3 Things Everybody Ought to Know About the Benefits of Decision Management


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Jens Goossens
Posted by Jens Goossens on Jan 9, 2015

Decision Model Management

Be honest, do you consider yourself a great decision maker? I believe, with a few exceptions, that many people are not able to make optimal decisions. Why you might ask? Well, the answer is quite simple: people don’t have the time to collect and analyze all the available data and information from information systems in your organization, suppliers, customers and other external sources.

In addition, people’s capacity to process and store certain amounts of information is very limited. Just try to remember what you had for dinner two weeks ago...? But don’t worry - help is on the way, because in this blog I will list three important benefits of Decision Management that everyone should know in order to improve business outcomes.

Before beginning, I'd like to point out that a colleague of mine, Ton Baas recently wrote a blog explaining the 5 most common pitfalls of informed decision making. He demonstrated three different types of decisions; strategic, tactical and operational. In this blog post, I will focus on the operational type, since these kind of decisions are made very often, and in a repetitive way. If you would like to read more about the strategic benefits I can recommend the What is decision management? blog by Suleiman Shehu. Without further ado, here are the three things everybody ought to know about the benefits of decision management.

1. Develop or redefine decision models

Define your business rules and model them in a way that they become visible and logical for your stakeholders. This way, you can learn how your business rules are embedded in business processes and gain insight into the factors and rules that are used. Making a decision model will reduce the complexity of numerous business rules and make them more manageable. This way, you'll improve your knowledge of your business processes and you'll be able to optimize and streamline corresponding actions. Most of the time, business rules change while the process remains the same, for example with taxes. The business rules around taxation change very often, whether it is your income or legislation, but the process of paying taxes remains the same. Modeling your business rules will enable you to change these rules without having to make any changes in your process.

2. Automate decisions

Once you have modeled your business rules, you'll see that many operational decisions can be reused and automated for multiple decisions. Take, for example, the processing of e-payments by an automated clearing house. The ACH has a set of rules for processing one e-payment and in turn these same rules can be reused for millions of other e-payments. Therefore the decisions need to be fully structured (or at least semi-structured) so that the decision model can help support the analytics and decision management tools. Given that operational decisions are numerous and need to be made on a minute-by-minute basis and within a timely manner, automating these decisions will improve quality and reduce the workload of the people who used to make them.

3. Make it “real-time”


Once you are able to automate operational decisions you could make use of real-time business intelligence. Note that real-time intelligence only makes sense for decisions that require immediate action once new and fresh data has been collected. Some examples that might benefit are: e-payments, fraud detection, call center optimization, algorithm trading and dynamic pricing. In some cases suboptimal, but quick decisions may be more valuable than accurate and prolonged ones. However, in order to make this work you will need to model your business rules into a fully automated process. As a result you will be able to make decisions more effectively, quickly and proactively.

“There are more things in heaven and earth than are dreamt of in your philosophy…”

I just couldn’t resist quoting a line from Shakespeare’s Hamlet (Act I, scene V), although there is some disagreement about the meaning of this sentence. I believe it means something along the lines of: education and rationale can’t explain everything we observe in this world, for example the ghost of Hamlets father. Putting this into the context of decision management: for some, it can be difficult to make sense of the complexity of the business rules surrounding your business processes. However, with the right set of tools and methods you can create necessary insights and develop knowledge about your decision making process and business rules. This way, you are one step closer to realizing the business benefits effective decision management can deliver.

Download Integration of decision modeling in organization design

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