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FYI Solutions Blog

Apr 08, 2015

Opening Day, Analytics and Your Business

Author: Brett Zaziski

In honor of this week being the start of the regular season for Major League Baseball I think it’s appropriate that I write a blog about baseball. Much like corporate America, baseball has evolved with the growth of technology. Instant replay is being used, games are now available all across the country at the click of a button and the league is generating record amounts of revenue. The larger market teams have historically dominated the league by signing all the best free agents, paying players the most and essentially buying championships. However, that all changed when the publication of the book Moneyball brought to light the value of sabermetrics. Sabermetrics is known to the business world as analytics. Moneyball is about the 2002 Oakland Athletics who had a total team payroll of $40 million, the third lowest in the league, and yet they still managed to make the playoffs in both 2002 and 2003. You might say, “Yes, but they didn’t win the World Series.” While this is true, my response would be that does not matter. While the fans may not appreciate that answer the truth is that just like FYI Solutions, any Major League team is a business. The Oakland A’s ran the most efficient business and maximized their revenue by spending less and winning more.

This Moneyball approach created a buzz across the league and now all but two teams, the Philadelphia Phillies and Miami Marlins, have data analysts on their payroll. The Boston Red Sox, Chicago Cubs, Cleveland Indians, Houston Astros, New York Yankees, Oakland A’s, Pittsburgh Pirates, St. Louis Cardinals and Tampa Bay Rays are considered “all in” and spend the most on analytics in the Major Leagues. All of those teams have made multiple playoff appearances except for the Cubs (*analytics does not negate billy goat curses) and the Astros, both of whom are considered to have a farm system loaded with prospects ready to help make a playoff push in the near future. While analytics seems like the be all end all, it is important to remember that in both business and sports, without the right environment, leaders, managers and chemistry within the organization, all the data in the world might not be enough for a team or a business to succeed.

With the season underway, we will have a larger sample size to see how the teams with the most invested in analytics will perform versus those with lesser analytics payrolls. The team to watch will be the Miami Marlins as they have put together an exciting team without the use of analytics. Recent history has shown that the use of analytics has yielded positive results in terms of playoff appearances. Even if the Miami Marlins do have a successful season, it does not prove that analytics is a hoax rather, it proves that the old methods of scouting are still applicable. Analytics is a tool that should be utilized in all businesses and it should not be viewed as an invaluable or insignificant investment. The use of analytics is not a replacement to old business methods. Rather, analytics should be used to augment them. The point is, here at FYI Solutions, we have a great team that can assist you with your business analytics needs. Underestimating the value and significance of analytics is an old fashioned way of thinking and if you don’t want to make the investment now, you could end up like the present day Phillies in the future.

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