In organizations, people make decisions every day, and yet humans are inherently unreliable in making decisions as they are influenced by mood, bias, culture, experience, skills, and etc.
The decision-making activities happen hundreds of thousands of times across all different functions and departments in organizations about critically important matters such as product configuration, pricing and discount strategy, product and service offering, eligibilities, payments, invoicing, installments, troubleshooting, patient diagnosis, underwriting, creditworthiness, validation and so on.
As you can see, the quality of these decisions will determine the quality of business operation. Therefore, organizations require to make optimized, customer-centric, and situation-aware business decisions.
A Decision is not a…
On the very surface can be mistakenly considered as some other similar concepts in organizations. It depends on whom you may talk to; they have a different definition of it and how they look at it. Some people know it as an outcome of a process. Some technology-minded group sees them as mathematical, statistical, or even Machine Learning (ML) algorithms. And others may see it as business rules or requirements and so on.
Do not make a mistake; It is not business rules, processes, data, algorithms, requirements, or technology approaches to automation.
In a business operation context, a decision is an act of finding an answer to a business question.
- [Insurance] How much should a customer be paying for its premium?
- [Consumer] What other products can we offer the customer based on the items in the basket?
- [Government] What services and grants are an individual eligible for?
- [Health] What questions should be asking a person to diagnose based on some symptoms?
- [Smart city] In a particular accident, what agencies should be involved? Police, Ambulance, Insurance, etc. And what do to next?
As this example explains, a decision has its own existence, and there are different types of them. They are entirely different types of concepts and entities with their very own life-cycle, maturity model, owners of interest, and a set of KPI.
The decision in Practice
Hence it is an entirely different entity from all you might have known as process, rules, algorithms, data, code… the question is how to identify, model, execute, monitor, deploy, share and automate them.
Decision-Centric Approach® helps organizations raise their awareness about their decisions and manage them appropriately by providing structured guidance on how to model and manage them in organizations. There are many benefits to becoming a decision-centric organization, to managing them at the individual level and governing them across all different departments and functions in organizations.
To understand and manage them on a daily basis, we need to know the mechanics of decision-making. It requires an input that is passed through a decision logic (i.e., algorithm) to produce an outcome or shape a judgment.
This defines a single block of a decision. It is also very important to recognize this single block as its own cycle, i.e., decision-cycle, which it should satisfy. This cycle defines how this single block of the above structure will work.
The decision cycle enables this single block to fulfill its purpose of existence completely.
Decision Decomposition Technique
“There is only one way to eat an elephant, a bite at a time” and the same principle applies to decision-making. Business questions such as eligibility, patient diagnosis, payment calculation, and so on are too complex to be solved by a single block of operation. Therefore, they require to be decomposed into smaller blocks, and from there to even smaller sub-decisions and so on…
(business decisions have a hierarchy with multiple dependencies and influence paths)
As you can see in the above illustration, some of the smaller blocks (e.g. sub-decisions) are grouped together and act as a unit of decision-making. Some of them are individual blocks, all working in orchestration towards the final outcome i.e make a judgment or produce an outcome.
They are different entities and should be managed and automated differently from rules, processes, algorithms, data, etc. as they strongly influence and determine the quality of business operations. So, it is very critical to recognize them and manage them independently. They are heavily influenced by internal and external factors such as regulations, market dynamics, and data and information. Therefore, automating them i.e. decision automation, requires different thinking, mindset, and tooling.
A decision is a self-existent concept that determines the quality of business operations. Therefore, it should be modeled and managed explicitly and treated objectively. In addition, it has its very own life-cycle, mechanics, multi-dimensional KPIs, and interested parties.
Last updated February 15th, 2023 at 02:08 pm, Published June 24th, 2021 at 02:08 pm
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