Decision-making in Today’s Digital Age

By Jairo Fernandez, Senior Vice President, Human Resources, SAP Asia Pacific Japan

“I am not a product of my circumstances. I am a product of my decisions.” – Stephan Covey

The speed of technological advancements has heralded an era where consumers are bombarded with new offerings of products, services, and even new types of work. Hyper-connectivity and the mobile workforce have made it even easier for consumers to switch products or services and for employees to move from one company to another.

The digitalization of business has pushed the demand for companies to transform in order to keep up with the intense competition. Making smart, informed decisions at the right time is critical for a business, ultimately impacting its bottom line. Although the benefits of technology are clear, the latest research by SAP and Oxford Economics, Leaders 2020, reports that only 55% of executives are making data driven decisions – and only 43% in real-time!

Decision-making in the digital age

Times have changed and the decision-making process in the new age is entirely different from the past and significantly more challenging. I see this along the following three dimensions:

– Businesses today need to be agile and react in real-time in order to compete in the dynamic digital economy.
– The influx of data can either make or crush strategic decision-making.
– Repercussions of a bad decision can now be even more damaging in today’s highly transparent world.

Technology as a simplifier

Technology can help to improve business agility and aid people to make the most informed decisions for their unique business requirements.

– Cloud Analytics solutions: Reporting in the past meant massive Excel spreadsheets or PowerPoint decks. However, the cloud-based solutions available today can integrate all sources of data to provide a single source of truth, allowing people to access information in real-time and react to changes instantly. With access to instant and data-driven insights at their fingertips, executives are able to improve their decision-making significantly based on real-time and factual information, enabling immediate and precise action.

– Machine Learning: In fact, without being realized by many, machine learning has already begun to be a part of working life, making daily business decisions much faster. For example, recommending learning modules to a newly relocated employee, or suggesting best fitting profiles to recruiters and hiring managers without them having to sift through hundreds of CVs are just a few instances of machine learning at work.

Machine learning will also soon be applied to help identify potential bias in people processes such as performance reviews and job descriptions, recommending actions to encourage equity and improving workplace diversity.

Your talent as your biggest asset

The potential of technology is immense but ultimately it is the people who make decisions based on the insights technology provides.

– An MIT study reveals that only 44% of organizations are adequately prepared to lead in the digital future. Having leaders and employees with a digital mindset and skill set is key to successful digital decision-making. For organizations this means having a clear digital strategy and roadmap that are easy for every employee to articulate and embrace.

– Technology has made data analytics so simple that it is no longer just for data scientists: anyone can make use of it in one way or another. Employees should be equipped with basic analytical skills and easy-to-use data analytics tools to get the most insights out of their data.

– Decision-making should be spread across the organization rather than within just a few groups of people. According to Forrester, for every hour a product team spends on heads-down work, they spend 48 minutes waiting on decisions. That equates to more than 3.5 hours of “wait time” in an average eight hour work day. Some level of optimization is possible by making the decision process more agile (eliminating dependencies and parallel processing) while some can be brought about by self-sustaining end-to-end teams as a part of overall flattened organizations. This must be coupled with the investments in technology for easy accessibility.

The pace of change shows no sign of slowing down. The truth is that the data deluge will increase complexity and decisions with far reaching consequences will need to be made faster and in real-time. Making the right investments in technology, articulating a solid digital strategy and leveraging people as change agents can bring about a sustained competitive advantage through digital decision-making.

To learn more insights from the Leaders 2020 study by Oxford Economics and SAP, please visit here.