Business Intelligence and Organizational Decisions

Business Intelligence and Organizational Decisions

Thomas H. Davenport (Babson College, USA)
Copyright: © 2010 |Pages: 12
DOI: 10.4018/jbir.2010071701
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Abstract

The focus on transactional systems in the earlier decades of information management is beginning to shift toward decisions. In order to study the relationship between information and decisions, the author interviewed 32 managers in 27 organizations where an attempt to use information to support decision-making had been made. A framework involving three different relationships between information and decisions is introduced: loosely-coupled, structured human, and automated. It is suggested that loosely-coupled information and decision environments, while productive for information providers, may require too much knowledge on the part of information users to be effective. A four-step process for bringing information and decisions in closer alignment is also advanced.
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A Study Of Decisions And Information

In this article I describe a study of attempts by organizations to improve decision-making through the use of information, among other interventions. Using telephone interviews in the second half of 2008, I spoke with 32 managers in 27 organizations about specific initiatives their organizations had undertaken to improve decisions or decision processes. In each interview I asked about why the initiative had been undertaken, how the decision process varied before and after the intervention, and what steps were taken to provide the decision process and decision-makers with better or more trusted information. The research sites were selected based on press accounts of decision-oriented business intelligence applications, or references from business intelligence vendor personnel.

My intent was to understand how information is being applied to improve decision-making in a broad range of contexts. A list of the decision types and organizational contexts is provided in Exhibit 1. Most of the decisions listed are made frequently and involve core business processes of the organization. I sought out such core processes because it seemed that they would be the most likely to be the subject of initiatives to supply information for decisions.

Figure 1.

Types of decisions studied

While most of the managers interviewed were comfortable with talking about attempts to bring about better decisions, the topic was not yet “top of mind” in most companies. It was clear in the discussions that most firms had not focused consciously on better decisions as an area for business improvement. Some had not initially viewed their efforts as decision-oriented; this was true, for example, at a testing and research firm, which was attempting to improve its new product development processes. The manager interviewed stated, however, that the key issue in the process was making decisions about which products to develop.

There were some exceptions, however, to the “invisibility” of decisions. Two large banks, for example, had created “decision management” groups that focus particularly on analytical and quantitative decision processes. One major consumer products firm had renamed its IT organization “Information and Decision Solutions,” and the organization contains substantial numbers of analysts who assist decision-makers with analyses and fact-based decision processes. While these organizations are moving toward a stronger focus on decision-making, most do not seem to have broad agendas in place for connecting information and decisions in general, though they may have particular decision emphases such as greater use of analytics or automated decisions.

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