Feature Article: The Future of Decision MakingBy Judi Hess
The Business Council of British Columbia is a collaborative, non-partisan organization whose mission is to produce timely and exceptional public-policy research and advice on issues to enhance B.C.’s competitiveness and prosperity. They recently featured Copperleaf CEO Judi Hess as a guest author on their blog, where she wrote about the future of decision making and why it is vital to an organization’s success:
How important is it for businesses to make better decisions?
As someone who’s been leading technology companies in B.C. for more than two decades, I’ve come to realize, it’s THE most important thing organizations can do to ensure success. A Harvard Business Review article summed it up nicely:
If decision-making is the holy grail of success, then how good is your organization at making decisions to deploy funds that fuel your strategic objectives? How would you assess this capability within your organization? Some key questions to consider:
- Are you confident you are making the right trade-offs when deploying capital, resources and operational investments?
- Are you using data and a consistent approach to decision-making across your organization to create an executable plan?
- Do you understand what the impact will be on your strategic objectives between one investment portfolio versus another?
- Does your organization trust that, collectively, the right decisions have been made?
I believe businesses that focus on two key areas – enhancing decision quality and enabling decision agility – will see benefits that ripple across their entire organizations. The digital transformation of the enterprise must include value-based decision analytics to gain a step-change improvement in value creation.
What does the future of enterprise decision-making look like?
Using DATA vs. INTUITION: Intuition will no longer be a substitute for analytics; decisions need to be supported by data. Multiple-criteria decision analysis (MCDA) has been around since the 1950s, and the field of artificial intelligence (AI), including machine learning, that we’re hearing so much about today, was founded more than 60 years ago. It’s time to put these technologies to work to deliver higher performance.
A 2017 survey of 260 senior IT and business decision-makers in the Americas, Europe and Asia-Pacific across various industries found that 80% of enterprises already have some form of AI in production today and 30% are planning on expanding their AI investments:
SOURCE: TERADATA, STATE OF ARTIFICIAL INTELLIGENCE FOR ENTERPRISES REPORT OCTOBER 2017
FUTURE FOCUSED: Historical information and performance data can be useful to understand what happened in the past, but it’s not safe to assume what happened in the past will repeat. We are also at a point in time where the quantity of data can be overwhelming. When I started at Copperleaf™, almost every client’s response was “we don’t have the data.” Today, it’s “we have so much data but how can we use it effectively to improve decision-making.” Predictive analytics can help companies analyze millions of data points to find patterns and forecast what will happen in the future. “What-if” analyses can be used to evaluate different scenarios to understand decision tradeoffs and risks at an enterprise level.
CULTURAL SHIFT TO VALUE CREATION: Creating a cultural shift to a focused, value-driven organization drives consensus around what really matters and links day-to-day decisions with the business strategy. It’s all about getting more value for less spend. However, defining what “value” means can often be the biggest challenge. I’ve seen firsthand that organizations that institutionalize a value framework (i.e. mathematically linking strategic outcomes to business case assessments), and use decision analytics to perform optimization, improve decision quality and agility enterprise-wide.
B.C. Business Summit 2018: Canada 360° – Action to Win in the Global Economy
Making decisions to optimize value creation is the key to obtaining a competitive edge. Enhancing decision-making with the latest technology to improve decision quality and enable decision agility will undoubtedly increase our ability to compete in the changing global marketplace.
This is the theme of the B.C. Business Summit 2018 event this week, where I’ll be discussing this topic in more detail. Hope to see you there!
A growing number of companies are turning to Copperleaf’s decision analytics software to help them decide where and when to invest in their businesses to improve capital efficiency, manage risk, and improve shareholder value. To learn more about value-based decision analytics, please download our whitepaper on this topic.