The value of business decisions and how to manage them

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By Anne-Teresa Patt

Business decisions are anything but harmless. Their results can have a big impact on the enterprise’s performance. Business Decision Management (BDM) is a professional method to control and to optimize recurring decisions.

This blog post takes a closer look at its value and tells you how to get started.

The impact of business decisions

Inconsistent decision-making processes often lead to a big effort in time and money and to disregarding compliance standards. Imagine the case of processing personal data: employes have to know when personal data is really required and necessary, and when it isn’t. Business Decision Management (BDM) is a professional and proven method that protects you against compliance violation, risks and additional costs by enabling consistent decisions.
Whether you are working in the financial sector, in the retail market, in healthcare or in any other industry, operational business decisions happen everywhere and all the time. If these decisions are always made differently, even if the original conditions are identical, the risk of bad decisions increases.

A practical example: healthcare

To determine the treatment for a patient, a doctor must know all relevant factors in advance. Is the patient’s age important for the choice of treatment? And if so, is this value his absolute or his biological age? This shows how complex and influential operational decisions might be and that one decision might also contain sub-decisions. The optimal treatment plan, and thus the patient’s recovery, depends on a decision making process based on facts, logic, responsibilities and rules.
How can you guarantee that everyone involved in daily business is sure about every aspect of a decision? Would the right solution be to hand out extensive rules and standard documents? Since these documents are not always easy to understand and nobody can make sure that people read every regulation, enterprises should focus on a better solution.

Professional Business Decision Management and how to get started

Negative consequences of decisions, such as dissatisfied customers, inappropriate patient treatment or financial loss are a constant threat. How can managers bring their decisions ahead in order to create them in an optimal way?

1) First of all, start with “why”: determine and analyse the hassles.

To get the right approach for rule-based decision management, you need to understand the factors that determine poor decisions. These are primarily:

  • time pressure
  • unclear information
  • uncertainty about relevant facts
  • uncertainty about the responsibilities (who is supposed to make this decision?)
  • complexity of the decision-making
  • cumbersome rule and compliance document

How can you improve these circumstances? Which information do employees need? Start with an analysis of the hassles and then define clear decision Logic.

2) Make your decision logic a basic principle.

Ensuring continuity and establishing principles for your internal decisions in the long term means adopting software-based decision management that makes it easy to define decision logic without any programming knowledge. In a Decision Management System, you can define rules and document your recurring decisions in a standardized way. Organizations may thus create a uniform approach across the entire organization.
With software-based decision management, you can establish clear decision logic that considers all relevant factors. You thus ensure long-term compliance in your decisions. Consistent decision-making provides an important competitive advantage, which is primarily visible in the form of minimal risk and sustainable cost reduction.

With a software based decision management, you improve:

  • decision quality
  • decision speed
  • the decision-making ability of each individual

3) Identify and standardize decisions in your daily processes.

Operational business decisions take place within your daily processes. To identify operational decisions, take a closer look at the individual process steps. Many process steps are actually decisions. For example, a proposal acceptance process includes the question, “Can a proposal be granted?” This decision has to follow clear logic, instead of being treated differently for every single proposal. If you define these rules once, everybody can refer on them.

4) Connecting BPM and BDM

Decision management can be a second step of process management: If you have already implemented a process management initiative, even better. Take it to the next level with Business Decision Management. An integrated platform makes it possible to create a direct link between processes and decisions that preserves the relationship between them.

Consider an insurance example: Suppose an insurance company employee who administers a compulsory health insurance scheme has to decide whether a client has state health insurance, as part of his work. His superior can identify this task as a rule task. Hence, for each new case all decision-relevant questions are asked and the employee is safely guided through the whole decision process.
By using an integrated platform, the decision logic is understandable for all and is no longer “hidden” in a process diagram. All input data which is necessary to determine the insurance contract in our case study, as for example the insurance status of the parents or the gross salary of a privately insured parent, are taken into account in a decision model and can easily be understood. Furthermore, all sub-decisions are integrated in the process.Is the client above the annual income limit? Are there special acceptance conditions for private health insurance? An integrated platform makes common review of processes and decisions as easy as possible.
By implementing software-based Business Decision Management you can easily establish central documentation of all operational and recurring business decisions and their related decisions logic. Employees neither have to read complex regulations nor invest as much time in their daily business decisions. The whole decision process is accelerated, leading to:

  • faster decisions
  • better compliance
  • reduced risk
  • sustainable cost reduction
  • customer satisfaction
  • organisation wide transparency of critical business decisions.

If you want to dive deeper into the BDM topic, why not visit our Download Center, where you will find relevant white papers in German and English. To test a professional BDM system for free, sign up for our a 30 day trial.