Till last decade, the efficacy of small and medium businesses mostly depended on the management team, their expertise and exposure to various hurdles along the way. The digital decade has empowered the management with multiple tools and techniques to make data-driven decisions for complex issues in business. Experts say that increasing number of businesses utilize sophisticated analytical tools to arrive at key strategic decisions across all facets of business.
Before going into further details, let me tell you in brief about the term “Decision Sciences”. In simple words, it is an approach to resolve business problems by using a combination of mathematical formulae, technological applications and behavioral sciences. Simple isn’t it? No?
Ok. Let me give you some simple examples.
- Placement of a particular brand of products in a prominent location to improve the sales in the retail store – based on observing consumer behavior inside the store and comparing the sale of products placed in different locations inside the store.
- Arriving at marketing mix model utilizing historical marketing spend and related revenues, macro economic factors like purchase behavior of customer segments, demand etc. taking into account various business constraints and assumptions.
- Sales force optimization by studying market dimensions like size, growth rate, intensity, consumption patterns, infrastructure, receptivity, risk appetite etc. Based on the above dimensions, one can arrive at the market potential index (MPI) for different markets which in turn helps decide the optimal number of sales force required.
Hope the above examples helped you understand about decision sciences a little deeper. Let us now discuss how small business can benefit from decision sciences.
1. Data driven decisions
Instead of relying mostly on intuition and experience, managers can now utilize data to decide on various things. Most common examples could be data mining and predictive analytics which emphasizes the adoption of structured approach to break down the problem in a hypothetical manner, analyze data and arrive at decisions.
2. Choice under uncertainty
When innovation is the back bone of a business, then uncertainty is certain. Managers might find it difficult to predict how the market will behave, what would be the reaction to specific products / service etc. During such tough times, decision sciences can help managers come up with normative or prescriptive decisions. It might not be a best decision but the decision could be optimal in nature.
3. Edge over competition
Data driven management can help navigate the business close to accuracy. This gives a clear edge over competition.
4. Rationalize Alternatives
Decision sciences helps managers rationalize available alternatives and arrive at the opportunity costs. Benefits to business through such analysis are plenty as it reduces risk considerably.
5. Effective Interpretations & Visualization
Automation has led to data explosion. At present businesses are able to capture huge chunk of data related to each and every process. Decision sciences applied along with decision support tools can help effective interpretations and visualization of captured data. This helps in pattern analysis, predictive intelligence etc.
Thanks to cloud based solutions, more companies are now able to automate almost all their processes through various applications in a cost effective manner. Analyzing the data captured through these applications will provide good insights into the business and decision sciences truly are capable of ensuring accurate analysis and decision-making.
[This guest post is written by Ramesh Kumar, an avid netizen who specializes in cloud computing, mobility solutions, data sciences, analytics and next gen IT. You can get in touch with him on Facebook or his site ]