As BPM begins to expand beyond isolated projects to mainstream programs at the division or enterprise level, there is a need to engage a far greater number of business people in the...

Business Decision Management - Part 2

In Part 1 we discussed using business rules and analytics in the context of Business Decision Management to automate and improve operational business decisions.  There are many ways to bring business rules and analytics to play in information systems and they can be used to improve business processes, Business Decision Management is emerging an extremely productive and effective method. In this article we will address some of the most frequently asked questions about this topic.

Is there any difference between the different flavors – Business Decision Management (BDM), Enterprise Decision Management (EDM) and plain old Decision Management?
Well not really, it’s just a matter of emphasis. Enterprise Decision Management is the phrase we like to use as it emphasizes the importance of enterprise ownership of decisions. Business Decision Management is emphasizing the parallel nature of the concept to Business Process Management – just as a business has processes, it has decisions too that should be managed. Decision Management is just short hand for either or both of these. They all boil down to the same idea – that the operational decisions that an enterprise must take to run its business should be managed just like its data or its processes.

How does BDM relate to business rules?
BDM builds on a business rules foundation and is just one of several things you can do with business rules. Business rules have a long history of giving organizations a declarative way to talk about what they do and executable business rules can be used in everything from process control to data quality. BDM takes business rules and focuses them on the operational decisions that drive the transactions on which a business functions. Automating and improving these decisions, and externalizing them using business rules so that they can be managed and reused is critical to BDM.

How about data mining and predictive analytics – do they relate to BDM too?
Yes they do. Most people think of policies, procedures and legacy code as the sources for business rules. Data mining, analyzing the information you have about the past, especially about customer behavior, is a great additional source of business rules. Most organizations also find that, if they can make predictions about their customers or products or suppliers, then they can write new and more interesting rules about how to treat them. If I can predict loyalty in a customer I can use that prediction to treat them more appropriately. Predictive analytic techniques take uncertainty about something (like customer loyalty) and use the data you have to turn that into a probability or a score that can be used in rules. BDM relies on data mining and predictive analytics to enhance and extend the kinds of rules you have by learning from your data.

Isn’t BDM just part of Business Process Management or BPM?
Some people have said so. However, decisions are fundamentally different from processes. Processes drive sequences of actions and link people and systems together – they define how to do the next thing. Decisions are about what should be done next and so complement processes. Decisions do show up in processes – all those little diamonds on your process charts – but the definition and management of decisions is something much better done in parallel with BPM than within it.

Is BDM a business initiative or a technical one?
BDM is a business initiative, first and foremost. While it will require new technologies to be adopted and existing ones to be used differently, the drivers for it and the barriers to it are overwhelmingly business issues. Businesses need more agility, more control over their information systems and processes that treat their customers more appropriately. They need ways to use their data to protect and grow their business, they need more effective operations. BDM can deliver those things and more.

Do I have to be doing BPM/SOA to do BDM?
No, but it is sure easier if you are. A focus on processes and on component services that support those processes makes it much easier to identify decisions that should be managed and to develop and implement the decision services that can deliver those decisions to the systems and processes that need them. Plenty of successful BDM projects have been done that were not based on SOA and that supported traditional systems rather than processes defined using BPM. Clearly, however, the growth of BDM will come from organizations also doing BPM and SOA.

Can I do BDM today or do I need to wait for new technology?
You can, and should, do it today. Business rules management systems are robust and established and data mining/predictive analytic tools are both proven and increasingly accessible to less technical users. In addition, many software companies are delivering combined rules and analytic platforms or applications that use rules and analytics to manage customer treatment decisions. With the growing integration of these technologies with optimization and with process and performance management, everything you need is in place.

How do I get started?
Find the decisions that make a difference in your operations. It might be a pricing decision or a cross-sell/up-sell one, it might be a customer treatment decision or a scheduling one. Think about how you could automate and/or improve that decision. Could you define a set of rules for it that would let the business define how they want the decision taken? Could you analyze your data to provide some insight that would drive the way the decision is made? You don’t need to do everything at once – just rules or just data mining can work well – but begin with the decision in mind and focus on it. As Bill Fair once said “Grab the decision by the throat and don't let go.”

James Taylor is Principal and Co-Founder of Smart (enough) Systems LLC, a full service, vendor neutral company focused on the business decision management marketplace, providing research, advisory services and implementation Prior to this, James was a Vice President at Fair Isaac Corporation where he developed and refined the concept of enterprise decision management or EDM. Widely credited with the invention of the term and the best known proponent of the approach, Mr Taylor helped create the emerging BDM/EDM market and is a passionate advocate of decision management. james[at]smartenoughsystems.com Visit the EDM Blog.

Neil Raden, co-founder of Smart (enough) Systems, is a consultant and industry influencer in BI and analytics. His current book, "Smart (Enough) Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions," co-authored with James Taylor, was released by Prentice Hall in June, 2007. neil[at]smartenoughsystems.com

Business Decision Management - Part 1 .

Back to Articles, including BPM, SOA, BDM, BA & OP