Enterprise Decision Management

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Enterprise Decision Management, commonly abbreviated "EDM", entails all aspects of managing automated decision design and deployment that an organization uses to manage its interactions with customers, employees and suppliers. Computerization has changed the way organizations are approaching their decision-making because it has enabled "information-based decisions" - decisions based on analysis of historical behavioral data, prior decisions, and their outcomes.

Enterprise Decision Management is described by the Cutter Consortium: "Enterprise decision management (EDM) is emerging as an important discipline, due to an increasing need to automate high-volume decisions across the enterprise and to impart precision, consistency, and agility in the decision-making process." and goes on to say that EDM is implemented "via the use of rule-based systems and analytic models for enabling high-volume, automated decision making." [1]

Organizations seek to improve their Decision Yield (the value created through each decision) by deploying business processes and software solutions that better manage the tradeoffs between precision, consistency, agility, speed, and cost of decision-making within organizations. The concept of Decision Yield focuses on five key attributes of decision-making: more targeted decisions (Precision); in the same way, over and over again (Consistency); while being able to adapt “on-the-fly” (Business Agility) while reducing cost and improving speed, is an overall metric for how well an organization is making a particular decision. Decision Yield is described in this 'Harvard Business Review' article Little Decisions Add Up.

Organizations are adopting EDM technology and business processes because they need a higher return from previous infrastructure investments, are dealing with increasing business decision complexity, face competitive pressure for more sophisticated decisions and because increasingly short windows of competitive advantage means that the speed of business is outpacing speed of Information Technology to react.

The topic of EDM has recently been extensively covered in the book "Smart (Enough) Systems", which argues that applying the approach to operational decisions is an effective way to make information systems smart enough to be useful (as distinct from intelligent in the sense of Artificial Intelligence).

Other terms used include "Intelligent Process Automation" (where EDM is combined with Business Process Management) and "Decision Management".

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Automated Decision Making Comes of Age by Tom Davenport
The Cutter Edge
Smart (Enough) Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions, Prentice Hall PTR, June 2007, ISBN 0132347962 

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