According to a new survey of 500 senior decision-makers at large organisations across industries, decision-making is becoming increasingly complex, with multiple departments and seniority levels all responsible for some form of decision-making, leading to a lack of cohesion between units and a waste of business resources. The professional services industry is no different.
The study, conducted by research organisation 3GEM and commissioned by Board, found that 87% of respondents agreed that making good decisions is important to the success of a business. A speedy and effective decision-making process can help companies respond quickly to external changes such as supply chain disruption, cater to changing customer demands and capitalise on market opportunities.
But overall, the authors warn that decision-making is being impeded by a number of factors. A global to local disconnect is one of them. While a clear majority of respondents (63%) say the important decisions they are responsible for get implemented globally, the decision-making process itself is not joined-up across the business, with one third (33%) also saying that crucial business decisions are made in departmental silos.
While professional services firms follow a similar pattern, with 69% of decisions in these organisations implemented globally, and one third (33%) making decisions in departmental silos, businesses in the sector are also making more decisions in geographic silos (11%) compared with their counterparts (8%).
The research also asked respondents the tools they use to make decisions and, while almost every action within an organisation today will lead to the creation of new data, it seems many businesses are not using the crucial insights which data can provide to make important decisions.
In professional services firms, just over half (51%) of respondents said they were making business decisions based on data and insights, while ‘gut feeling’ decisions are still made by half (49%) of companies. What’s more, half (52%) of professional services companies still rely on spreadsheets to aid their decision-making, despite the more modern and reliable tools now available to them.
“In today’s fast-paced, data rich and evolving business environment, making quick and effective decisions is critical to both compete and survive,” explained Gavin Fallon, Managing Director for UK, Nordics & South Africa at Board. “Important decisions are being made at any one time across multiple business functions, but all too often, important decision-making is disconnected, modular or fragmented.”
Across the board, little cross-department collaboration, a cohort of people involved and insufficient data insights are regarded as the top challenges for decision-making. In professional services, more than a quarter (28%) cite low collaboration within their companies, and approximately another quarter (24%) cite a lack of available data and insights as their biggest frustrations.
However, industry decision-makers believe that the process can be improved with the introduction of new technology, with 47% of respondents saying this would make their decision-making better, while 43% also felt increased use of data and insights would help.
“Businesses have to plan every day for a far more uncertain future and set themselves up to prepare for change and keep changing against the backdrop of a more volatile and uncertain marketplace than ever,” continued Fallon. “A bad decision can have wide-ranging impact across the whole organisation and no business can afford to waste time and resources on bets that may or may not come off. As the business environment increases in complexity, the ability to not just react, but predict, in real-time, becomes more important than ever.”