The advent of technology has forever changed the way business decisions are made today. But how much easier has it really made things? Let’s take a look.
In all business areas making decisions is a natural and integral part of any company’s management process. Doesn’t matter if it’s a small family business or a huge multi-national corporation. At some point or another they all need to make decisions to ensure their continued operation. And that’s exactly what a manager’s job in an organization comes down to – a constant process of decision-making to ensure continued growth and achievement of business goals. Needless to say, that process is rarely an easy one.
In the past all managers had to rely on in their decision making was pretty much just their experience, their limited knowledge and their instinct (and sometimes plain ol’ guesswork). But today, thanks to the wonders of technology, decision makers can have access to an enormous amount of data, making the process a lot easier. Or does it?
So Much Data
Technology is taking on increasingly major role in decision-making today. The sheer amount of data that managers have to operate with on a daily basis is absolutely staggering compared to what they had to work with just a few decades ago. And while on the surface it may seem as if the more information we have at our disposal the better our decisions are, research shows that the exact opposite is often the case.
Indeed, we only need to look at the number of different tools, systems and strategies designed to streamline the decision making process available today to understand the scope of the “problem”. While technically different, at their core they all revolve around the same objective. And that is to provide managers and executives with critical data and the means to analyze it to help them make the most well-informed and logical business decisions.
Take business intelligence, for example. A term coined by a Gartner Group consultant in the late 1980s, it describes a technology-driven process that leverages various software solutions and services to transform data into actionable information and helps decision makers understand the current state of their company. In today’s world BI-centered tools are a critical component of any successful company’s strategy. They allow managers to streamline the effort needed to search for, combine and query data to obtain the information required for good decisions.
Time tracking and activity tracking solutions on the other hand offer a great way to collect data. Stay on top of the day-to-day activities of your business by keeping track of your team’s time expenses. Sounds simple enough, but the benefits of integrating such a tool into your internal process could be quite significant. At a glance you can see which projects are your biggest profit-drivers, what types of tasks take your team longer to accomplish than others and which areas don’t get enough attention. Study, analyze and act on that information accordingly.
And finally, AI and machine learning technology. This sector has seen a rapid growth in the recent years. Today the world’s biggest and most innovative companies like Google, Amazon and Facebook are already using AI-powered algorithms as part of their decision-making process. And evidence seems to suggest that over the coming years the role of the AI-based systems in making real-world decisions will only keep getting bigger. Just last year AI-led hedge funds outperformed their human counterparts with annual returns of over 8.44%! The benefits of incorporating AI into your decision-making process are hard to deny. It’s faster, it can process a lot of data at once, and it doesn’t suffer from decision fatigue. At the same time, an algorithm does not provide any explanation as to why it arrives at specific conclusions. So a lot of executives are still reluctant to trust the opinion of a machine, even if it’s a very smart one.
Leave Room for Emotion
In a fascinating discovery made a few years ago neuroscientist Antonio Damasio found out that people with damage in the part of the brain where emotions are generated found it near impossible to make decisions. They all could describe in perfectly logical terms what they should be doing, yet could not make even the simplest decisions, such as what to eat.
So where does it all leave us? Well, much like technology by itself does not guarantee you better or more accurate decisions, all the data in the world won’t help you if data is all you’re going to rely on in your decision-making. Information should absolutely inform your decisions, yes. But your emotional response and intuition should also be a part of the decision equation.