Leadership issues, ill-defined processes seen as major factors behind decision dysfunction
By Staff -- Manufacturing Business Technology, 4/1/2007 6:00:00 AM
While companies are keeping their eye on plant and supply chain operations, they'd best expand their efforts to include optimized decision-making, says a study by the Palo Alto, Calif.-based DecisionROI Institute and the Business Performance Management (BPM) Forum.
According to the report, Business Traction from Business Decision Action, the decision-making process is one of the least understood and most ill-defined in an enterprise, resulting in routine suboptimization.
“Decision-making is typically held so close to the vest that it becomes a highly difficult issue to deal with,” says Mychelle Mollot, VP of market strategy for Cognos, which underwrote the research conducted by BPM Forum. “The study reinforces for us what we have known for a long time but didn't have the data to support: Bad decision-making is hurting organizations, and technology can improve that.”
Cognos offers a range of integrated business intelligence software, including business and production reporting; OLAP/analysis; dashboarding; data integration/extract/transform, load technology; and business activity monitoring.
“The disconnect in the metrics was quite revealing,” says Adriano Gonzalez, director of BPM Forum. “Of total respondents, 40 percent cite a significant shortcoming in the decision-making process, and only 26 percent say they have formalized policies and procedures in place.”
And while 59 percent have made little investment in technology to support decision-making, of those who have, and claim to have formal practices in place, 60 percent say they have no confidence in them, Gonzalez adds.
One of the most startling discrepancies in responses exists between that of senior management compared with middle management.
“There's a huge confidence gap between C-levels and the rest of management,” Gonzalez says. “More than 60 percent of C-level executives say they have confidence in the decision-making capabilities, versus less than 22 percent among VPs, directors, and managers.”
Recommended best practices start with clear policies and procedures that specify goals, as well as who's responsible for meeting them so there's accountability. “You need to be able to track and measure the effectiveness of decisions across the entire value chain,” says Gonzalez.
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