What is decision intelligence? And how can it improve your business performance?
A new application of artificial intelligence is unlocking better decisions for business
We make decisions all day, everyday. It is a simple, unavoidable fact of life.
Usually there aren’t major repercussions if you make the wrong choice.
Pick a bad restaurant and while you might be disappointed, it isn’t a significant life set-back. Wear the pink or the blue shirt? Probably not going to affect your board meeting.
But for operational decisions; when to schedule a delivery, how much raw material to order, how many staff are needed for fulfilment, which customers to prioritise, getting these right is crucial.
Making a series of good decisions compounds into growth. The ability to do so repeatedly results in a sustainable competitive advantage.
But, for a number of reasons, making the right call is increasingly difficult. Gartner found 65% of businesses say decisions they make now are more complex than two years ago, so it’s easy to see why businesses get decisions wrong. This complexity is only going one way, so how do you make sure you are making the best business decisions?
Firstly, decision making is all about context. This requires you to unlock an understanding of cause and effect. But that can be difficult across a complex supply chain or business process, especially if you are a global company. A local or tactical decision can look optimal at that level, but can be sub-optimal when you zoom out to the operational or strategic level.
Many organisations are simply too large and complex, without the right infrastructure, to be able to talk to each other effectively. Teams and managers end up making decisions in silos, based on limited and sometimes conflicting information.
Secondly, the methods and processes by which decisions are made today are prone to error and no longer fit for purpose. How many businesses are still manually updating spreadsheet after spreadsheet, with different functions across the organisation adjusting as they go? Even if there are small errors here and there, they compound into some pretty hefty losses.
This is further hampered by multiple ERP and other systems which can’t talk to each other, meaning you don’t get the full picture.
Thirdly, all too often decisions are made by looking back on the past, using old sales data and poor forecasts. You unwittingly throw good money after bad because it is the best insight you have and you haven’t been able to work out the root cause of the problem.
Enter decision intelligence (DI). DI helps organisations leverage artificial intelligence. By using machine learning, DI can support humans to make the best decisions. It aims to bring together all of the available information to allow managers and executives to have a helicopter view of their business.
How can decision intelligence help me?
Really great DI has the power to revolutionise business processes and performance. It can automate simple decisions to free up time and improve organisational efficiency, while surfacing deep insights for the complex decisions that need human judgement.
But not all DI is created equal. You should interrogate carefully the underlying technology to check whether it is simply a minor business intelligence upgrade, or whether it’s really going to give you ROI.
If you want some of the best DI, one of the key things to ask is whether the technology can show you true, accurate causality. Knowing more of what has happened isn’t really all that helpful for your decisions; you need to know why something happened. ‘What’ will tell you profit was down £100k last week. ‘Why’ will tell you if it was due to switching off a promotion, production planning, customer behaviour, or an external factor you hadn’t considered. If you can understand ‘why’, both in the past and in the future, you know exactly the right decision to take.
A key benefit of good decision intelligence is in bringing this information and analysis closer to the C-suite, especially in complex sectors such manufacturing or in supply chains. As organisations grow and supply chains become longer and more global, decision-making can become fragmented.
As a leader, wouldn’t you love to be able to zoom in on any part of your operation to see how decisions are being made and whether they are optimised for the overall health of your business?
By using decision intelligence in a manufacturing business you would know not only how much stock you need, but also avoid having too much cash tied up in inventory, or too many old products when there is a new one ready to ship.
Advanced machine learning can allow you to orchestrate your whole supply chain with a high degree of confidence in what will happen, and therefore know the right decisions to make. You can clearly see where there are efficiencies to be made and where value can be added.
Decision intelligence, deployed well, brings a layer of intelligence to your organisation, which can connect your business and even allow individual functions and existing data and software to ‘talk’ to each other.
Decision intelligence engineers are already being employed in healthcare, banking, law enforcement and other sectors – and delivering a successful decision intelligence strategy is going to set out the industry leaders of the next five years.
Contact us today to find out how Faculty Frontier, our highly advanced decision intelligence software, can help your organisation make better decisions.