The anatomy of decision making, augmented by artificial intelligence – DATAQUEST

  • Lauren
  • March 31, 2020
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Ever battled the thought of having more than 24 hours a day? In today’s fast-paced, complex world, time is the most valuable and perhaps the least available commodity – sometimes, even 24 hours seem not enough in a day. This is especially true of business leaders. Not only do C-suite executives have to complete certain tasks, but they also need to make critical decisions based on sound data and robust processes. And now given the COVID-19 outbreak, the importance of timely and quality decisions cannot be understated! It is this aspect of decision-making that is often little understood or ignored altogether. It’s a time-consuming, often cumbersome process that has real repercussions on the business.Traditionally, business leaders have resorted to instinct and experience, but with the stakes higher than ever this is no longer enough. Chances are that businesses will run into problems related to lack of information or simply bias. Good decisions are a mix of various factors: data and its analysis, human expertise and experience, consultation, contextual awareness, application of data in a particular situation, etc. In recent times, artificial intelligence (AI) has become indispensable to business decision-making, helping drive insights and leading to solutions faster, more accurately and in a scalable manner. AI is being applied in a range of sectors, from medicine to retail, automobile, human resources and education. It presents a wide spectrum of benefits to industry, though it is also making many anxious about how intrusive it will get and how it will change the way we work.Reports suggest that organisations using consumer behaviour insights strategically outperform their peers by 85% in sales growth margins and by more than 25% in gross margins. AI offers this strategic use of information, enhancing and extending human capability for businesses to achieve more, faster and more efficiently. Like with anything else, optimum use of AI for decision-making comes from the use of the following elements – experience, expertise and consciousness.ExperienceWith artificial intelligence, we have exposed data to tools that analyse and draw insights from the analysis. However, it is also important for us to understand the patterns that arise during the analysis and use it to further enhance the results. Algorithms today, can recognise such patterns and share insights for better decision-making. For instance, retailers can map the buying or selection patterns of customers and identify a pattern which will probably help in improving the look and feel of the website or indicate the need for more product details or something else of importance in the business. This experience not only helps in decision making but also enables businesses to optimise processes and add value to the services offered.ExpertiseWhile technology and algorithms are assisting decision-makers, it is also important to leverage human judgement to achieve the best possible result. Algorithms and technology could tactically address data and analyse it to derive insights; however, human judgement can strategise the inferences to achieve improved decision making. Algorithms could also have bias and the inability to see beyond the data and analytics. Thus, human judgement can bring in value to the results derived from an algorithm and also deal with grey areas an algorithm is unable to see, enabling strategic and meaningful decision making.ConsciousnessThe effects of artificial intelligence on business decisions are as good as the data we use in the algorithms. It is hence important for us to be mindful of the data we use for analysing and deriving insights. Apart from checks on the source of the data and its credibility, it is also vital to be consciously aware of the problem we are trying to solve or the decision we are trying to make. This will lead us to make correct use of the information or data which is needed to achieve business goals.For example, a large office supplies distributor wanted to reduce labour costs and improve margins. However, there was still a lot of ambiguity in terms of identifying the actual problem and lack of attention to the goal. With attention to the data patterns and attention to the requirement, we were able to identify several opportunities, which may not have been a direct solution to the problem. In this case, along with human judgement, it was important to leverage data and analytics to understand the viability of the solutions and their implementation.The integration of human judgement and advanced analytics is thus an important aspect of any business decision-making process. Sometimes, knowingly or unknowingly our experiences could be subjective and create bias in the analysis. Hence, businesses are turning to data and AI to augment the decision-making process and drive impact, deriving solutions for our specific business problems.The ability to apply some or all these elements to the decision-making process, along with the use of data and AI, can help make smarter, faster and more impactful decisions. Or should I say suffice the 24 hours in a day!By Mihir Kittur, Co-Founder and Chief Commercial Officer, Ugam, a Merkle Company
Source: https://www.dqindia.com/anatomy-decision-making-augmented-artificial-intelligence/