Organizations are constantly changing the way they do business and these changes are largely brought about by advancements in digital technology. The integration of digital technology into business has materially changed how organizations operate and deliver value to the customers. It has allowed businesses to reach their customers faster, adapt to changing market forces, improve operational efficiency, and increase profitability, among other things.
An aftereffect of this dependence of businesses on technology is the growing significance of Information Technology (IT) and associated decision-making for the sustainability and competitiveness of organizations. Given the criticality of the decisions that the IT department takes, it is beneficial for decision-makers to have an understanding of the decision-making processes, methods, and factors that influence decisions.
And that is exactly what this blog post is all about. In the following sections, we introduce you to decision-making in IT, different methods of decision-making, and factors- both traditional and new that influence decisions.
What Is Decision-Making?
In simple terms, decision-making is the process of selecting an option from among several alternatives. In a business scenario, decision-making is a little more complicated. Business decisions are driven by the need to achieve certain business goals. So, they follow structured methodologies and are dynamic and continuous. Business decision-making usually involves various steps including defining objectives, data collection, and analysis, problem-solving, evaluation of alternatives, decision implementation, and monitoring of outcome.
Decision-Making In IT
The decision-making process in IT starts with the overall business requirement and continues with the development of policies, processes, systems, and applications to support those requirements. Since it is also primarily responsible for security and compliance, the IT department defines the architecture and is solely responsible for the implementation, maintenance, and operations of the systems infrastructure.
The selection or development of the solution, operational management, and ownership of the selected hardware, software, and communications platforms are all responsibilities of the IT department. This exclusive control over the infrastructure often makes IT-related decision-making centralized within the IT department with little to no flexibility.
Decision-Making Methods
Decision-making is done using one of the following methods:
Command
The command method of decision-making is one where decisions are made without discussion or inputs from others. This is the fastest method of decision-making since it requires little to no input from others. It is, therefore, ideal in the event of emergencies when things need to move quickly. Such a method is generally used by those in leadership roles. Although the speed of this method is an advantage, the lack of involvement or buy-in from stakeholders can make such decisions risky.
Consult
The consult method of decision-making involves taking input from others but the final decision-making power is retained by one individual. The consult method is more collaborative as it ensures that others feel included and heard. Such decisions are deemed less risky due to their collaborative nature. But it takes more time than the command method, making it unsuitable when you are in a time crunch.
Vote
The vote method of decision-making is a highly collaborative process involving open discussions. It involves all stakeholders and calls them to participate in the decision-making process in a democratic way by putting the decision up for a vote. Everyone involved can vote in favor of or against the decision. Voting can be a viable option in small group settings but is difficult to manage in large organizations, as it may not be possible to listen to everyone’s opinion. Although voting is a democratic process of decision-making, it can still leave a large group of people feeling bitter and against a decision.
Consensus
In the consensus method of decision-making, all involved parties present different perspectives and openly discuss alternatives until they all reach an agreement. It is the most collaborative method but is very time-consuming. It often takes multiple rounds of discussions but ensures buy-in from everyone involved. Such decisions are usually low-risk and are readily accepted by all stakeholders.
Traditional Factors Influencing IT Decision-Making
Here are the five most important factors that have traditionally influenced decision-making in information technology:
1. Business Constraints
Business constraints such as stakeholder interests, organizational culture, etc. have a big influence on decision-making. Smaller organizations and startups are usually more consensus-driven but as they grow larger such a culture is difficult to maintain. Decisions in larger organizations are driven more by stakeholder interests. But, one business constraint that is uniformly applicable to organizations both small and large is regulatory compliance.
Regulatory compliance such as SOC, HIPAA, CCPA, etc. as well as standards such as ISO 27001 have a huge impact on an organization’s decision-making. For example, healthcare organizations need to be HIPAA compliant. This compliance requirement factors in on their decisions on any process or tool impacting how they create, collect, or transmit Protected Health Information (PHI).
2. Resource Constraints
A resource is a broad term that encompasses anything required to conduct business. Financial or budgetary limitations, lack of access to a skilled workforce, lack of technical knowledge, etc. are common examples of resource constraints.
3. Time Constraints
The success of any decision is measured by its outcomes over a defined period of time. Therefore, time is a fundamental constraint applicable not only to decision-making but to every business endeavor.
4. Risk Appetite
How an organization perceives risk and how much risk it has tolerance for have a significant impact on its decision-making. Every business decision has some amount of risk associated with it and the risk appetite of the organization determines its risk treatment strategy. For example, risk-averse organizations make decisions that avoid risks while more adventurous organizations may opt for a risky decision with plans for risk mitigation.
5. Cognitive Biases
Cognitive biases impact our decision-making in all walks of life. These systematic biases brought about by pre-established beliefs, attitudes and values distort how we process and interpret information, introducing errors in our decision making.
For example, anchoring bias causes us to rely heavily on the first piece of information we receive about a topic. Such a bias can have a severe impact on project plans and estimates since it prevents us from objectively evaluating new information and updating our schedules and estimates based on the new information.
New Factors Influencing IT Decision Making
As organizations transition conventional workloads to the cloud, increase reliance on SaaS applications, and transform work cultures with remote and hybrid offices, new factors that influence IT decision-making are coming into play.
Increasing Dependence On Technology
Organizations are increasingly becoming dependent on technology. Take for example video conferencing and how it went from being a luxury to an asset to a necessity. Today video conferencing technologies play an important role not only in digital communication but also in collaboration, onboarding, training, sales, and many more business functions.
The use of SaaS solutions has also experienced an exceptional growth spurt. Typically, organizations use hundreds of SaaS applications with each team or function having their own applications stack that serves them best given the parameters of their specific situation. The decision to adopt such SaaS solutions is increasingly being taken based on the productivity needs of the team while sidelining IT concerns.
IT decision-making needs to adapt to this growing trend and find workarounds for data and security challenges to avoid productivity roadblocks.
Changing Role Of The IT Department
The logical conclusion from the previous section is that the role of the IT department is changing; it now is primarily a productivity enabler. Coming to terms with this growing reality means that IT departments need to give up their role as sole decision-makers and become more collaborative in their decision-making process.
Growing Expertise Of End-Users
While the IT department does play a central role in the security and management of technology, it does not actually use most of the tools and applications adopted by the organization. The end-users, on the other hand, play a dominant role in the use of those tools and applications. Many of these end-users are often much more knowledgeable about the tools, applications, and technologies than those in the IT department. Therefore, they can play an important role in IT decision-making.
Conclusion
Traditionally, the IT department has been responsible for building, operating, and maintaining a capable, efficient, and stable IT infrastructure. They have solely borne the responsibility for organizing all things related to technology within the organization. However, this traditional role is undergoing a transformation, especially with respect to decision-making. Irrespective of these changes, the IT department still plays a crucial role because it is the only one that has a comprehensive view of the entire technology stack, systems, security, and compliance requirements.
Involving end-users in the decision-making process, in fact, can relieve some of the IT department’s burden, allowing them to focus on other critical matters such as security, data protection, and compliance. A collaborative approach to decision-making also allows the IT department to shed its image of technology gatekeeper and to become a productivity partner for everyone in the organization.
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About The Author
Hari SubediMarketing Manager at Jones IT
Hari is an online marketing professional with a focus on content marketing. He writes on topics related to IT, Security, Small Business, and Mindfulness. He is also the founder and managing director of Girivar Kft., a business services company located in Budapest, Hungary.