One of the (many) advantages to an Enterprise Decision Management or EDM approach is the opportunity for real strategic alignment, top to bottom. At first sight this may seem contradictory with the ruthless focus on operational, high-volume decisions regular readers will know me for. If EDM is focused, and it is, on operational decisions how can it contribute to strategic alignment.
Many organizations are challenged to keep their operational execution – the way front-line staff operate and the way self-service applications behave - synchronized with their strategic plans. For instance
- You might want to treat all gold customers a certain way but have a self-service application that does not differentiate between customers.
- You might want to get more aggressive about retaining a certain class of customer but have call center representatives who have too many campaigns to remember and so treat everyone the same.
- You might want to offer demand-based pricing but have a website disconnected from the demand algorithms used by sales representatives.
And so on. Divergent agendas and miscommunication between those working on an organization’s strategy and those executing it operationally are chronic problems. These disconnects can hinder executive leadership’s access to information about what’s really going on and their ability to effect change in organizational behavior when they see the need. All the performance management infrastructure in the world won't solve this - you will just have a real-time, accurate view of how badly it is going.
Using EDM to align strategy and operational decisions you can reduce inefficiencies and improve effectiveness. For example, an EDM system can help brand managers assess and improve the alignment between the promotional campaigns executed in the call center, the mailing house and over the website and their overall marketing strategy. An EDM application that managed customer retention decisions could ensure that the right retention offers were made to the right customers regardless of channel (call center, store, agent, website) and that these offers changed as quickly as the strategy did. By focusing on the operational decisions that implement the strategy at the front-line, by automating that and by giving the business leaders control over how those decisions are taken you dramatically improve the likelihood that there is alignment between strategic intent and operational reality.
This need for strategic alignment brings us into the area of business agility - you must be able to change the way your organization behaves more quickly than ever before. You need to be able to respond to competitive pressures, regulations, legal rulings, product introductions and more. Communicating and supporting both strategic and tactical course corrections organization-wide is a competitive requirement, not an option. The growth in real-time or right-time business intelligence systems means that organizations have more visibility into how well (or poorly) they are doing than ever before. Yet if they are to respond effectively to this new understanding, then delivering new processes, skills and expertise rapidly to front-line workers and information systems is essential. The time it takes to update these operational activities is likely to be the key factor in how fast an organization can respond – the determinant of its business agility. If your analysis of last week’s sales shows that a competitor is eating into your sales and you decide that a new pricing model is required, how long it takes to implement that pricing model in your call center system, your website, your stores or the systems your agents use will determine how quickly you can respond. An EDM approach would ensure that the way you make pricing decisions was automated once, consistently across all these channels and would mean you only had one place to go to make a change. Further that place would be implemented so as to make the change easy.
An EDM approach would ensure your systems had the agility they need and were not the bottleneck for a change in strategic direction.