Jim Harris of the OCDQ Blog (Obsessive-Compulsive Data Quality) interviewed me for his OCDQ radio show recently and the podcast is now live – check it out on his blog. In the interview Jim and I discuss the whys and wherefores of Decision Management, the four principles of Decision Management Systems and the three legged stool among other things.

And you can win a copy of the book simply by entering Jim’s competition –  just Email Jim Harris by February 29, 2012 and tell him at least one of the four principles of decision management systems that I discussed. Enjoy!

Tad Anderson just wrote a great review of Decision Management Systems, my new book, over on his blog on the SOA World Magazine site. Two of his comments struck me particularly. The first summarized what I consider to be the biggest limiting factor in information systems today:

There are not too many systems being created today that I would consider more than interfaces to a data structure.

How many systems does your company have that do more than allow the management of data? Once you eliminate their ability to create, find, update and delete data records what else do they do? They probably allow you to report out the data they store (though this might involve using a separate analytical system) and if you are lucky they might tell you when something is due or when you need to take some action. But for most systems, that’s about it. If they are programmed do anything else they probably don’t do it right – it was perhaps right once upon a time but the business has changed, the regulations have changed and customer behavior has changed so it’s not right any more. As a result, as Tad puts it,

The systems themselves are viewed as a necessary evil by the people who use them.

Most users know they have to use the systems so that the company has the data it needs to operate but that’s about it. How many customer service agents REALLY use their CRM system? How many sales people do more with their SFA system than put in the data that will get them their commission? Does your ERP system really manage your supply chain or production facilities or simply record what happened in them? Do users email each other spreadsheets because it is too hard to get the system to do what is necessary or too hard to change the way it works?

The idea behind Decision Management Systems is to use proven technology (business rules management systems, data mining and predictive analytic workbenches, optimization tools) to create applications that are agile (so they can be changed when you need to change them), analytic (so that they use the data you have to make better decisions) and adaptive (so that they learn and adapt over time). These systems become your partners in running your business not just passive repositories of your data.

Tad points out that we have a ton of material over on DecisionManagementSolutions.com – our “awesome web site” as he calls it. Check out the white papers and briefs in particular. Of course I also REALLY like the last line of the review:

Over all if you are in IT, I highly recommend reading this book.

And if you haven’t already bought it, you can do so on IBM Press (35% discount code TAYLOR4389), on amazon.com (book and Kindle version), on Barnes and Noble (book and nook version) and on InformIT, Pearson’s site.

I am participating in an interactive chat on AllAnalytics on Wednesday November 9th at 11:30 am Pacific/2:30pm Eastern. Beth Schultz and I are going to chat about Decision Management Systems (both the book and the systems themselves), the role of analytics (especially predictive analytics) and more. Why not join us?

Go to allanalytics.com/messages.asp?piddl_msgthreadid=243067 to participate (don’t forget to register).

I had no slides for my session but I thought I would post my notes or outline:

I have just written a new book called Decision Management Systems about a class of system not widely deployed in organizations. They’re not new systems – I have been talking about them and helping people build them for the better part of a decade and the reality is that they have been around significantly longer even if the category itself was not well established as an umbrella. Recently the pace of adoption, the pace of change, in decision management has really picked up. And it’s done so because the business world is changing in 3 ways

• Changing Expectations
  • Real-time responsiveness is expected
  • Global customers expect global service
  • Self-service expectations have risen as we enter the 24/7 world
  • Changing Interactions
    • More mobile interactions
    • Increasingly social interactions
    • Changing organizational structures with outsourcing and partner networks
    • And, of course, Changing Scale
      • Big Data
      • More pressure on efficiency
      • Increasing transaction Volumes

These changing expectations, interaction styles and scale mean that companies have to change the kind of systems they build.

• From built to last to built to change – Agile
  So they can handle changing circumstances, deliver agile compliance and support ongoing process improvement
• From seeing data as something to be processed to seeing it as something to be used – Analytic
  Used to manage risk, reduce fraud, target and retain customers and focus resources
• From passive and repetitive to learning and Adaptive
  They must help find new approaches, support test and learn and manage increasingly complex trade-offs

In each case these new systems are built around an operational decision. What are operational decisions? Decisions involve making choices or selections from a range of possible actions. They are action-focused – not just learning but doing. And operational decisions are focused on a single customer a single transaction a single loan a single claim a single marketing interaction. These matter because

• They implement business strategy
• They manage risk
• They are where customer centricity happens
• They are where operational and analytic systems come together

The most powerful stories of Business Rules Management Systems are all about automating these decisions. Focusing on operational decisions makes it easier for business and IT to collaborate – decisions become a shared object that avoids the “big bucket o rules” problem where business or IT creates long lists of rules without context. A focus on decisions also addresses the problem that business rules get everywhere – UI, process, MDM etc. A clear focus on decisions makes it obvious which rules should be managed in a business rules management system and which ones need not be.

And business rules management systems are critical to these kinds of systems. They offer the design transparency needed for agility as well as allowing for business ownership for BUSINESS agility. Their support for execution transparency supports test and learn as well as impact analysis. They provide a platform for collaboration across the three legged stool of business, IT and analytics and they represent a great deployment approach for analytics.

When all you have is a hammer everything looks like a nail. It is easy to see everything as a process. Some processes are not really processes at all but simply decisions. Other processes are very complex because they include decisions and would be much simpler if the decision was managed separately. Sometimes there are fewer processes than you think because the differences between processes are all about decision-making. And sometimes it is the need for a decision that eliminates the local exceptions to your global process. There’s more on this in my white paper Decisions at the Heart of Your Process.

Bottom line? It’s time to build Decision Management Systems that are Agile, Analytic and Adaptive. To do so apply the 4 Principles of Decision Management System:

• BWTDIM – Begin with the Decision in Mind
• Be Transparent and agile
• Be predictive not reactive
• Test, learn, adapt, improve

I am participating in a Business Agility Radio event on Thursday October 27th at 11:30 am Pacific/2:30pm Eastern (NOTE CHANGED TIME). We’re going to talk for 25-30 minutes about my new book; about what we mean when we talk about decision management; where it is best used and where it’s best left alone; how DM helps companies be more agile (competitive, innovative, proactive); and more. Once we are done I will be participating in a live chat session.

Go to http://www.businessagility.com/radio.asp?doc_id=233343 participate (don’t forget to register).

Cross-posted from International Institute for Analytics

There was a great article recently in the McKinsey Quarterly – The Second Economy. In it W Brian Arthur discusses the fact that

Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution.

It’s a good article and worth a read. Brian talks about the systems that drive this economy – that automate decisions so that systems can communicate and collaborate without human intervention. These systems for automating decisions have three characteristics it seems to me:

• They are very agile or “constantly changing” as Brian says – easy to change as needs and circumstances change.
  The digital economy moves faster than the physical one as it has fewer constraints on change – it’s much easier to reconfigure something electronic than it is to reconfigure something physical
• They are analytic – using the data available in the network to decide what will work best
  We have more data than ever before both inside our organizations and in the network as a whole. The systems for the digital economy consume this data analytically, using it to behave in more effective, more profitable ways
• They are adaptive or self-configuring as Brian puts it – testing and learning to see what might work better over time
  Whether people conduct the experiments or the systems conduct experiments automatically, the systems for the digital economy learn and evolve constantly to maximize their value.

These, of course, are the characteristics of Decision Management Systems. To participate in the digital economy your organization needs these kinds of systems so learn to build them.

My new book - Decision Management Systems: A Practical Guide to Using Business Rules and Predictive Analytics – is officially shipping – you can now order it (rather than pre-order it) at IBMPressbooks.com, at amazon.com or at InformIT.

Build Systems That Work Actively to Help You Maximize Growth and Profits

Most companies rely on operational systems that are largely passive. But what if you could make your systems active participants in optimizing your business? What if your systems could act intelligently on their own? Learn, not just report? Empower users to take action instead of simply escalating their problems? Evolve without massive IT investments?

Decision Management Systems can do all that and more. In this book, the field’s leading expert demonstrates how to use them to drive unprecedented levels of business value. James Taylor shows how to integrate operational and analytic technologies to create systems that are more agile, more analytic, and more adaptive. Through actual case studies, you’ll learn how to combine technologies such as predictive analytics, optimization, and business rules—improving customer service, reducing fraud, managing risk, increasing agility, and driving growth.

“A very rich book sprinkled with real-life examples as well as battle-tested advice.”
Pierre Haren, VP ILOG, IBM

“James does a thorough job of explaining Decision Management Systems as enablers of a formidable business transformation.”
Deepak Advani, Vice President, Business Analytics Products and SPSS, IBM

You can buy at IBMPressbooks.com, at amazon.com or at InformIT.

Well my new book has shipped to the printers and it should be available in mid-October. The nice folks at IBM Press have set up a 35% discount code TAYLOR4389 and the book is ready for pre-order here on IBM Press. Just go to their site, order the book and enter the code. You can also download the Decision Management Systems Discount Flyer if you want to give it to someone, send it to someone or just use it to remember the discount code! If you are addicted to amazon.com the book is also available there. It’s also available over on InformIT, Pearson’s site.

UPDATE: The book is now in-stock!