Understanding the Importance of Operational Decisions for Companies

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Correct business decisions have a long-lasting effect on the success of an organization. As companies grow in complexity, business decisions require an increasing number of stakeholders and choices. Therefore, businesses today need to find ways to make complex decisions while being flexible and responsive to market changes.

What Are Operational Decisions?

Traditionally, operational managers and other employees execute operational decisions; they determine day-to-day activities.

Examples of these types of decisions include scheduling equipment use, the number of products to buy from suppliers, and ascertaining how much inventory to keep.

Operational Decisions in More Detail

Operational decisions help bring your business goals to life by ensuring that the organization runs efficiently. As a result, these types of extensive implications for the viability and growth of businesses.

An operational decision is composed of these three steps:

  • Input Data
  • Decision Logic
  • An Action Taken

Operational decisions are the bedrock of every company, regardless of size or industry. Many organizations make hundreds and thousands of operational decisions daily.

Operational decisions can also be used in many various cases. In fact, they are typically made quickly; sometimes even with clients being onsite.

Even though operational decisions are frequently made about customers, they can also streamline processes involving suppliers and employees.

For example, decisions pertaining to things such as equipment maintenance, shipment orders, and scheduling employee shifts.

Operational Decisions Characteristics

Operational decisions are systematic and repetitive which enables the decision-making to be constantly reused in different instances. 

Namely, once operational decisions have been modeled, they can then be reused and run countless times against millions of records. These decisions are closely monitored, enhanced, and approved with testing.

Some popular examples of operational decisions include:

  • Setting commission rates for sales representatives. 
  • Outlining which services to offer to particular customers.
  • Preventing scams and other fraudulent transactions.
  • Managing complex insurance cases.
  • Maintaining compliance with relevant regulations.

These are only some of the countless processes made on a daily basis in companies of varying sizes across different industries. 

Deploying Operational Decisions the Right Way

The consequences of inadequate operational decisions can range from loss of revenue and market share to compliance violations that can damage a company’s reputation. To complicate matters further, operational decisions are not fixed or permanent, which means that organizations have to make constant changes to their decision-making. 

Thankfully, operational decisions are great candidates for intelligent automation. 

For that reason, organizations of different sizes use software solutions that are powered by business rules engines, which allow them to write, handle, update, and automate operational decisions seamlessly.

A business rules engine runs powerful conditional statements “If-Then” statements known as business rules. Operational decisions of varying complexity can be expressed by these simple yet robust business rules.

Many businesses use rules engines to run as decision management systems that provide high-level operational decisions. As a result, non-technical business users can create and manage operational decisions that create innovation and growth without having to wait for help from the IT department. 

From streamlining underwriting processes to generating highly-relevant product recommendations, business rules engines enable organizations to manage and update decisions when new market conditions arise. 

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