Research Question and Hypothesis

Taking the described topic into scientific context, the research question is asking for a relationship between an intelligent digital setup for decision making and the quality of the strategic decisions. The intelligent digital setup means a well-customized system for an organization which enables a more efficient process. The type of customizing has the respect the industry, customers and the organizational set up of a company because every single organization has its own perfect fit in a competitive system. A digital setup means all organization's procedures transferred into a digital context, either fully digital in machines or executed by a cyber physical system. The quality of the strategic decision has to be taken into context to the origin of the decision. A profit improvement is not necessarily an indicator of a quality increase of a strategic decision because not all strategic decisions are directly linked to profit increase vice versa sometimes profit happens by coincidental effects. The main hypothesis of this paper will analyse the dependency of the efficiency of strategic decisions and the digital set up for decision making in organizations (H0).


Figure 2. Generic Model of Digital Setup for Optimized Decision Making (designed by the author)

The generic dependency model with the relevant variables is displayed in figure 3 and the basis for the subsequent research model. Based on the generic model, which has to be seen as an open model for various business cases, a more detailed model will be designed in the chapter "Research Model". In the generic model, the independent variable "x" is the mathematical representative for "digital set up for strategic decision making in an organization" and the dependent variable "y" is the mathematical representative for "optimized efficiency of strategic decisions". To set the variable into relation, the following expression will be proved on validity:
• The more intelligent the digital setup for decision making of an organization, the better the quality of strategic decisions.
• The more human (manual) procedures for decision making of an organization, the worse is the quality of the of strategic decisions.

In the further analysis of the hypothesis, the generic model has to be set in context with a real business case, to make assumptions and the prove these hypotheses.


3.1 Research Model

The research model for this paper is based on the above mentioned generic model. As described, a supply chain business chase should be analyzed on its dependency between the variables of "digital setup for strategic decision making in an organization" and "optimized efficiency of strategic decisions". The different values of the variables itself are quite interesting, but also the dependency of the variables.


Figure 3: Dependency Model with Underlying Variables for a Distribution Decision (designed by the author)

The definition of the independent variables is, as described in figure 4, the digital process of data transfer from customer to supplier, then into the material management, production planning, and inventory management system. Followed by the customer confirmation if it's done on a defined digitalization level. For the dependent variable, the relevant values will be analyzed, from cost reduction over working capital reduction to turnover growth. For both variables, the characteristics will be analyzed in detail.


3.2 Empirical Design & Research Method

For the empirical design and the research method, the above-described supply chain case is relevant. Gaining data in an appropriate approach more data ensure a higher quality of the conclusion, hence a questionnaire is a common tool to collect data for a statistical approach. The questionnaire structure is asking in the first part of personnel and organizational data of the interviewee. In the second part of the questionnaire the digital characteristics of the process and data flow will be asked ("a-section"). The "b-section" questions will ask in general for the decision type, either if the decision is completely automated (autonomous by cyber systems) or a decision support process (digital preparation of a decision and final human decision making). "c-section" and "d-section" are more general and are asking for the questionnaire style itself, if there are any remarks and the level of difficulty of the question. In the third part of the questionnaire, the goals and results of digital decisions have to be evaluated, to have the full picture of the research model.

This questionnaire will evaluate the digital characteristics of the supply chain process. Based on the SCOR model the selected process steps are customer forecasts and the subsequent activities until production will be analyzed. Participants have to answer if this process in their company is done digital or manual. After evaluation of the kind of data processing, the goal for the digitalization will be analyzed. The key question for an organization is the strategic scope – more cost or revenue driven. The SCOR model describes the type of interaction between suppliers and customers, as shown in the following chart. For this questionnaire, only the planning and sourcing part will be analyzed. It means forecasting of customer demand and availability of products and production opportunities are in the scope of this questionnaire.


Figure 4: SCOR Model

The distinction between „Manual" and „Digital" will be defined as follows. „Digital" means that data processing will be done automatically without manual or human interaction. „Manual" means, that manual or human interaction is necessary to process data further in the workflow. If the process consists of both parts, please estimate in the given categories. "Decision support" means, a proposed result is automatically calculated, but a manual approval (human interaction) is required to finalize the process step. „Decision automated" means that a decision is made by a machine without further human interaction. The SCOR model as a description of supply chain processes in business is relevant and well known.


Figure 5: Flow Model with Underlying Variables for a Distribution Decision (designed by the author)

In the flow chart above, the detailed process with all independent variables is defined. Starting from the customer forecast, as an external event the process will move then into the organization's environment and is becoming an internal process. The availability of the requested products will be checked, if they are on stock. If the product is not available, the production planning and the sourcing process of materials will be steered, either manual or digital. To finalize this process, an order confirmation to the customer is necessary, meaning the process is moving from the internal organizations' environment again external to the customer. In this questionnaire, the relevance and the proportion of digital characteristics will be analyzed. All above-mentioned process steps are manual or digital possible. The explained flow chart is the basis for the questionnaire and is in detail available in appendix A "Questionnaire".