, the priests would tell Pharaoh that he would have a bountiful harvest that year and could collect more taxes, conquer more territory and the like. If the Black Nile prevailed, the priests would inform Pharaoh that he would have to use grain stores as a reserve to feed his kingdom. And magically, the priests would be correct in their predictions and in their counsel to Pharaoh.
To Pharaoh, data analytics is magic. For us, it’s not magic. It only looks like it is.