Decision Analysis Framework

Overview

Big Sky can help optimize the most important parts of a core business process – the key decisions

Our approach to doing it involves four steps, which can be adopted as part of a larger process improvement effort

This short briefing explains the steps and the considerations of each

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Our Approach

Define Core

Capability

Document its

Process

Identify Critical

Decisions

Optimize Decisions

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Step 1: Define Core Capability

All organizations have a relatively small number of core capabilities – those functions they must perform well

Core capabilities are driven by the organization’s strategy

Before any work on decision optimization can begin, those critical capabilities are identified (or validated) by our clients

Big Sky can help an organization identify those capabilities if they have not already been well defined

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Define Core

Capability

Document its Process

Identify Critical

Decisions

Optimize Decisions

Step 2: Document its Process

All capabilities may be defined as a process Before optimizing decisions, Big Sky helps to document the

process that creates a capability, making sure to carefully document each decision point

Big Sky chooses the right approach for the process based on its complexity, and may include value stream mapping, process mapping, swimlane diagrams, or process models or simulations

In many engagements, Big Sky helps a client to both optimize a process using traditional improvement techniques while simultaneously optimizing decisions in the process

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capability

a b c dprocess

Define Core

Capability

Document its Process

Identify Critical

Decisions

Optimize Decisions

Step 3: ID Critical Decisions

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capability

a b c d

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process

decisions

critical decisions

Define Core

Capability

Document its Process

Identify Critical

Decisions

Optimize Decisions

Once the process describing the capability has been thoroughly documented, Big Sky helps to identify those decision points which are most critical to process success

Each decision point is treated as a critical input variable x which drives the process outcome y. The process outcome y might be customer service, quality, speed or some other capability objective

The decisions that have the greatest impact on y are selected for optimization

Step 4: Optimize Decisions

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capability

a b c d

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Strategy

Technique

Technology

Strategy

Technique

Technology

process

decisions

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Define Core

Capability

Document its Process

Identify Critical

Decisions

Optimize Decisions

How to Optimize

After critical decisions are identified, Big Sky uses a 3-part approach to optimize each

First, we assess the linkage from the decision to overall corporate strategy

Second, we assess the technique used to make the decision

Third, we evaluate what technology is used to support decision-making

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Strategy

Technique

Technology

Define Core

Capability

Document its Process

Identify Critical

Decisions

Optimize Decisions

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How to Optimize: Decision Strategy

THE ANGLE: Decisions start with a purpose. Big Sky helps clarify how a decision ties to strategy in specific, measurable terms. METHODS:• Capability Analysis• Critical Decision

Identification• Value Chain Analysis • Budget Analysis• Financial Analysis• Strategy Validation• Organization Analysis

Strategy

Technique

Technology

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How to Optimize: Technique

THE ANGLE: A good carpenter chooses the right tool for the job. Big Sky helps select the right decision tool for your situation, regardless of whether it’s a complex recurring supply chain problem or a one-time strategic choice. METHODS:• Hypothesis testing• Analytic Network Process • Analytic Hierarchy

Process• Decision Trees• Real Options• Group Consensus

Strategy

Technique

Technology

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THE ANGLE: Good decisions result from a qualified decision maker armed with the right information, delivered at the right time in the right context. Big Sky helps define an architecture optimized for effective decision-making.

How to Optimize: Decision Technology

METHODS:• Business Intelligence• Group Decision Tools• Context-Dependent

Models• Visual Control Tools

Strategy

Technique

Technology

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Finally, Big Sky makes change last by compressing decision cycle time (DCT), reducing decision error, and reducing decision waste. By applying lean, six sigma, and process improvement techniques and principles, Big Sky helps make lasting, measurable change in decision fundamentals.

Making decisions stick

METHODS:• BPR/Process Improvement• Lean Process Design• Six Sigma (DMAIC)• Rapid Decision

Improvement

Strategy

Technique

Technology

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