Decision-Making Systems Give Benefits to Managers

In late 1970s, a new idea emerged from academics who worked with applications of information technology. Fortunately, decision-support systems involving the use of complex computer algorithms to support and enhance human decision making helps managers report, analyze, and interpret data rather than execute business decisions. The concepts of numerous kinds of decision support capability basically is that a computer program would churn through data and with human interpretation would reveal previously hidden trends and patterns that would allow an executive to make smarter and faster programmed decisions.

However, initially, there were some issues resisted the development of this new approach. Such as the notion of computer-augmented decisions never really exploded like some other categories of computer software since it often was difficult to extract decision rules or algorithms from human experts. Also, these systems are very complex, and typically only a few people in an organization can understand and work with them. So, the shortage of managerial time and analytical expertise caused the rise of automated decision making. These new systems came about not only because technologies have matured, but also in response to business needs.

Perhaps, although many executives may somewhat doubt the type of the computational decision making ability but rather prefer to rely on gut feelings or other traditional approaches to make decision, the automated decision-making systems and processes can still involve some human review along with adopting the rational decision-making model. A physician, for example, either initiates an order following the system checks or is able to override the recommendation of an automated protocol. Patients are safer when an automated system need to combine with physician knowledge and rational professions. As a result, while adopting computer systems to make important decisions, both implementing the decision making systems as well as human involvement checking can expectedly reduce as many mistakes as possible. Ultimately, the company will benefit not only by extracting the rules into a common rule base but also by integrating automated decision-making capabilities into workflow and transactional applications while maintaining a separate rules base.

Yin-Chin Huang

Publish Post

Referent Article Source: Harris, J. G. and Davenport, T. H. (July 1^st, 2005) Automated Decision Making Comes of Age. MIT Sloan Management Review.