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Using EDM and adaptive control to respond to uncertainty


In a recession, perhaps even more than in other business climates, companies face a high degree of uncertainty. How will markets and consumers react to each new piece of news? How desperate will competitors get? Which products and services will be regarded by customers as necessities even in hard times and which will be jettisoned to save money? Ensuring that systems and processing can handle this uncertainty, and that a company can be effective even in the face of uncertainty, is key.

Two aspects of EDM are particularly relevant – its overall ability to improve the agility of information systems and the systematic use of adaptive control.

The agility of information systems is particularly important in times of uncertainty. If the pricing logic, loyalty program, risk, or eligibility rules are coded in ways that are hard to change or even in ways that take an IT project to change, then you take an agility risk. If a change in that logic is required there may well be an economic implication of each day’s delay – products may not sell because they are price uncompetitively or may sell at a loss; too many or too few customers may be given an award or offered a product. If you are not sure what is going to happen next week, next month or next year then you need to build information systems that can be adapted to suit as you find things out. EDM externalizes the decisions that are often both high-change and high-cost into managed decision services (wiki). Using business rules as the basis for these decision services allows them to be changed rapidly and cheaply, often by business users directly. EDM is an approach that let’s you architect systems for uncertainty.

There is another kind of uncertainty – not one related so much to change as one related to doubt as to what the best approach actually is. You don’t know how people will react to economic changes such as a recession and so marketing, sales and risk approaches that worked fine in the past may not work so well. Building adaptive control (wiki) into key decisions can mitigate this by allowing you to constantly challenge your best approach to see if something different would work better. A challenger might be one designed on the assumption that your product will cease to be considered essential and another might be designed for circumstances in which you are no longer the low cost provider. These alternative approaches are constantly tested against subsets of your customers to see if they generate a better return. If/when they do they can become the default approach. Building in this kind of test and learn environment is particularly powerful when you are uncertain as to what will be dominating your customers thinking in the future.

Still more on EDM and recessions tomorrow.


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