What is an algorithm?

When your invoicing software works out the VAT, when a bank decides in seconds whether to approve a loan, and when an online shop tells you that customers also bought something else, algorithms are running underneath. An algorithm is a set of precise, step-by-step instructions that a computer executes identically every single time. Any kitchen recipe is an algorithm; the difference is that a computer never improvises and never forgives ambiguity, which is why turning business rules into algorithms always exposes the exceptions a company used to handle case by case, informally, in someone's head. For an owner the word matters in two situations. When you automate a process, you must be able to describe its rules without saying it depends. And when a supplier talks about their intelligent algorithm, the right question is which rules it actually applies and to which data — the algorithm is only the recipe, and the quality of the ingredients still decides the meal.