BI and Decision Making

Written By: Rick Beers - Senior Director,  Fusion Middleware Product Management

If you think you know everything you need to know about Business Intelligence technologies and decision making, prepare to be a bit unsettled. I am, and it didn’t take much to get me there.

Most recently, paper in the CIO Journal section of the WSJ entitled ‘Inner Workings of the Executive Mind’ explored the psychology of executive decision making, drawing from recent advancements in neuroimaging, in which scientists map the brain’s processing of tasks ranging from the tactical to the most strategic. What they found reinforces what most of us have believed for quite some time: there is a science to ‘gut feel’. Quoting from the paper: “…most of us assume that when we try to solve problems, we're drawing on the logical parts of our brains. But, in fact, great strategists seem to draw on the emotional and intuitive parts of their brain much more”.

These findings are similar to views expressed by economist/psychologist Daniel Kahneman in 2011's 'Thinking, Fast and Slow', which explored decision making patterns and, specifically, that the mind intuits first, then narrows choices, then decides based upon facts. Or, that facts are often used to evaluate the outcomes of intuition rather than at the start of an objective decision making process.

While many could dismiss such things as academic and not relevant in the practical world, they are in fact disruptive in many ways. Think business intelligence systems and processes that we all interact more each day. They are structured to drive increasing amounts of information at decision makers, under the belief that 'more, faster' is better. But the mind wants context and landscape first around which to logically (or emotionally!) develop and evaluate options around which to position data.

Is it perhaps possible that Big, Fast, or Real time data could actually lead to increasingly poorer decisions as our intuitive qualities are circumvented?

Consider last year’s Accenture publication ‘Analytics in Action: Breakthroughs and Barriers on the Journey to ROI’, which provides results and analysis following a survey of Analytics Practitioners. On page 6 in the section entitled ‘Data Driven Insights’ is the finding that “.…while more than six in ten users rate faster better decision making as a priority, only one in four habitually rely on data as a source of inspiration or basis for decision making.” While increasingly effective in measuring past results and predicting future events, BI’s ability to improve or even change the way decisions are made is still elusive.

But things are beginning to change in a big way. In memory computing, and the outcome of information tied to business processes and within a situational or role-based context will finally deliver upon the dream of fact-based decision making. 

 Business Intelligence technologies, and the management processes that utilize them, have been evolving since the earliest such systems in the 1970’s. The chart to the left proposes that BI Evolution from a business perspective has progressed through three levels:

· Level 1: Reactive

· Level 2: Predictive

· Level 3: Intuitive

It’s important to note that this evolution does not imply that the singular ideal is the ‘Intuitive’ level. Each level is needed for different reasons. The degree to which depends upon the organization and the purpose. Very few would argue, for example, that intuition has a role in Performance and Operational Reporting.

Translating that innovation into true business value will require us to increasingly focus on the business perspective. Many will say that BI still feels too much like an IT Project. For it to go to the next level, where a true transformation occurs in the decision making process (Level 4?), business needs to be truly engaged as equal partners. We’re getting there to be sure, but my gut says we’ve still got a way to go.

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