Analytics & Optimization The End of the IT Department – business rules to the rescue!

Oct252005

A colleague of mine shared a presentation given by Neil MacDonald of Gartner, Inc. titled "The End of the IT Department". Neil gave the presentation at the Financial Services Technology Summit in August of 2005. There's a lot of good stuff in here but let me summarize a few key points: Two of the top 5 issues of importance for CxOs are improving productivity and building a responsive organization. Flexibility is in fact the number 1 issue for CEO-level executives in larger organizations Half of all CEO-level executives identified changing their underlying IT systems as a problem in getting strategic projects completed. The velocity of business is increasing with Gartner estimating windows of opportunities below 6 months in the next 5 years. It will be more important to change strategies quickly than to pick the single best one So what does this all means for IT? Clearly if it is to survive as a core component of a successful organization it must radically restructure itself, and its systems, to focus more energy on innovation and it must improve...

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Analytics & Optimization Predictive analytics can detect growing fraud in Healthcare Claims

Oct242005

I saw an interesting article in CIO Insight the other day: Health IT Must Target Fraud, Group Says. The report - from the Foundation of Research and Education (FORE) of the American Health Information Management Association (AHIMA) - says that it is essential that fraud management programs be built into the new National Health Information Network (NHIN) to significantly reduce health care fraud losses. The report calls for interoperable Electronic Health Records as a major enabler - integrated data being no less important for healthcare than it is for CRM - and goes on to say that major strides can be made in reducing health care fraud by applying advanced analytics like those used so  successfully in the financial services industry.  The best results will be driven by both prospective and retrospective approaches, the report said, and made a fairly dramatic prediction of the value:“By 2007, healthcare payer organizations that adopt automated systems for fraud and abuse detection will see a return on investment of at least 5 to 1,”The report was...

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Analytics & Optimization Microsoft, analyzing data and EDM

Oct242005

An article on Microsoft's new Business Scorecard Manager in the Wall Street Journal was brought to my attention this morning. Titled "Microsoft Unveils Tool to Analyze Business Data" it discussed another extension to Microsoft's range of Business Intelligence tools. Happy as I am to see this broadening of the target for business intelligence tools, I think the comment made by Lewis Levin is particularly noteworthy:"Our view is that decisions are made at all levels of the organization"Now I completely agree with Lewis.  I also agree that more access to simple to understand summaries of progress to date, the state of the business etc would be useful for almost anyone (assuming you build a scorecard that makes sense to them). I do think, however, that the power of analysis or analytics to a front-line person or to a customer in a self-service model, comes from improving the decisions made at the point of contact. This means being able to embed both the analysis and the actions to take as a result in operational systems and websites. This is...

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Analytics & Optimization Can rules help with SOA before “Level 5”?

Oct212005

In this blog entry - From ESB to ESP: action-oriented SOA - Joe McKendrick - discusses the SOA Maturity Model being promoted by some SOA vendors. The first time this 5 level model mentions rules is in level 5Level 5: The SOA information systems becomes the "enterprise nervous system" and takes action automatically according to events occurring at the business level according to rules optimizing business goals. So does this mean that business rules is a technology suitable only for the last level of maturity? I don't believe so. When getting started at level 1 business rules can be a huge boon. Not only are decision services an obvious first service - the desire to decide consistently across channels and across systems is often a key driver for SOA - but they also represent a great way to take part of an existing system and expose it as a service. I wrote about that approach here. When an organization reaches level 3 and starts to try and manage responsiveness then the use of business rules will start to show a strong return. Business rules are ideal...

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Analytics & Optimization Robust Web Apps with rules-driven conversations

Oct202005

This article in ComputerWorld - No Pause to Refresh: More Robust Web Apps - Heather Havenstein talks about the new world of richer web applications. She says:The new tools essentially eliminate the need to refresh a Web page every time a user enters or receives new data... Companies are using the tools for e-commerce and call center applications that require complex interactions with users. So why do these new, complex interactions require a different kind of development approach. Well:Traditional HTML-based applications are built as static, page-based applications that require an HTTP request to a server every time data needs to be refreshed. However, applications on the Web often require heavy interaction with users. For example, a customer service application could require a call center representative to enter information from a customer while also accessing a technician's service schedule. These types of applications can't work efficiently with the latency that comes with constant page refreshes.What strikes me as interesting about this situation is the extent...

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Analytics & Optimization Using business rules to renovate old applications

Oct202005

In this article - Tough Decisions for Old Apps by Stephen Swoyer - there's a great summary of the problems of integrating legacy applications into an SOA:Web enabling or exposing mainframe applications to new and different constituencies—including non-mainframe applications—is supposed to be easy, provided organizations have prepared by separating their app’s business logic from its presentation logic. Unfortunately, some industry watchers claim, that's not the case for many mainframe apps, forcing enterprise service-enablement initiatives to negotiate some fairly difficult roadblocks.This is indeed a common problem with legacy systems. One example of how to address this can be found in this great case study from the California DMV - http://www.edmblog.com/weblog/2005/08/license_fee_cal.html. The basic process they followed can be used by anyone facing the issue of how to expose the core logic of a mainframe system as a service: Identify the services that are hidden in the legacy system Figure out the rules implemented in these services - perhaps by...

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Analytics & Optimization Customer Segmentation to increase profits

Oct182005

Customer segmentation is often the first kind of analytics attempted by a company. It is not, however, only for "newbies" - even the most sophisticated companies can use better segmentation to drive better results. Take Barclaycard, one of Europe's largest credit card companies and a very sophisticated company when it comes to analytics. They had seen consistently good results from their account management strategies, with “champion” strategies performing solidly. How then to do better? Their approach was to work on developing a better customer segmentation approach and then using more finely defined customer segments to better target the customers in each segment. They used a CART-based tool called Model Builder for Decision Trees from Fair Isaac , a tool that uses historical data to rapidly create new decision trees to segment customers using multiple performance dimensions. This ability to segment first, say, on retention and then on profitability and then on likelyhood to respond (rather than having to use a single perofrmance dimension...

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Analytics & Optimization Rethinking development with SOA and business rules

Oct182005

Saw an interesting blog entry today - Rethinking development - which talked about a report from the Burton Group. A couple of comments in particular caught my eye:Choose development tools and infrastructure products that support SOA design practices. Well that's pretty straightforward. Business rules products like Blaze Advisor with its focus on deploying rules services or decision services clearly meet this criteria. The blog entry goes on to say:[W]ith slow and steady commitment, SOA will decrease duplication of development work, simplify maintenance of service code, and improve overall consistency of business processes." The objective is "business flexibility and adaptability."This seems like a plug for business rules! Business rules management systems can reduce duplication by: Centrally managing business rules in a repository. Simplify maintenance by making it possible for business users to maintain their own business rules using a controlled but flexible interface. Make processes more consistent and simpler by automating previously manual...

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Analytics & Optimization Is a Services Architecture Threatening?

Oct132005

An interesting CIO insight article caught my eye today - Services Software Architecture: Efficient, but Threatening? This article suggested some good questions to ask about SOA and raised a number of great points about the potential for an SOA to be threatening. Let's take the questions first: Are our enterprise architecture efforts providing business users with the business flexibility they require? What is our plan for reducing maintenance costs and speeding up development times? Both of these questions could, and should, be answered by pointing to the development of business rules-based services. Such services not only have all the advantages of a service in an SOA, they also allow: Business users to maintain the rules in these services, giving them flexibility and agility Reduce time to develop complex decisioning services by using a technology designed specifically for that issue while taking advantage of the pluggability of SOA Dramatically reduce maintenance by eliminating the role of IT in changing key business rules in those services (see Gartner,...

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