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2 June 2025

Latent Variables (Glossary)

Artificial intelligence Automation Big data and smart data Digital transformation Sanjay Sauldie Glossary

The term "latent variables" is primarily used in the fields of artificial intelligence, big data, smart data and digital transformation. Latent variables are characteristics or influences that we cannot measure directly, but which are nevertheless important for our analyses.

Imagine you want to know how satisfied people are with an online shop. Satisfaction itself is not directly measurable, but it influences measurable things such as click behaviour, how long users stay on a page and how often they buy something. We can record this measurable data, but the underlying satisfaction remains "latent", i.e. hidden.

Latent variables are used in artificial intelligence to recognise correlations that are not visible at first glance. With big data in particular, they help to create an overall picture from a large amount of individual information, which supports companies in making decisions. Latent variables therefore make it possible to gain important insights from data, even if not all the information is obviously available.

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Sanjay Sauldie

Sanjay Sauldie is a digital strategist, speaker and developer of the transruption toolkit, which companies can use to make their digital transformation measurable, human and sustainable. With kiROI - the AI-based approach to value creation in the digital age - he helps self-employed people and companies to integrate artificial intelligence into their processes in a practical way. With his outstanding marketing strategy iROI, he has already led countless companies to greater visibility and thus more profits. He combines digital innovation with disruptive thinking models for a sustainable business strategy. He studied mathematics and computer science at the University of Cologne, completed a Master of Science in Digital Disruption at the University of Salford (UK) and a Design Thinking programme at MIT/EMERITUS Singapore. As a multiple award-winning expert - including the Golden Web Award and the Innovation Award of the Initiative Mittelstand - he advises SMEs and corporations. His motto: "Digitalisation is not an end in itself - it must serve people."

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