Analytics & Optimization What the people REALLY want

Apr272006

A good friend of mine, Ken Molay over at Webinar Success, spotted this article Times have changed, technology needs to follow about the need for new technological solutions as work shifts increasingly to knowledge work."86% feel they are being asked to take on higher levels of responsibility when it comes to strategic decisions, calculating risks, providing analysis and developing and running complex projects at all levels of an organization. Nearly all of those polled, 98%, said given the higher levels of responsibility at work they need the right technological tools to increase productivity, reduce costs and increase revenue."In other words they want their organizations to adopt an EDM-approach. They want to know that the systems that support the business allow for effective analysis of data and use of this analysis at every point of the organization. They want to be able to apply their knowledge so that every user can make better strategic and tactical decisions that reduce operational costs, increase productivity (automation of tasks), and increase...

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Analytics & Optimization EDM and your Digital Business Architecture

Apr272006

I was reading some work by Randy Heffner and his colleagues at Forrester recently on Digital Business Architecture - here and here.  He defines a Digital Business Architecture as: An IT Architecture centered on business metadata on which IT solutions act in a unified and consistent way to deliver rapid business change Wow - this sure sounds like something that would leverage EDM to the hilt. If I think about customers implementing an "enterprise policy hub" or "enterprise decisioning backbone" they are trying to get control of business metadata (rules) so they can build systems that use this in a unified and consistent way to deliver on agility. Randy correctly identifies business rules as a form of business metadata for policy definition and goes on to give some great examples. Interestingly one of them strikes me as a perfect example of where rules could have played a role - the process for calculating and approving sales commission. If the rules for calculating this were managed in a business rules management system where the business...

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Analytics & Optimization Reduce Fraud? Use EDM…

Apr262006

Interesting article in Insurance Journal ABI Calls for "Radical Action" to Reduce U.K. Fraud talking about insurance fraud costing each family in the UK $1,000 annually. The article talks about some steps that could be taken to improve this situation. What the article does not do is talk about how software, especially decisioning software suitable for an Enterprise Decision Management approach, can address this. Other industries, like credit for instance, have had great success in reducing fraud using business rules (to target spot fraud or new fraud trends) and analytic models that predict fraud (like neural nets to track out of pattern behavior). One example here is Fair Isaac's product Falcon Fraud Manager. Similarly the same combination works really well in claims fraud here in the US (when there is a political will to use it) - Vericomp Fraud Manager is our product there. This stuff works - it just needs to be applied to the industry. So what would I suggest? Well I might suggest that the ABI: Get insurers to pool data to build effective fraud...

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Analytics & Optimization Sense and Respond with business rules

Apr262006

Christian Plaichner wrote a nice article recently in DM Review about Agile Business Process Management with Sense and Respond. There's lots of good stuff in the article but I do think one "clarification" is called for. In many cases it is not process change that I see happening in response to events. Many core processes are well defined and very stable, with lots of alternate branches defined for most if not all of the  things that might happen. What must happen, however, is that a decision must be made as to how to respond to the event - will one of the existing processes or sub-processes work or must this be escalated? If it must be escalated then to whom? Christian defines agility as the ability to respond to unforeseen developments but I might add that it is also the ability to respond to foreseen but unpredictable developments. For instance, the DMV in California can foresee that there will be changes to regulations, and can design systems and processes on this basis, even though it does not know exactly what change will be requested. ...

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Analytics & Optimization If only they had used rules…

Apr242006

Ian Graham (of Trireme) pointed out a great example of a government project that should have used business rules - Jobcentre Plus misses deadline.  This story, courtesy of the British Government, tells of a simple increase in an allowance that failed to make it into a system despite a year's notice. As the article saysSoftware experts say such a minor change would only take so long if the earlier rules had been hard-coded into the software.I have to contrast this experience with my friends at Egg (also in the UK) who change their rules themselves without IT involvement and who have made 40 changes in 3 years without even having to re-start the rule server and who take 2 days to make a change like this. Or, to use a government example, my friends at the Department of Motor Vehicles in California whose licensing system brings in $4B annually in revenue and who can make a 20 rule change in less than a month. This is not rocket-science, plenty of companies and government agencies are using business rules management systems to build for change. I'll close with...

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Analytics & Optimization Live from Brainstorm (almost): Business Process Management, SOA, and Composite Applications

Apr212006

Ken Vollmer of Forrester Research gave a nice presentation on Business Process Management, SOA, and Composite Applications.  I particularly liked both the phrase "Digital Business Architecture" to describe these general trends and his comment that we are finally able to treat processes as "business metadata". Clearly I think EDM is a core component of the first phrase and that a business rules management system let's you treat business logic, likewise, as business metadata. Some specifics takeaways: Ken outlined steps of Define, Implement, Execute, Monitor, Optimize and back to Define as the loop you need to create. Business rules play a key role in allowing you to apply your optimizations to your deployed processes. He talked a fair bit about complex event processing (CEP), something for which I think rules have great potential. He discussed how self-healing processes can be developed that use business rules, analytics and CEP to impact running processes without the need to wait for someone to review a dashboard. He noted that...

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Analytics & Optimization Live from Brainstorm (almost): The role of business rules in Enterprise Architecture

Apr212006

Larry Goldberg, of KPI, gave a presentation on the role of business rules in Enterprise Architecture, leaning on both the Rule Maturity Model KPI has developed and the Zachman Framework. Larry spent quite a lot of time on the various frameworks and how/why to use business rules in them - you can contact him or read the materials for more - but a couple of key points I wanted to make here: Business rules are orthogonal to data, network, function, process etc.They must be linked and thought of together but managed as their own "dimension" Source rules, the kind of near-natural-language statements generated by business executives, do not map 1:1 to technical rules suitable for being implemented in a business rules management system. There is no good way to classify business rules into static/dynamic or centralized/decentralized that does not cause problems with specific types of rules. Patterns on developing rules services and on managing them are needed but still nebulous. Interesting stuff. Clearly we have work still to do in terms of how rules...

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Analytics & Optimization Live from Brainstorm (almost): The Rules of Automated Underwriting

Apr212006

Mike Koscielny of Auto Club Group gave a great presentation on the value of business rules. As I have described his case before - here - I won't go into too much detail but there were a couple of points I noted in the session: Mike's underwriting team has only grown from 8 to 14 in a period when the business underwritten has grown nearly 6x! If the underwriting team had scaled with the business he would now be employing 45 underwriters! It only took them 3 months to add the capability to underwriter a new state and only 60 days to start offering a specific member benefit (forgiveness of a first accident for members) that they had been considering for years but never been able to justify implementing given the $400,000 estimate for changing the old system! Mike discussed how important regression testing was and how his business and IT folks now collaborate on the testing - a big change from the old system where the business folks thought this was IT's problem. Mike pointed out that not only are fewer policies and renewals being manually reviewed than before...

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Analytics & Optimization Live from Brainstorm: Business Rules and Business Process – Perfect together or perfect apart?

Apr192006

I sat on a panel today about business rules and business process and whether they should be separate or combined. I already have a couple of posts on this topic - here and here - so regular readers (both of them) will know where I stand on this. The panel was somewhat predictable in terms of where vendors stood but there were a couple of interesting items: There was some good discussion of whether you should always start with rules, always start with processes or always start with both. The consensus seemed to be that you should usually start with both (at least thinking about both the rules and the processes in which they are executed) but that this was not a hard and fast rule (think about a legacy modernization problem where the process implementation is not being changed, just a decision) and that it did not imply that both pieces would repay automation equally. Everyone agreed it was important to demonstrate success early, regardless or which technology choices you made, and that it was important to think about the enterprise vision even while remaining...

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