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11th July 2008

Should Enterprise Decision Management only cover automation?

James Taylor Posted by James Taylor
Categories: Decision Management, Reader Questions

The same reader who asked yesterday’s question had a second:

Do you see the terms “Enterprise Decision Management” and “Smart Enough Systems” concerned mostly with the automation of decisions — which means really only covering strictly operational and appropriate tactical decisions.

The term “Enterprise Decision Management” to me suggests a broader definition, one that I would expect to include the management of *all* decisions in an enterprise — operational, tactical, and strategic. I guess I see SES as a subset of EDM, but I felt like they were used as synonyms in a few places and I wasn’t sure I agreed with that usage.

This is a great question and one I probably have not thought about enough. First let’s get the difference between Enterprise Decision Management - EDM - and smart (enough) systems clear. Systems are “smart enough” if they are able to take enough decisions to be useful without having to rely on waiting for human interaction. This is somewhat judgmental but typically means someone has identified the decisions that matter in a system or process, made them explicit and then automated them in a reasonably intelligent fashion. In contrast, EDM is a more formally defined approach. Taking the definition from the back of our business cards:

Enterprise Decision Management is an approach for automating and improving high-volume operational decisions. Focusing on operational decisions, it develops decision services using business rules to automate those decisions, adds analytic insight to these services using predictive analytics and allows for the ongoing improvement of decision-making through adaptive control and optimization.

Applying EDM is an effective way to develop systems that will be smart enough to be useful.

Now to the broader question - should the definition of Enterprise Decision Management be limited to automated decisions and, by implication, to operational or higher-volume tactical decisions? or should it be limited to operational decisions whether automated or not?

Currently the focus of EDM is on operational decisions whether they are automated, informed by automation or merely supported by it. The explicit focus is on these decisions and on the systems that can help improve them. EDM would thus cover an instant approval decisions for a credit card, giving a call center representative the two best offers to make to retain a cell phone customer or an inline visualization designed to help a claims agent make a subrogation decision. All are systems focused on “the automation and improvement” of decisions that are high-volume and operational. So, while complete automation is not required, the operational focus is explicit.

But should it be? What do you think? Let me know and I’ll continue the discussion next week.

This entry was posted by James Taylor on Friday, July 11th, 2008 at 3:09 pm and is filed under Decision Management, Reader Questions.
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There are currently 3 responses to “Should Enterprise Decision Management only cover automation?”

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  1. 1 On July 11th, 2008, Dave Dixon said:

    Hi James. I’ve actually been somewhat frustrated by the more narrow definition of “Enterprise Decision Management”. Whether decisions are strategic, tactical, or operational, all knowledge associated with decisions affecting the enterprise should be “managed” as enterprise assets. They are all informed by various enterprise information sources and all should seek to maximize shareholder value given that information. Differences would seem to be largely implementation details: whether the information comes from human brains or information systems, or if execution is largely automated through systems or carried out by humans. Decision models connecting corporate enterprise information to the value of decisions are a vital knowledge asset, regardless of the type of decision.

  2. 2 On July 12th, 2008, Dave Wright said:

    I think the operational focus is where the most apparent value of EDM is seen right now, and is what will sell it to adopting enterprises.

    This question is also about transactional systems, even if informed by analytics, versus business intelligence systems. Transactional systems are about what you do, and BI systems are about what questions do you need answers to. The latter may lead to strategic decisons that change what the business does in the future.

    So, most companies really need the value of operational EDM, sooner than later. If you are then able to consider EDM in a wider context, you will be in a better position to do so.

  3. 3 On July 19th, 2008, Shelby Goerlitz said:

    I think SES brings a valuable emphasis on operationalizing automated decision-making to the idea of Enterprise Decision Management, and certainly there are good historical reasons for this emphasis.
    But I actually think that Dr. Dixon’s formulation of *all* decisions as enterprise assets and EDM as the discipline focused on those assets seems a clearer definition of the term.In the spirit of a great article on CPM I only recently read I would say that using Enterprise Decision Management to describe what is essentially Enterprise Decision Automation leaves a larger opportunity on the table.

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