Lessons learned in 2009 – Dealing with uncertainty

on January 12, 2010
SMARTS™ Data-Powered Decision Management Platform

2009 has been a rough year for the business.  We had to deal the aftermath of the 2008 economic crisis and start rebuilding.

In those times, I try to keep a French proverb in mind “À quelque chose malheur est bon”.  It literally means “Unhappiness is good for something”.  In the US, we would rather say “Every cloud has a silver lining”.  Given the emergence of Cloud technology as a consequence of the recession, it seems to be quite appropriate.

Capital vanished into thin air, confidence went down the drain as well.  Most businesses had to do more with less in those circumstances.  the industry focused on better managing finances to run operations.  Cloud computing, Software as a Service, that technology with many names, became attractive to finance new projects or to reallocate Capital Expenditures into Operational Expenditures.  Less risk, faster execution.  Sounds logical.

How we got there though was in my mind a more interesting ounce of wisdom that, if well applied, could turn into real value.  Nassim Taleb captured it quite well in the Black Swan.  In addition to expected changes — those regulations that are announced in advanced, competitive product announcements, or predictions of the market — there are unexpected changes that need to be dealt with.  They may be totally unexpected or events with a probability so low nobody is getting ready for it — the unknown unknowns.  Those will never be taken out of the equation.  Although we may be tempted to at times, it would only lead to incomplete, insufficient models such as those that brought us where we are.

Learning to live with those unknowns, learning to better handle uncertainty is a skill that became more appreciated in 2009 and that business will start developing more in 2010 and beyond.  Our systems should help us made decisions that are not so sensitive to market conditions we believe are here to stay.

Jim Sinur at Gartner is spot on in his blog post (http://blogs.gartner.com/jim_sinur/2010/01/06/bpm-and-business-rules-its-not-just-about-agility/) about business agility.  Agility is what we all know is required in our systems but it is not enough.  New capabilities such as Decision Simulation and Decision Optimization are key.

I am predicting that 2010 will see a lot more emphasis on this topic.

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