“There’s millions and billions of pieces of information flooding out of the vehicle [at all times] into this dumb telematics device,”
“Now you have to mine it,” Levis said.

Absolutely. Now you have to mine it. There is too much data, arriving too fast to put this on a dashboard or in a report and get real value from it. Instead you need to mine it for insight and operationalize this insight so it is actionable. Add the rules that make it actionable and then make the decisions, take the actions, that will add value to your business.

While not every company has telemetry data, many have high volume data streams that seem to offer the potential for better business operations. But you have to mine it.

Comments

The value of business rules and decision management in Jim’s mind includes:

• Prevent unacceptable kinds and levels of risk by monitoring warning signs and addressing root causes
• Accept the necessary consequences of doing business by monitoring thresholds and impacts, minimizing likelihood of risk
• Seize opportunities by identifying events and implementing a rapid response

Rules and decision management allow more innovation and let companies do more for less. But business rules are everywhere – in applications, BAM, BPM, CEP and more. The leading vendors are taking more control of these rules. Furthermore they are looking forward, using leading indicators not lagging ones, and merging predictive analytics and simulation with business rules (decision management). They will also adopt what Gartner call pattern-based strategies: Seek out changes that might need a new pattern, model these patterns and then adapt these new performance-driven patterns based on the combination of rules and analytics.

New adaptive software, he says, will leverage explicit rules as well as goal-seeking capabilities. Near real-time improvements in processes require constant analysis and change of business rules that manage the critical decisions within a process. Today this is people-centric (people make the changes to the rules) but this is becoming more automated such as with analytics. In addition, decisions add value to the process and rules are an effective tool for defining decisions. Decisions can help processes skip steps, simplify sequences and provide additional agility.

Gartner sees rules as the primary driver for business control in processes. The business rules that handle things like tax and accounting, regulatory compliance or underwriting – decision-making rules – have the best fit for business rules management (as against system rules, presentation rules, event correlation rules etc). These are true business rules, they drive business decisions, and should be managed by the business directly. These tend to be more volatiles but may represent only 35-50% of the rules in a business.

Jim showed a continuum – from a few companies that embed all their rules in systems through a semi-structured sweet spot with a mix of rules and processes to a few that are completely rules-based and dynamic. Today the market is moving up the curve but is still mostly stuck at explicit navigation rules with a little more complex navigation. Once the market matures, some will need to move past rules-guided process behavior to rules-driven composites and rules-based dynamic processes.

Legacy modernization is another area where he sees opportunity, with companies identifying hot spots that require rules-based approaches. These hot spots are where agility is required, where there is lots of change, and represent ideal opportunities for rules-based modernization. The business rules market has traditionally focused around application development, packages and application integration (I would say risk management too) but is moving into CEP (Complex Event Process), BPM, governance and what Jim calls Intelligent Decision Management. This movement is driven by improvements in both the technology and the methodologies/understanding of its use. Some best practices/planning suggestions:

• Centralizing business rules management of the critical rules with effective management of local variations gives a combination of executive control and agility that will become critical in the future. This, of course, is  not as easy as all that and requires thoughtful implementation relative to your company’s approach.  Stewardship and governance must be thought through and managed.
• Part of what is driving the further use of business rules has been a big improvement in different kinds of rule representation (Decision Tables, Decision Tees, common vocabularies) as these make it possible for the business and IT to collaborate.
• A Business Rules Management System or BRMS is what you need and it contains a rule execution engine, a rule design environment, rule repository, modeling and simulation/impact analysis, business user rule management, industry templates, monitoring and analysis tools (my definition is on my site). This is where the market is going.
• As rules are used to drive processes you must manage the overlapping roles and skills. Line of business managers must determine which rules are volatile and author/manage these rules. System Architects must manage more complex rules and administer the whole environment. Business process analysts must monitor the health of both rules and processes, author new rules and identify opportunities for decision making in processes/simulate new scenarios.
• Develop a business rules champion and arm them with business benefits, whether these benefits are decreased reaction time, improved risk management or customer satisfaction, reduced cost for governance or compliance, improved transparency or product design and pricing flexibility.

Finally a list of best practices:

• Do some volatility analysis and focus rules on high volatility rules
• Let business people manage at least some of the rules
• Establish roles and change management processes
• Get business and IT to share ownership, collaborate
• Express rules clearly so both business and IT can understand them
• Get a BRMS that works for you
• Pick suitable rule representation(s)

Don’t go to BPM or SOA and ignore rules – the future involves rules, BPM and SOA. Business rules help business grow by giving you agility with compliance, consistency. They help you differentiate and expose the knobs and levers you need to drive your business.

Comments

First, because decisions have generally been viewed as the prerogative of individuals—usually senior executives. The process employed, the information used, the logic relied on, have been left up to them, in something of a black box. Information goes in, decisions come out—and who knows what happens in between?

This is, of course, a critical issue and one of the reasons I push organizations to adopt decisioning technology. The ability to log exactly how a decision was made, the steps that were taken, the analytic models considered is something that comes with the use of technology like business rules management systems. Beginning to create a history of how and why decisions were made puts you in a dramatically improved position when it comes to conducting systematic analysis. Tom’s focus in the article is on ways in which organizations can make manual decision making more explicit, but the potential for decisioning systems to play a role should not be forgotten.

Second, unlike other business processes, decision making has rarely been the focus of systematic analysis inside the firm. Very few organizations have “reengineered” their decisions. Yet there are just as many opportunities to improve decision making as to improve any other process.

Absolutely. Like Tom I believe organizations should conduct some kind of decision discovery – indeed this is the first step in my Decision Management methodology. Decision Discovery helps organizations to identify decisions and see how they impact strategy, balanced scorecards, KPIs or other operational measures. Identifying the decisions that will make the most difference and then classifying, understanding and prioritizing them puts organizations in a better position when it comes to improving manual decision making as well as adopting decisioning technology. And just like other re-engineering opportunities the power of technology to maximize the value of re-engineering is real with organizations that adopt decisioning technologies as well as a thoughtful approach to decision making seeing tremendous results.

It’s a great article and there’s lots I agree with. For instance several times in the article Tom talks about institutionalizing better decisions. One way to do this is to embed these decisions in decisioning technology so that it the right decision is available to everyone – right down to front line staff – and yet still determined by those with the relevant expertise and experience. He also talks about formalizing the consideration of decision alternatives and the use of adaptive control techniques – part of a phase I call Decision Analysis – is critical in both designing and then executing and learning from experiments. His warnings to ensure that the assumptions behind models are understood and his push for managers to have enough analytic/mathematical understanding to use such models are equally valid. Finally I really like his closing comment to the effect that if you are not measuring the impact of your decisions, of your choices, you are most unlikely to get any better at it. And you need to.

Tom is a little too negative on automated decisioning for my taste. He describes automated decisioning systems as hard to develop and implies they can be hard to change. My experience is that it is getting easier and easier to develop automated decisioning – easier than Tom thinks – and that the use of flexible business-centric technologies like a Business Rules Management System makes it easy to change and evolve the decision criteria even when these are embedded in automated decisioning systems. I also happen to think the book Neil and I wrote, Smart (Enough) Systems, has some good stuff about decisioning in it – though I like all the books he lists too (Competing on Analytics, Blink and Super Crunchers are all ones I have reviewed).

I recommend the article both as a general one on decisioning and for those of you thinking about how to improve decision making  in your executive and management teams.

Comments

How many reports do business people in your organization get every day? How many of them actually prompt an action?

If they don’t prompt an action, a change in behavior, what is the point of the report?

If they do, could you do something more useful? Could you recommend a suitable action or take the action automatically and just tell them what you did? Would a focused analytic give them more actionable information than a report? Could you apply their rules to your data and generate something more focused? Instead, for instance, of giving them a report of product sales which might prompt them to promote products moving slowly perhaps you could use analytics to figure out which products were moving slowly and tell them just about that, perhaps with suggested promotional rules based on what has worked in the past (derived by another analytic)?

Reports may be a mainstay of information systems but decision management can often create more value from the same data. Act don’t report.

Comments