Decision Management 101 Part 1
Our Decision Management 101 series is designed for business leaders who are unfamiliar with decision management and are currently facing challenges with automation, adaptability, and scalability. In this series, we address the following:
- What is decision management?
- How can decision management address business growth challenges?
- What to look for in a decision management system (DMS)
We also address frequently asked questions regarding decision management here.
Business processes and business rules keep your business running
Before we dive into decision management, we need to talk about business processes and rules. Processes and rules drive an organization’s day-to-day operations. Business processes are the procedures necessary to accomplish a task. Business rules are the policies that govern activity. In other words, business processes inform employees and machines what to do and business rules inform them how to do it. Together, they are the instructions for how a business gets things done. Examples of business processes and rules include:
- How to price a product or service
- How to handle customer complaints and issues
- How to process an invoice
For example, a process for pricing products for a customer may be as follows:
- Calculate cost for each item
- Apply appropriate margin
- Apply relevant discounts
And the rules may be as follows:
- Cost of Product A = $100, Cost of Product B = $200…
- Margin of Product A = 30%, Margin of Product B = 20%…
- If Total Cost > $500, apply 10% discount
When process automation prevents effective rules management
Traditionally, the goal of automation has been operational efficiency and therefore the focus has been on process. Organizations typically define and automate process workflows and then hard-code rules within those workflows. The result is an automated yet rigid system that is managed by IT rather than the subject matter experts and business analysts that are responsible for business outcomes. Over time, business rules management systems have been developed to make it easier to manage and update business rules. However, these technologies keep ownership of business rules with IT.
Decision management gives businesses more control and agility
Decision management is a discipline and set of technologies designed to bring management of business rules back to the business side of an organization. Rather than starting with business rules, decision management starts with a decision outcome and then considers all the data, models, and business rules that must be in play to achieve that outcome. Decision management systems separate this decision logic from the applications that automate business activity and make it easy for non-coders to define, test, and deploy decision logic. As a result, the business owners responsible for a particular decision outcome can effectively manage business rules without needing to go through IT.
Decision management systems not only enable an organization to automate costly and repetitive decisions, but also enable an organization to:
- Ensure the consistency of decisions
- Rapidly adjust decisions as needed
- Improve the quality of decisions over time
Want to learn how SMARTS™ gives your business more control and agility? Contact us today to request a custom demo.
