Techniques and Tools to Help You Make Business Decisions

Get some help making sense of the data to make the best business decisions.

By Siri Hedreen, Contributing Writer | Editor Reviewed: Adam Uzialko, Senior Editor
Business News Daily | Updated: May 7, 2024

Decision-making occurs at every business level, including daily decisions by team members and far-reaching executive decisions that may require years of deliberation. However, all business decisions – even the most seemingly mundane – can have far-reaching consequences for an organization and its employees. Decision-making is a critical business skill, but you don’t have to go it alone or rely on your gut. Tools and techniques can inform your decisions and ensure you carefully weigh your options to help steer your company toward the right path.

5 steps of decision-making

Numerous entities, from blogs to academic institutions, have attempted to distill the decision-making process into a series of steps. For example, the University of Massachusetts/Dartmouth’s seven basic steps is an oft-cited decision-making system. However, the steps involved in making decisions typically include the following:

1. Identify your goal. This may sound like a no-brainer for personal goals, but it’s also critical when setting achievable business goals. The more stakeholders involved in the outcome, the more likely your goals will be misaligned. Therefore, goal clarity is crucial.
2. Gather relevant information. Amass a wealth of information about your goal and what it will take to achieve it. For example, relevant courses of action and alternatives should be identified and researched thoroughly.
3. Evaluate your options. During this step, decision-makers must carefully weigh all the evidence they’ve collected.
4. Make your choice. Based on all the above factors, you’ll arrive at your decision.
5. Evaluate your decision. Gauge your decision’s success with both short-term and long-term evaluations.

Decision-making tools and techniques

There are dozens of tools and techniques for organizing your thoughts during the decision-making process. Here are some of the more popular options:

• Decision matrix: A decision matrix helps you evaluate all your options. When using the matrix, create a table with all the choices in the first column and all the factors that affect the decision in the first row. Next, score each option to decipher which factors are more important. A final score is then tallied to reveal the best pick.
• Pros-and-cons list: Many decision-makers use a T-chart – or pros-and-cons list – to weigh the benefits and disadvantages of all options. This list ensures that you consider all positive and negative outcomes when making a decision.
• Decision tree: A decision tolree is a graph or model that contemplates each option and its outcomes. This technique is also helpful for conducting statistical analyses.
• Multiple voices: Multivoting is used when multiple people are involved in making a decision. This technique helps whittle down an extensive list of options to a smaller group until the final decision is revealed.
• Pareto analysis: A Pareto analysis technique is helpful when making many decisions. This tool helps prioritize which decisions should be made first by determining which will have the most significant impact.
• Cost-benefit analysis: This technique is used when weighing the financial ramifications of each possible alternative to determine what makes the most sense from an economic perspective.
• Conjoint analysis: A conjoint analysis is a method business leaders use to determine consumer preferences.
• SWOT analysis: A SWOT analysis assesses strengths, weaknesses, opportunities and threats to help you arrive at the best decisions.
• PEST analysis: An acronym for “political, economic, social and technological,” a PEST analysis can improve decision-making and timing by analyzing external factors. This method considers present trends to help predict future ones.

AI-powered decision-making

Artificial intelligence is increasingly used to help businesses make better decisions. The more complex a decision is, the greater the benefit of using AI will be, because this technology can process significant amounts of data using algorithms and computing power.

More and more companies are utilizing AI systems in decision-making; the industry is projected to grow significantly. In fact, according to IDC data, researchers predict that 85 percent of enterprises will combine human input with AI to become better decision-makers by 2026.

Here are two examples of AI-powered decision-making tools:

• MakerSights: MakerSights is AI decision-making software for retailers. It analyzes product attributes, sales data, customer data and production parameters to help make decisions about new product introductions, marketing and waste reduction.
• Rainbird: Rainbird is an AI decision-making platform that focuses on optimizing customer experiences and creating new digital products.

Why decision-making tools are useful

Businesses can benefit from decision-making tools in the following ways…[MORE]

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