I am at the EDM Summit this week and will be blogging live from some of the sessions and posting random thoughts and comments in addition. Despite the difficult market conditions, attendance looks good with a nice full room for the keynote and attendees from 17 countries. This year’s event also has a dozen new sponsors - nearly half are first timers - which I take as a great sign for the market as a whole. Ron Ross gave the opening keynote and began with a discussion of the current financial crisis. Clearly this is going to result in more regulation and some soul searching in companies about their processes and systems. Most companies are not doing things as smart as they could and the current climate makes that painfully clear.

To illustrate the challenge, Ron told a story of a large health care organization that spends 400 person-days over a 4 month period to make moderate business rules changes as part of spending 24 person years per year on maintaining a key legacy system. They feel that they work for the legacy system, not the business and worry that they can no longer think through innovation as they are so used to being constrained by the limitations of the systems. He contrasted this with a medium-sized financial services company that used business rules and a business rules management system (BRMS) to cut their elapsed time to change their fraud detection approaches from 30-60 days to 3-6 days. First project, no prior experience, no real methodology and a 10x improvement. The first application more than recouped the cost of the BRMS and related costs. They also realized, however, that really taking advantage of the technology and approach would take organizational change and new business approaches. There is no silver bullet for business agility.

Ron moved on to discuss the balance between business process management (BPM) and decisioning/business rules. Clearly process improvement and process management is important to companies but the opportunities to use decisioning to improve processes, to innovate new products and services and thus change the business.  A balance is needed between process and decisioning.

Companies are looking to find the “optimal edge” for their products and operations - trying to marry analytics, optimization and business rules to find and then operate at the optimal edge. This requires an understanding of your strategy, goals and measures to track it and clear linkage to the operational decisions being made every day. Performance management and alignment are critical to staying on the optimal edge.

Business agility is often thought of simply as being able to respond quickly, make changes quickly.  More accurately it is being able to respond to change in the time it takes to make the business decision and no more - the time to ensure it is the right change from a business perspective but with no additional overhead. As Ron put it:

You achieve full busines agility when the IT aspect of change disappears into the plumbing

Our goals as we engineer business agility should be that:

• There are no artificial constraints on our ability to change
• All operational business practices are represented as rules
• All rules can be found, analyzed and modified by business people

Ron spent a little time talking about operational decisions (check out this article for more) and about the need to reduce the time to get insight (derived from their data) into action. You must close the loop - decide, act, capture information, analyze it, deploy the insight and decide anew. Putting this insight to work requires an understanding of and control of business rules in production. Business processes and business process management will not do this - decisioning within these processes will do.

Business Agility will take:

1. Business-level Rule Management
2. Business-level Change Deployment
3. Business-level Organizational Function to control this

To get there from here you cannot afford to put your organization on life support. Must be able to improve the current systems by finding and externalizing problem decisions and taking gradual control over them using business rules. Deploying these rules as a decision service allows you to put the right rules to work throughout your application portfolio. You will know you are there when you can deliver:

• Location transparency
• Consistency across channels
• Selective and targeted customer treatment
• Competitive time to market
• Painless compliance

Next week Neil and I will be at the EDM Summit/Business Rules Forum the whole week so say hi if you are there and look for posts from the show.

Tim Walters of Forrester had an interesting post this week - Is Web Personalization Now A Matter Of “Thurvival”? in which he emphasized that, even in a downturn, getting better at web personalization has a payoff. Now I think personalization is a good thing and the evidence that it results in more engagement, better results and increased loyalty is pretty widespread. I don’t think the question should be about web personalization though. Why should the experience I have on the web be personalized but not the one at the call center or by email or at the ATM?

Consumers react to your decisions as though they are personal and deliberate regardless of channel. The negative impact of generic and accidental decisions in terms of customer annoyance, disenfranchisement and lost loyalty is real. Only a focus on your customer-facing decisions and a plan to make these personal and deliberate will correct this. I call this extreme personalization. After all, if you are not personalizing the live agent channel then your live agents could be hurting, not helping and your ATMs will annoy not sell.

Graham Hill wrote a piece on Evidence-based CRM that focused on evidence-based CRM programs and it made me think about evidence-based CRM processes.

To me, evidence-based CRM means customer relationships, and thus customer treatments, that are based on evidence (data) and not judgment, hope, guesswork etc. It means

• making offers that you have evidence this customer will want
• testing things to make sure they work before rolling them out to everyone
• ensuring that different agents will take the same, evidence-based, action with a customer
• treating customers as risks (fraud risks, collections risks, retention risks) based on historical data
• formulating policies, segmentation, and customer treatment approaches based on data
• ensuring that these evidence-based actions are taken consistently across channels

Making CRM evidence-based is, I think, another way of saying that CRM should be decision-centric. If you externalize and manage the decisions that impact your customers - that contribute to the customer experience and so build the customer relationship - then you can drive those decisions with evidence. If you don’t then you can’t. Evidence-based decisions would:

• use predictive models to turn uncertainty about the future or a customer’s preferences or risk into probabilities
• use data mining to find the treatment rules or segmentation that have worked in the past
• group customers into segments that are both alike and statistically significant so they can be treated similarly
• be consistent across agents and channels because they are automated
• use adaptive control - champion/challenger or A/B testing - to try new approaches, new models on a subset of the population before rolling them out
• use simulation to see what the impact of a change to a decision might be (or would have been) before trying it at all

In other words, Enterprise Decision Management, EDM, is the best way to deliver this kind of evidence-based CRM.

While on this topic you might want to check out a couple of articles in DM Review this month. First is this one on Next-best offer and the use of predictive analytic - well worth a read for a nice overview. The second is Six Best Practices for Delivering a Successful Customer Experience. In this Ray talks about a customer-focused strategy and gives a great example:

For example, when designing solutions to implement a consistent, channel-independent customer experience, a specialized offer service can be created to provide access to offer-generating algorithms regardless of the channel.

Well of course I completely agree - an offer service is after all a decision service by another name. Ray also makes the point that organizational transformation and continuous measurement are critical for improving the customer experience just as they are for improving the decision making that drives them.

Well at least one more as of today - Jim Sinur, over on his Gartner blog - has finally started to use the phrase he has been threatening to use for a while “Intelligent Decision Management”. While Jim has not published a formal definition - I expect he will soon now he is back at Gartner - a few clues exist in the post.

1. The post is called “Are you driving through your rear view mirrors”
   So I think we can safely assume that predictive analytics and using data not for reporting but to look forward will be part of it
2. He explicitly mentions business rules, constraints and heuristics
3. A decision sandbox gets a few lines
   Clearly simulation, like that provided by Chordiant’s Visual Business Director, should be part and parcel of it.
4. Processes and Events
   The decision management he envisions will be integrated with both processes and events so that simulation and design can take account of the operational environment into which the decisions are being injected.

Like the phrase Neil and I use in Smart (Enough) Systems - Enterprise Decision Management - Intelligent Decision Management is going to use business rules, analytics, optimization and simulation to take control of the critical decisions that run your business. Jim will, I am sure, add his own twist to this but I suspect he is on very much the same page as we are.

Whether you call this Enterprise Decision Management (EDM), Intelligent Decision Management (IDM), Deciison Management or Business Decision Management the overall direction is clear. It is time to start managing decisions.

I am one of the featured speakers in the forthcoming Tibco series on Using Events to Add Real-Time Intelligence. It’s an online event with webinars, “booths”, and real Tibco people available to answer questions. You can register for it here.

I recently past 10 years as a US citizen and, as a result, was returning from Europe with a new passport. To celebrate this occaision the INS decided to put me through a manual check - apparently my name matched someone on the watch list. Now it should be noted that nothing else did - I was born somewhere different, am a different height, have different colored eyes etc etc. Despite the single match (my name, not exactly an uncommon one after all) the folks at INS had to spend 30 minutes checking me out and I had to wait while they did. Then I heard about this class action suit based on a similar problem - simple name matching being used to stop benefits to “fleeing” felons.

In both cases the systems involved have more information than just a name but in both cases stupid decisions are being taken based only on a name match. Of course, <sarcasm>no felon or terrorist would ever change their name </sarcasm> so this is a great approach!

If those designing these systems had put some thought into the decisions and had built them so they could be refined and updated easily - using business rules say - then more effective checks could be in place and changes could be made as and when needed. Sadly no-one did and dumb systems and wasteful processes are the result.

ho hum.

Randy Saunders had a great post over on the Perfect Customer Experience -Can I please speak with a live agent? In it he has a great quote:

Forester’s study finds that 45 percent of consumers prefer to speak with a customer service agent to answer questions and resolve service issues, yet most walk away from customer service agent interactions disillusioned, disappointed, and disgruntled.

If everyone is so keen to talk to someone, how come they have such rotten experiences? Well the trick is that, as Natalie L. Petouhoff, Ph.D. says in the report Randy quotes, customers want agents who are:

knowledgeable, patient, friendly, courteous, informed, easy to understand, and responsible for resolving issues

Ha! No wonder they are unhappy. With the turnover typical in most call centers and the prevalence of outsourcing and offshoring, this list sounds most unlikely. Yet need it be? If the systems your agents were using were decision-centric:

• The agent would seem more knowledgeable as they would be given the write choices to make when critical decisions came up in their conversations.
• They would be more informed as the systems would be telling them what to do or what the implication of something was not just presenting information.
• You would be able to make them responsible for resolving issues because the decisions would be controlled by the business but delivered by the agents - they would know what they could and could not, should and should not do.

Now even the most decision-centric system will not make your agents patient, friendly, courteous or easy to understand. They might be nicer to customers if they were not so frustrated with their systems and if their customers were less frustrated they might be more friendly but these aspects of the relationship will require you to do more than just adopt decision management!

The report makes some specific observations that reflect the lack of decision management in most call centers. Clumsy self-service to live service transitions and bad call routing reflect a lack of thought and management of these critical routing decisions. Bad knowledge management can also be seen as a lack of focus on decisions - after all it is the decisions your agents make that the knowledge management process is meant to improve.

Applying decision management can help modernize your call center by giving you business control of critical customer decisions, improve routing and call handling and give a focus to knowledge management. It can also help fix your self-service interactions as I have noted before.

So, are your live agents helping or hurting? If they aren’t helping, applying decison management could make all the difference. You should also read The Best Service is No Service.

There are only 12 Days Left to register for the first Enterprise Decision Management Summit so get off your butt and register!

Neil and I Co-Chairs and readers of the blog can get a discount. We are presenting twice - A Pre-Conference Tutorial Succeeding as a Decision-Centric Organization and a Keynote Competing on Decisions. Because of this you can get a special $100 Conference Discount courtesy of Smart (enough) Systems LLC if you use code “GVDJT” when you register.

In Late-Breaking News …

• First come, first served in the Fun Labs! Hands-on sessions by Fair Isaac, ILOG, Delta-R, InRule & Pegasystems.
• Hot topic for the vendor panel moderated by John Rymer, Forrester … “With IBM and SAP in the Game, What’s Next for Rules?”
• Jim Sinur, Gartner analyst, to talk about … “Increasing the IQ of Processes for Profitability”
• Case studies recently added to the program … Hotwire.com, ING and Freddie Mac.
• Participants in our Practitioner Panel announced … Bank of America, The Hartford, Hotwire.com, Liberty Mutual, MortgageFlex, West Bend Mutual.

Register now…

Today Chordiant announced their new Visual Business Director (CxVBD). I saw an early prototype of this some months back and got a more detailed look at the finished product at their recent Customer Advisory Board. I really like CxVBD as I think it shows the critical business value of externalizing decisions. I have yet to see anything like it - despite various rules and decisioning platforms offering “simulation” capabilities - and I think business users will immediately see the potential of the product.

The premise of CxVBD is that simulation of a business, especially the decisions that drive a business, is critical to change management, to planning and to devising strategy. Users of Chordiant’s decisioning platform (reviewed here) already have the information available when a decision is made (inputs), the outcome, the responses to the decision and the logic used in the decision. Extending the platform to capture this information allows CxVBD to replay logic, report on and monitor decisions, simulate alternative approaches and provide some look-ahead capability. Here’s a quick screen shot:

In Chordiant Decision Manager all the decisions are managed in a proposition hierarchy and CxVBD allows any part of this hierarchy - down to the atomic decisions being made right now - to be analyzed by customer segment, channel, application and more. Targets can be defined and tracked against and the timeline can be controlled from years to hours to provide the level of detail you want. CxVBD provides an incredibly rich dashboard environment for analyzing and monitoring your decisions.

But it goes much further than that. Allowing you to change your decisioning approaches and see what impact such a change would have had or might yet have is central to CxVBD. This simulation shows the impact of a change not only on the outcome of that decision but on the other, related decisions in the system. If the outcome is what you expect or want, you can put the new approach into production directly turning your dashboard into a true business cockpit.

CxVBD has the power to usher in a new era of business management in which companies are able to measure and fine tune the impact of every customer-facing decision.

There’s also a short article at New Chordiant Cx CRM Simulation Solution Helps Enterprises Swim To Success.