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Decision Management, Operations Research and BI


I spoke to Seth Grimes last week about an article he was writing that just published on Intelligent Enterprise –What BI Practitioners Can Learn From Operations Research. As I was reading the article I also noticed a response over on Michael Trick’s OR blog –Business Intelligence and Operations Research. Both Seth’s article and Michael’s response are worth a read.

As Seth quotes me I think the “O” in “OR” is really important – OR is focused on operations and on the direct improvement of those operations – the improvement of decisions in operational processes and systems. BI has come to mean the support of more strategic or tactical decisions being taken by knowledge workers.
Thus, even if both arenas may be using, say, regression analysis, their focus is quite different.

Michael makes the point that “the field is not particularly excited about embracing a new name for our field.” but I think there is more to it than that. I am certainly not suggesting that OR needs a new name and I agree with Michael that “BI will inevitably use non-OR methods for some of their issues, so is rightly not “the same as” OR.” BI is not the same as OR and neither are the same as Enterprise Decision Management or EDM.

One of the reasons for using EDM as a phrase is to focus on the business issue – the management of decisions as though they are an enterprise asset – rather than on the tools/technologies/techniques being used (data mining, predictive analytics, business rules, optimization/OR, adaptive control). In the end the business needs to take operational decisions quicker, cheaper, more precisely and more consistently while being able to change them more easily. Any and all approaches are fair game in doing so.


Comments on this entry are closed.

  • Mary Grace Crissey May 5, 2008, 11:58 am

    The “O” in OR is VERY IMPORTANT – to me i say – it’s what gives analytics and BI real VALUE. As the cliché’ goes –its where the rubber meets to road . The “O”bjective behind APPLIED math and data analysis is not limited to conducting exercises resulting in producing a report for reporting sake. it is about “O”pening eyes to new insights and perspectives not yet considered. It is about “O”ptimizing people and processes so that large complex “O”rganizations can run more efficiently and effectively.

    Hey – check that out –I’m using “E” words to explain how OR and BI both can help with Enterprise Decision Management — Efficient and Effective.
    OR can be a narrow beam of light focusing on department level or one process step — or it can be applied in a SYSTEMS Analysis manner with the wide scope of view.

    OR and BI and EDM are not the synonyms – but they can all contribute and interact with the overall sense of IMPROVEMENT in mind!

  • James Taylor May 5, 2008, 12:58 pm

    Mary Grace
    Thanks for the comment – improvement (and ongoing improvement at that) is clearly the key. Focus on decisions, figure out how to improve them and go on improving them ad infinitum.