Smart Enough Systems How to Deliver Competitive Advantage by Automating Hidden Decisions

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  • Edition: 1st
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  • Copyright: 2007-06-29
  • Publisher: Prentice Hall
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"Automated decisions systems are probably already being used in your industry, and they will undoubtedly grow in importance. If your business needs to make quick, accurate decisions on an industrialized scale, you need to read this book." Thomas H. Davenport, Professor, Babson College, Author ofCompeting on Analytics The computer-based systems most organizations rely on to support their businesses are not very smart. Many of the business decisions these companies make tend to be hidden in systems that make poor decisions, or donrs"t make them at all. Further, most systems struggle to keep up with the pace of change. The answer is not to implement newer, "intelligent" systems. The fact is that much of todayrs"s existing technology has the potential to be "smart enough" to make a big difference to an organizationrs"s business. This book tells you how. Although the business context and underlying principles are explained in a nontechnical manner, the book also contains how-to guidance for more technical readers. The bookrs"s companion site, www.smartenoughsystems.com, has additional information and references for practitioners as well as news and updates. Additional Praise forSmart (Enough) Systems "James Taylor and Neil Raden are on to something important in this bookthe tremendous value of improving the large number of routine decisions that are made in organizations every day." Dr. Hugh J. Watson, Chair of Business Administration, University of Georgia "This is a very important book. It lays out the agenda for business technology in the new centurynothing less than how to reorganize every aspect of how a company treats its customers." David Raab, President, ClientXClient "This book is an important contribution to business productivity because it covers the opportunity from both the business executivers"s and technologistrs"s perspective. This should be on every operational executivers"s and every CIOrs"s list of essential reading." John Parkinson, Former CTO, Capgemini, North American Region "This book shows how to use proven technology to make business processes smarter. It clearly makes the case that organizations need to optimize their operational decisions. It is a must-have reference for process professionals throughout your organization." Jim Sinur, Chief Strategy Officer, Global 360, Inc. Contents Foreword by Barbara von Halle xix Preface xxi Acknowledgments xx About the Authors xxv Introduction 1 The Smart Enough Systems Manifesto 5 Chapter 1 The Need for Smart Enough Systems 9 Chapter 2 Enterprise Decision Management 39 Chapter 3 Why Arenrs"t My Systems Smart Enough

Author Biography

Neil Raden is the president and founder of Hired Brains, a firm offering research and analysis services to technology providers as well as consulting and implementation services.

Table of Contents

Forewordp. xix
Prefacep. xxi
Acknowledgmentsp. xxii
About the Authorsp. xxv
Introductionp. 1
The Smart Enough Systems Manifestop. 5
Operational Decisions Are Importantp. 5
Organizations are perceived through the lens of the decisions they makep. 5
Lots of small decisions add upp. 6
All decisions an organization makes should be managed as though they are deliberatep. 6
Operational Decisions Can and Should Be Automatedp. 6
High-volume, operational decisions can and should be automatedp. 6
Traditional technology approaches won't succeed in automating decisionsp. 7
The overall effectiveness of automated decisions must be measured, tracked, and improved over timep. 7
Taking Control of Operational Decisions Is Increasingly a Source of Competitive Advantagep. 7
The Need for Smart Enough Systemsp. 9
The Importance of Operational Decisionsp. 9
Strategy Drives Decision Makingp. 11
Strategy Is Not Staticp. 12
Operational Decisions Matterp. 14
Operational Decisions Are Under Pressurep. 16
Operational Decision Making as a Corporate Assetp. 17
Characteristics of Operational Decisionsp. 18
Characteristics of Corporate Assetsp. 19
Introducing Smart Enough Systemsp. 21
Characteristics of Smart Enough Systemsp. 21
Current Approaches Failp. 32
Decision Management Is Requiredp. 35
Introducing SmartEnough Logisticsp. 36
Enterprise Decision Managementp. 39
Introducing Enterprise Decision Managementp. 39
The EDM Processp. 40
The EDM Definitionp. 41
Key Featuresp. 46
Characteristics of Decision-Making Problemsp. 48
Operational Decisionsp. 50
Hidden Decisionsp. 52
Finding Hidden Decisionsp. 56
Enterprise Decision Management and Smart Enough Systemsp. 59
The ROI for Enterprise Decision Managementp. 61
Cost Reductionsp. 65
Revenue Growthp. 78
Strategic Controlp. 82
Costs of Enterprise Decision Managementp. 93
Introducing Decision Yieldp. 96
Why Aren't My Systems Smart Enough Already?p. 101
How Did We Get Here?p. 101
Problems with Datap. 103
The Reporting Gapp. 103
Enter the Data Warehousep. 107
Business Intelligencep. 110
Operational Business Intelligencep. 111
Data Mining, Predictive Reporting, and Operations Researchp. 112
Problems with Programsp. 113
The Weight of Legacy Codep. 113
Artificial Intelligence and Expert Systemsp. 114
4GLs and Other User-Friendly Toolsp. 116
Business Rulesp. 116
Buying Solutionsp. 117
Processes and Servicesp. 118
Moving at the Speed of Peoplep. 118
The Training and Adoption Lagp. 119
Procedure Manuals and Intranetsp. 119
Knowledge Managementp. 120
SmartEnough's Experiencep. 120
Core Conceptsp. 125
Introductionp. 125
Finding the Right Decisionsp. 126
Decision Servicesp. 127
Data and Analyticsp. 129
Data Requirements for Decision Makingp. 130
Data Requirements for Analytic Insightp. 132
Uses for Analytic Modelsp. 134
Business Rulesp. 135
Adaptive Controlp. 140
Deploymentp. 143
More Informationp. 145
Data and Analyticsp. 147
Architectural Overview of Data and Analyticsp. 147
Concepts in Applying Analyticsp. 152
Different Types of Datap. 152
Internal and External Datap. 153
Event-Based and Stored Datap. 153
Characteristics of Predictive Analytic Modelsp. 154
Modeling Techniquesp. 155
Liftp. 159
Scorecardsp. 160
Variablesp. 162
Standardsp. 162
Technology for Managing Data and Analytic Modelsp. 163
Operational Databasesp. 164
Data Warehousesp. 164
Content Management Systemsp. 165
Search Enginesp. 165
Business Intelligence and Performance Managementp. 165
Stream-Processing-Enginesp. 166
Repositoriesp. 166
Data Preparation Toolsp. 166
Modeling Toolsp. 167
Model Deploymentp. 168
Automated Tuningp. 168
The Model Development Processp. 170
Determine the Desired Outcomep. 171
Determine Data Requirementsp. 172
Prepare the Datap. 172
Conduct Data Mining and Analysisp. 174
Develop the Modelp. 174
Validate the Modelp. 174
Deploy the Modelp. 174
Tune the Modelp. 175
Business Rulesp. 177
Architectural Overviewp. 177
Concepts in Business Rulesp. 178
Business Rulesp. 180
Rule Syntaxp. 181
Decision Flowsp. 182
Patternsp. 184
Rule Setsp. 184
Rule Set Metaphorsp. 186
Execution Modesp. 187
Semantics and Business Rulesp. 190
Metadata and Business Rulesp. 191
Model-Driven Design and Business Rulesp. 192
Rule Standardsp. 193
Business Rules Technologyp. 194
Repositoriesp. 194
Design Toolsp. 197
Business User Rule Maintenance Applicationsp. 198
Rule Templatesp. 200
Deployment Managementp. 203
The Rule Development Processp. 204
Rule Developmentp. 204
Rule Validation and Testingp. 206
Rule Maintenancep. 209
Rule Deploymentp. 209
Adaptive Controlp. 213
Architectural Overviewp. 213
Concepts in Adaptive Controlp. 216
Champion/Challenger Approachp. 216
Experimental Designp. 217
Optimization Techniquesp. 219
Decision Modelsp. 222
Efficient Frontierp. 222
Business Simulationp. 225
Adaptive Control Technologyp. 225
Modeling Toolsp. 225
Optimization Engine or Solverp. 226
Production Environmentp. 227
Simulation/Testing Environmentp. 228
Tools for Business Usersp. 228
The Adaptive Control Processp. 229
Champion/Challenger Setupp. 229
Experimental Designp. 230
Decision Analysisp. 230
Optimization Model Designp. 231
Simulationp. 232
Readiness Assessmentp. 235
Overview of Readiness Assessmentp. 235
Business and IT Collaborationp. 236
Data Readinessp. 236
Analytic Understandingp. 238
Willingness to Changep. 240
Management Focus on Operationsp. 243
Getting There from Herep. 245
Themes in EDM Adoptionp. 245
Adopting EDMp. 247
Piecemeal Approachp. 248
A First Business Rules Projectp. 249
A First Analytic Projectp. 260
Building Critical Foundations for EDMp. 268
Local Decision Managementp. 273
Integrating Rules and Analyticsp. 274
Using Champion/Challengerp. 284
Expansionp. 287
Improve the Decision Management Foundationsp. 288
Overlapping and Adjacent Problemsp. 291
Broaden the Analytic Basep. 295
Manage Scenariosp. 300
Steady State: Enterprise Decision Management for Realp. 301
What SmartEnough Logistics Didp. 309
Readiness Assessmentp. 309
Using Piecesp. 310
Decision Managementp. 311
Expansionp. 312
EDM Adoptionp. 312
Extending EDMp. 313
Integrated Decision Modelsp. 313
Time-Sequenced Decisionsp. 314
Automated Modification of Decisionsp. 315
Bringing Text into the Mainstreamp. 315
Independent Agentsp. 316
EDM and the IT Departmentp. 317
Complementing, Solving, and Enablingp. 317
Decision Services and the EDM Ecosystemp. 321
Concepts in Deploying Decision Servicesp. 322
Deployment Processp. 323
Complementing Your IT Architecturep. 325
Building on SOAp. 326
Completing Application Decompositionp. 329
Avoiding Brain-Dead Processesp. 330
Better Decisions, Not Just Better Datap. 335
Using Customer Interests and Social Mediap. 339
Solving IT Problemsp. 340
Ending Maintenance as You Know Itp. 340
The Requirements Tar Pitp. 343
Channel Consistencyp. 344
Multiplatform Consistencyp. 345
Commodity Enterprise Applicationsp. 346
Enabling IT Capabilitiesp. 349
Self-Servicep. 349
Making Mobile Matterp. 350
Smart Event Processing and Business Activity Monitoringp. 351
Model-Driven Engineeringp. 353
Smart Outsourcingp. 354
Corporate Performance Managementp. 355
Extending Your Software Development Life Cycle to Support EDMp. 357
General Approach to Adapting an SDLCp. 357
Rational Unified Process and UMLp. 360
Agile Approachesp. 363
Closing Thoughtsp. 367
Recap: Smart Enough Systemsp. 367
Why Now?p. 368
What Next?p. 370
Decision Yield as a Way to Measure ROIp. 373
Overview of Decision Yieldp. 373
Measuring Decision Yieldp. 376
Develop Questions to Assess Decision Performancep. 376
Calculate Your Yield for the Five Dimensionsp. 379
Compare Your Decision Yield to Othersp. 379
Using Decision Yield to Drive Planningp. 381
Conduct a Decision Auditp. 382
Optimize Decision Performance over Timep. 384
Evaluate Specific Opportunitiesp. 386
Closing Thoughtsp. 388
Indexp. 389
Table of Contents provided by Ingram. All Rights Reserved.


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