Improving Business Decisions is The Key to Improving The Quality of Business Operations

In order to improve business decisions, you must first understand the different types of business decisions and understand how each aspect can be improved.

“Data and analytics leaders are investing heavily in analytics, machine learning, data science, AI and other related technologies. The belief is that such technologies can drive better decision making and thus business outcomes. However, there is a real gap between this belief and the idea about what a decision really is.”

Analysis by Andrew White, Gartner

Every organization is made up of three overall types of business decisions:

Strategic decisions lay the framework for overall business decisions by allowing to create guidelines and a sense of direction for both tactical and operational decisions. An example of a strategic decision that a company may make is to focus on a specific market for a period of time. The tactical decision for this example would then define the specific internal procedures and processes required to deal with this new market and to successfully penetrate the said market in a specific segment. Operational decisions would then further prescribe how exactly products and services should be priced based on specific customer profiles.

Strategic Decisions

Strategic decisions are made by senior executives and board members in order to lead business operations and are complicated, they handle uncertainties and require a large amount of analysis. Over time, as their knowledge matures, the decision-makers gain a better understanding of the strategic decision process, and decision-making criteria evolve as they make headway.

Some examples of these strategic decisions are:

• Company acquisition, expanding current market, and/or offering expanded products.
• Focusing services in specific regions
• Deciding between remaining local, outsourcing, or moving current resources offshore to improve productivity.

Tactical Decisions

Tactical decisions have more structure than strategic decisions. Tactical decisions are the next step in the decision-making process; they further define and structure the processes, policies, and procedures laid out by the strategic decisions.

Some examples of these tactical decisions are:

• Defining the specific products and services offered for a particular geographical location, e.g., South America vs. North America.
• Eligibility of services for a discount based on the circumstances.
• Defining the specific priorities of services offered to customers.

Operational Decisions

Thousands of operational decisions are made in everyday business operations. They are structured, repeatable, and are a big part of customer engagement transactions as well as the companies’ administrative operations.

Some examples of these operational decisions are:

• Determining the product offerings a customer is eligible for.
• Specifying how much a patient should be paying.
• Determining the percentage of discount a customer is eligible for.
• Determining the next course of action after registering for a course in a university.

How Can You Improve These Business Decisions

The quality of business decisions is a determining factor to the overall quality of business operations at any organization, especially in a dynamic and constantly changing business environment.

Quality of the outcome through consistency, accuracy, auditability, etc., and speed of delivery and adapting to changes determine improvement in the quality of business decisions.

An organization’s ability to model, execute, monitor, and reconfigure business decisions speedily with minimal effort and investments will enable them to improve the key business metrics of the decisions.

Find out more here: https://www.flexrule.com/archives/business-decisions/