The impact of business decisions

In every company, every day, thousands of business decisions are made. From strategic concerns about the direction of the company, to the exact time to deploy a new software update, to which type of coffee is stocked in the office kitchen, every decision can have a big impact on the company’s performance. (Well, perhaps not the coffee as much…)

The quality of decision-making within an organization relies on an enormous range of factors. They could include the data sources available to decision-makers, the consistent application (or otherwise) of business rules, whether management and staff are making information-based decisions, or relying on instinct or experience, even whether a particularly valuable customer has asked for a certain decision to be made.

Decisions resulting from these factors could all have positive or negative impacts on the way a business functions, its profitability, and numerous other areas. After all, if these decisions are always made differently, even if the original conditions are identical, the risk of bad decisions increases, and with it the risk of negative impacts, from dissatisfied customers, to wasted effort, to financial losses.

The question becomes, how can organizations ensure business rules are followed consistently, business problems are anticipated and avoided, and staff have a framework that allows them to make the best decisions quickly and easily? With this goal in mind, it is no wonder the value of business decision management is becoming more and more apparent to an increasing number of companies.

What is business decision management?

The simplest way to describe business decision management (BDM) is as a professional method to control and to optimize recurring decisions within an organization. In practice, decision management can expand and improve the existing business processes, while also assisting to more clearly define and better manage issues like compliance, business rules, and risk management.

Systematic decision management is also an important element of well-functioning and effective business process management. The representation, analysis and implementation of decisions within the process models that make up an organization’s process management landscape ensures compliance with legal and internal requirements, makes knowledge explicit, and preserves a unified, understandable visual appearance.

The value of business decision management

Inconsistent decision-making can often lead to a big effort in time and money, not least of all because it encourages disregarding or minimizing compliance requirements. To take one example, consider the collection and processing of personal data, perhaps in a healthcare setting. In the age of increasing consumer skepticism of Big Data, not to mention the application of regulatory standards like the GDPR, employees have to know when collecting personal data is really necessary. Even more importantly, they have to understand when it is not appropriate to collect data, before beginning to collect the data itself.

Business decision management removes some of the risk from this process by providing business users with a professional and proven method to assess and confirm whether a decision is the correct one under a specific set of circumstances. This ‘decision-centric’ approach (rather than a focus on extraneous factors) can help protect your business against compliance violations, risks, and additional costs, by enabling consistent decisions. This is particularly true for organizations and industries dealing with high-volume, data-driven decision-making.

Healthcare example

To extend the example above, healthcare, imagine a doctor determining the right course of treatment for a patient. Even if we focus on a single factor, like age, there are still a myriad of factors that weigh into the ultimate decision. First, is the patient’s age actually important for this particular treatment? If it is, should the doctor consider the patient’s absolute or biological age? What if a particular treatment cannot be administered to people over 70, but the patient’s 70th birthday was only yesterday?

The optimal treatment plan, and thus the patient’s recovery, depends on a decision making process based on facts, logic, responsibilities and rules. Of course, the doctor’s professional knowledge and experience comes into play, but think how much more effective the doctor would be if they had a system of rules they could rely on to take the burden of much of their decision-making, leaving them free to train their expertise on the truly challenging cases.

This gives just a small insight into how complex and influential operational decisions might be and that one decision might also contain sub-decisions, each of which may (or may not) have lasting real-world repercussions. The next challenge, or course, is how to 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.

Securing the value of business decision management for your business

For any enterprise to secure the value of business decision management, there are several key steps that must be followed.

Identify your challenges

Any must start with understanding the human and organizational factors that lead to poor decision making processes. These may include:

  • 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 documents

The logical next step then becomes, how can you work to improve these circumstances? What information do employees need access to, and which business rules will be most critical to effective decision-making? Start with an analysis of the challenges within your organization, and then define clear business logic to drive the decisions you need to make.

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, rule-based logic, instead of being treated differently for every single proposal. If you define these rules once, everybody can refer to them.

Automate your decision logic

Ensuring continuity and establishing principles for your internal decisions in the long term usually means adopting software-based decision management. Using decision management technology, you can define rules specific to your organizational context, then ensure recurring decisions take place in a standardized way, as the element of human error is reduced or removed entirely. In addition, a further benefit of this approach is that decision logic can be defined and automated without any programming knowledge. Organizations can therefore create a uniform approach across the entire organization, with a minimum of technical skill.

The consistent decision-making enabled by an automated decision management platform provides an important competitive advantage, which is primarily visible in the form of minimal risk and sustainable cost reduction. With software based decision management, you improve decision quality, decision speed, and the decision-making ability of each individual. In the future, as digital transformation becomes further entrenched across industries, decision management software may be able to take advantage of machine learning and advanced analytics to reduce the human element even further.

Connecting BPM and BDM

If, like many modern organizations, you have already implemented a process management framework, decision management is the logical next step. An integrated platform makes it possible to create a direct link between any business process and its related decisions that enhances both independently, while also preserving the relationship between them.

To take another industry example, suppose an insurance company employee who administers a compulsory health insurance scheme has to decide whether a certain client has government-backed health insurance. The insurance worker’s superior can identify this task as a rule task, and for each new case all decision-relevant questions are asked and the employee is safely guided through the whole decision process.

Integration is the answer

By using an integrated platform, the decision logic is understandable for all, and no longer ‘hidden’ in a process diagram. All input data which is necessary to determine the insurance contract in the example above (for example the insurance status of the client’s parents, or the client’s salary) are taken into account in a decision model and can easily be understood. Furthermore, all sub-decisions are integrated in the process (for example, whether the client is above the annual income limit, or if there are any special acceptance conditions which apply).

Implementing software-based business decision management means you can easily establish central documentation of all operational and recurring business decisions and their related decision logic. Employees will no longer have to read complex regulations, nor invest as much time or mental energy into their daily business decisions. The whole decision process is streamlined and accelerated, leading to faster decisions, better compliance, reduced risk, sustainable cost reduction, improved customer satisfaction, and the organization-wide transparency of critical business decisions.

Next steps

The cloud-based Signavio Business Transformation Suite fully supports the Decision Model and Notation (DMN) standard, enabling your business decisions to be displayed graphically. The DMN standard is seamlessly integrated into the Suite, meaning you can design, optimize, manage, and investigate your organizational decision-making in the same way you would the processes that underpin your business.

Decision modeling is easier than ever with Signavio Process Manager. To see how effectively linking your business decisions and business process management in one software solution can help streamline your business, and lay the foundation for effective automation, sign up for a free 30-day trial with Signavio, today.

Published on: January 29th 2020 - Last modified: February 4th, 2020