Designing Failsafe Systems

Business Decision Making in the 21st Century

We live in a world of increasing complexity and compression of time which means that the systems whether they are business structures, economic and political institutions, or even societal systems need to take into account complexity and increased interconnection along with reduced time to react and acceleration of life. For instance, imagine how your daily life would play out in terms of these aspects. You go to work for a firm that is most probably engaged with multiple stakeholders spread out all over the globe and with minute interactions between and with these stakeholders. This means that your business processes, T (Information Technology) systems, and associated organizational structures have to be resilient to withstand the shocks and stresses as well as the pressures of integration, interconnection, globalization, complexity, acceleration of time, and compression of decision making windows. Therefore, business decision makers have indeed tough task on their hand as they grapple with the complexities and challenges of 21st century business landscapes.

Designing Failsafe Systems

Any design of a failsafe system must take into account the fact that the system is strongest or weakest as its weak link meaning that any disruption to the complex and intricate supply chain and value chain is subject to the resilience of each of the links and more importantly, the strength of the joints that tie in these links. Therefore, business decision makers have to first map out the strengths and weaknesses of each of the steps in the supply chain and each of the links in the value chain and then ensure that the threats are addressed in terms of strengthening each component and the entire system is geared to leverage the opportunities afforded by the integration of the world economy. In other words, just as businesses have benefited from the explosion of global trade and commerce, they have also been left vulnerable to the shocks and the shifts in the changing contours of the global economy.

How it Works in the Real World

Recently, we spoke to a senior executive in one of the transnational companies who is in a decision making role in the global business in which he works. A typical day for him would entail firefighting the various aspects of ensuring that the resource supply chain, the production value chain, the logistical processes, and the internal systems are all aligned to each other and any disturbance to one does not overly burden the entire business decision making capabilities. In other words, this business decision maker’s challenge is to ensure that each of these intricate parts of the business’s systems work like well lubricated parts in a machine and that the entire apparatus does not grind to a halt because of friction between them. This is especially important when the resources are being procured from different locations, manufactured in dispersed factories, shipped to all parts of the globe, and consumed wherever the value addition is the most and all supported by an IT backbone that maps each of these chains and provides the business decision maker with a bird’s eye view of the entire process.

Prioritization and Risk Mapping

Exploring these aspects in greater detail, we find that designing failsafe systems would entail drawing up business continuity plans, preparing the workforce to continue business as usual with minimal downtime, coordinating with and communicating to the stakeholders without leaving anyone, and then ensuring that the flow in the value chain is unimpeded. This means that the business decision maker has to decide on which components of the value chain are most critical so that there is zero downtime for them, prioritizing the activities so that the most crucial are identified leading to more resources being dedicated to them, designing the IT backbone in such a manner as to ensure that risk and especially high risk events are flagged immediately. Indeed, one of the most important aspects of tying in all these disparate and discrete processes into a coherent and comprehensive business system is the bottom line requirement of the process of designing a failsafe system.

Resiliency of the Systems

Next, since we have discussed the aspects of designing failsafe systems, we can now turn to how resilient the system needs to be and how efficient it is to absorb shocks and recover from failures. For instance, the business decision maker we spoke to underscored how early warning systems are absolutely necessary for decision making since being alerted about potential downsides and risks as early as possible is in everyone’s interest. This is the reason why many global corporations insist on their employees at all levels to escalate emergencies and even preempt major blowouts (literally as well as figuratively) to their higher-ups before they turn to full-fledged showstoppers.

Keeping the Communication Channels Open

While the reason for this is to avoid downtime as much as possible another reason for this is that in this 24/7 age of breaking news culture, it is better for the decision makers to know about potential disruptions from their own employees and managers instead of from the media. Indeed, this is the reason why many global corporations have established a clear chain of command which is activated in times of emergencies so that information flows from the bottom to the top, decisions from the top to the bottom, and feedback both ways is fed back into the loop. As mentioned earlier, one of the key requirements of failsafe business decision making is communication channels being kept open at all times so that there is no data black hole where decision and analysis paralysis sets in leading to more loss for the business.


❮   Previous  Article Next  Article   ❯


Authorship/Referencing - About the Author(s)

MSG team comprises experienced faculty and professionals who develop the content for the portal. We collectively refer to our team as - “MSG Experts”. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.