Since we are still in January, it is appropriate to post my predictions for the year, isn’t it? Now that I am free from my day-to-day responsibilities with a vendor, I can also spend more time thinking about those kinds of things, which never made it to my blog before…
Decision Management is an interesting space, very dynamic with the many acquisitions and even more relevant now with the global economic situation. I have spent my whole career making and watching this discipline, in the early days from a pure technology angle with an AI background, then advocating and selling ILOG (now acquired by IBM) technology but more recently building the decision management tools strategy for FICO. As a result, my predictions my be tainted with a technology outlook. Now you know my bias!
1. Stress Testing your Decisions under Uncertainty
Given my previous post on uncertainty, Decision Modeling could not be omitted from my list of predictions. Plotting the business outcome of a change in direction is the miracle everyone dreams about. Access to Stress Testing tools is still limited to an élite unfortunately. Designing a good model can take months for a domain expert. This is an area where tools and technology will need to evolve to become more usable by “normal” people. 2010 will aim at educating the market on this under-utilized discipline, and I will contribute actively in this blog.
2 . Measuring Success
The related low-hanging fruit for the industry is Decision Performance Monitoring (DPM), which is the term I came up with to cover Business Activity Monitoring (BAM) but applied more widely to business performance rather than specifically to information flow. I am not married to that term of course and as always we will eventually settle on one after generating many different variations…
The interesting aspect here is to monitor the value of decisions. This has been a pretty important value brought by Business Process Management (BPM) products. Operationalizing the practice and extending its scope to business decisions rather than technical aspects of those decisions will add value to the business owners within the enterprise. Dashboards and other forms of insights (notifications, alerts, etc.) will spread quickly once those business users will get a taste of it.
3. Lowering Risk with Better Forecasts
I posted a few months ago in edmblog an article on the momentum I saw in the marketplace for Predictive Analytics. Why is that? Simply because many business realize that they have been shooting darts in the dark. Backing decisions with data feels safer of course but it does create a competitive advantage. Assume that a population of clients are available out there, if you had a way to measure risk or potential revenue, you would be able to cherry-pick who to go after, who to decline, leaving the bad apples to your competitors. Although some models have not worked too well for the mortgage industry, it had to do with the wrong or lazy assumptions we applied rather than the potential of the technology. On the contrary, one of the lessons learned was the importance of a good predictive model!
This demand is real. I have seen a huge increase in end-user demand for such technologies. While the Financial Services industry has been a traditional consumer of Predictive Analytics, many others are now also trying to get educated on the subject. There is still a lot of confusion between the various types of analytics and more specifically Business Intelligence and Predictive Analytics. I foresee that this trend will continue in 2010, still focusing more on education without necessarily translating into significantly increased adoption yet.
4. Clouding your judgment?
The economy has definitely changed the way businesses are looking at technology investment, shifting capital expenditures (CapEx) towards operational expenditures (OpEx). The goal being to lower the costs, I am not sure that all businesses are actually considering too much the total cost of ownership (TCO) as the primary objective. In the current economy, the focus is on the initial risk, the initial stakes. With a pay-as-you-go model such as Cloud offerings, corporate buy-in may be easier to get. Less initial licenses and installation cost and duration is appealing for business applications deployed as a Service (SaaS). Salesforce.com is the example on everybody’s mind.
Platform-as-aService (PaaS) does not enjoy the same pace of adoption. Low level services have become available in 2009. Decision Management remains under-represented. Sandy Kemsley (http://www.kemsleydesign.com/) presented at Business Rules Forum (http://www.businessrulesforum.com/) 2009 an interesting state-of-the-art intro to Business Process Management (BPM). It is still quite immature though with mostly design capabilities exposed for collaboration rather than full execution. This may evolve this year as Microsoft Azure is now finally also available as a credible player, pushing the Amazon and Salesforce.com competition to the next level. I expect that we will get some traction there in 2010.
I have had a number of conversations with Industry Analysts on this subject. There seems to be a consensus about the slow demand for Decision Management on the Cloud so far. I believe this will evolve quickly when underlying Cloud Computing platforms evolve and Business Tools become more accessible.
5. Complex Technology Choices
Technology decisions are always difficult… How to know what technology to use? Is this a good fit? Is this the best fit? How do I know it will accommodate my needs for the longer term?
After a few excruciating years, we finally got a consensus as far as Business Process Management (BPM) and Business Rules Management Systems (BRMS). Now we see more activity and confusion around Complex Event Processing (CEP). Some claim it replaces BPM. Others claim it replaces BRMS. In reality, I believe it does overlap a little but mostly it is an execution algorithm that will fit within one or the other, or may remain a separate piece of the modern architecture. It certainly does not cover all that BPM or BRMS aims to cover.
2010 will see an increase in CEP adoption as a result of the hype initiated in the marketplace but I am afraid that we will see many disappointing failures. Not because CEP is not a good technology but because its over-promises in capabilities or applicability. Projects will miss the mark in terms of business user management (which is truly the main goal of BRMS) or in terms of document management and other BPM capabilities.
I do wish we collectively do a better job at categorizing those technologies such that the marketplace understands what to use and when… Confusion may seem like an appealing marketing strategy but I am convinced that it always bites back. The industry would be better served with clarity.
6. Business Users at the Helm
Decision Management is a Business discipline, supported by technology of course. We tend to forget who the main constituent is though. Tools have been developed sometimes with the business user in mind but way too often for the usage of technical users. Developed by developers for developers, user interfaces remain often techie. Even when tools offer a business view into the decisions, their implementations do not always reflect those capabilities.
With the on-going requirement for lean, and the vocal involvement of key industry analysts such as Jim Sinur from Gartner (http://blogs.gartner.com/jim_sinur/2010/01/20/rule-representation-the-potential-showdown/) and Mike Gualtieri from Forrester, I expect that more attention will be given to the choices of representation.
Forrester emphasized the Business Technology transformation at Forrester Business Technology Form in Chicago late last year. I do agree that empowered business owners will want to take charge and IT will have to speak their language more than they have in the past. This will accelerate the evolution promoted by thought leaders in the industry.
7. A Few Good Men
Well, I will not argue that you can’t handle the truth… We all know that the industry is Consolidation at the speed of light. Giant platform vendors like IBM are absorbing smaller technology vendors in the Decision Management space like crazy. This covers Business Rules Management Systems (BRMS) of course but more aggressively Business Intelligence (BI) — to the point where there seem to be no independent vendors left! — Business Process Management (BPM) and Optimization and Analytics companies.
The BPM space is actually changing pretty dramatically with very few independent vendors left. Global 360, Metastorm and K2 come to mind. So the main question that comes to mind is what that means for the market. All seems to indicate that the big platform vendors: IBM, Microsoft, Oracle and SAP are beefing up those capabilities and will be busy in 2010, likely translating in little innovation. Yet again, smaller nimble players may be what we should be looking at. In 2010, some of them may end up gobbled up as well, leaving the space pretty sterile for a little while.
Don’t take me wrong. This is not necessarily a bad thing. This will open the door for new modern technologies to develop in the coming year to fill the gap. I am sure this will be an interesting year to watch. I am glad I got a front-row seat!
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