What is Decision Automation?
Decision Automation is a practice that utilizes multiple techniques and technologies such as AI/ML, Business Rules, Multistep decisions, Orchestration, Decision Robotics and etc. to automate decision-making processes across organizations. The automated decisions may go cross multiple organization boundaries, functional groups, departments, etc. to deliver higher business value and outcomes.
Decision Automation enables organizations to automate the decision-making process in many different areas (i.e., within a process, application, department, etc.). There are many benefits to automating decisions. For instance, automated decisions will increase productivity and reduce risks and error rates in a decision-making process. It also increases the consistency of decisions as these will be less reliant on individual discretion.
Decision Automation tends to be applicable to routine, repetitive decisions that occur in an organization's day-to-day activities. These kinds of decisions can be found in various functional areas and departments of companies. Perhaps you would be surprised at how many decisions can occur in the course of a business day! These types of decisions are called ‘operational', which means that they drive the day-to-day operations of a particular business.
Operational Decisions can be driven by business rules knowledge (i.e., rule-based driven decisions) or can be based on data and information knowledge (i.e., data-driven decisions using statistical, analytic, and predictive algorithms). In advanced cases, both of these techniques should work alongside each other in order to automate a decision.
Rule-based Decision Automation
Decision Automation can be fully based on business rules. In many industries, such as insurance, finance, banking, and so on, routine and reparative decisions are automated in order to ensure that quality and consistency are not compromised. For example, in insurance, many of the decisions that are made in underwriting, claims processing, pricing, discount, etc., can be automated using business rules automation.
Business rules automation becomes very critical when the decisions are in a regulated environment. When the ‘explainability' and reasoning behind certain decisions are important for the customer, regulator, or other third parties, decision automation using automated business rules is particularly effective.
Data-driven Decision Automation
There are many scenarios where the decision is not based on some rules, but instead is based on how a case in a certain situation is developing, and if there is uncertainty surrounding how the case may behave. For example, in a car insurance policy scenario, there is uncertainty about how risky a driver may be. Or in cross-sell offers there is uncertainty about how the party may respond to the offer.
These are the cases where a predictive model can work well in decision automation, especially when it is combined with rule-based decision automation. This will help in addressing any ambiguity in the decision-making process.
Not all decisions in organizations can be fully automated, and some of these will require human intervention. Decision Automation should allow scenarios in which fully automated decisions are not possible because of ambiguities, uncertainty, and so on regarding the decisions. Instead, these require domain experts’ inputs and intervention.
Although it is tempting to build intervention handling as part of the application's logic or process automation, the caveat to these approaches is that handling intervention will introduce a disconnected decisioning experience, which should always be avoided.
Multistep and Long-Running Decisions
Many decisions are instantaneous. For example, calculating a discount based on quantity. You provide the quantity and you receive a discount percentage. However, what if the discount is based not only on quantity but also on customer loyalty? What if loyalty is determined by the total value of customer purchases of last year or month?
This is a consumer-based example, but it shows the general idea in which a single decision about Discount requires the results of multiple other decisions. This is called multistep decisioning.
In multistep decisioning, there might be some cases where the next decision requires some external information or some intervention from an expert. These may not be immediately available when the previous decision is being executed. So, the transition from one decision to another may take time (e.g., hours, days, weeks, etc.) and are not immediately ready to determine the results for any reason. These special types of multistep decisions are called ‘long running decisions'.
In these cases, decision automation uses multistep and long-running decisions techniques can be implemented as part of the application or process automation but will introduce the disconnected decisioning experience.
Disconnected Decisioning Experience
Building and deploying end-to-end decision automation is challenging because it is easy to lose the end-to-end view of the decision and the results are lost or cannot be associated with a single valid business-oriented context.
The end-to-end view gives organizations the ability to ensure everything related to the decision is in one place. Therefore it can easily be measured, reconfigured, and monitored in order to ensure the semi-automated decisions deliver value to an organization and these don’t become just external tasks requiring human intervention. Once the end-to-end view is available, after a while semi-automated decisions can be fully automated by removing the referral (intervention) part.
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Part of ensuring that the decision automation end-to-end view is not lost is to make sure that the methodology can find the right decisions, and the means to automate them is also in place – the Decision-Centric Approach®. By using the Decision-Centric Approach® as an automation methodology, organizations can identify decision types, their maturity level, and how to automate them.
Why Should You Care about Decision Automation?
We talked about decision automation benefits earlier, but in short, decision automation will help organizations to make better decisions. The “better decision” depends on different scenarios, but it consistently delivers accurate results for customer-centric decisions in a particular situation (situation-aware) that may involve calculation, data, and domain expertise and knowledge. It also removes the risk of decisions that rely on an individual's discretion.
Decision automation always works and delivers great results in repetitive operational decisions. It increases the quality of decisions as well as the productivity of workers, as they will not need to worry about making those decisions. It is also an opportunity for organizations to focus workers' time and effort in areas that cannot be automated.
Last updated October 26th, 2023 at 12:54 pm, Published January 6th, 2020 at 12:54 pm
CEO and the founder of FlexRule – He is an expert in architecture, design, and implementation of operational decisions, business rules, and process automation. Created Decision-Centric Approach, a methodology that brings People, Data, Rules, and Processes together to automate operational business decisions.
This approach is recognized by Gartner as the missing link to provide business value to organizations.