The Management Decision Market is expected to register a CAGR of 15.26% over the forecast period 2021 - 2026. The outbreak of COVID-19 has caused immense secondary effects on many economies. Some companies are seeing shutdowns of their supply chains, while others face extreme demands, leading to disrupted workforces and changed communication and decision-making processes.
- Management decision solutions are significantly becoming the method of choice for implementing digital transformation strategies across multiple industries. The approach of such solutions is about focusing on the high volume. These operational decisions should be made every day in the organization, including the decisions in the operational processes, the decisions of the call-center representatives, and other front-line staff. Management decision solutions are needed to implement business rules and even for the way to tie business rules and analytics together to manage risk, reduce fraud, and improve customer engagement.
- Alpha, a rapid consumer feedback platform, surveyed more than 300 decision-makers to discover their primary challenges and the most effective decision-making processes. They found that the forces of change, both from the internal company organization and external market forces, have changed the nature of business decision-making. 86.8% of respondents reported that their work environment is in constant flux or lacking clear, correct decisions, and 40% said that they're motivated to change their decision-making process because of changing market conditions. Many companies have made progress in adopting data-driven decision-making frameworks and launching new products and features faster. However, decision-makers now face an overabundance of data inputs while remaining obligated to numerous stakeholders.
- AI is being incorporated in multiple management decision solutions that leverage domain knowledge and human expertise to provide context to and complement data-driven insights by applying decision management with business rules, knowledge graphs, or physical models in conjunction with machine learning models. In June 2021, Bristlecone, a provider of AI-powered application transformation services for the connected supply chain, announced a new partnership with Cognitive Automation company Aera Technology.
- Business processes and back-office tasks still lag in terms of end-to-end automation. Wherever a certain degree of intelligence is required in the process flow, traditional business process management approaches often fail, resulting in interrupted processes. Instances include assigning tasks to the right person, validations and calculations, document classifications, or customer segmentations. Management decision solutions can combine different methods and technologies to embed the necessary intelligence into digital business processes.
- The management decision solution offered by ACTICO has more than 100 clients, and more than 90 of them are billion-dollar enterprises, and the remaining are small and medium enterprises. This shows that the penetration of such solutions is significant in large enterprises with substantial capital to invest compared to small and medium-sized businesses.
Key Market Trends
BSFI Sector is Expected to Hold Significant Share
- Most of the BFSI companies also deal with critical credit management and need to effectively manage collection management and fraud detection management for its day-to-day financial operations. Using decision software, the bank officer can spend more time focusing on borderline cases or dealing with people instead of dealing with spreadsheets. In other words, all the routine analyzing, and number crunching is handled automatically intuitive decision making.
- Most banks wanting to launch new services simply hand over their business requirements to IT and go through a lengthy software development cycle of months or years. Business needs are often not properly met by the software due to the inability of the business domain to clearly articulate their business requirements. This can be highly detrimental to the organization. In such scenarios, management decision tools can be helpful.
- Furthermore, in various geographies, banks are impacted by the increasing credit gap. Numerous initiatives have been deployed to decrease the gap in countries, such as India. These measures can be coupled with increased focus on credit lenders to target consumers and further acquire them has supported the growth of the market. Financial institutions are focusing on adjusting models to eliminate poor decisions and mitigate risks. This has led to the adoption of various solutions offered by the market propelling its growth.
- The industry is marked with several partnerships between banking institutions and technology developers which is supporting the growth of the market. Credit Unions and Community Banks are applying decision management solutionsto automare lending decision leveraging cloud-based platforms.
- For instance, in July 2021, Experian announced that Soar, a digital banking platform is deploying Decision Analytics solution aimed to cater to the demands in the community banking platform. The partnership outlines the usage of SaaS PowerCurve Customer Acquisition platform for automation of lending decisions, digitisation of customer onboarding and customer application.
North America is Expected to Hold Major Share
- The North American region houses significant players such as Oracle Corporation, IBM Corporation, and SAS Institute, Inc., to name a few. The emergence of robust management decision models made different types of organizations in the North American region opt for supply chain optimization, customer management, debt collection, fraud, and financial inclusion.
- In the US, analytics is one of the relevant topics in many organizations today, with many increasingly focused on advanced analytics - data mining, predictive analytics, text analytics, machine learning (ML), artificial intelligence (AI), and cognitive. Yet, most analytic systems are completely separate from operational systems that run the business. These analytic systems rely on the data extracted from the operational systems but are otherwise quite standalone. In contrast, Decision Management Systems deeply embed analytic insight to improve their operational behavior.
- In June 2020, FIS, a financial services technology company, has announced that the company is teaming up with FICO, a leader in predictive analytics and financial crime prevention, to help North American financial institutions to stay ahead of the increasingly sophisticated money launderers and other financial criminals by building an advanced anti-money laundering (AML) solution.
- According to the U.S. Department of Treasury, domestic financial crime generates an estimated USD 300 billion of proceeds for laundering activities. Under the collaboration, FIS AML Compliance Manager, coupled with FICO Falcon X decision management technology, will offer financial institutions a unified platform for AML risk and compliance. The new cloud-based solution will use machine learning and A.I. to detect suspicious activity and provide bank investigators with transparent, detailed intelligence.
- In the healthcare segment, according to National Academy of Medicine, the US healthcare system spends USD 750 billion on unnecessary services. Predictive analytics can help in reducing the wastage of money and save up to 15% of its budget through analyzing the likelihood of the particular patient being subjected to a particular disease.
The management decision market primarily comprises multiple domestic and international players such as IBM Corporation, Oracle Corporation, SAS Institute, Inc., TIBCO Software Inc., etc. in quite a moderately fragmented and highly competitive environment. Technological advancements in the market are also bringing considerable competitive advantage to the companies, and the market is also witnessing multiple partnerships.
- Jan 2021 -FICO has announced that they partnered with Yapi Kredi, one of the largest private banks in Turkey who will use FICO Decision Central to manage analytics models and decision logic across the enterprise. This is part of Yapi Kredi's System of Intelligence vision and roadmap to seamlessly conduct and orchestrate smarter analytics and data pipelines and enhance AI/machine learning lifecycle management. FICO Decision Central enables businesses to capture models and other decision assets to be reused, modified, and improved over time.
- May 2021 - Oracle announced its plans to add support for India to Oracle Fusion Cloud Payroll, part of Oracle Fusion Cloud Human Capital Management (HCM). This new offering is intended to help make it faster and easier for local and multinational companies to pay workers in India while allowing customer to follow local regulations and practices.
- June 2021 - Slovenska sporitelna, the largest commercial bank in Slovakia, has partnered with FICO to use its FICO Decision Optimizer to increase profitability and improve its cash loan portfolio management. Using FICO's advanced AI-powered optimization, the bank will develop data-driven lending strategies to enhance results systematically.
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