How to become a 'decision-centric' organization

It's no secret: Combining automation with decision management can add up to major rewards. But doing the job well requires a "decision-centric" mindset.

By automating and improving operational business decisions, companies can increase the precision, consistency and agility of those decisions—while saving significant amounts of time and money.

"Operational or 'micro' decisions about a single customer or a single transaction are where automation really pays off," says James Taylor, CEO of Decision Management Solutions. "Even though each decision isn't worth that much to the organization, the volume of decisions acts as a powerful multiplier. That makes investing in automating these decisions a good idea."

That's also a good argument for becoming what Taylor calls "a decision-centric organization," which he defines as one that's moving away "from a focus solely on processes and the functional applications that support them to decisions and systems that automate them."

Of course, decisions have always been critical for businesses. But, in many organizations, they're ineffective because they're mired in various functions or processes, says Taylor, also co-author of "Smart (Enough) Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions" (Prentice Hall, 2007). In contrast, organizations that have adopted that decision-centric mindset emphasize streamlining and automating their decisions as well as the use of data and analytics to improve them.

Automation's bumper crop of benefits

Automating decision-making can help boost efficiency. But the approach provides other benefits as well, Taylor says. Among them:

  • Decreased processing time; lower processing costs. Automating decisions allows transactions and other business events to flow smoothly and quickly in a much higher percentage of cases. When necessary, a well-designed system can request manual intervention, then quickly return control to the automated system once the issue has been resolved.
  • Ability to create unique processes: Companies want to balance standard processes with taking a customer-centric stance. If the decisions within a process are focused on the right action for a specific customer, then every process execution will be unique, even if all the process steps are consistent. Each process becomes infinitely customizable by making the decisions more specific. By tailoring them to particular customer segments, the processes become more targeted and more customer-centric.
  • Increasing agility: Decisions are high-change components and changing decision-making drives many IT projects. Automating decisions using business-centric technology such as business rules allows decisions to be changed without requiring a full IT lifecycle. That, in turn, enables the business side to make important changes without dealing with sluggish IT lifecycles. The approach also simplifies the IT structure by removing the most complex aspect—the decision. Instead, it allows IT to focus on standardizing processes and developing complex functional components.

Becoming decision-centric

So how do you move toward automation and decision-centricity? Taylor offers these steps:

  • 1. Identify the types of decisions you're trying to automate. The best candidates: small-scale decisions involving a single customer or a single transaction. Also look for decisions that are "repeatable, typically must be made quickly and often must be delivered at the front-line of an organization," Taylor advises. Other types of decisions— such as unique, one-off decisions—are typically too expensive or research-intensive to automate.
  • 2. Assemble business, IT and analytics teams to build decision services for automating decisions. Once automated, decisions can be integrated into the systems, processes and events that use them. Building decision services – services that make decisions for other services - "involves applying decisioning technology, such as business rules and predictive analytics, in the context of these self-contained, decision-making components," says Taylor, who's also written a decision services briefing paper.
  • 3. Monitor, analyze and improve. You can only streamline and improve a decision-making system after you've seen it work in a real-world situation. That involves "establishing a monitoring and continuous- improvement process for decision analysis," Taylor says. "No decision is static, and what makes a decision a good one changes constantly--so an infrastructure for constant evolution is required." Continuously analyzing decision data will further allow you to improve decisions and put your data to work.

Turning decisions into action

Ultimately, effective decision management involves more than just obtaining new information and insights, Taylor says. "Decisions are a point in time where you have gathered and considered some data and you have a selection to make. You have a set of options you could consider, a set of choices from which you must select," he says.

Using those options and choices, you can close the "insight-to-action gap" and take the right business action, he concludes: "You can say, 'Because of what we know, because of the circumstances in which we find ourselves, because of the rules that apply, we are going to take this action with this customer or this transaction.'"

Ryan Cloutier, a student at Northeastern University, contributed to ebizQ during his editorial co-op internship with ebizQ's parent company, TechTarget.

About the Author

Ryan Cloutier, a student at Northeastern University, contributed to ebizQ during his editorial co-op internship with ebizQ’s parent company, TechTarget.

More by Ryan Cloutier

About TechTarget

Company Description Here