The Impact of Cognitive Bias on IT Strategy

Article by Mike Chaput on March 18, 2024
Mike Chaput
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Exposing the Incompatibility of Exponential Growth with Human Understanding and Network Survival

Cognitive bias isn’t bad. It’s just often ignored or misused. How does cognitive bias impact business? Humans operate businesses. Humans make business decisions. Those decisions are ripe with cognitive bias and the inability of human brains to fathom exponential growth. Why not? The human brain is wired to think in linear terms. 

For example, the following is a thought exercise from the book Abundance by Peter Diamandis and Steven Kotler. 

If I asked you to go out your front door and take 30 steps, I bet you could guess where you’d end up without even taking that short walk.

It’s a simple, linear, step-by-step experience you’ve done a thousand times.

But what if I told you to take 30 exponential steps? That is to say, double the size of your step each time. 1 + 2 + 4 + 8 + 16 + 32 + 64, etc...

If you took 30 exponential steps out of your front door, where would you end up?

The answer? You’d go around the earth 26 times! 

This guide describes how cognitive bias affects business decisions around IT strategy, technology, AI (Artificial Intelligence), ML (Machine Learning), and data analytics. 

Key takeaways 

  • What is cognitive bias?
  • Understanding the advantages of exponential growth  
  • How does cognitive bias affect emerging technology, data, and IT strategy?

What is cognitive bias?

Cognitive bias is theoretically an evolutionary advantage humans developed over time to survive. It’s present in all our decisions, including business decisions involving technology and IT, that we often don’t fully understand.

For example, a standard business approach is to plan out IT and business strategy goals in 3-to-5-year chunks of time. That’s linear thinking. With IT and technology, there’s no way to accurately estimate the value of computers, networks, devices, and software because it uses an exponential curve, not a linear one.

In 3 to 5 years, every piece of technology we use today may be outdated and replaced by new technology. That’s why it’s critical to think of business planning year by year, including your IT and technology strategy.

The technology investments planned and made for a business must be considered year by year, at minimum, to make sure the business has the technology it needs to be productive and grow. Face facts, IT investments are critical for the operational success of every modern business. Your business will be left behind without continuous technology, security, and IT infrastructure updates.

Remove cognitive bias in planning your business strategies, including IT and technology. Understand that without investing in and planning an effective IT strategy, your business will be unable to compete. 

Understanding the advantages of exponential growth

Technology advances in an exponential path rather than a linear path. Humans are hard-wired to think in a linear pattern. It explains why short-sighted IT decisions make businesses less competitive over time. Is it that business leaders have a cognitive bias toward technology and IT? Or is it because it’s impossible to predict how technology will change?

Consider planning IT and technology investments frequently and updating plans and strategies as new technology evolves and impacts a business. Maybe you can’t exactly predict how technology and IT will change, but you can plan your investments, so the business continues to thrive by having the IT and technology it needs to compete. 

Consider the importance of the current IT network, software, hardware, and devices to your business. Could you operate without IT and technology? It's likely not, and certainly not at the same capacity or productivity levels. Keep the importance of IT and technology at the top of your mind when planning business and IT strategies. 

How does cognitive bias affect technology, data, and IT strategy?

Cognitive bias impacts every business decision made. For example, remember that humans create the algorithms that are the building blocks of technology. Algorithms are programs or code that calculate and make decisions in software and emerging technology in generative AI and ML.

Humans are creating the software and hardware used to run most modern businesses around the globe. Humans determine what data is important to analyze. AI and ML technology learn from who? Humans and human-created data sets. How can businesses make the best decisions based on potentially biased data?

IT strategies must include a variety of opinions across the business. With diverse opinions come the best plans to manage investments in technology and IT now and into the future. 

The only way to compete is to keep up with technology and IT. Plan to invest in your business’s future by planning for IT and technology. 

Need input on your IT, Data, and Technology Strategies?

Are you struggling to keep up with the ever-changing landscape of IT and technology? Do you worry about making the wrong decisions when it comes to investing in new technology or data analytics? You're not alone - many businesses struggle with these challenges. But the good news is that Endsight can help.

At Endsight, our business is making your business IT and technology successful. We’ll give you a fair and honest assessment of how critical your IT systems, networks, and technology are. We’ll also help you plan exponentially to invest in the technology you need for business success.

Find the right managed services team for your business. Endsight can help you create a positive IT strategy that will set you up now and into the future. If you need to take advantage of new technology, Endsight can help get you up and running. Endsight can also manage your system and keep it secure.

Need advice or a quick assessment to see where your IT strategy stands? Endsight is an exceptional MSP partner that helps keep your business up and running and ahead of the competition. Get your free assessment today and see how Endsight can help your business advance.

Tags: IT strategy, technology, data analytics, general IT

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