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James Taylor

I will use this blog to discuss business challenges and how technologies like analytics, optimization and business rules can meet those challenges.

About the author >

James is the CEO of Decision Management Solutions and works with clients to automate and improve the decisions underpinning their business. James is the leading expert in decision management and a passionate advocate of decisioning technologies business rules, predictive analytics and data mining. James helps companies develop smarter and more agile processes and systems and has more than 20 years of experience developing software and solutions for clients. He has led decision management efforts for leading companies in insurance, banking, health management and telecommunications. James is a regular keynote speaker and trainer and he wrote Smart (Enough) Systems (Prentice Hall, 2007) with Neil Raden. James is a faculty member of the International Institute for Analytics.

I participated in a panel at IBM's launch of its new Business Analytics and Optimization service line this week. I wrote a quick post to go with the launch and having attended and heard the IBM folks talk about it and had a chance to talk with some of them I thought a longer post was in order.

The core premise that the enterprise of the future is instrumented. interconnected and intelligent. This enterprise needs to make smarter decisions faster and to understand and be able to optimize those decisions ahead of time. It must be able to tell the consequences of a decision in advance (be predictive) and it needs to generate new insights into opportunities and threats from existing data while taking advantage of new data sources.

IBM feels, and I agree, that the current business climate, the explosion of new data source and the growing fear of blind spots combine to make a fundamental shift towards fact-based, directive action support systems and to a new kind of company that puts information to work in a culture of fact-based decisioning. Delivering these kinds of systems takes an understanding of a company/industry software (for information management and decision management) as well as advanced analytics and optimization.

These companies need to make smarter decisions for optimized performance and IBM talked about them moving to "perceive, predict, perform" so they can react faster and react correctly. I like to think of this as a move from a "those who know first win" mentality to a "those who act first win, providing they act intelligently" one. The focus on acting fast not just knowing is critical.

IBM sees three main focus areas for their worldwide offering - advanced customer insight, risk and fraud and analytics and data optimization. Of these the first two obviously match with the most common applications of decision management and both are critically focused on micro decisions. Risk and fraud happen one transaction at a time and customers are treated one at a time - focusing the analytics on these micro decisions will be critical for IBM to succeed in these areas.

IBM sees the pillars of this new approach and its Business Analytics and Optimization service line as Strategy/Road Map, Business Intelligence/Performance Management, Advanced Analytics, Enterprise Information Management and Enterprise Content Management. Of course I would add Decision Management to this list and point to the WebSphere stack with its recent inclusion of ILOG's BRMS as a critical component too. The platform cannot just support information management and information analysis it must also deliver decision making to the front line and nothing is better for that than a Business Rules Management System. Indeed right at the end of the event IBM made the point that many of the systems that will be delivered under the auspices of the BAO service will include analytics and optimization but in a way that the user of the system is not aware of the complexity - decision management applications in other words.

From a business perspective IBM was very clear that this is not just a consulting play but involved research and software in a tight partnership. This is crucial as pulling the pieces together takes consulting work but new data and new algorithms require the research folks and delivering it at scale requires software. They also see this as becoming pervasive across the IBM practice areas like CRM and supply chain. And, in case you were wondering, this did not "just happen" - IBM has clearly been incubating this a while with groups like the Center for Business Optimization and client engagements around analytics.

One final note. IBM talked a lot about an information agenda and a need to manage information as a strategic asset - not using data or information application by application but as an enterprise asset. I would go further and talk about a decision making agenda and decisions and decision making as an asset.

I think this is an interesting development and I look forward to seeing how IBM delivers and evolves this service, particularly around decision management. BusinessWeek ran a nice little article on this too.

Posted April 15, 2009 9:24 AM
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