Operational decisions are what make your business strategy real and ensure that your organization runs effectively, right down to the front-lines interacting with your associates. To ensure that operational decisions are effective, you need to manage operational decision making. Operational decisions helps the organization to understand some fundamental cost-volume relationship relate to the operation in the company. In operational decision making, the decision makers have to consider about volume, latency, variability, managing risk, self service and personalized. Volume is the number of decisions of a specific type that decision makers made must be high. The volume can cause problems or exacerbate another decision problem, such as compliance and risk assessment. Besides that, latency means when you could foresee problem is coming but still couldn’t change how you are going to make decision in time. So you might have an operational problem. The change in mind-set required is akin to the changing view of data over the past few years. Data is no longer just something needed to run systems; it has become visible to many and is managed as a resource for the whole organization-a corporate asset. Managing operational decision making as a corporate asset means treating it as strategic, managing it explicitly, making it visible and reusable across the organization, and improving it constantly.
Important Characteristics of Operational Decisions
To be effective, an operational decision must be precise, agile, consistent, fast, and cost-effective:
- Precise – Good operational decisions use data quickly and effectively to take the right action, behaving like a knowledgeable employee with the right reports and analyses. They use this data to derive insight into the future, not just awareness of the past, and use this insight to act more appropriately. They use information about customers to target them through micro-segmentation and extreme personalization. They use behavioral predictions for each transaction or customer to ensure that risk and return are balanced properly, and they use the information a customer (or supplier or partner) has provided (explicitly or implicitly) to improve the customer experience.
- Agile – Operational decisions can be changed rapidly to reflect new opportunities, new organizations, and new threats; otherwise, they rapidly decline in value. No modern business system can stay static for long. The competitive, economic, and regulatory environment simply doesn’t allow it. When organizations automate their processes and transactions, they often find that the time to respond to change is affected largely by how quickly they can change their information systems. To minimize lost opportunity costs and maximize overall business agility, operational decisions must be easy to change quickly and effectively. The agility of these decisions-both the speed of identifying opportunities to improve and the readiness with which they can be changed-ensures that they remain aligned with an organization’s strategy, even as that strategy changes and evolves.
- Consistent – Your operational decisions must be consistent across the increasing range of channels you operate through-the Web, mobile devices, interactive voice response systems, and kiosks, for example-and across time and geography. They allow you to act differently when you choose to-to offer a lower price online to encourage the use of a lower-cost channel, for example-but ensure that you don’t do so accidentally. These systems support third parties and agents who act on your behalf and the people who work for you directly. They enforce your organization’s laws, policies, and social preferences wherever it does business and make sure you avoid fines and legal issues. They deliver a consistently excellent experience for your associates.
- Fast – You need to take the best action that time allows. The saying on the Internet is that your competition is three clicks away. Your associates are learning to be impatient and have short attention spans. Meanwhile, your supply and demand chains are becoming more real-time, and the systems that manage them must respond quickly as well as smartly. With fewer employees handling more customers, partners, and suppliers, you must eliminate the wait time for these associates. You must decide, and act, quickly.
- Cost-effective – Above all, operational decisions must be cost-effective. Despite the massive efficiency gains and cost reductions of recent years, reducing costs continues to be essential. Good operational decisions help eliminate wasteful activities and costly reports. They reduce fraud and prevent fines. They help your people be more productive and spend their time where it really matters. They make sure you do as many things right the first time as possible and avoid expensive “do-overs.” They reduce the friction that slows processes and increases costs.