Some examples best illustrate what is Occam's Razor and its application in business.
Developing additional functionality in Information Technology systems invariably entails additional cost. Very often, the costs to add functionality that serve a single business process make such addition unviable. Most business managers, nevertheless, decide to go ahead with the addition assuming that such functionality will find use in the future. Application of Occam's Razor principle in such scenarios would reveal the lack of hard data to substantiate that the functionality would find use in the future.
Many entrepreneurs and business managers go in for automatic error-handling procedures. In reality, over-automating error handling results in needless complications, and the benefits rarely justify the cost. Application of Occam's Razor theory to select the simplest of alternative solutions would allow adoption of a simpler solution to detect and flag error and manual resolution, instead of the complicated, albeit fashionable automated error-handling process.
One good real life example of applying Occam's Razor in business is that of 37 Signals, a company founded by Jason Fried and David Heinemeier Hanson, famous for its product "Ruby on rails." They adopt a policy of removing barriers and eliminating complexity to design for the web. For instance, they eliminate some navigational choices if it becomes too complex, remove a background image if it distracts a message, or provide instructions to guide users on where to click, all contributing to making web pages simple.
The advantages of applying Occam's Razor theory seem obvious and common-sense, but the fact remains that many entrepreneurs and business managers overlook such simple and basic things under the spell of contemporary fashion and trends.