Module 1 – Decision making,
data and analytics
Business Logic
Dr. Tuan Truong
Learning outcomes
01 02 03
Identifying and Classifying Explaining and
clearly decisions: using the
articulating a Strategic – framework:
business Tactical – Decision →
decision Operational Information →
Data
What decisions does a business
have to make
• Choose a familiar business (café / e-commerce / store /
app, etc.)
• List 5 decisions they have to make in one month.
• For each decision: “What decision?” + “Who made it?”
(Decision | Who)
• Note: The decision must be a “choice between options,” not an
“operation”—remember the decision point in BPMN?
Why start with
"decision"?
• Businesses have
dashboards, but they lack
clear decision-making.
• Good data = faster/more
accurate/measurable
decision-making.
• Know how to ask the right
questions before searching
for data.
What is business
decision
• Decision = choosing one option
from several options to achieve
a goal (within constraints)
• 4 core components:
• Goal: What do you want to
achieve?
• Options: What options are
available?
• Criteria/Metrics: What
criteria are used to make
the choice?
• Constraints (budget, time,
legal, etc.)
3 types of decision
• Strategic: Long-term direction
(quarter-year), changing the way
• Tactical: Optimizing medium-term
plans (week-month), allocating
resources
• Operational: Daily operations,
execution & exception handling
• Example – Restaurant Decisions
• Strategic: Open more branches?
Segment positioning?
• Tactical: This month's promotion?
Seasonal menu?
• Operational: Table priority? Handling
late orders? Shift scheduling?
Stakeholder Unclear owner → “Many
people offer suggestions,
s & Decision but no one takes
Owner responsibility”
Decision Owner = the
person who finalizes the
decision and is
responsible for the
outcome
Stakeholders = those who
influence / implement /
receive the output
RACI
• RACI - Task-Focused
Responsibilities
• Responsible: The doer(s) who
perform the work.
• Accountable: The one person
ultimately answerable for task
completion (must be only
one).
• Consulted: Those who provide
input (two-way
communication).
• Informed: Those who need to
be kept in the loop (one-way
communication).
DACI
• DACI - Decision-Focused Ownership
• Driver: Manages the decision
process, gathers info, and
pushes for a decision.
• Approver: The ultimate decision-
maker with final authority (the
"Decision Owner").
• Contributors: Subject matter
experts who provide input and
recommendations.
• Informed: Stakeholders kept
updated on the decision and its
outcomes
RACI vs DACI
• Focus: RACI for tasks/workflows;
DACI for decisions/approvals.
• Decision Ownership: DACI has a
clear Approver, making it great for
clarity on who decides; RACI's
Accountable role is about overall
success, not just the final 'yes/no'.
• Best For: RACI in large projects with
many tasks; DACI in situations
needing quick, clear decisions, like
product development or strategy
Decision making process
• Intelligence - Discovering,
identifying, and
understanding the problems
occurring in the organization
• Design - Identifying and
exploring solutions to the
problem
• Choice - Choosing among
solution alternatives
• Implementation - Making
chosen alternative work and
continuing to monitor how
well solution is working
• Monitoring and feedback → Simon’s Decision-Making
learning & adjusting Process
Where does "data" appear in the
process?
• Intelligence: Anomalous signals (drop/spike)
• Design: Hypothesis & verification
• Choice: Trade-off simulation / Expected impact
• Implementation: Monitoring, guardrails
• Feedback: Impact measurement, learning from
experience
Basic framework - Decision → Information
→ Data
• Decision → Information → Data
• Decision: What decision needs
to be made?
• Information: What information is
needed to make the decision?
(3–5 sentences)
• Data: What data is needed to
answer the question?
(field/table/source)
10 minutes
exercise Identify a decision
What information we
need to give decision
What data we need in
what departments or
functions
Evolution of Computerized Decision
Support to Analytics/Data Science
Figure 1 Evolution of Decision Support, Business Intelligence,
Analytics, and A I
How we transform data to
information?
• transform data into information through a process called
data processing or data transformation
• Collection: Gather raw data from various sources (databases,
sensors, forms).
• Processing/Transformation: Clean (fix errors, remove duplicates),
structure (organize), and enrich (add context) the data.
• Analysis: Apply techniques to find patterns, trends, and
relationships.
• Interpretation & Presentation: Contextualize findings and present
them clearly (charts, reports) for understanding and action
Business
Analytics
Figure 1.21
Three Types of
Analytics
• Descriptive or reporting analytics
• Answering the question of what
happened
Descripti • Retrospective analysis of historic
data
ve • Enablers
• OLA P/D W
Analytics • Data visualization
• Dashboards and
Scorecards
• Descriptive statistics
Predictive
Analytics
• Aims to determine what is likely to happen in the
future (foreseeing the future events)
• Looking at the past data to predict the future
• Enablers
• Data mining
• Text mining/Web mining
• Forecasting (i.e., time series)
• Aims to determine the best possible
decision
• Also called decision analytics or
normative analytics
• Uses both descriptive and predictive to
Prescripti create the alternatives, and then
determines the best one
ve • Enablers
• Optimization
Analytics • Simulation
• Multi-Criteria Decision Modeling
• Heuristic Programming
• The outcomes (i.e., decisions) can be
provided to decision maker to use or
implemented automatically
Analytics
Examples
in Selected
Domains
Example of
Analytics
Applications in a
Retail Value Chain
Analytic
Analytics
Application Business Question Business Value
Inventory 1. Which products have high 1. Forecast the consumption of fast-
Optimization demand? moving products and order them with
Examples
2. Which products are slow moving sufficient inventory
or becoming obsolete? to avoid a stock-out scenario.
2. Perform fast inventory turnover of
slow-moving products by combining them
with one in high demand.
in Retail
Value
Price Elasticity 1. How much net margin do I have 1. Markdown prices for each product can
on the product? be optimized to reduce the margin dollar
2. How much discount can I give loss.
on this product? 2. Optimized price for the bundle of
products is identified to save the margin
dollar.
Chain
Market Basket 1. What products should I combine 1. The affinity analysis identifies the Table 1.1 Examples of
Analysis to create a bundle offer? hidden correlations between the
2. Should I combine products products, which can help in following
Analytics Applications in
based on slow-moving and fast- values a) Strategize the product bundle the Retail Value Chain
moving characteristics? offering based on focus on inventory or
3. Should I create a bundle from margin. b) Increase cross-sell or up-sell
the same category or different by creating bundle from different
category line? categories or the same categories,
respectively.
Homework
• Choose a real-business and one decision
• Identify the following
• Goal: What do you want to achieve?
• Options: What options are available?
• Criteria/Metrics: What criteria are used to
make the choice?
• Constraints (budget, time, legal, etc.)
• Create decision making process - Simon (4
stages)
• Complete the flow: Decision -> Information -
> Data