Concepts Flashcards
decision-making process
involves identifying a goal, getting the relevant and necessary information, and weighing the alternatives in order to make a decision.
Good decisions last longer.
You will rarely need to revisit a decision that was made
using a well thought out process, and it can sometimes last the entire lifespan
Good decisions weigh internal and external factors.
A decision-maker should consider a company holistically. A sound decision won’t have one part of the
business succeed at the expense of another. Both internal and external factors can affect the decision and the company’s road map.
Good decisions eliminate conflicts of interest.
With transparency and stakeholder buy-in during the decision-making process, questions or concerns after the fact become far less likely. The benefits of this process keep the organization on track and focused, and reduce churn.
Good decisions actually work better overall.
Good decisions actually get the decision-maker, department, and company closer to their goal, and solve the initial problem
Decision biases
Most of the decisions we believe we’re making with a clear mind are actually controlled by mental shortcuts known as cognitive biases and it is important to learn how to minimize their negative impacts on innovation and decision making.
heuristic
A “shortcut” method of problem solving that makes assumptions based on past experiences, a “rule of thumb.
Anchoring Bias
The anchoring bias is the tendency to fix on the initial information as the starting point for making a decision, and the failure to adjust for subsequent information as it’s collected.
Confirmation Bias
The rational decision making process assumes that we gather information and data objectively, but confirmation bias represents the gathering of information that supports one’s initial conclusions.
Business Analytics
The use of: • data, • information technology, • statistical analysis, • quantitative methods, and
• mathematical or computer-based models
Benefits of BA
• reduced costs • better risk management • faster decisions • better productivity • enhanced bottom-line performance such as profitability and customer satisfaction
Challenges of BA
• lack of understanding of how to use analytics
• competing business priorities
• insufficient analytical skills
• difficulty in getting good data and sharing information
• not understanding the benefits versus perceived costs
of analytics studies
Descriptive Analisys
what happened.
Techniques: metric reports, data minning, summary statistics.
Diagnostic Analisys
Why an event happened.
Techniques: principle components analysis, sensitivity analysis, regression analysis.
Predictive Anlysis
What might happen if an specific event occurs.
Techniques: quantitive analysis, predictive modelling and machine learning algorithm.
