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David Linthicum wrote a great article in ebizQ earlier this year - The ROI of Your SOA. In it he gives a mechanism for assessing the value of agility:Agility is a strategic advantage that is difficult to measure in hard dollars, but not impossible. We first need to determine a few things about the business, including:The degree of change over time. The ability to adapt to change. Relative value of change. The degree of change over time is really the number of times over a particular period that the business reinvents itself to adapt to a market. Thus, why a paper production company may only have a degree of change of 5 percent over a 5 year period, a high technology company may have an 80 percent change over the same period. The ability to adapt to change is a number that states the company’s ability to react to the need for change over time. The notion being that the use of an SOA provides a better ability to change IT to adjust to needed changes in the business. Finally, the relative value of change is the amount of money made as a direct result of...

Larry Goldman makes some interesting points in his article on alerts - Red Alert! All Hands Battle Stations! - and it made me think about alerts in an EDM context. In the article Larry asks thisOrganizations should ask themselves the following questions to see if alerts can benefit them:What would I do if I knew a customer was trending downward? What would I do if I knew a customer was having a bad service experience? What would I do if a customer starting using our product/service differently?If you can think of innovative strategies for any of these questions, you may be a candidate for trigger and alert technology.If you are taking an EDM approach to decision-making, then you are likely to come across alerting in two areas - the responses to the questions Larry poses when the volume of these alerts is very high or where a real-time, as against quick, response is needed and the actual determination of whether these things are true, or not. Let's take the first situation. If you have these kinds of alerts but have them in large volume, you probably cannot...

In Banks Get Their Bearings Online Evan Schuman covers some of the positive news on how banks are starting to "get it" online.  Although much of the article covers web design and other related topics, a couple of quotes leapt out at me as pointing up the value of an Enterprise Decision Management approach."Another key report conclusion is that customers are hungrier for related banking services and that they want to be sold to more than banks had assumed"One of the key premises of EDM is that customers don't mind being sold to, provided that the selling obeys the rules (privacy, preferences etc) and that it is relevant (targeted, appropriate, cognizant of what has gone before). EDM gives you the tools to assure this kind of targeting (combining business rules and predictive analytics) so that even automated selling can be done in a way customers like and to which they will respond.Among the verbatim comments bank customers told her team was "This bank knows so much about me that I wish they could tailor their offerings to me,"...

Interesting link in the loosely coupled blog on Change Time. Phil Wainewright has some great pithy comments about what happens to deployed services:Services have to operate in the real world, where nothing can be taken for granted and nothing is set in stoneI could not agree more. But what do you do if you have a service that you know is going to change a lot? Are there not better tools for building those kinds of services? I think so -and I think those kinds of services will often be decisioning services.  I think you could use a business rules management system like Blaze Advisor to design these kinds of services and protect yourself from change by empowering the business users to take control of the rules in these services.Conventional software tools do a poor job of catering for the change-time phase of the development lifecycle. This is a problem, considering that change-time represents the entirely of the lifecycle except for that thin sliver of design time before a service is initially deployed.All true. Again, often the highest change components of an...

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Decision Yield is an evaluation metric that reveals the quality of your current decisions and decision processes, and helps you plan, justify and measure improvements. Why do we need one? Well, what constitutes a good decision? Is it the outcome alone? The cost of executing that decision? The speed? How about the coordination of multiple decisions across different parts of your organization? Many organizations lack a consistent method for measuring and managing the performance of automated decisions. The result is that plans for improvements that are vital to growth are often made based on metrics that focus on only one dimension, such as cost savings. To determine what constitutes a “good” decision process, you need to understand the many different facets of a decision that contribute to overall business performance. This holistic way of evaluating decisions is called Decision Yield. Decision Yield is ideal to evaluate automated decisions which are typically: Customer-facing—from approving loans to pricing insurance to determining cross-sell offers. ...

Rete III is the most advanced commercially-available inference engine, benchmarking more than 300% faster than its competitors, making it the ideal solution for organizations managing large, complex business rule sets, where high performance is critical. Benchmark programs test the ability of rule execution systems to deal with large working memories and large numbers of full and partial matches for the rules. Benchmarks of this nature are interesting because they are the best predictors of how well a rule interpreter can handle complex rule bases. When a rule-based system has performance problems, it is almost always the result of the rules having to deal with more data than the match algorithm can handle efficiently. Rete III was developed specifically to make it possible for rule systems to deal efficiently with large amounts of data as well as large numbers of rules. While other rule engines bog down as rule complexity or transaction volume increases, Rete III scales effectively to provide an enterprise solution. The Rete III engine was developed by...

Interesting article in Business 2.0 about Allstate's use of Data Mining.  What is not brought out in the article is that in order to get value from this data mining, Allstate had to use it to improve a transactional decision - the underwriting process. This means that a system, in this case the one being used by an agent, had to have the insight gained from the data mining embedded in it. Now clearly if the person in the article had gone online or called a call center you would have wanted him to get the same offer. All of this is the basic premise behind EDM - automate decisions and use data analysis to improve them. It should be noted, in case you are worried, that credit is a strong individual predictor but when combined with other predictive variables provides great underwriting and pricing segmentation. Knowing how to identify these variables and account for their relationship with other variables is how you really get a return from using credit data - you can find good overall risks with poor credit and poor overall risks with good credit. Fair Isaac...