I am at the EDM Summit this week and will be blogging live from some of the sessions and posting random thoughts and comments in addition. Despite the difficult market conditions, attendance looks good with a nice full room for the keynote and attendees from 17 countries. This year’s event also has a dozen new sponsors – nearly half are first timers – which I take as a great sign for the market as a whole. Ron Ross gave the opening keynote and began with a discussion of the current financial crisis. Clearly this is going to result in more regulation and some soul searching in companies about their processes and systems. Most companies are not doing things as smart as they could and the current climate makes that painfully clear.
To illustrate the challenge, Ron told a story of a large health care organization that spends 400 person-days over a 4 month period to make moderate business rules changes as part of spending 24 person years per year on maintaining a key legacy system. They feel that they work for the legacy system, not the business and worry that they can no longer think through innovation as they are so used to being constrained by the limitations of the systems. He contrasted this with a medium-sized financial services company that used business rules and a business rules management system (BRMS) to cut their elapsed time to change their fraud detection approaches from 30-60 days to 3-6 days. First project, no prior experience, no real methodology and a 10x improvement. The first application more than recouped the cost of the BRMS and related costs. They also realized, however, that really taking advantage of the technology and approach would take organizational change and new business approaches. There is no silver bullet for business agility.
Ron moved on to discuss the balance between business process management (BPM) and decisioning/business rules. Clearly process improvement and process management is important to companies but the opportunities to use decisioning to improve processes, to innovate new products and services and thus change the business. A balance is needed between process and decisioning.
Companies are looking to find the “optimal edge” for their products and operations – trying to marry analytics, optimization and business rules to find and then operate at the optimal edge. This requires an understanding of your strategy, goals and measures to track it and clear linkage to the operational decisions being made every day. Performance management and alignment are critical to staying on the optimal edge.
Business agility is often thought of simply as being able to respond quickly, make changes quickly. More accurately it is being able to respond to change in the time it takes to make the business decision and no more – the time to ensure it is the right change from a business perspective but with no additional overhead. As Ron put it:
You achieve full busines agility when the IT aspect of change disappears into the plumbing
Our goals as we engineer business agility should be that:
- There are no artificial constraints on our ability to change
- All operational business practices are represented as rules
- All rules can be found, analyzed and modified by business people
Ron spent a little time talking about operational decisions (check out this article for more) and about the need to reduce the time to get insight (derived from their data) into action. You must close the loop – decide, act, capture information, analyze it, deploy the insight and decide anew. Putting this insight to work requires an understanding of and control of business rules in production. Business processes and business process management will not do this – decisioning within these processes will do.
Business Agility will take:
- Business-level Rule Management
- Business-level Change Deployment
- Business-level Organizational Function to control this
To get there from here you cannot afford to put your organization on life support. Must be able to improve the current systems by finding and externalizing problem decisions and taking gradual control over them using business rules. Deploying these rules as a decision service allows you to put the right rules to work throughout your application portfolio. You will know you are there when you can deliver:
- Location transparency
- Consistency across channels
- Selective and targeted customer treatment
- Competitive time to market
- Painless compliance