When it comes to making business decisions, the words "better" and "faster" are top priorities among executives. Although businesses may be speeding up their rate of decision making due to economic pressures, their paths to decisioning may need improvement. This month, the Economist Intelligence Unit put out a report sponsored by CSC and Oracle about the culture of decision making. The research group enlisted 208 survey respondents, all of whom were CEOs, presidents and directors, or held other c-level titles around the world. The report following the survey presents interesting statistics about business decisions, areas of growth, and areas that could use improvement.
The study indicates that despite recessionary conditions, businesses are ramping up their decision making.
- 34 percent say decision making has quickened slightly.
- 14 percent say significantly.
- 15 percent say it has slowed slightly.
- 8 percent say it has slowed considerably.
Companies decisioning processes have become more centralized. Thirty-eight percent say decision-making has become more centralized in the c-suite. And a whopping 84 percent say the CEO or the CFO is the primary driver of information-based decision making.
The research report states: "For most firms, traditional data hoarding and silos still present formidable challenges." Most companies admit that their use of business information to drive better decisions could use improvement.
- 55 percent say their organization has some experience in this, but that it could be better.
- 24 percent called themselves "advanced practitioners" but still say there is room for improvement.
- 17 percent call themselves laggards in using data to drive decisions.
- 3 percent consider themselves experts.
Respondents say the biggest challenge to successful decision making is departmental silos.
- 51 percent say lack of collaboration among business units is an obstacle.
- 39 percent say inadequate tools for gathering and analyzing information hinder decisions.
- 36 percent say lack of timely data contributes to challenges.
- 21 percent say insufficient support from c-suite executives for business intelligence projects is a problem.
The report's author, Rob Garretson, writes that customer service data is often a reported problem area in gleaning insights. In fact, when the survey asked participants which business areas produce the best business insight, customer service and support came in at a low 10 percent. However, when asked how important the business information is to the company strategy, customer service comes in second to market research at 34 percent. The bigger point here is that companies recognize the importance of voice of the customer data, but are largely unable to make proper use of it. "Particularly in a weakened economy, when customer loyalty becomes paramount, this signals a call to action for companies to improve the quality of insights gleaned from the customer service function," Garretson writes.
In terms of governance, more than half of organizations say information governance is a shared responsibility between information technology (IT) and business. However, one in five organizations says they have no formal policies surrounding governance at all.
- 14 percent say governance is strictly an IT issue.
- 16 percent say they have a dedicated office to handle data governance.
- 21 percent have no formal policies or procedures.
- 3 percent aren't sure.
Based on the findings, the Economist Intelligence Unit makes the following recommendations for decision making:
- Embrace collaboration. Allow information to flow through departments and not just rest in silos.
- Treat governance as a way to ensure the quality of data.
- Use customer insights as a mechanism to foster stronger loyalty.
- Foster a culture of speedy decision making. Give employees tools and procedures for using timely data to impact processes and decisions.
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