Custom Software Apps & SharePoint Consulting

Business Intelligence and Decision Making

Using Business Intelligence to Keep Pace

The pace of our daily work life goes ever faster, and for many knowledge workers, business intelligence is a vital tool for keeping up. In particular, companies are finding that decisions they might have delayed for hours — or even days — a few short years ago must now be made within minutes.

Failure to make decisions and to act decisively can cause major supply chain disruptions, unhappy customers, higher costs and other problems that adversely affect the company’s performance.

Business applications such as ERP or CRM are not designed to support decisions. They are designed to process transactions, and as a result, it is usually difficult and time consuming to pull together the information necessary to determine the right course of action, especially when faced with a shrinking decision window.

Manual Tools Don’t Support Decision Making

Business intelligence and decision makingMany people turn to spreadsheets or similar tools to format data in a way that helps them do their jobs faster. There are several problems with turning to a manual system rather than a modern business intelligence tool to support decisions, including:

  • Lack of data validation and safeguards
  • Data is not available across the organization
  • Manual entry is time consuming and error prone
  • There is no certainty that the data is accurate

Lack of information forces many managers to make decisions based on guesswork or rules of thumb, and this lack of facts makes many managers uncomfortable, since speculative decisions usually don’t result in optimum performance.

The inability to access actionable business intelligence to support decisions also leads to mediocre results. Companies without adequate business intelligence under-perform their competitors, as shown in the research report Measuring the effects of business intelligence systems: The relationship between business process and organizational performanceby Mohamed Z. Elbashi, Philip A. Collier and Michael J. Davern.

In addition, people often exhibit negative personality traits such as low sense of control and pessimism when they are in the process of making a decision, according to research from Peter Gollwitzer of NYU and Shelly Taylor at UCLA. In addition, less decisive managers tend to exhibit these traits more often than managers who are more decisive.

People have varying degrees of decisiveness in their personalities, but providing business intelligence enables naturally less decisive managers to make fact-based decisions quickly, and improves the outcomes of their decisions.

Naturally decisive managers also benefit from having facts available quickly, and faster decisions help the entire organization to be more responsive and to perform better.

Business Intelligence Enables Every Decision Maker

Like any muscle that becomes stronger with use, decisiveness increases as the individual makes decisions. To improve an organization’s responsiveness, it is important to provide tools, such as business intelligence, that enable confident decision making.

Modern business intelligence systems, coupled with effective data management techniques, provide timely, accurate and actionable information that aids both decisive and indecisive managers to improve the quality of their decisions. As the outcomes of the decisions becomes more reliable and predictable, managers become more comfortable making decisions.

In effect, they have exercised their “decision muscle” and made it stronger because the business intelligence system provided the necessary information to give them confidence in the rightness of their decisions. They are more capable of making accurate decisions inside the shrinking decision window, and that response improves overall organizational performance.

Some companies use software consulting experts or custom software to fine-tune their business intelligence to ensure the information is not only timely and accurate but presented in a way that makes it easy to understand. Whatever choice you make, it is clear that business intelligence is an important tool that every company needs to survive and thrive in today’s fast-paced competitive environment.

 For more on enabling decision making in a fast based environment, check out our series, “What is business intelligence?

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