What are Decisions?
Businesses and other large organizations must make many decisions – not just unique strategic decisions, but also day to day operational decisions.
What do we mean by decisions?
A decision is the act of determining an action or a result from a set of input information. Businesses and other large organizations must make many decisions – not just unique strategic decisions, but also day to day operational decisions. For example, determining the likelihood of fraud in a claim, deciding to approve a loan and determining a commission payment.
The way an organization makes these decisions impacts their performance and is reflected in the key business performance indicators and metrics that they track. To succeed, they need to make these operational decisions in a repeatable, reliable, accurate, explainable and appropriate way. The way these decisions are made, the decision-making approach applied, can and should be defined in advance and explicitly managed. Defining decision making in this way ensures that the people and systems that make each decision can do so consistently, accurately, legally and effectively.
DMN (the Decision Model and Notation) is a global, open (that is to say, public, not owned by any vendor) standard for decision modeling. It is controlled and published by the Object Management Group (OMG), one of the most highly regarded standards bodies in the world. DMN is not the only way to represent a decision but it is the only global standard for decision modeling. DMN is the recommended means to represent an operational business decision.
Decision Automation Vs Management
To be an effective business requires routinely making the right decisions. To achieve this, the decision-making approach must be understood, captured, communicated, analyzed, and optimized with respect to a company’s business goals. In other words, decisions must be explicitly managed.
In organizations using decision management, operational decisions are the driving principle for every initiative. They are directly linked to an organization’s performance metrics, subject to continuous assessment and improvement (e.g., of their accuracy, consistency, cost and latency), and their evolution is explicitly tracked. Decision management increases an organization’s agility and adaptability by making its systems easier to monitor and change. When an organization explicitly defines its decisions in a format designed to capture essential information and communicate it to stakeholders, this is called decision modeling.
Decision modeling has many uses, from cataloging critical decisions and measuring their business value to determining their data requirements and from deducing the internal structure of decision-making to exhaustively capturing decision logic. Decisions can be modeled to varying levels of detail depending on the application. At the highest level of detail capture, a decision model can be executable. Executable decisions are used to automate decision-making in a highly transparent and agile way. Decision automation can be extremely valuable, but the ability to manage decisions, even non-executable ones, is the more fundamental benefit.
Definitory Vs Strategic rules
Automation of logic in a business case usually requires combining various forms of logic and types of rules.
Rule-governed goal-oriented activities can be easily understood through the analogy of game theory. Definitory being the rules that would define the game. For example in chess the movement rules that govern each piece.
In a business scenario like an insurance claim; definitory rules may be regulation imposed by governments or internal product structures, and strategic rules would be those that helped reduced the loss ratio, for example better fraud detection without loss of customer satisfaction.
Every decision management or modeling project is unique.
The functionality offered by any DMN tool cannot be measured in a binary fashion. Nor can it be represented simply as a checklist of items which are part of the tool repertoire. It cannot be described on a single, graduated path either, because there are many independent aspects of functionality that may be more applicable in some business scenarios than others.
Follow the link below and experience how the DMN can be used within your unique business context, to assess and assist you in developing better business opportunities.
Associate Member
Read only access to all content- FREE membership for individuals
- Access all documentation and articles
Individual Member
Participate in the community- Paid membership for individuals
- Access all documentation and articles
- Participate in committees, review drafts, contribute
Corporate Member
Actively support the community- Membership for corporations and organizations
- Access all documentation and articles
- Participate in committees, review drafts, contribute
- Corporate profile and 2 additional users included