Uh…, What’s a “Decision?”
Blog: Enterprise Decision Management Blog
Here at FICO we’re all enthusiastic about “decision management solutions” that automate decision processes to make smarter decisions. But before we wax too ebullient on the wonders of decision management, perhaps it would be helpful if we explained what we mean by a decision.
First of all, as much as I personally love pondering Zen koans, the decisions we’re talking about have specific answers that are obtained by applying clearly-defined business logic to similarly-well-defined sets of data. Furthermore, these are operational decisions, rather than strategic decisions. Strategic decisions are momentous things, made infrequently by executives who cite the gravity of the decisions as justification for their bloated salaries. Strategic decisions may or may not be made with the assistance of data and analysis (or even much thought, depending on the executive), and often resemble koans more than decisions. We are focusing on operational decisions, which, according to Dr. Alan Fish, “are frequently made, low-value decisions and are the responsibility of frontline staff.” They are all the little decisions you need to make about each transaction, customer interaction, or other routine occurrence that individually may not mean much but collectively have a lot to do with the success or failure of your enterprise.
If making those decisions sounds tedious, Bingo! If they sound error prone, double Bingo!! If they sound like the types of decisions you don’t want stressed-out employees to make on hundreds or thousands or millions of customers every day, with no way of tracking who decided what about whom and how you explain the results to your shareholders and regulators, then you’ve come to the right place! Here’s a video:
The point of a decision management solution is to make those millions of operational decisions consistently, when and where they are needed, by applying tested and approved logic developed by your best decision makers. The relevant data about what decisions were made are all captured and made available for reporting and analysis, so you can measure how well you’re doing and explain to the regulators why it really is legal. If your smart folks think they see a way to improve the decisions, you can run tests and experiments, and measure the results. Instead of a chaotic mess of disconnected interpretations of poorly-worded policies, you have an unambiguous, well-managed way to develop and apply decision logic, and measure the results.
“Sounds great!” you say. Followed by: “How the hell do I do that?” “Glad you asked!” I say, adopting a tone somewhere between a Jr. College assistant professor and a used car salesman. In my next post I’ll talk about the exciting new field of decision modeling. In the meantime, I’d like to invite you to the FICO Tech in Action Day. It’s a great way to learn about this stuff, and get hands-on experience with developing a solution. I hope to see you there!
Post originally appeared in FICO Community Blogs.