Decision Intelligence - How Can It Really Be Used?

In my last article here I mentioned that one of the most interesting predictions made by Gartner for 2022 is their belief that a large number of companies will start using structured decision-making systems. This is a trend that will impact organizations over the next two years, so we are talking about dramatic short-term change.

Gartner recently published an e-book focused on this subject. You can go and download the entire book here, but I’d like to use a real-life example of a typical management decision to show how a data-focused approach is different.

Many executives struggle when considering why they should expand into a new region. Is it because they can sell their products to customers in this new region or because they want to access skills and resource in this location – or possibly a mixture of both? Companies sometimes expand into a new region to access resources, but find that they can also access a rich new seam of new customers.

A structured approach to a decision like this would include five key steps:

1. Capture: collecting information from inside the organization and the external market to help support the potential decision

2. Interpret: investigating the options using the gathered information and interacting with partners to understand the local market.

3. Explore: this is where you model potential outcomes and explore ‘what if’ scenarios. What if you take action and your biggest competitor also enters the same market?

4. Resolve: analyze the proposal and ensure that all stakeholders are consulted – use feedback to improve the proposal.

5. Act: communicate the decision internally and externally and then take action to make it happen.

Listed like this it sounds simple. You gather information to support a decision, consult your partners, and then decide the best way forward. The problem is that if this process is undertaken without rigor and structure then several problems will creep into the process:

• Personal preferences influence the decision. Managers are only human and therefore a decision over which new market to enter can be influenced by how the executive team already feels about these potential new markets. Is it best for the business or do I just choose the place I want to be visiting more often?
• Politics may outweigh data. This refers more to the internal politics of the organization, rather than national politics. For example, if the European head sees that more investment in Africa leads to the African head playing a more important future role in the company then they may campaign for more investment in their own region, regardless of what the data says about the decision.
• Rationale can be hard to track. Without a documented process, who can remember why certain decisions were taken or even when they were taken?

This is a great example of how decision intelligence can be used to reduce politics and personal preferences in executive decision-making. This can be applied equally well to predictive analytics, especially when trying to use past behavior to predict how customers will behave in the future.

Many managers take pride in their skill at predicting customer behavior, but experience assumes that this year will always be the same as last year. The use of more structured tools for decision-making can ensure that many additional sources of insight can be included in decisions – whether it is an attempt to predict the behavior of customers or to determine if a decision will be good for the company.

Decision intelligence is one area where the companies that get it right will have a distinct advantage over their competitors. For this reason, I strongly believe that it will be one of the most important IT trends in 2022.

Read more predictions and trends for 2022 in our recent blog Which Are The Gartner Top Strategic IT Trends For 2022?  Also, watch or read our vlog on 2021 Results And Outlook For 2022 and don’t forget about the second part.