Decision engineering - AbsoluteAstronomy.com

Decision Engineering is a framework that unifies a number of best practice

Best practice

A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark...

s for organizational decision making

Decision making

Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.- Overview :Human performance in decision terms...

. It is based on the recognition that, in many organizations, decision making could be improved if a more structured approach were used. Decision engineering seeks to overcome a decision making "complexity ceiling", which is characterized by a mismatch between the sophistication of organizational decision making practices and the complexity of situations in which those decisions must be made. As such, it seeks to solve some of the issues identified around complexity theory and organizations

Complexity theory and organizations

Complexity theory and organizations, also called complexity strategy or complex adaptive organization, is the use of Complexity theory in the field of strategic management and organizational studies.- Overview :...

. In this sense, Decision Engineering represents a practical application of the field of complex systems

Complex systems

Complex systems present problems in mathematical modelling.The equations from which complex system models are developed generally derive from statistical physics, information theory and non-linear dynamics, and represent organized but unpredictable behaviors of systems of nature that are considered...

, which helps organizations to navigate the complex systems in which they find themselves. Decision Engineering can also be thought of as a framework that brings advanced analytics

Analytics

Analytics is the application of computer technology, operational research, and statistics to solve problems in business and industry. Analytics is carried out within an information system: while, in the past, statistics and mathematics could be studied without computers and software, analytics has...

techniques to the desktop of the non-expert decision maker, as well as incorporating, and then extending, inductive reasoning

Inductive reasoning

Inductive reasoning, also known as induction or inductive logic, is a kind of reasoning that constructs or evaluates propositions that are abstractions of observations. It is commonly construed as a form of reasoning that makes generalizations based on individual instances...

and machine learning

Machine learning

Machine learning, a branch of artificial intelligence, is a scientific discipline concerned with the design and development of algorithms that allow computers to evolve behaviors based on empirical data, such as from sensor data or databases...

techniques to overcome the problems articulated in Black swan theory

Black swan theory

The black swan theory or theory of black swan events is a metaphor that encapsulates the concept that The event is a surprise and has a major impact...

.

Despite the availability of advanced process, technical, and organizational decision making tools

Decision support system

A decision support system is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in...

, decision engineering proponents believe that many organizations continue to make poor decisions. In response, decision engineering seeks to unify a number of decision making best practice

Best practice

A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark...

s, creating a shared discipline and language for decision making that crosses multiple industries, both public and private organizations, and that is used worldwide.

To accomplish this ambitious goal, decision engineering applies an engineering

Engineering

Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

approach, building on the insight that it is possible to design
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...

the decision itself using many principles previously used for designing more tangible objects like bridges and buildings. This insight was previously applied to the engineering of software

Software engineering

Software Engineering is the application of a systematic, disciplined, quantifiable approach to the development, operation, and maintenance of software, and the study of these approaches; that is, the application of engineering to software...

—another kind of intangible engineered artifact—with significant benefits.

As in previous engineering disciplines, the use of a visual design language representing decisions is emerging as an important element of decision engineering, since it provides an intuitive common language readily understood by all decision participants. Furthermore, a visual metaphor

Visual thinking

Picture thinking, visual thinking , visual/spatial learning or right brained learning is the common phenomenon of thinking through visual processing using the part of the brain that is emotional and creative to organize information in an intuitive and simultaneous way.Thinking in pictures, is one...

improves the ability to reason about complex systems as well as to enhance collaboration

Collaboration

Collaboration is working together to achieve a goal. It is a recursive process where two or more people or organizations work together to realize shared goals, — for example, an intriguing endeavor that is creative in nature—by sharing...

.

In addition to visual decision design, there are other two aspects of engineering disciplines that aid mass adoption. These are: 1) the creation of a shared language of design elements and 2) the use of a common methodology or process, as illustrated in the diagram above.

Motivation

The need for a unified methodology of decision making is driven by a number of factors that organizations face as they make difficult decisions in a complex internal and external environment.

Recognition of the broad-based inability of current methods to solve decision making issues in practice comes from several sources, including government sources and industries such as telecommunication

Telecommunication

Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...

s, media

Media (communication)

In communications, media are the storage and transmission channels or tools used to store and deliver information or data...

, the automotive industry

Automotive industry

The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....

, and pharmaceuticals

Drug

A drug, broadly speaking, is any substance that, when absorbed into the body of a living organism, alters normal bodily function. There is no single, precise definition, as there are different meanings in drug control law, government regulations, medicine, and colloquial usage.In pharmacology, a...

.

Examples:

The outcomes of decisions are becoming more complex, going well beyond next quarter's revenues or other tangible outcomes to multiple goals that must be satisfied together, some of which are often intangible:

Global increase in complexity:

Transferring engineering principles

Unlike other decision making

Decision making

tools and methodologies, decision engineering seeks to bring to bear a number of engineering

Engineering

practices to the process of creating a decision. These include requirements analysis

Requirements analysis

Requirements analysis in systems engineering and software engineering, encompasses those tasks that go into determining the needs or conditions to meet for a new or altered product, taking account of the possibly conflicting requirements of the various stakeholders, such as beneficiaries or users...

, specification, scenario planning

Scenario planning

Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and generalization of classic methods used by military intelligence.The original method was that a...

, quality assurance

Quality Assurance

Quality assurance, or QA for short, is the systematic monitoring and evaluation of the various aspects of a project, service or facility to maximize the probability that minimum standards of quality are being attained by the production process...

, security

Computer security

Computer security is a branch of computer technology known as information security as applied to computers and networks. The objective of computer security includes protection of information and property from theft, corruption, or natural disaster, while allowing the information and property to...

, and the use of design

Design

Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...

principles as described above. During the decision execution phase, outputs produced during the design phase can be used in a number of ways; monitoring approaches like business dashboards

Dashboard (business)

Dashboard provides at-a-glance views of key performance indicators relevant to a particular objective or business process...

and assumption based planning

Assumption based planning

Assumption-based planning in project management is a post-planning method that helps companies to deal with uncertainty. It is used to identify the most important assumptions in a company’s business plans, to test these assumptions, and to accommodate unexpected outcomes.- Overview :Conventional...

are used to track the outcome of a decision and to trigger replanning as appropriate. One view of how some of these elements combine is shown in the diagram at the start of this article.

Like related engineering disciplines before it, decision engineering promises improvements in the quality of decisions made, the ability to make them more quickly, the ability to align organizational resources more effectively around a change in decisions, and lowers the risks associated with decisions. Furthermore, a designed decision can be reused and modified as new information is obtained.

Bringing numerical methods to the desktop

Although many elements of decision engineering, such as Sensitivity analysis

Sensitivity analysis

Sensitivity analysis is the study of how the variation in the output of a statistical model can be attributed to different variations in the inputs of the model. Put another way, it is a technique for systematically changing variables in a model to determine the effects of such changes.In any...

and analytics

Analytics

are mature disciplines, they are not in wide use by decision makers. Decision engineering seeks to create a visual language that serves to facilitate communication between them and quantitative experts, allowing broader utilization of these and other numerical and technical approaches.

In particular, dependency links in a decision model represent cause-and-effect (as in a causal loop diagram

Causal loop diagram

A causal loop diagram is a causal diagram that aids in visualizing how interrelated variables affect one another. The diagram consists of a set of nodes representing the variables connected together...

), data flow (as in a data flow diagram

Data flow diagram

A data flow diagram is a graphical representation of the "flow" of data through an information system, modelling its process aspects. Often they are a preliminary step used to create an overview of the system which can later be elaborated...

), or other relationships. As an example, one link might represent the connection between "mean time to repair a problem with telephone service" and "customer satisfaction", where a short repair time would presumably raise customer satisfaction. The functional form of these dependencies can be determined by a number of approaches. Numerical approaches, which analyze data to determine these functions, include machine learning

Machine learning

and analytics

Analytics

algorithms (including artificial neural networks), as well as more traditional regression

Regression

Regression could refer to:* Regression , a defensive reaction to some unaccepted impulses* Regression analysis, a statistical technique for estimating the relationships among variables...

analysis. Results from operations research

Operations research

Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...

and many other quantitative approaches have a similar role to play.

When data is not available (or too noisy, uncertain, or incomplete), these dependency links can take on the form of rules as might be found in an expert system

Expert system

In artificial intelligence, an expert system is a computer system that emulates the decision-making ability of a human expert. Expert systems are designed to solve complex problems by reasoning about knowledge, like an expert, and not by following the procedure of a developer as is the case in...

or rule-based system

Rule-based system

In computer science, rule-based systems are used as a way to store and manipulate knowledge to interpret information in a useful way. They are often used in artificial intelligence applications and research.-Applications:...

, and so can be obtained through knowledge engineering

Knowledge engineering

Knowledge engineering was defined in 1983 by Edward Feigenbaum, and Pamela McCorduck as follows:At present, it refers to the building, maintaining and development of knowledge-based systems...

.

In this way, a decision model represents a mechanism for combining multiple relationships, as well as symbolic and subsymbolic reasoning, into a complete solution to determining the outcome of a practical decision.

Origins

It is interesting to note that, despite decades of development of decision support system

Decision support system

and methodologies (like decision analysis

Decision analysis

Decision analysis is the discipline comprising the philosophy, theory, methodology, and professional practice necessary to address important decisions in a formal manner...

), these are still less popular than spreadsheet

Spreadsheet

A spreadsheet is a computer application that simulates a paper accounting worksheet. It displays multiple cells usually in a two-dimensional matrix or grid consisting of rows and columns. Each cell contains alphanumeric text, numeric values or formulas...

s as primary tools for decision making. Decision engineering seeks to bridge this gap, creating a critical mass of users of a common methodology and language for the core entities included in a decision, such as assumptions, external values, facts, data, and conclusions. If a pattern from previous industries holds, such a methodology will also facilitate technology adoption, by clarifying common maturity models and road maps that can be shared from one organization to another.

The decision engineering approach is multidisciplinary, unifying findings on cognitive bias

Cognitive bias

A cognitive bias is a pattern of deviation in judgment that occurs in particular situations. Implicit in the concept of a "pattern of deviation" is a standard of comparison; this may be the judgment of people outside those particular situations, or may be a set of independently verifiable...

and decision making, situational awareness, critical

Critical thinking

Critical thinking is the process or method of thinking that questions assumptions. It is a way of deciding whether a claim is true, false, or sometimes true and sometimes false, or partly true and partly false. The origins of critical thinking can be traced in Western thought to the Socratic...

and creative thinking

Creativity

Creativity refers to the phenomenon whereby a person creates something new that has some kind of value. What counts as "new" may be in reference to the individual creator, or to the society or domain within which the novelty occurs...

, collaboration and organizational design, with engineering technologies.

Decision engineering is considered an improvement upon current organizational decision making practices, which include the use of spreadsheet

Spreadsheet

s (difficult to QA, hard to collaborate and discuss), text (sequential in nature, so is not a good fit for how information flows through a decision structure), and verbal argument. The movement from these largely informal structures to one in which a decision is documented in a well understood, visual language, echoes the creation of common blueprint

Blueprint

A blueprint is a type of paper-based reproduction usually of a technical drawing, documenting an architecture or an engineering design. More generally, the term "blueprint" has come to be used to refer to any detailed plan....

methodologies in construction, with promise of similar benefits.

Decision engineering is both a very new and also a very old discipline. Many of its elements—such as the language of assessing assumptions, using logic

Logic

In philosophy, Logic is the formal systematic study of the principles of valid inference and correct reasoning. Logic is used in most intellectual activities, but is studied primarily in the disciplines of philosophy, mathematics, semantics, and computer science...

to support an argument, the necessity of critical thinking

Critical thinking

to evaluate a decision, and understanding the impacts of bias

Cognitive bias

—are ancient. Yet the realization that these elements can form a coherent whole that provides significant benefits to organizations by focusing on a common methodology is relatively new.

Visual decision design

Because it makes visible the otherwise invisible reasoning structures used in complex decisions, the design aspect of decision engineering draws from other conceptual representation technologies like mind map

Mind map

A mind map is a diagram used to represent words, ideas, tasks, or other items linked to and arranged around a central key word or idea. Especially in British English, the terms spidergram and spidergraph are more common, but they can cause confusion with the term spider diagram used in mathematics...

ping, conceptual graph

Conceptual graph

Conceptual graphs are a formalism for knowledge representation. In the first published paper on CGs, John F. Sowa used them to represent the conceptual schemas used in database systems...

s, and semantic network

Semantic network

A semantic network is a network which represents semantic relations among concepts. This is often used as a form of knowledge representation. It is a directed or undirected graph consisting of vertices, which represent concepts, and edges.- History :...

s.
The basic idea is that a visual metaphor enhances intuitive thinking

Intuition (knowledge)

Intuition is the ability to acquire knowledge without inference or the use of reason. "The word 'intuition' comes from the Latin word 'intueri', which is often roughly translated as meaning 'to look inside'’ or 'to contemplate'." Intuition provides us with beliefs that we cannot necessarily justify...

, inductive reasoning

Inductive reasoning

, and pattern recognition

Pattern recognition

In machine learning, pattern recognition is the assignment of some sort of output value to a given input value , according to some specific algorithm. An example of pattern recognition is classification, which attempts to assign each input value to one of a given set of classes...

—important cognitive skills usually less accessible in a verbal or text discussion.
A business decision map

Business Decision Mapping

Business Decision Mapping is a technique for making decisions, particularly for the kind of decisions that often need to be made in business...

can be seen as one approach to a formal decision language to support decision engineering. See, e.g., Waring, 2010.

Explicit representation of intangibles

Decision engineering recognizes that many aspects of decision making are based on intangible elements, including opportunity cost

Opportunity cost

Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...

s, employee morale, intellectual capital, brand recognition and other forms of business value that are not captured in traditional quantitative or financial models. Value network analysis

Value network analysis

Value network analysis is a methodology for understanding, using, visualizing, optimizing internal and external value networks and complex economic ecosystems. The methods include visualizing sets of relationships from a dynamic whole systems perspective...

—most notably Value network maps—are therefore relevant here.

External links

Computer and Decision Engineering at Université Libre de Bruxelles
Decision Engineering Centre at Cranfield University
Decision Engineering Workshop by Craffiti Consulting
The Decision Science and Decision Engineering Laboratory at Michigan Technological University

Decision Sights is a decision engineering specialist offering different tools and services
Quantellia, LLC offers decision engineering consulting, training, and its World Modeler(tm) software solution
Integrated Decision Engineering Analysis, Inc. offers software and services supporting disaster preparedness program development, decision engineering, planning, risk and threat analysis; business decisioning analysis and strategic planning
Navigating the telecom ship: The CEM Control Center Catalyst is a collaborative case study describing a decision engineering proof-of-concept developed by Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...

, Netezza
Netezza
Netezza designs and markets high-performance data warehouse appliances and advanced analytics applications for uses including enterprise data warehousing, business intelligence, predictive analytics and business continuity planning....

, Nokia Siemens Networks
Nokia Siemens Networks
Nokia Siemens Networks is a global data networking and telecommunications equipment company headquartered in Espoo, Finland. It is a joint venture between Nokia of Finland and Siemens of Germany...

, N-Pulse, Quantellia, and Subex.

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

Motivation

Transferring engineering principles

Bringing numerical methods to the desktop

Origins

Visual decision design

Explicit representation of intangibles

See also

External links