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Enterprise Decision Management by any other name would smell as sweet

I was reading Guy Kawasaki's blog and saw this article on a new company called cFares. Now cFares is a new kind of discount travel company. Two of the distinctive characteristics that Guy describes strike me as the kinds of things that are enabled by an Enterprise Decision Management or EDM approach. cFares does not describe itself that way, and nor did Guy, but I think it remains valid. Here's what he said:

  • cFares offers something called “dynamic rebates.” cFares’s proprietary technology allows airlines to know what is happening at the point of sale and lower their prices dynamically to win a specific customer—for example, when they have lots of empty seats on a specific flight. cFares customers get a custom-designed price in real-time and receive the savings from cFares in the form of a rebate to their credit card after they submit their flight confirmation number.

  • cFares has a unique name-your-own-price service called cAgent. Unlike other name-your-price services, which involve “buying blind,” cAgent provides total transparency so that consumers know the airline, itinerary, and price before they have to pay. Travelers can pick a specific flight and then set up a persistent search for a fare that they are willing to pay. cAgent will seek out that fare and can hold it for twenty-four hours before the customer has to pay. Since airfares typically fluctuate several times during the day, cAgent snags the fare on the downturn.

So what makes these capabilities "EDM-like"? Well firstly they are focused on a specific (indeed customer-specific) operational decision. In the first case the price is being generated for a specific customer at a specific moment in time. I sometimes call this the "micro" decision as compared to the "macro" decision of pricing the flight in a more generic way. In the second the event is triggered at a micro level. Secondly there are rules involved in these decisions - rules from airlines, rules from consumers themselves (especially in the second case) and rules from the various booking engines/sources that cFares use. These rules are dynamic, constantly changing, reused across decisions and so should be managed. I don't know how cFares does this, though I would love to, but the decisions are clearly heavy on rules and show a clear need for agility.

In the first case there is also a need for precision - the airlines are making predictions I suspect as to how the flight will fill up etc and using those as part of the dynamic pricing. This use of predictive analytics and optimization is another key component in EDM - using data not to report on what has happened but to predictive what might happen and then use that prediction to make a better decision. The airlines have long used analytics and optimization as part of their pricing mechanism and cFares is exposing this at a more granular, real-time level. cFares is a great example of what you can do by focusing on, and automating, an operational decision in a very customer-centric way.

One last thing. Today cFares has a single channel - through the web. If they add to this in anyway then they had better be sure that their decisions will be consistent across these channels, the last tenet in the EDM threesome of Precision, Consistency and Agility.

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