It is essential that firms measure those activities that contribute to its

business model and corresponding strategy, because whats get measured,

gets done. The key notion that should be conclude from this chapter is that
an organisations strategy should be based on the needs and preferences of
the firm stakeholders, and that a companys strategy drives the values,
objectives, goals and plans of company, which, in turn, determine the (key)
performance indicators. Therefore, a link between the BI process and an
organisations strategy is required. This link is established by defining keyperformance indicators that are based on the firms business model. In turn,
the business model should reflect the organisations strategy. This
perspective on business intelligence is schematically presented in figure 26.

Decision making is a managerial process and function of choosing a particular course of action out of several
alternative courses for the purpose of accomplishment of the organizational goals. Decisions may relate to general
day to day operations. They may be major or minor. They may also be strategic in nature. Strategic decisions are
different in nature than all other decisions which are taken at various levels of the organization during day-to-day
working of the organizations. The major dimensions of strategic decisions are given below:
Strategic issues require top-management decisions: Strategic issues involve thinking in totality of the organizations
and also there is lot of risk involved. Hence, problems calling for strategic decisions require to be considered by
top management.
Strategic issues involve the allocation of large amounts of company resources: It may require huge financial
investment to venture into a new area of business or the organization may require huge number of manpower
with new set of skills in them.
Strategic issues are likely to have a significant impact on the long term prosperity of the firm: Generally the results
of strategic implementation are seen on a long term basis and not immediately.
Strategic issues are future oriented: Strategic thinking involves predicting the future environmental conditions and
how to orient for the changed conditions.
Strategic

issues usually have major multifunctional or multi-business consequences: As they involve organization in
totality they affect different sections of the organization with varying degree.
Strategic issues necessitate consideration of factors in the firms external environment: Strategic focus in
organization involves orienting its internal environment to the changes of external environment.

Business Intelligence and Decisions

All respondents argue that they make better decisions with the Business
Intelligence system compared to before. The argument is that the decisions
have become more informed when you have more information, more
data and more correct data. One respondents states that there is varies ways
and possibilities to find information, both on high and detailed level, which
according to the respondent implies better decisions. Another respondent

expresses that the system is a foundation for strategic decisions in his division;
From the perspective of the business, I will not say that it is crucial, like
completely determinant, but it is an important part of our price negotiations
and the respondents further on argues that the Business Intelligence sys-tem
and the reports it is providing are a business foundation.
In general the respondents state that they feel more secure and safe with their
decisions. I feel much safer with what I am doing. Because you know that it is
not just a feeling that I have, but this is facts, this is how it is, this is correct
So yes, absolutely, this helps us a lot in our decision making. An-other
respondent compares the previous decision support with current decision
support and express; More feeling. Now you can confute information, there is
data actual showing how it is. It is not just a feeling or conclusion. If this and
this and that pointing in one direction, it should be like that but now you actual
can verify it as wellThis data was not available before.
The awareness of that the competitors also work with Business Intelligence
makes one re-spondent to compare with the sport worlds; We have
competitors, we are competing with them in the same manner as any athlete.
The better tool we have the better chance to win, eh? If you are about to
being on track and fight towards the greatest, you will need to have the
greatest tools We might not achieve a better result compare to before but we
would have achieved a lower result if BI would not have been a part of the
picture.
The respondents claim that their organization has a better target
achievement and that the targets have become clearer. For example one
respondent argues that overall and general
targets are easier to break down into smaller and step-by-step goal and that it
is easier to see what your own division can do to reach the overall goals. The
respondent takes an ex-ample of the goal of 95 % timely deliveries; It can be
hard for us in operative level to work with. When it is so overall, but then we
can use BI to go to a lower level and see how much is 95 % of my sub-groups,
my models, my storages? ...General goals are not easy to transform into
personal goals, but since you can go down to details it is easier to get a
concrete goal. This aspect can be connected to the im-provement in the
internal communication as one of the IT-consultants mentioned in pre-vious
section. It was argued that it is easier to follow up internal goals when using
Business Intelligence.
One respondent expresses that some decisions are harder to take with the help
from the system, for example if going into a new market and setting price in
new markets. The or-ganization then applies previous experience or compares
with similar countries. That struc-tured decisions are easier to take with help
from IT-systems has been suggested by Turban et al. (2007) and Davenport et
al. (2001), and has also been indicated in the interviews with IT-consultants.
Yet, the respondent in the case do not refer to structured and unstructured
decisions, but the described problem would match a unstructured problem
described in the literature.
According to the respondents it happens now and then that the core data turns
out to be incorrect or misleading. One respondent highlights that this may

cause irritation and can create distrust towards the numbers and the system.
The same respondent also expresses that it can be frustrating to be aware of
that some KPIs contain errors and in the same time be aware of that the
management evaluate their division based on these KPIs. The opera-tive
management knows that some measurements are built up by false data but
when the higher management only considering aggregated and compiled
numbers there is a risk that the decision support also is false and misleading.
The respondent stresses that this can im-ply that the organization takes less
appropriate decisions if the higher management not be-come aware of which
KPIs that might be misleading. This aspect is of concern in Corpora-tion A as
well, since they fear that the decision base will be misleading without anyone
no-ticing and the danger with low data quality is also mentioned by the ITconsultants.
How Decision Support Has Improved
Several of the respondents argue that the decision support has improved since
it is much more extensive now, the respondents state that they have access to
more information with the Business Intelligence system. The respondents claim
they take better decisions since they are more informed, more information
results in more informed decisions and there through better decisions is the
argument.
One respondent argues the Business Intelligence system makes it easier to respond faster to
certain events and takes the example of monthly sales. When three weeks have passed the sales
should be of planned/budgeted sales for that month and if not, they can react directly instead of
following it up at the end of the month. Another respondent argues that there is a value in the ability
to measure variables more often and build trends since he con-sidering trends to be important, a
Business Intelligence system can to a larger extent allow
this kind of measuring compared to other system. The respondents also
mentioning that the Business Intelligence system is better in producing reports
and have improved the pos-sibilities for analyses, especially when the data is
compiled and aggregated, for example on a world-wide level instead of on
national level.
There are examples of situations when the system makes decision. In one organization the
suggestions by Eckerson (2003) is reality, and the users have created certain rules to make the system
to take decisions. In this corporation the Business Intelligence system is used for inter alia prognoses,
the system calculates a production need out of the current stock status together with the calculated
prognoses and transfer it to the production system.

To manage daily operations and to face the external competitive pressure, business decisions
need to be made on three levels: strategic, tactical and operational. Strategic decisions look ahead
to longer time horizons, larger expenditures, greater uncertainty and therefore greater deviations
from the current business model (Ramakrishnan et al. 2012), whereas operational decisions

concern short-term day-to-day activities. With the right information available for the right person
at the right time, an organization can make conscious, fact-based decisions (Popovic et al. 2010).
It is able to compare its past performance against targets and set new managerial objectives in
strategic decision-making. It can protect itself from business risk with tactical management and
finally cut costs with more efficient operations. Thus, BI serves the information needs of all three
levels of decision-making (Pirttimki 2007).
Van Roekel et al. (2009) recognize four levels of information services within an organization
that describe the information needs of each organizational level. In their work, the operational
information directed to operational workers and operational management is discussed separately.
These four levels of information services are as follows:
Information services for operational workers: the everyday administration of product,
customer, financial and process data that is usually in a structured form to enable efficient, fast
and reliable transactional processing.
Information services for operational management: monitoring and managing the primary
business processes and up-to-date reporting of results. Data is structured and segmented by
product type, organizational function, or business process.
Information services for tactical management: indicating trends and comparing the results
across product groups, processes and departments.
Information services for strategic management: the development of business models based
on past and future market development and internal capabilities. Different information is needed
during different phases of the strategic planning cycle and it is structured according to various
business objectives such as customer value, financial analysis or risk management.
On the strategic level, BI makes potential to set goals accurately and to pursue realization of the
goals. BI facilitate carrying out a variety of comparative reports, such as on chronological
results, profitability of a certain offers, effectiveness of distribution channels together with doing
modeling of development or anticipating future trend on the base of some hypothesizes (Olszak,
& Ziemba, 2003). Strategic decisions are made or modified rarely, but the scope of decisions is
extensive and has influence on other decisions (Karen, 2010).
On the operational level, BI Systems are utilized to carry out ad hoc analyses and respond
matters linked to departments current operations, the latest financial status, collaboration with
contractors and clients, sales etc (Olszak, & Ziemba, 2003). Operational decisions represent a
policy hub, as the policies are applied to different decision points where actions are taken (Karen,
2010).
On the tactical level, BI Systems can facilitate decision making in sales, marketing, capital
management, etc. BI is capable of optimizing future achievements and changing organizational,
financial or technological aspect of business performance properly to support organizations in
achieving strategic goals successfully (Olszak, & Ziemba, 2003). Decisions in this level can
happen in high volume and repeat regularly. Such decisions can also be made automatically such

as, approval of loans and assignment of credit lines. These decisions are made by extremely
programmed algorithmic decision support processes (Karen, 2010).
It can be concluded that the information needs of strategic management are the most
extensive and varied. Nowadays the information to support executive decision-making is
gathered from various sources both internal and external, in a structured and unstructured form
(Hovi et al 2009, Kaario and Peltola 2008). Internal information is company specific information
about the companys performance and capabilities, such as sales data, financial information and
customer records (Pirttimki 2007). In its most tacit form, it can also be firm-embedded knowhow only shared by the employees of the company. Internal information, in the form of statistics
and company internal reports, is often structured, focused and closely aligned to operational
information services (Swash 1997), and therefore more easily processed and analyzed via BI
tools.
External information, on the other hand, is gathered from outside the company in
publications such as reports, conference proceedings, trade literature, external databases, and in
legal and technical documents, concerning the business environment, technological advances and
competitors (Swash 1997). More often than not, it has diverse sources and it involves documents
in an unstructured form, which makes automated information systems processing and the use of
traditional BI tools challenging (Kaario and Peltola 2008). External information is also more
difficult to process and requires interpretation to assess its value in terms of relevance and
usability (Swash 1997). Nonetheless, Uusi-Rauva (1994) argues that the value of external
information grows remarkably in significance as decision-making moves from operational to
strategic. Most of the information presented in operational enterprise applications is about the
current state of business (Popovic et al 2010). To transform this information from operational to
strategic a vigilant attitude towards historical data is needed. Historical data is foremost an
indication of past performance with only some value in forecasting future scenarios (Gilad and
Gilad 1988), and as the pace of decision-making is ever accelerating, the value of timely,
forward-looking information continues to increase (Hovi et al. 2009). Due to the greater impact
of strategic decisions on a company, the quality requirements of strategic information and its
sources are higher than in operational decisions (Pirttimki 2007).
As mentioned, identifying information needs is the starting point of any information
management project, but unfortunately, it is also one of the most problematic tasks. Decision
makers and intelligence users who act as data stewards by determining the specifications for the
wanted information can find articulating their needs demanding. Some of the information needs
are unconscious or change rapidly (Pirttimki 2007). In addition, decision-makers are not always
aware of all the possibilities information management can provide. Another issue is the
difference between subjective and objective information needs, recognized by Hglund and
Persson (1985). Subjective needs are those an individual thinks he has, but that are not
necessarily relevant in objective terms. Subjective needs can thus also be called information
wants. Objective needs are more common, and they involve information that is generally needed
in the decision-making process in question. Pirttil (1997) concludes that the most significant

information exists where the information needs and wants or the objective and subjective needs
overlap. When it comes to recognizing both types, Hovi et al. (2009) suggest that information
needs could be collected, discussed and prioritized by conducting surveys or workshops with the
most essential stakeholders of an organization. This is suggested to ensure interaction between
the decision-makers and information producers and to reduce misinterpretations
The difference between the actual information needs and the amount and content of
information gathered is called the information gap (Pirttimki 2007). It exists between the
information received, the information wanted and the information needed by the decision maker.
According to the author, during an information management project, these gaps should be
recognized and reduced by successfully mapping the information needs, and by using
appropriate BI tools.
They recognized the most common reasons behind information gaps as 1) the lack of
integration between enterprise applications, 2) overly extensive reports that are not in line with
the current information needs or are too time-consuming to make use of, 3) the amount of
unexplored data in an organization, 4) the time wasted on gathering the required information
instead of its analysis and 5) the lack of external and/or valuable competitive information to
support strategic decision-making. The authors conclude that a higher level of information
quality alone does not generate business value, but it often leads to higher information usage and
therefore has an indirect impact on the profitability, maturity and success of the information
management process. (Popovic et al. 2010)

2.2.2 The business value of BI

Ramakrishnan et al. (2012) discuss the three general purposes for which BI is implemented.
Firstly, an organization wants to gain insight. The competitive pressure in the market increases
uncertainty, and the authors argue that BI systems are fast becoming a necessity for an
organization to be able to deal with the more and more dynamic business environment
(Ramakrishnan et al. 2012). BI has become the key activity assisting chief information officers
(CIOs) in forecasting market behavior, so that an organization can adapt to changing business
conditions (Smith and Lindsay 2012). BI provides the management with a better understanding
about the underlying trends and dependencies that affect the environment they operate in. The
other two purposes of BI Ramakrishnan et al. (2012) offered are related to the cohere nce of
organizational information. The authors state that BI provides an organization with a single
version of truth and it can also facilitate organizational transformation. Enterprise data is under
constant change especially as companies go through mergers and acquisitions. Organizational
changes bring in new information consumers with possibly brand new information needs.
Obtaining a single version of truth facilitates the communication between these individuals when
all have access to the same information. The clear business logic of figures, calculations and
terms also improves the quality of data and saves time for better analysis. (Ramakrishnan et al.
2012)

The quality of information is important since mass quantities of information are available from
various sources and lack of information is not a problem anymore; instead, the problem is
capability of gathering, related applicable and consistent information from authentic sources.
This means that, information is not significant by itself; instead, the quality and excellence of
information as well as its accessibility at right time and quickly for taking a correct decision is an
important matter
However, it becomes crucial to consider human decision making when studying Business
Intelligence since this is an IT-solution that to a large extent aims to support managerial decision
making
The need for Business Intelligence does according to Davenport (2006) emerge from in-creasing
competition. The business climate is constantly changing and becoming more and more complex
(Turban et al. 2007). This development requires managers to react and re-spond quickly, which in
turn requires that the managers are able to interpret their environ-ment. Davenport (2006) argues that
in a highly competitive environment where all indus-tries offer similar products and possess equal
technical equipment, the remaining source of differentiation is the business processes.

Simons (2008) claims that the most significant reason for investing in a Business Intelli-gence
system, is the aim to improve decision making. According to Davenport et al. (2001) the problem is
not that the decision-makers lack data, thanks to the ERP system they are overwhelmed by data but
they do not have the ability to aggregate and analyse them and thereby create business value. In a
survey from Massachusetts Institute of Technology (re-ferred to in Lindvall, 2013) it is indicated that
more than 60 percent of the managers expe-rience that they have more information than the can
incorporate in their operations.
Davenport et al. (2001) state that most companies are unable to translate data
into intelli-gence and thereby create business value. This is confirmed by
Nilsson & Sellns (2006) study on Swedish companies and their usage of the
Business Intelligence system. Nilsson & Sellns (2006) conclude that Swedish
organizations do not exploit the full potential of their Business Intelligence
systems; in addition they are not as analytical as they could be. This inability to
fully exploit the system is not unique for individual organizations, as one ITconsultant in this study observes;
There are few organizations that distinguish from the rest; I think I would say individ-ual
companies are quite similar to other companies in the same situation. But they are in no sense bad.
However, if an organization would manage to exploit the full potential of the system it is highly
probable that that organization would be far from the others pretty fastYou will be able to beat
your competitors pretty fast, due to the fact that the rest are not brilliant either.

The data retrieved from systems, applications and the data warehouse must somehow be translated to
be useful in decision making and analytics. Within the literature there are sev-eral model and
suggestions of how this can be done.
Eckerson (2003) illustrates Business Intelligence as a data refinery. When the
data have been extracted and loaded into the system, the user can analyses the
data through certain analytical tools. The aim is to identify trends, patterns and
exceptions and Eckerson (2003) argues that this analytical phase allows the
user to turn information into knowledge. Out of this knowledge you can create
decision rules, for example order 50 more units whenever the inventory falls
below 100 units, or forecasts and predications. The rules can be highly
complex and based on statistical algorithms and models. Examples of statistical
rules would be to automatically adjust prices in response to changed prices on
raw material, or to iden-tify cross-selling opportunities by using data on
customer response.
When these rules are implemented the user will gain experience and can
reevaluate the rules. The user might have launched a campaign to a certain
customer segment, based on a prediction of how customers will respond to
certain offers, or the result of previous cam-paigns. Eckerson (2003) argues
that this behavior becomes a cycle which repeats itself and makes the
organization into a learning organization. When results constantly can be reviewed and evaluated, the organization will gain knowledge and insight of their
own busi-ness (Eckerson, 2003).
To create knowledge and intelligence out of data is referred to as intellective skills by Zuboff
(1985). These intellective skills consist of three dimensions; the ability to think ab-stractly, inductive
reasoning and the ability to have a theoretical conception in mind. Zub-off (1985) argues that the
ability to think in abstract terms plays a role since a computerized
environment implies more abstract elements and that the physical actions are
eliminated by the IT-system. Tasks used to be performed through physical and
concrete activities but are now performed through pushing a button. The user
must understand what happens when the button is pushed and be able to relate
the data to the real activities and processes, and according to Zuboff (1985)
this requires an ability to think abstractly. The second dimen-sion is inductive
reasoning and Zuboff (1985) explains it as the ability to determine poten-tial
relationships between variables and the use of data to build and test
hypothesis.
People learn how to organize data in their minds. They build models in their
heads about what is really happening, and they build on the model with data
until they have a complete picture (Zuboff, 1985, p. 11, quoting a system
engineer)
The inductive reasoning is according to Zuboff (1985) related to the ability to keep a theo-retical
conception in mind. If you are about to generate hypothesis on the data you must have some frame of
reference. The information system contains a huge amount of data and the user must therefore know
what is significant to be able to determine it. Zuboff (1985) argues that the more of a theoretical
conception the user has in mind, the more infor-mation will be discovered in the data.

4.3 The Process of Decision Making

Conforme a los modelos formulados por Herbert A. Simon1 , A.A.Rubenstein y C.J.
Haberstroh2 , con tres y cinco fases respectivamente. El proceso de TD puede definirse de
acuerdo a las etapas y resultados que se ilustran en la Figura 2, denominada El proceso de toma
de decisiones, cuya representacin y explicacin se ofrece a continuacin: La Investigacin es
una tarea de discernimiento e interpretacin compuesta por: Identificacin de problemas, el rol
del tomador de decisiones y la formulacin de problemas, de a cuerdo con la siguiente
descripcin.
Identificacin de problemas. Busca alguna diferencia entre la situacin existente y un estado
deseado. Es decir, compara el modelo del estado esperado con el existente, precisa y evala las
diferencias para determinar si existe un problema. Por ejemplo, Pounds3 usa cuatro modelos
para desarrollar expectativas frente a las cuales se compara la realidad:
Histricos. Las expectativas se delinean como resultado de las experiencias anteriores.
De planeacin. La expectativa est definida por el plan.
Otras personas en la empresa. Son las expectativas de terceros.
Extra organizacionales. Se derivan de la competencia, clientes y mercado entre otros.
El rol del tomador de decisiones. Es la funcin que est vela no solamente de la aparicin de
las diferencias entre la expectativa y la realidad, sino tambin a prevenir a que esto no ocurra;
asumiendo entonces un papel pro y reactivo de acuerdo con las circunstancias 4 La formulacin
de problemas. Para resolver un problema es indispensable identificar su origen, desarrollo y
resultados que se han producido o estn por suceder. Esta definicin debe ser clara, procurando
reducir la complejidad conforme a las siguientes estrategias:
Precisin de los lmites. Identifica claramente los elementos implicados en el problema.
Examen de los argumentos. Los cuales pueden haber precipitado el problema.
Descomposicin del problema. En varios problemas ms pequeos y especficos.
Concentracin. En los elementos controlables.

1 Simon, Herbert A. The New Science of Management Decision, p. 54 2

2 Rubenstein A. y C.J. Haberstroh. Some Theories of Organization. p. 10. 3
3 Pounds, William F. The Process of Problem Finding. p 1-19. 4
4 MacGrimmon, K.R. y R.N.Taylor, Decision Making & Problem Solving. captulo 22.

El Diseo es la abstraccin, planteamiento de hiptesis, invencin, anlisis y desarrollo de

cursos de accin. Para ello, el responsable debe comprender el problema, generar opciones,
considerar su repercusin y estimar la factibilidad de ejecucin con base a tres elementos:
Condiciones, Acciones y Consecuencias, los cuales se presentan a continuacin.

Condiciones. Describen la situacin conforme a los valores que toman ciertos atributos,
como los nmeros rojos en las finanzas de una empresa, constituye un modelo del problema en
s.
Acciones. Es la secuencia de actividades a realizar bajo un programa y recursos
determinados, que representa la respuesta de solucin al problema.
Consecuencias. Estiman la situacin que ocurrir al cumplir las acciones establecidas,
describiendo los valores de los atributos que caracterizan al problema, como en el caso anterior
la obtencin de nmeros negros en los saldos financieros.
La Eleccin es la toma de decisin que el responsable realiza con el afn de resolver el
problema de acuerdo con los criterios considerados en su definicin, adems de los recursos
disponibles e intereses organizacionales en vigor. El desarrollo de esta funcin clave, es matizado
por diversos factores como la magnitud del problema, urgencia en resolverlo, consecuencias, los
elementos de certidumbre al alcance del tomador, lo extraordinario que resulta ser el problema,
as como los lineamientos establecidos por la propia empresa para normar el proceso. Para
efectos de estudio, resulta conveniente describir los criterios de: Conocimiento de los resultados,
grado de programacin y el Grado de exigencia:
Conocimiento de los resultados. Se define la consecuencia de lo que ocurrir al escoger
una alternativa en funcin al grado de conocimiento:
Certeza. Representada por el conocimiento completo y exacto del resultado de cada
opcin, donde se establece una consecuencia por alternativa.
Riesgo. Aparece cuando existe la posibilidad de que ocurran varios resultados para cada
curso de accin con una probabilidad asociada a ellos.
Incertidumbre. Se presenta cuando se aprecian mltiples consecuencias para cada
alternativa pero se ignora la probabilidad de que ocurran.
Manejo de certidumbre. Requiere del uso de conocimiento e informacin especializada,
modelos estadsticos y de la investigacin de operaciones entre otros.
Grado de programacin. Conforme a la naturaleza del problema y a los requerimientos, se
pueden emplear dos modelos para estructurar el mtodo de TD:
Decisiones programadas. Son aquellas que resultan ser susceptibles de expresarse de una
manera clara, sencilla y completa, mediante un conjunto de reglas, pudiendo documentarse a
travs de manuales, normas y polticas. Este modelo se aplica en condiciones de certeza.
Decisiones no programadas. Su definicin responde a situaciones particulares y
extraordinarias, resulta complicado establecer un modelo que sirva como referencia tanto para la
decisin en turno como para las posteriores. Normalmente, ocurren en respuesta a una crisis,
cambios en las condiciones de la organizacin y de su mercado de trabajo. Grado de exigencia.
Hay dos modelos de toma de decisiones, cuyo alcance se pretende lograr con la decisin, a saber:
prescriptivo o normativo, y el descriptivo. El modelo prescriptivo o normativo de toma de
decisiones. Es aquel modelo que instruye en como tomar una clase de decisin, basado en el
criterio de la maximizacin u optimizacin de la utilidad o valor esperado que se expresa
cuantitativamente viene a ser la funcin objetivo para una decisin procurando la utilidad
mxima, rendimiento o menor costo. Observa los supuestos de conocer todas las alternativas y

sus consecuencias, se busca maximizar el beneficio o utilidad y existe un marco de referencia

completo de conocimiento y razonamiento. El modelo descriptivo de toma de decisiones. Precisa
la manera como se toman actualmente las decisiones, procurando la satisfaccin, donde el
decisor no est completamente informado sobre las alternativas, ni aplica una racionalidad plena
en su bsqueda pues simplifica los factores considerados y limita la exploracin de opciones, por
lo que acepta la primera que satisfaga todas las restricciones del problema, en lugar de proseguir
hasta encontrar el camino ptimo. El modelo est basado en la heurstica, asumiendo que el
decisor no conoce todas las alternativas ni todas los resultados, hace una exploracin limitada
para descubrir unas pocas alternativas exploratorias y escoge una opcin que cumpla con el nivel
mnimo de satisfaccin.
La Comunicacin e implementacin de la decisin es una vez tomada la opcin es necesario
proceder a expresarla a los involucrados (personal, superiores, clientes, etc.), adems de precisar
el plan para su ejecucin, organizar los recursos necesarios y proceder a la direccin de su puesta
en marcha para que se realice conforme a los tiempos y formas estipuladas. Seguimiento y
retroalimentacin insta a supervisar la ejecucin de las actividades para detectar y corregir
desviaciones del curso y resultados planeados, ejerciendo la retroalimentacin constante que
inspire a modificar las acciones, los recursos y procedimientos participantes, en aras de llevar
alcanzar su objetivo en la solucin del problema planteado.

Davenport et al. (2001) argue that the process of decision making is highly
influenced by the organizational and cultural contexts, and to strive towards a
culture that values decision based on data is therefore important if you want
your decision making process to be influ-enced by data and facts. Within the
literature there is also a strong connection between Business Intelligence and
decision making, the Business Intelligence systems are somehow aimed for the
decision makers which also can be seen in the presented definitions of Business Intelligence in section 4.1. To dig deeper into how humans make decisions
and how external information is interpreted is therefore necessary.
How Humans Make Decisions
The invisibility and irrationality in the process of decision making makes it a
diffuse area to address (Davenport et al., 2001), and traditional theories of
choices have been heavily criti-cized for simplifying the human mind. Simon
(1997) concludes that humans act on intend-ed or bounded rationality instead
of perfect rationality, since the human mind is limited. Even if the decision
maker is intent on making a rational decision, he or she is limited to bounded
decisions which aim to satisfy rather than optimize or maximize (Simon, 1997).
March (1987) argues that traditional theories are underestimating the
ambiguity of choice. Everything cannot be known and decisions are therefore
likely to be based on incomplete information concerning the alternatives and
consequences (March, 1987). Similarly, it is as-sumed that the preferences of
the decision makers are stable and consistent. However, people do often have
conflicting interests and preferences are changing over time. March (1987)
states that preferences are expected to form actions and do affect actions but

pref-erences are at the same time affected by experience and consequences

from a certain be-havior.
According to Kahneman (2003) ideological theories of choice assume that the
decision maker seeks utility and select the option providing the highest utility.
However, utility can-not be separated from emotions and the feeling of loss;
people value losses differently. Kahneman (2003) suggests that out-of-pocket
losses are valued higher than opportunity costs which imply that the decision
maker can switch from risk averse to risk seeking de-pending on which
emotions the decision evokes. According to Kahneman (2003) the change in
wealth seems to be more important for the decision maker than the actual state
of wealth.
Kahneman (2003) states that humans are not accustomed to think hard and
twice, and are therefore likely to trust an automatically thought when
considering a problem. Lindvall (2013) describes that it is hard for the
individual to identify and determine human errors of thinking since they are
presented as truth. To create meaning humans seek rational explana-tions for
their own behavior and what is going on around us and Lindvall (2013) claims
that when these conceptions of the world have been well formulated and
defined, it will suppress alternative explanations. In addition, it seems that
some thoughts are more acces-sible than others and that expectation is a
strong determinant of accessibility (Kahneman, 2003). The human mind tends
to suppress ambiguity and uncertainty and therefore see what it wants to see.
Kahneman (2003) states that an observer will automatically put an event into a
certain context, and not automatically become aware of alternative interpretations since they will be repressed. Lindvall (2013) also claims that it might be
the case that humans seek information that confirms their first conception.
Kahneman (2003) differentiates between intuition and reasoning and defines
intuition as System 1 and reasoning as System 2. System 1 implies fast and
effortless response, often emotional and automatic, while System 2 requires
more effort and is often more con-trolled and rule-governed. The ability to
doubt and revaluate options is connected to Sys-tem 2, Kahneman (2003)
expresses it as the: ability to think incompatible thought about the same
thing. (p.1454). System 2 does also have the ability to correct errors.
The Organizational Perspective
When it comes to decision making from an organizational perspective, March
(1987) de-scribes the real organization as a loosely coupled system with weak
connections between problem, solution and action;
Organizations seem to be loosely coupled systems in which the connections
between prob-lems and solutions are obscure, as the connection between
means and ends, between action today and action yesterday, and between
action in one part of the organization and action in another part. People,
problems, solutions and choice opportunities seem to be combined in confusing
ways... (p.157)
This perspective on organization leads March (1994) to conclude that decisions
are made to establish meaning and are always made in a context of meaning
(March, 1987). Decision making is considered as a highly symbolic and ritual
activity and March therefore argues that decision making is much more than

just choosing between available alternatives. The interpretation of information

and the decision making do to a large extent contribute to the development of
meaning according to March (1987). In addition, March argues that the search
for information is not driven by the uncertainty of alternatives or consequences
but by a general lack of meaning.
Similarly, Simon (1997) concludes that not only the behavior of the individual but the be-havior of
organizations is boundedly rational.
Business Intelligence and Rational Decision Making
Lindvall (2013) conclude that unsuccessful attempts with decision support
systems are due to the ambition to implement traditional and rational theories
of decision making. The Business Intelligence solutions are according to
Lindvall (2013) implemented with the aim of being rational as in the decision
making theory. The systems should be developed from a bounded rationality
perspective instead, since it is closer to how decisions are taken and acted
upon in reality (Lindvall 2013). March (1987) also claims that theories of
choice, game theory and statistical decision theory are in some sense useful but
are incomplete and even potentially misleading when it comes to modifying the
design of IT systems. Howev-er, Eckersons (2003) study indicates that users
who consulting data more than intuition and use data to support intuition
rather than the other way around, is more likely to suc-ceed with a Business
Intelligence project.
22
Since the decision making process is characterized by ambiguity, Lindvall
(2013) stresses the role of the Business Intelligence system as sense maker.
The need for translation and identification of the organizations values,
expectations and conceptions do according to Lindvall (2013) become more
important than mathematical and statistical calculations. The IT-system shall
therefore be used to develop a meaning and context which within the deci-sions
can be taken.
Lindvall (2013) argues that poor decisions are mainly caused by the decisions process itself and that
it is a common human error to assume that there is no need for a structured deci-sion making process.
In addition, Davenport et al. (2001) argue that managers will be more effective if they become aware
of what the decision making process looks like. Lindvall (2013) even state that the use of a more
systematically defined decision process and statisti-cal model would improve the decision making
process. In System 2 the decision making is more structured and less influenced by individuals
experiences and conceptions, and the decision making process and analysis would be more structured
if a model is developed. Lindvall (2013) therefore concludes that statistical models to some extent
would neutralize the decision making process.

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