I recently started a new blog series on why Real-Time Decision-Making is required during periods of market uncertainty. In this next blog, lets level set on exactly what is Real-Time Decision-Making and why it matters so much more during periods of market uncertainty and business disruption. Naturally, what got me thinking about all of this is COVID-19 and that more than likely, peaks and valleys of this pandemic will generate intermittent business disruptions, possibly though spring 2021. And, even if this episode mercifully does simply go away, it is unlikely this is the last Coronavirus we will see in our lifetimes.
If it weren’t a pandemic, it would be floods, political instability, wars, earthquakes – you name it – that creates unexpected business challenges for organizations large and small. Upon further reflection, I realized my thinking around business-as-usual should be adjusted as well; after all, mergers and acquisitions, significant regulatory changes, even labor disputes, and strikes can create similarly devastating impacts.
With this broader set of disruptors as a backdrop, I believe a simple definition for Real-Time Decision-Making is in order. Real-Time Decision-Making is the ability to deliver decision support within the shortest possible time-frame using the best possible set of data and decision-making model to direct and report on business operations and interactions. Some qualifiers need to be applied though; essentially, everything is case by case, with the key factors being:
- Time frame: The time constraints of your business or organizational and operational process.
- Best Possible Set of Data: comprehensive, reliable, fresh.
- Decision-making model: built by and for use in decision support across your organization with results that are clear, prescriptive, and actionable and extensible to new players on your virtual team.
It is worth noting what Real-Time Decision-Making (RTDM) is not. Most notably, it is not the actual business process being executed, although data extracted from those processes and metadata about them is part of the data collection and aggregation to perform the analysis behind RTDM. Instead, based on the definition above, think of it as the closed feedback loop in a control system. It’s also not the individual data collection events, data queries, or other “steps” within an intelligence-gathering or reporting process. In fact, think about a query on any search engine and the fact that the engine aggregates and maps all the data that the query is being executed on long before the query is made.
In fact, defining RTDM narrowly against the real-time part of the name misses the forest for the trees and locks us into a more technical definition of real-time execution. Not that speed isn’t important – it is – but bounded by the time constraints of the business implemented by IT and not the other way around. Further, RTDM should not be equated to Real-Time Analytics. While digital transformation and the rise of Mobile, IoT, and web and social media streams make streaming data commonplace, there is still a place for batch processing and analytics as they will often satisfy time constraints from a business perspective.
Well, that’s my definition. Why does it matter more in times of market uncertainty and business disruption? First, let’s establish a baseline, RTDM always matters and the more that a company has evolved along their digital transformation path, the more that RTDM is a part of their normal business operations. However, during periods of market uncertainty, the speed of business is compressed. Compounding this difficulty, often several course corrections are needed – sometimes in parallel – to accurately respond to changing market and business conditions. RTDM serves as the feedback loop and its capabilities and performance must rise to the occasion, optimizing what are often negatively correlated parameters: speed and accuracy and cost.
There are three key traits that define a world-class RTDM supporting strategic capabilities:
Complete Common Operational Picture (COP): Some of you may recognize this as term used in net-centric operations but it really applies to almost any scenario where your situational awareness is a function of how complete your dataset is and the ability for it to paint a picture understood by all parties in your virtual team. The more complete your COP, the higher your situational awareness or in non-militaristic terms, situational IQ.
Data-Guided: I could’ve used the term Data-Driven, but it often means that the decision is made solely on the data and there is no weighting given to prior experience nor external parties that bring in their own point of view (often without an ability to see let alone vet their data fully). The completeness of the COP and how easily its visualized by each role in the context of the operational task will determine the extent Data-Guided equates to Data-Driven and how high your situational IQ is.
Prescriptive and Executable: The RTDM generates decision support in a format that works for the specific business process or reviews of one or more of them with speed and accuracy. Additionally, this support must be in a format that is actionable. By actionable we mean that the intelligence informs humans or machines as to what path they should take, operation they should execute, or to combine it with other intelligence in order to do the same.
All three of these characteristics are strained by market turmoil. The complete COP for normal business is incomplete when faced with the need for a new supply chain partner, a significant segment of your workforce unable to show up to work, and so forth. There will be a need to incorporate data from external sources and new entries into your virtual team – new business partners, government, customer feedback, and so forth – to help fill gaps in your COP, hence the point above on Data-Guided instead of Data-Driven. And finally, how do you take these new relationships and missing pieces to the data puzzle and deliver your situational intelligence into your now not-so-normal business process, adjusting your execution to respond better to uncertainty and disruption?
Underpinning your RTDM with the Actian Avalanche Real-Time Connected Data Warehouse will determine if you can build up an IQ and turn that into executable recommendations at the operational level. More on that in the next blog.