Asset Management / Optimization

Beware straight-line projections

Market analyst research reports often predict growth rates or adoption curves in a straight-line extrapolation of the recent past, but in the real world, things are seldom so predictable or comfortable.

By Keith Larson

By Keith Larson, VP Content, Putman Media

Keith LarsonAs process automation professionals, subjugating variability and managing change in a predictable, orderly fashion are our stock in trade. We deploy automatic feedback mechanisms to restore order where natural variation would run amok. We use predictive models to forecast precisely the results of process modifications, often long before any physical changes are made.

But in the real world—and by “real” I mean the one inhabited and influenced by people and personality—things are seldom so predictable or comfortable. The course of things to come is often determined by discontinuous events that can’t be extrapolated from current conditions. Yet for some reason, even rational, professional people often are surprised at this turn of events, acting as if they’d forgotten the second half of Newton’s first law—that an object in motion will remain in motion, unless acted on by an outside force.

A familiar case in point: the seemingly ubiquitous straight-line projection. Pick any market analyst’s research report, and I challenge you to find a growth rate or adoption curve prediction that strays from a straight-line extrapolation of the recent past.

One favorite example of mine is an early 1990s industry report that charted the persistent penetration of the MAP/TOP protocol developed by GM (remember that one?) in the industrial network space, predicting its ultimate domination. MAP/TOP’s cost and complexity, along with an unanticipated virtuous cycle of innovation that would continue to boost Ethernet’s capabilities, undermined that forecast in very short order.

Around the same time, I remember surveying process control software makers on future trends in computer operating systems. Neither Microsoft nor Windows was on anybody’s radar screen, yet a news item elsewhere in the very same issue announced the release of Windows 3.0, which turned out to be the platform’s breakthrough release in the automation market.

Indeed, I don’t know who first placed “the forecast is wrong” alongside death and taxes in the pantheon of things you can count on, but as a long-time creator and manager of P&L forecasts, I can personally attest to his or her wisdom. There are just too many factors that can’t be controlled or adequately accounted for. In the end, you’ll be either lucky or wrong.

Perhaps nowhere are the forces of discontinuous change more evident than in the information and communications technology arena. New technologies and business models are emerging, expanding—and sometimes flaming out—at an accelerating pace.

Granted, the process automation industry is nothing but a mole on the backside of these global forces, but developments in this arena often affect how the business of process automation gets done.

The publishing industry, too, is subject to many of the same forces. Back in the pre-public Internet days, a business-to-business magazine such as Control was a relatively straightforward pursuit. Write articles, sell advertising, print and mail the magazine. But the advent of email, the web, and search-engine technology have represented both a wrenching change and opportunity for us to reinvent how we help to mediate the information exchange between end-users and providers of process automation technology.

As keeper of the Control flame, it’s my job to stay on top of developments in the broader media world. Mobility, time-shifting, and on-demand are the buzzwords for an increasingly Tivo-ed and iPoded mass media scene. And, ever since Google’s $1.65 billion acquisition of YouTube, video has taken center stage as the next evolution of online content.

I think I understand the entertainment-oriented “clip culture” that YouTube has helped to foment, but when attempting to apply it to a business-to-business community such as ours, I’m not yet convinced of its utility or appeal.

Don’t get me wrong—we’ve been blogging and podcasting for some time now, and editor-in-chief Walt Boyes’ very first “Automation Minute” video experiment received an impressive number of downloads when it debuted last month. But, frankly, we have a ways to go before online video passes muster for anything beyond entertainment value.

Conversely, we do need to find ways to effectively satisfy the information needs of the coming generation. What will be the lay of that land? I don’t know, but you can bet it won’t be found in a straight line from here.

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