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Adaptive Control

Syndicated from ebizQ John Reynolds over on the Thoughtful Programmer had a great post a little while back – 19th Century BPMS. In it he said I sometime find it useful to describe a BPMS in terms of things and people that you probably would have found in an office or factory in the 1890s This [...]

With the business world in a state of flux and everyone worried about what might happen next, and how they might respond to it, scenario testing (and its compatriot, stress testing) should be top of mind for executives. They should be thinking about different scenarios, testing out how those scenarios would effect their business and trying out various alternatives. On the risk side they should be using this kind of scenario planning to stress their assumptions – stress testing – to see how their financial reserves would cope with the various alternatives.

For too many executives, however, this kind of testing is done only at the aggregate level and done largely (if not completely) in Excel. I have nothing against Excel but this is clearly not really acceptable. Good scenario or stress testing should consider how customers, products, suppliers, locations will be impacted by the scenario at a granular level and then present rolled-up results, not simply attempt to model some averages or totals. Similarly, if executives want to develop alternative scenarios that would be effective in certain possible futures then they need to test those scenarios against actual transactions, actual customers, to see if they work.

Companies that have adopted decision management have the infrastructure to manage this. Decision management brings the crucial decisions – choices of actions – into the open and makes them explicit. Scenarios can be developed for these decisions and tested against real data. The results can be compared against what happened, or against alternative scenarios to see what would work best. Different assumptions can easily be fed into the decisions to see what impact those assumptions have and stress testing or scenario development conducted based on the results. Decision management makes all this possible. It’s still work, but it is much less work and the results can be much more precise and grounded in real decisions.

A growth in scenario management was one of my predictions for 2009 and Jim Sinur wrote a nice piece on this too – Scenario Planning is No Longer Optional.

Doug Henschen had a blog post on IBM today that caught my eye – Will IBM Add Analytics to its Toolbelt? in which he quoted Ambuj Goyal (who heads up information management at IBM) as saying predictive analytics are overrated. Sadly this reminded me of the old days of IBM – when FUD (fear, uncertainty [...]

Two articles I saw recently (Is SOA Enabling Intelligent Agents? and Three Keys to Enabling Agile Business Services) made me think about decision services in the context of agility and of so-called “intelligent agents”. Clearly SOA, web 2.0 and network-centric…

Charlie Berger of Oracle presented on Powering Next-Generation Predictive Applications with Oracle Data Mining (ODM). Charlie joined Oracle from Thinking Machines about a decade ago and have been putting machine learning algorithms into the Oracle kernel. Data Mining, in database or otherwise, sifts through data to find hidden patterns, discover new insights and make predictions. [...]

CRM Daily had a nice little article on Customer Retention that reminded me of the example I often use for how the elements of decision management contribute to more effective customer retention decisions. Large organizations spend vast sums on retention – one bank, for instance, spends $1Bn annually – and retention is a perfect candidate [...]

Hotwire.com Revenue Management

Darren Koch presented on Hotwire.com’s use of ILOG business rules in revenue management. Summary: Ongoing segmentation and optimization help businesses serve customers Smart testing + flexibility = better service = higher profits Continues to show ROI that is increasing over time Hotwire.com was founded in 1999 to help travel partners (who invested) sell excess inventory [...]

Graham Hill wrote a piece on Evidence-based CRM that focused on evidence-based CRM programs and it made me think about evidence-based CRM processes. To me, evidence-based CRM means customer relationships, and thus customer treatments, that are based on evidence (data) and not judgment, hope, guesswork etc. It means making offers that you have evidence this [...]

I just finished presenting at the SOA Symposium and if you are interested in my presentation you can find it on slideshare.

Scott Sehlhorst (with whom I have presented and about whom I have written before) had a great post this week called Hidden Business Rule Example. Scott walks through some analysis of a process and shows how finding hidden decisions within that process can really inform how you think about the systems and processes you need. [...]

Nina Shikaloff discussed an analytics technique that I had not heard of – Impact Modeling. Impact Modeling is a decision modeling technique. Decisions on acquiring customers – what to offer for instance – managing customers and handling difficult customers are all important and it can be tricky to identify better ones. Impact modeling is about [...]

The Conference Board recently announced strong growth in online content or content-on-demand. The press release can be summarized by this comment: Fundamentally, consumers expect content to be available when they want it, and on the screen of their choice This, of course, creates both a challenge and an opportunity for those providing content. The challenge [...]

Stephan Chase of Marriott generated the third set of thoughts. He is working to make Marriott more customer-centric, in particular by employing predictive modeling to determine what customers are likely to do in the future while using results in marketing to create a learning organization. This is of course the heart and soul of decision [...]

I got a chance to speak with ILOG today and do some thinking so it’s time to write more about the IBM and ILOG announcement. As it is an acquisition of one publicly traded company by another neither company can legally say very much. As a result I, like everyone else, have a bunch of [...]

Transpromotional marketing – yes, another new phrase that I heard for the first time this week. Wooing Customers in a Weak Economy was the source – an article on 1:1. Chris Stone wrote the article and it talks about the need to use different channels to contact customers and to do so consistently and in [...]

One of my regular readers had a question today about Enterprise Decision Management and the Software Development Lifecycle – the EDMSDLC if you like. Here’s what he asked: We do Business Rules in our approach… I guess one question would be, where does EDM fit in a typical SDLC? [company] does Requirements, we have a [...]

One of the things I like to do on the blog is bring attention to those companies applying the principles of Enterprise Decision Management to deliver useful, smart enough systems. I recently came across Strategy DirectorTM from Stratagem Portfolio Services. This uses EDM to deliver analytics and strategy support for collections. The product is built [...]

When I talk to folks about decision management they sometimes seem intimidated by the complexity of the problem and the sophistication of organizations that have invested heavily in the approach. Here, then, are some thoughts to help you get started. Begin – even if the first version is not perfect or even close. Automate the [...]

I have just finished presenting on the last of a series of roadshows for Silverlink. I was one of a series of presenters for their Think Different seminars. I presented with Kinney Zalesne (author of Microtrends: The Small Forces Behind Tomorrow’s Big Changes), Liz Boehm (Healthcare analyst at Forrester) and Fred Jubitz (recently of American [...]

I can’t blog this session live as John Rymer and Mike Gualtieri have asked me to participate. What follows is a combination of thoughts based on the presentation and post-presentation notes. The theme of the presentation is that “The next frontier in business process management (BPM) and business rules is automating decisions within business processes”. [...]