DIGITAL DECISION

MAKING
HOW TO MAKE A RIGHT DECISION IN DIGITAL
ERA

Dr. Ir. Khairul Ummah, ST, MT

LinxBrain
DR. IR. KHAIRUL UMMAH, MT

Education:
• S1 – Aerospace Engineering ITB
• S2 – Industrial Engineering ITB
• S3 – Geological Engineering UNPAD

Experience:
• Bandung Institute of Technology (ITB)
• Lecturer at Aerospace Engineering (1997-present)
• Waviv Technologies
• Computational Geoscientist (2008-present)
• LinxBrain
• Digital Transformation Consultant (2019–present)
SOFTWARES

Aerospace Engineering:
• Air Combat War Theater Simulator Software
• Aircraft War Simulation (AwaS) Software
• Airport Investment Analysis (AIA) Software
• Ground Radar Placement Software

Business:
• Banking Credit Scoring App
• Satutim Work Project Management App
• Aman Street Parking App
• TrainMart on Demand Food Ordering App
• Knowledge Management System (KMS) Software
• Train Simulator Software

Geoscience & Engineering:

• GeoHIT Oil Gas Detection Software
• Seismic Stochastic Full-Waveform Tomography Software
• 3D Resolution Enhancement Software
• Empirical Mode Decomposition Software
• Hybrid SOM Kohonen Neural Network Software
• Seismic Structure Oriented Smoothing Software
• Seismic Signal Reconstruction Software
 CHAPTER 1

DIGITAL VORTEX
WHAT WILL HAPPEN IN THE NEXT DECADE?
DIGITAL VORTEX
 THE WORLD IS
DIGITIZING…
.. because we are seeking low friction and
immediacy
BANK 1.0 : MUTUAL SAVINGS

Crowd at New York's American Union

Bank during a bank run early in the Great
Depression. A customer's deposit book,
for a Post Office Savings
Account.
BANK 2.0 : UTILITY

• In 1950, Bank of America was the largest bank in California, and led the world in the use
of checks.
• This presented a serious problem due to the workload processing them. An experienced
bookkeeper could post 245 accounts in an hour, about 2,000 in an 8-hour workday and
approximately 10,000 per week. Bank of America's checking accounts were growing at a rate
of 23,000 per month and banks were being forced to close their doors by 2:00 PM to finish
daily postings.
• After the project's successful conclusion, General Electric was contracted to build 32 ERMA
machines. They were so successful in operation that Bank of America was propelled ahead of
other banks in profitability, and became the world's largest bank by 1970.
 ERMA

• Electronic Recording Machine,Accounting

• The first production ERMA system, known as the GE-100,
was installed in 1959. Over the next two years 32 systems
were installed and by 1966 twelve regional ERMA centers
served all but 21 of Bank of America's 900 branches.The
centers handled more than 750 million checks a year, about
the number they had predicted to occur by 1970.
• First use of Bank Account Number

The wiring in an ERMA machine

 BANK 3.0 : ANYWHERE,ANYTIME

• The era of ATM in 80’s

The world's highest ATM at the Khunjerab Pass in Gilgit

Baltistan, Pakistan, which is located at the height of
Actor Reg Varney using the world's first cash machine 4,693 metres (15,397 ft) above sea level
in Enfield Town, north London on 27 June 1967
BANK 4.0 : DIGITAL BANKING

Major benefits of digital benefits are:

• Business efficiency
• Cost savings
• Increased accuracy
• Improved competitiveness
• Greater agility
• Enhanced security
 PAYTM

Paytm was founded in August 2010

with an initial investment of $2 million
by its founder Vijay Shekhar Sharma in
Noida, a region adjacent to India's
capital New Delhi.
It started off as a prepaid mobile and
DTH recharge platform, and later
added data card, postpaid mobile and
landline bill payments in 2013.
PAYTM FACTS

• 350 millions registered user

• 130 millions active users
• over 12 millions registered merchants
• 30 millions users of Gamepind
• 400 millions monthly transaction
• 70 millions games played per month
• 3 millions movie ticket sold monthly (2016)
• 9 millions Travel ticket sold in 2016
• Over $4 billion transaction monthly (2018)
 WECHAT PAY

• WeChat Pay is a digital wallet service incorporated into

WeChat, which allows users to perform mobile payments and
send money between contacts
• In 2019 it was reported that WeChat had overtaken Alibaba
with 800 million active WeChat mobile payment users versus
520 million for Alibaba's Alipay.
• In 2019 it was reported that Chinese can use WeChat pay in 25
countries outside of China, including, Italy, South Africa and the
UK.
 WECHAT FACTS
• WeChat accounts for 34% of total mobile data traffic in China

• WeChat market penetration in China at 79%

• Around 30% of mobile internet time in China is spent on WeChat

• 170 million WeChat mini program users per day
• Average user opens four mini programs daily
• 900 million users of WeChat Pay on a monthly basis
• Tenpay market penetration at 84% (includes other Tencent payment apps)

• 820 million users sent or received a Chinese New Year Angpao over WeChat in 2019

• 2,000 mini games available on WeChat

• 300 million players of WeChat mini games

Tencent Game revenue : $19 Billion (2018)
• Amazon Prime member : as of June 2019, there were an estimated
105 million U.S. Amazon Prime subscribers, up from 95 million in
June 2018. On average,
• Amazon Prime members spent 1,400 U.S. dollars on the e-retail
platform per year. December 2018 data also states that non-Prime
members only spent 600 U.S. dollars annually.
• According to App Annie’s The State of Mobile 2019
report,Alipay was the No. 1-ranked application
worldwide by monthly active users in 2018
• Alipay has evolved from a digital wallet into a lifestyle
enabler, providing access to over 100 kinds of services
from hailing cabs, paying utility bills, to medical
appointments.
• Alipay currently serves over 1.2 billion users globally
together with its local e-wallet partners
• e-wallet partners include Paytm in India,TrueMoney in
Thailand, GCash in the Philippines, Kakaopay in South
Korea, DANA in Indonesia,AlipayHK in Hong
Kong,Touch n’ Go Digital in Malaysia, Easypaisa in
Pakistan and bKash in Bangladesh.
ALIPAY VS WECHATPAY
Yu’e Bao
• A few years ago, Alipay’s e-wallet started allowing users in China to conveniently
transfer these unused cash into a money market fund, at as little as one yuan at a
time (about 15 cents in the U.S.). This spare cash management platform became
known as Yu’e Bao, or “leftover treasures”.
• From one fund in 2013 (which grew to become the world’s largest by 2017 and
now has 588 million investors — or a third of China’s population), today’s Yu’e Bao
platform hosts a growing selection of such funds, forever changing the way users
manage their spare cash.
• In a report last week, the South China Morning Post noted how assets under
management grew 80 times on average for 13 of the money market funds on the
Yu’e Bao online cash management platform.
• One of those funds in particular grew by 418 times — or more than 40,000
percent, in the six months since it was added onto Yu’e Bao’s platform.
• About $180 billion asset under management
• Libra is a permissioned blockchain digital
currency proposed by the American social
media company Facebook, Inc.
• The currency and network do not yet exist, and
only rudimentary experimental code has been
released.The launch is planned to be in 2020.
• The project, currency and transactions are to be
managed and cryptographically entrusted to the
Libra Association, a membership organization of
companies from payment,
technology, telecommunication, online
marketplace and venture capital, and nonprofits.
 KickStarter
• Overall, almost 4.7 billion U.S. dollars have
gone into successfully launched projects.
• As of July 2019, the most popular category
of projects featured on Kickstarter is
games, with some 1.1 billion U.S. dollars
pledged.
• One of the most funded games so far is
Exploding Kittens, a card game designed
by Elan Lee, Shane Small and comic
creator Matthew Inman, a.k.a. The
Oatmeal.Their initial funding goal was only
10 thousand U.S. dollars, which was
reached within eight minutes. Exploding
CROWDFUNDING FACTS 2019
PayLater
Crowd Investor
BITCOIN
 TRENDS

• Mobile payment innovations

• Hyper-personalization via big data and AI
• Robotic process automation (RPA)
• Conversational interfaces
• Blockchain
 MOBILE PAYMENT INNOVATIONS

• Google,Apple,Tencent, and Alibaba already have their own

payment platforms and continue to roll out new features
such as biometric access control, inducing fingerprint, and
face recognition.
• One of the most popular payment methods in China and
used by hundreds of millions of users every day is WeChat
Pay.Alibaba’s Alipay, a third-party online and mobile
payment platform, is now the world’s largest mobile
payment platform.
• Many mobile payment platforms are building programs and
offers based on the user’s purchase history.
HYPER-PERSONALIZATION VIA BIG DATA
AND AI
• Financial institutions now have information about their
customers' behaviour and social and browsing history.
• AI facilitates real-time omnichannel integration of these
insights to deliver a personalized one-to-one marketing
experience for their customers at the time when the
information is most relevant and useful.
 ROBOTIC PROCESS AUTOMATION (RPA)

• Today’s advanced RPA (Robotic Process Automation)

don’t have to be explicitly programmed to perform
tasks; they can simply observe what humans do and
then automate or suggest improvements to
processes.
• This includes processes such as customer
onboarding, verification, risk assessments, security
checks, data analysis and reporting, compliance
processes as well as most other repetitive
administrative activities.
CONVERSATIONAL INTERFACES

• According to Gartner, by 2020, chatbots will interact with

the customers of 85% of banks and businesses. By
eliminating human involvement in these interchanges,
productivity, and speed improve.
• Customers of financial institutions have come to rely on
conversational interfaces to provide 24/7 service, instant
responses to queries, and quick complaint resolution to
improve personal banking significantly.
• Conversational interfaces also provide an easy and
economical way for organizations in the financial sector to
receive customer feedback.
 BLOCKCHAIN

• Blockchain can make things more efficient in the

financial services industry. Since fraud and
identity theft cost financial institutions billions of
dollars annually, blockchain has the potential to
save the industry from experiencing these
significant losses.
• Blockchain in fintech is expected to
reach $6,700 million by 2023 in the United
States.
• Financial institutions will use blockchain for smart
contracts, digital payments, identity management,
and trading shares.
 BANK 5.0 : FINANCIAL ADVISOR?
• Uses AI-based predictive technology to scan customers’ spending
patterns and determine when their monthly bills are due.
• Technology includes a digital feedback communication loop that
shows consumers where they are spending their money and how
their behaviour may have changed.
• Users also see an overall assessment of where they have spent
money, how much they have spent within the past month and how
it compares with past spending behaviour. It includes a color-coded
wheel with green, yellow and red to depict whether customers are
overspending.
• The visual component explains to users how their spending can
affect their financial goals. For example, if a user has eaten out a lot
more than usual, they will receive alerts about how their food
budget changed and how it may negatively impact their ability to
save more money.
BEHAVIOUR CHANGES
TREND
 CHAPTER 2

DIGITAL DECISION MAKING

 HOW TO MAKE

A RIGHT DECISION ?
PROBLEM SOLVING VS. DECISION MAKING

• Problem solving is the process of investigating the given information

and finding all possible solutions through invention or discovery.
• Decision-making is regarded as the cognitive process resulting in the
selection of a belief or a course of action among several possible
alternative options, it could be either rational or irrational.
• Traditionally, it is argued that problem solving is a step towards decision
making, so that the information gathered in that process may be used
towards decision-making.
DECISION MAKING  PROBLEM SOLVING
DECISION MAKING  PROBLEM SOLVING
VUCA CHALLENGES
VUCA LEADERSHIP RESPONSES
DECISION MAKING IN DIGITAL ERA IS ...

AGILE DECISION MAKING

 AGILE DECISION MAKING
HOW TO STAY RELEVANT IN DIGITAL ERA
AGILE DECISION MAKING
Agility is more important than raw power.

F-18 & F-16

Kill Ratio 1:6
BUSINESS LESSON

Nokia vs Blackberry vs iPhone Bank vs Fintech

AGILE DECISION MAKING – OODA LOOP
 INTUITIVE VS RATIONAL DECISION MAKING

Intuitive Rational
Decision-Making Decision-Making
Model Model

©KU-LxB
THE RATIONAL (ANALYTICAL) DECISION-MAKING MODEL
EXAMPLE: ANALYTICAL HIERARCHY PROCESS (AHP)
INTUITIVE (NATURALISTIC) DECISION MAKING MODEL
EXAMPLE: RECOGNITION-PRIMED DECISION (RPD)

The U.S. Navy became interested in naturalistic decisions following

the 1988 USS Vincennes shoot-down incident, in which a U.S. Navy
Aegis cruiser destroyed an Iranian commercial airliner, mistaking it
for a hostile attacker. Both the Army and the Navy wanted to help
people make high-stakes decisions under extreme time pressure and
under dynamic and uncertain conditions.
AGILE DECISION MAKING
RATIONAL-INTUITIVE SITUATION

INTUITIVE RATIONAL
(NATURALISTIC) (ANALYTIC)

UNKNOWN

TIME PRESSURE

UNCERTAINTY
©KU-LxB
INTUITIVE OR RATIONAL?

At the age of 12 years, 7 months, and 17 days, Indian prodigy Gukesh Dommaraju
became the second youngest grandmaster in chess history.
AGILE DECISION MAKING
RATIONAL-INTUITIVE RELATION
PATTERN

RATIONAL INTUITIVE

VALIDATION
©KU-LxB
RATIONAL – INTUITIVE USE

• Klein suggested that 90 per cent of important decisions were probably made this way, with
more than 90% of routine decisions. Klein also found that army officers used intuition in 96%
of their planning decisions. Naval commanders used this model 95% of the time, too.
Commercial air crews and managers of offshore oil platforms use intuition in 90% of their
decisions!
• What Klein and Co. are suggesting in their recognition primed decision making model is the
use of intuition as well as rational decision making models, but with our intuition in the driving
seat!
• Intuition is used to recognize situations and help to decide how to respond, and analysis is
used to verify that our intuitions are appropriate to the situation.
AGILE DECISION MAKING FRAMEWORK
OODA : Observation – Orientation – Decision - Action RATIONAL INTUITIVE

Boyd's OODA loop focuses on assessing available information and putting it into In this OODA-Loop model, the ‘loop’ is
context to make the best choice quickly, with the understanding that the situation very important! The faster the better!
may change.
©KU-LxB
OBSERVATION

CYNEFIN SITUATION FRAMEWORK

Intuitive Rational
Decision- Decision-
Making Model Making Model

(The Cynefin framework (/kəˈnɛvɪn/ kuh-NEV-

in) is a conceptual framework used to aid
decision-making. Created in 1999 by Dave
Snowden when he worked for IBM Global
Services, it has been described as a "sense-
making device". Cynefin is a Welsh word for
habitat.

Cynefin offers five decision-making contexts or

"domains"that help managers to identify how
they perceive situations and make sense of their
own and other people's behaviour.
Harvard Business Review, A Leader’s Framework for Decision Making
by David J. Snowden and Mary E. Boone
 ORIENTATION

THREE LEVELS OF DECISION MAKING

Strategic Decision

Rational Decision-Making

Intuitive Decision-Making
DECISION

DESIGN THINKING : YOUR TOOLS

ACTION

OKR :YOUR GUIDANCE

Objectives & Key Results
CHAPTER 3

PRACTICE !
DIGITAL DECISION MAKING
HOW DIGITAL CAN MAKE DECISION MORE AGILE AND FASTER?

• multi-sources of data
• easy access to information
• collective decision making (rational)
• coordinated decision making (intuitive)
• decision making tools support
• rapid feedback
MISSIONARIES AND CANNIBALS

https://javalab.org/en/boat_puzzle_en/
SAILBOAT AGILE RETROSPECTIVE 1. The island
On the right, draw the island. The island is a
visualization of your team’s goals. It is the
purpose of their journey.

2. The boat
3 On the left, draw a ship that represents your
2 team. (You can add the name of your team on it,
or use your team’s logo to make your team
1 members feel more engaged.)

5 3. The wind in your sails

Illustrate the wind that is pushing the boat’s sail.
The wind symbolizes everything that helps the
team reach their goals.

4. The anchor
Draw an anchor that is in the ocean and
attached to the boat. The anchor stands for
4 anything that is slowing the team down.

5. The iceberg
Last but not least, draw an iceberg in the ocean.
The iceberg is a symbol of the risks that the
team could encounter in the future.
LDJ : YOUR TOOL FOR SIMPLE PROBLEM
lightning-decision-jam
AHP : YOUR TOOLS FOR COMPLEX PROBLEM
Analytical Hierarchy Process
TOOLS

DecisionMentor.app
miro.com
123ahp.com