Decision-Making Crisis Hits Executive Suite

Top management having to make more decisions faster using more data, putting profits, revenue at risk, survey shows

Top management having to make more decisions faster using more data, putting profits, revenue at risk, survey shows

Seattle  September 26, 2003  A crisis in decision-making is developing, with high-level executives at top U.S. companies saying that they are having to make more decisions faster using more data than in the past, according to a new survey of senior executives at large corporations.

More than half of the polled top-tier executives said the decisions they make are more complex this year than last, and 73 percent reported that the number of daily decisions has increased, according to the survey, conducted by BuzzBack online market research on behalf of Teradata, a division of NCR Corp.

The survey, for Teradata's 2003-2004 Report on Enterprise Decision-Making, queried 158 executives, with 59 percent of the respondents being vice presidents or higher executives, and 74 percent working at companies with annual revenues of exceeding $1 billion.

In all, 59 percent of the executives said that available data has doubled or tripled in the past year, and 53 percent said there is less time to make decisions.

"Our 2002 and 2003 surveys of senior executives show worsening trends," said Bob Fair, chief marketing officer of Teradata. "Executives are deluged with data, and decision-making is deteriorating as a result."

In particular, according to Fair, 80 percent of the respondents reported that the top three casualties of poor decision-making are profits, revenue and company reputation.

Of the executives surveyed, 34 percent said they're working harder and longer to deal with the increase in data. "Working harder is not the answer," said Fair. "According to the survey, the top two key factors for avoiding poor decision-making are clear corporate vision and the integration and sharing of information across the enterprise."

Teradata, of course, is not without a vested interest in promoting these sorts of statistics, given that the company offers enterprise data warehousing and enterprise analytic technologies and services. Fair, for instance, said that the survey showed that 80 percent of the respondents "recognize the benefits of enterprise data warehousing to make better, faster decisions."

However, Teradata is not alone in pointing out the challenges facing data-deluged executives these days. For example, technology consultancy Forrester Research has reported, based on a survey of 40 financial and operational managers at U.S. and European firms, "that 63 percent of C-level executives are unable to make the right strategic decisions because of poor visibility of internal operational data." In addition, 55 percent of those surveyed estimated that the opportunity cost of this poor visibility is greater than $55 million.

Moreover, many analysts would likely agree with Fair's assertion that companies need solutions that deliver the right information at the right time to make the right decisions. However, even Teradata views this issue as more than simply a technology challenge.

"An enterprise data warehouse is the tool to empowerment," Fair said, "but it takes strong executive leadership to the cut through corporate politics and other barriers to build a more equitable and democratic decision-making environment."

For more information on the challenges of enterprise performance management in the age of real-time data, read "The Reality of Real-time Performance Management," the Net Best Thing column in the October/November 2003 issue of Supply & Demand Chain Executive.