What is Decision Management?

Authors Note
 This blog post was originally posted by Suleiman Shehu on the 16th December 2014 as a guest blog post on BiZZdesign’s blog and can be viewed here.

 

A major challenge facing business today is how to harness the creative abilities and business knowledge of its employees to gain strategic advantages over its competitors that in turn result in significant increases in profitable sales and or reduction in business costs.

Central to this challenge are the many thousands of operational business decisions that are executed daily within mission critical business processes.  It is these operational business processes that are central to all the sales, production and delivery activities that create all the wealth within an organization.

Typically these individual operational decisions have been embedded within applications, programs and supporting technologies. The business managers who are tasked to manage and improve these business decisions do not have direct visibility on these decisions because they are written in IT languages that the business do not understand (e.g. Java, Cobol) or cannot even see because there is no available source code for most enterprise applications.

Because these operational business decisions have not been identified as strategic business assets and are not visible to the business in a language that they can understand, enhance, modify and rapidly deploy; means that the business is dependent on long IT development cycles, resulting in poor business agility.

The ability to relate management objectives directly to business decisions and the ability of business managers to manage those business decisions against performance over time has created the new discipline of Decision Management (DM).

Business logic is the detail behind a business decision. And a business decision is the conclusion that a business arrives at through business logic and which the business is interested in managing. Clearly a business may not want to manage all possible business decisions – it depends on the value that a business decision provides to the organization.

This new discipline promises dramatic opportunities for increased business agility and the ability to constantly improve the quality of business decisions in response to rapid changes in the business and regulatory environments.

The Corporate Challenges that are drivers for Decision Management

formulateOrganizations are facing a number of business challenges today which they must solve if they are to survive. These business challenges include:

  • Rapidly Changing Consumer Demand.  Customers are today demanding highly tailored and personalised experience with the organizations that they interact. They are expecting personalised offers and solutions from self-service applications that know about them and they things that they would like to buy.  If they do not get this experience they will move their business to a competitor organization.
  • Increased Business Regulations.  Organizations find that they need to expand into multiple global markets to maintain growth and are therefore faced with a massive wave of compliance regulations that are coming from foreign governments, national and regional regulatory authorities as well as multiple global organizations (such as Basel Committee on the Banking Supervision). These regulations must be understood and implemented so that the execution of all relevant business transactions can be compliant. Failure to be compliant can result in substantial fines that can cost the company $billions.
  • Rapidly Changing Competitive Environment.
    Today’s executive directors of established organizations are in constant danger of being eliminated by new upstarts that are re-writing the competitive landscape. To respond to these threats requires organizations to be highly adaptive and agile – creating new products, solutions and services within rapidly shrinking periods of time. If their human and IT resources fail to keep up to these changes in the competitive environment then the organization is at risk of going out of business.
  • Business Process Re-Engineering.
    In order to meet the challenges identified above, the internal business processes need to be re-engineered.  The problem is that the mission-critical corporate applications have their business knowledge and business decisions hard-coded in their application code.

It is now becoming clear to many organizations that the key differentiator between them and their competitor is their business knowledge and how it is created and managed; and. how business knowledge can be used to power the key business decisions that are required to meet to the corporate challenges identified above.

Those organizations that fail to transform their organizations into decision-centric organization will lose out to their competitors resulting in the loss of jobs and the destruction of shareholder value.

Decision Management Benefits

Decision Management offers the following benefits:

 

Linking Performance, Event, Process and Decision Management

 

Significantly reduces the time and cost of change
  • The time taken to create, manage and deploy business logic reduced by between 30% – 70%
  • Testing of decisions and associated decision logic reduced by 50% or more using new automated testing techniques
  • Significantly reduce programming effort and time by the ability to automate the conversion of decision models into executable code for deployment as decision services.
Simplifies Business Processes
  • Extracting business decisions and associated decision logic embedded within process models into separate decision models leads to a significant reduction in the size and complexity of process models reducing maintenance effort
  • Increased re-use of decision models between process models as shared decision services thereby reducing duplication and increasing assets efficiency
  • Significant reduction in the amount of work required to modify process models in response to changes in business logic. Changes in decision logic are easily made within the decision model and typically have little or no impact on process models.
Accelerates Business Agility
  • Business managers have direct control of the key operational business decisions and can modify, fine tune and automatically deploy decision logic in response to rapidly changing business environments.  This leads to a massive increase in productivity and business agility.
  • Improves straight-through processing converting the decision logic used by human workers during manual reviews and processing into decision models that are then deployed as automated decision services.
  • Reduces time-to-market and gives a competitive advantage because the creation, maintenance and deployment of the business logic and associated business decisions do not require the costly time consuming development cycles typically associated with the traditional approaches.
Enhances a Strong and Shared Collaboration Between the Business and IT
  • Decision models are simple and easy for the business to understand by both IT and the business and eliminates mis-understanding of decision requirements by IT
  • The business is free to design, refine and enhanced logic behind operational decisions without being constraint by IT. This is further supported by the use of a Glossary where business data names can be mapped into the equivalent IT data names.