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Pegasystems and Chordiant – an update


I got an update from Pegasystems recently, mostly to talk about how the integration of Chordiant is going. I shared my original thoughts on the Pegasystems/Chordiant combination at the time but this was my first chance to chat with them since then.  Pegasystems continues to do well with its  12th record revenue quarter and climbing to  #8 on the Fortune fastest growing company. The company has given Wall Street guidance of  $3488M in revenue this year. They now have over 5,000 trained consultants worldwide and the acquisition has pushed them to over 1,500 staff.  Motley Fool recently said that Pegasystems had a return on invested capital of over 15%. The company says it is not interested in being acquired, and with no debt and growing market share why should they be?

The meat of the update, though, was to discuss how Pega is integrating Chordiant. They want to bring Chordiant customers to Pega and enhance Pega customers with Chordiant. For instance, the process support and desktop sophistication of Pega represents value add to Chordiant customers as does bringing enhanced decisioning to Pega customers.

To bring the products together they are introducing what they call Decision Experience Manager. This is designed to be both part of the main Pega environment and still overlay the legacy Chordiant Decision Management product. It is an abstraction layer designed to bring decisions into processes while also allowing products like Recommendation Advisor (reviewed here) to be developed and customized. This configures next best action user interface components – it tightly integrates decision strategies defined in Chordiant with user interface components in Pegasystems.

Below this Decision Experience Manager the functionality of Chordiant Decision Management will be introduced as Decision Strategy Manager (to define and execute decision logic) and Adaptive Decision Manager (to define and execute adaptive models). Both will run natively in the main Pegasystems environment and be tightly integrated with the processes being defined and managed in Pegasystems. These will provide a unified design environment for decisioning within the Pegasystemsenvironment.

The bottom layer of the environment is the combination of the PegaRules and Chordiant execution layers. Their intent is to unify the products with a common user interface. In the meantime, the Pega rules engine will be complemented by the Chordiant engine for predictive and adaptive recommendations. The user interface for designing all of this however will be unified so that a single, thin-client experience will be available for designers.

Both Visual Business Director (for decision simulation) and Predictive Analytics Director (for constructing predictive models) will remain somewhat stand-alone, as they were in Chordiant’s stack and will be integrated with Pegasystems  (though this is not going to be immediate, obviously). The intent is to allow these products to be able to work against decisioning assets built in  the core Pegasystems environment. In addition Visual Business Director will be able to support process changes and execution. This would allow you to see the impact of a decisioning change on the overall process, which would be a great feature.

The top layer is based on Pega’s solution frameworks for BPM, CRM, Case Management and industry foundations and solutions.  By late 2010 and into 2011 they expect to see decisioning capabilities being added to their existing frameworks as well as adding new frameworks that depend on decisioning such as collections. Initially they will focus on places like cross-sell/up-sell/retention in their existing frameworks where the Chordiant decisioning capabilities can make a big difference. They will then focus on adding growth-oriented value to the existing efficiency value of process-oriented frameworks.

Overall I was impressed by the degree to which they articulated a common vision across the two companies and I am looking forward to seeing the new / combined products in action.


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