How does competitive intelligence software help you make better decisions in your business?

Every day we make decisions at the individual, departmental or corporate level that influence the future of the entire organisation. In the following article, we are going to learn about three main methods that help business decision making and how Competitive Intelligence software can help you succeed.

The decision-making process in the Rational or Classical Model

The Rational or Classical Model refers to a linear decision-making process and is applied to implement good practices based on rational problem-solving. In its application model we can distinguish different steps:

1. Define the problem.
2. Establish the matrix of criteria for evaluating the alternatives.
3. Prioritise the criteria according to the interests or strategy of the organisation.
4. Search for and propose possible alternatives.
5. Choose the most suitable alternative.
6. Test the choice.
7. Revise the choice made in step 5, or launch the implementation plan

Factors influencing the Rational or Classical Model

This decision-making model can be used as long as several factors are met, among which we differentiate:

1. The problem can be clearly defined. The objectives are equally clear. This is the "easy" part only if the problem and objectives are given to us, and we are only required to provide a solution.
2. The team can agree on a set of evaluation criteria and their relative weighting. If there is no agreement, the decision will be hotly debated, and perhaps not accepted by all.
3. The alternatives are all known.
4. We can anticipate all the consequences of each alternative although, in reality, this is only feasible in the ideal world.
5. Decision-making is rational, which is rather wishful thinking.

Although it would be a good thing to face a business decision-making process in which all these requirements are met, the truth is that this will rarely be the case.

Furthermore, we expect the team to be able to avoid bias in problem identification, anticipate the immediate and future consequences of decisions and investigate all alternatives that maximise the achievement of the objective.

Bounded Rationality Model for decision making

In order to make progress in a busy world, where we do not have as much information or as much time as we would like to make a decision, the Bounded Rationality Model has emerged.

In this decision-making model, its creator Herbert A. Simon considers that people are not individually rational in their decision-making. In this decision-making process, it is assumed that people examine only one alternative solution at a time, and stop investigating when they find an acceptable solution, even if it is not the optimal one.

To approach the analysis of alternatives, one starts with the areas where one considers that there is a higher probability of success in finding a satisfactory solution (heuristic method). And the "satisficing" criterion is followed, stopping the process when a solution is found that is "sufficiently satisfactory".

This "satisficing" criterion is applicable to minor decisions, when the time available is the major constraint, or when most of the alternatives imagined are essentially similar.

The Retrospective Model in Decision Making or Implicit Favour Model

In this model of decision making, we focus on how decision-makers rationalise their choices and try to justify a decision already made.

Its author, Per Soelberg, observed that decision-makers implicitly take an option as a favourite at first, although they continue their process of investigating alternatives. They quickly reach one decision, and the description of the process followed is aimed at justifying, with the appearance of rigour and impartiality, a decision that has already been made intuitively at the outset.

Why use Competitive Intelligence software to make better decisions?

Let's analyse how Competitive Intelligence software can contribute to decision making, taking the Rational Decision Model as a reference.

The greatest contribution of Competitive Intelligence software to the decision-making process will be obtained in the phase of considering alternatives.

For example, let's imagine that we are an organisation that offers trade missions to different countries, and we have to choose which country to focus our efforts on this year. To identify the alternatives, we will deploy a whole range of hypotheses in Competitive Intelligence software, relating different countries to the geostrategic and economic events that are taking place at the global level. We will have to add the conditioning factors derived from the sectors to which the potential companies participating in the trade mission belong.

The complexity of these hypotheses is only easy to express and manage with advanced software such as Antara Mussol, and thanks to this we will obtain precisely filtered information to support decision making.

Another example is if we are a technical department and we have to decide which technology/s to invest in over the coming months or years in order to incorporate them into our product or service. Using Competitive Intelligence software, we will build a framework of working hypotheses, in which we will combine:

• Candidate technologies. They will form a set that can grow thanks to the intelligence process itself.
• The monitoring of the impact that the different alternatives can have on our business. These may include cost improvement, customer service, or speeding up some phases of the business.
• Typically, we will conduct intelligence by focusing on other stakeholders in our value chain (suppliers and customers), as well as on markets that precede our own, where innovations usually appear earlier.

We will also obtain benefits in decision-making through the use of Competitive Intelligence software if we previously deploy a series of hypotheses that allow us to identify which key actors have opted for one of the alternatives.

If our customers are opting for a particular technology, and we can incorporate it in to our service, that will be a key intelligence conclusion that will directly influence our decision-making on the direction of our innovation.

In any case, let us remember that the Competitive Intelligence cycle takes the form of a spiral, where the analysis of the information gathered leads us to rethink the original problem, and even the criteria for evaluating alternatives. Therefore, let us keep in mind that, throughout the monitoring process, a new conclusion can influence any stage of the decision-making process.

In order to carry out the best path in the decision-making processes, it is essential to have a Competitive Intelligence Software such as Antara Mussol's, so that all possible hypotheses can be put forward and we can be sure that the final decision is the right one for our business. At Antara Mussol, we will be delighted to help you in the process of organising your company's information. Contact us.