Ineffective strategic decision-making is costly. Per McKinsey, 50% of the time spent on decision-making was inefficient, with an estimated business value of $250 million for the average Fortune 500 company.
Aside from the short-term loss, the company's long-term health is in jeopardy if the strategic decision-making process does not improve.
Making long-term plans and choices is a tough function. It's fraught with risk, uncertainty, ambiguity, and complexity.
Additionally, barriers like time constraints, executive biases, team conflict, and knowledge gaps can make it further challenging for executives to make sound business decisions.
Technology cannot solve issues like bias and conflicts but can help you improve speed, agility, collaboration, accuracy, and monitoring.
Technology can also help you understand the risk associated with each decision and help you develop strategies to future-proof your choices.
In this article, we explore 11 ways technology can supercharge how you develop and adopt effective strategic decisions that drive revenue growth.
1. Aids data collection
Companies struggle with gathering and leveraging data from multiple sources (customer relationship management tools, social media, websites, industry data, government data, etc.) and talk more about digging deep to gain valuable insights.
This challenge has to do with the four dimensions of data:
Volume: The sheer volume of data companies generate these days is massive.
Velocity: The speed with which they generate data is at an incredible pace.
Veracity: Parts of the data generated will be valuable, and others not.
Variety: Companies generate data from multiple sources and in different formats.
Technology makes it possible to aggregate data from multiple sources and convert them to formats that can be easily queried.
Kippy offers no-code integrations and API to mix data from various sources and have a single source of truth for your strategic objectives.
2. Provides rich insights
After aggregating data into a single pipeline, businesses need to perform data analysis to query the data for helpful and relevant insights.
Decision-makers can find patterns or identify themes, discover connections, categorize things, spot unusual situations, and more.
To get to this point, companies need tools to clean, process, visualize, and manipulate data, a task typically beyond the scope of spreadsheets.
Tools like Tableau, Microsoft Power BI, Python, MySQL, Oracle, RapidMiner, SAS, IBM Cognos Analytics, etc., are examples of AI-powered tools companies use to analyze and visualize data for intelligent data-driven decision-making.
3. Predicts the future
In our introduction, we stated that making decisions for the future is inherent with risks and uncertainty. Technology can help ease some of these burdens with risk analysis and mitigation.
This form of technology is known as augmented intelligence, a sub-segment of artificial intelligence (AI). It uses machine learning and statistical algorithms to analyze historical data and make deductions about potential possibilities in the future.
These potential possibilities include forecasting numbers, identifying potential risks, and optimizing resource allocation for future projects.
For companies, removing uncertainty can be the difference between making a prompt decision and dawdling because of the unknown, thus delaying critical business operations.
4. Improves communication and collaboration
In a survey by McKinsey, 57% of respondents satisfied with the business result of their decisions said “dissenting voices were given an ample opportunity to express themselves,” compared to 36% of respondents who experienced unsatisfactory business results.
The result of that survey underpins the importance of effective communication during the strategic decision-making process. Simply put, making informed decisions requires input from all stakeholders.
Executives can lean on a diverse pool of skills, backgrounds, experiences, and perspectives. The more diverse, the better.
Per McKinsey, “Companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.”
Simple technology tools like Slack, Trello, Google Workspace, and Asana facilitate real-time communication and collaboration.
5. Brainstorm more recommendations
According to Paul Nutt, Ohio State University management professor and author of Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacles, the root cause of decision failure is selecting from a limited pool of potential options or solutions.
Paul Nutt found that executives only examine one additional alternative 70% of the time when making important strategic decisions.
Yet, he found evidence that enlarging the pool of alternatives improves the quality of decisions. Foundational problems like ego, haste, and biased motives may be responsible for executives sticking to one alternative.
Technology cannot fix those, but it may help you garner and brainstorm more alternatives.
6. Evaluates and analyzes alternatives
We’ve established how building a pool of alternatives improves the probability of making quality decisions. But how do you evaluate these alternatives? It’s through analysis of alternatives (AoA).
Tools and frameworks used for an AoA include scenario analysis, consensus tracking for decision management, cost-benefit analysis, risk evaluation, suitability, SWOT analysis, PEST analysis, life-cycle cost, project timeline, and sensitivity analysis.
The key factor here is to define the problem, objectives, and business context and then determine the overriding ground rules your analysis will be based on.
Simul8 is a great example of a tool used by organizations to experiment with business processes and plan scenarios. SAP and Oracle have modules and features for performing cost analysis and risk assessment.
7. Bridges knowledge gaps
Bounded rationality is one of the challenges leaders face when making decisions.
Management school of thought defines this as “the notion that challenging complex issues that leaders cannot fully grasp makes them unable to be rational about the situation, and are, therefore, incapable of understanding an alternative.”
Amongst decision makers, there are likely those with limited knowledge about a particular business problem or parts of it. Executives must research and go through plenty of pages to bridge that gap.
Technology tools can help. Leaders can use AI tools for SWOT analysis, research market trends, and summarize competitors’ annual reports in seconds.
Additionally, you can build custom solutions using the same models that power these AI tools. These solutions are built on your company’s data. As such, you can query such applications to get more information about the customer journey, a department, product, or service.
8. Automates repetitive and tedious tasks
The decision-making process has many tedious and repetitive tasks that take your time. Every productive hour counts in today’s world, where speed, agility, and time-to-market matter.
For example, let’s say you want open-ended feedback from your customers or employees about a decision. It’ll take you days and maybe weeks to sift through each response to uncover valuable insight, particularly if you have a large customer or employee base.
You can deploy automated text analytics to tag each comment and classify them based on sentiment and theme.
This process simplifies your work, and you can easily dig into the topics that matter to your decision.
You may also like: How To Manage Your Corporate Strategy Using Artificial Intelligence
9. Cascades decisions and facilitates alignment
Tools like Kippy help executives and line managers cascade strategic decisions and goals to all levels of your organization, including business units and individuals.
Everyone in the organization knows what they’re working on and which parts are a priority.
You can also assign each goal and task under a decision to a team or individual to help with accountability.
Clear ownership for each task is essential in ensuring multiple departments are not working on the same task and duplicating effort.
10. Monitors, tracks progress and makes adjustments
How do you know if you should cut your losses, alter your plans, or continue as is? You can do this through an objective, data-driven review.
Otherwise, it's easy to fall into the trap of "escalation of commitment," where things are not working, but you're too stuck on your poor choices.
That's why performance measures are supercritical. You must have reasonable rubrics and metrics attached to every decision and their minimum targets.
The key takeaway here is that decision-making is an iterative process. Think of all your decisions as hypotheses. The data will tell you if you were right or wrong.
Kippy allows you to compute KPIs across projects, departments, objectives, and individuals, providing a bird's-eye view of performance across your desired unit.
You may also like: How to Set KPI Targets that Drive Business Growth
11. Enhances strategic decision-making with immersive virtual reality experiences
Some things are best seen. Rather than imagine what an experience may feel like for customers, leaders can simulate different scenarios through the help of virtual reality technology.
They can then make decisions based on what they’ve experienced and the data backing up that experience. Using VR is particularly helpful for product development or marketing decisions.
Takeaway: Improve decision-making speed and accuracy with technology
Strategic decision-making can be a long and arduous process. There are also no guarantees that you'll get every decision right because they're inherently risky and uncertain.
Technology can help to improve your decision-making tremendously. You can automate tasks to increase speed. You can try to leverage machine learning and artificial intelligence to predict the future and reduce risk and uncertainty.
Technology keeps you agile. You can make choices and quickly pivot if you're not getting the results you targeted. Technology embedded in the decision-making process is worth its weight in gold.
Don't let strategic decision-making be a complex task. Request a live demo with Kippy today to see how it can help you make better and faster decisions!