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

by Taylor, James; Raden, Neil

• ISBN13: 9780132347969
• ISBN10: 0132347962
• Edition: 1st
• Format: Paperback
• Copyright: 2007-06-29
• Publisher: Prentice Hall

Summary

"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

Foreword	p. xix
Preface	p. xxi
Acknowledgments	p. xxii
About the Authors	p. xxv
Introduction	p. 1
The Smart Enough Systems Manifesto	p. 5
Operational Decisions Are Important	p. 5
Organizations are perceived through the lens of the decisions they make	p. 5
Lots of small decisions add up	p. 6
All decisions an organization makes should be managed as though they are deliberate	p. 6
Operational Decisions Can and Should Be Automated	p. 6
High-volume, operational decisions can and should be automated	p. 6
Traditional technology approaches won't succeed in automating decisions	p. 7
The overall effectiveness of automated decisions must be measured, tracked, and improved over time	p. 7
Taking Control of Operational Decisions Is Increasingly a Source of Competitive Advantage	p. 7
The Need for Smart Enough Systems	p. 9
The Importance of Operational Decisions	p. 9
Strategy Drives Decision Making	p. 11
Strategy Is Not Static	p. 12
Operational Decisions Matter	p. 14
Operational Decisions Are Under Pressure	p. 16
Operational Decision Making as a Corporate Asset	p. 17
Characteristics of Operational Decisions	p. 18
Characteristics of Corporate Assets	p. 19
Introducing Smart Enough Systems	p. 21
Characteristics of Smart Enough Systems	p. 21
Current Approaches Fail	p. 32
Decision Management Is Required	p. 35
Introducing SmartEnough Logistics	p. 36
Enterprise Decision Management	p. 39
Introducing Enterprise Decision Management	p. 39
The EDM Process	p. 40
The EDM Definition	p. 41
Key Features	p. 46
Characteristics of Decision-Making Problems	p. 48
Operational Decisions	p. 50
Hidden Decisions	p. 52
Finding Hidden Decisions	p. 56
Enterprise Decision Management and Smart Enough Systems	p. 59
The ROI for Enterprise Decision Management	p. 61
Cost Reductions	p. 65
Revenue Growth	p. 78
Strategic Control	p. 82
Costs of Enterprise Decision Management	p. 93
Introducing Decision Yield	p. 96
Why Aren't My Systems Smart Enough Already?	p. 101
How Did We Get Here?	p. 101
Problems with Data	p. 103
The Reporting Gap	p. 103
Enter the Data Warehouse	p. 107
Business Intelligence	p. 110
Operational Business Intelligence	p. 111
Data Mining, Predictive Reporting, and Operations Research	p. 112
Problems with Programs	p. 113
The Weight of Legacy Code	p. 113
Artificial Intelligence and Expert Systems	p. 114
4GLs and Other User-Friendly Tools	p. 116
Business Rules	p. 116
Buying Solutions	p. 117
Processes and Services	p. 118
Moving at the Speed of People	p. 118
The Training and Adoption Lag	p. 119
Procedure Manuals and Intranets	p. 119
Knowledge Management	p. 120
SmartEnough's Experience	p. 120
Core Concepts	p. 125
Introduction	p. 125
Finding the Right Decisions	p. 126
Decision Services	p. 127
Data and Analytics	p. 129
Data Requirements for Decision Making	p. 130
Data Requirements for Analytic Insight	p. 132
Uses for Analytic Models	p. 134
Business Rules	p. 135
Adaptive Control	p. 140
Deployment	p. 143
More Information	p. 145
Data and Analytics	p. 147
Architectural Overview of Data and Analytics	p. 147
Concepts in Applying Analytics	p. 152
Different Types of Data	p. 152
Internal and External Data	p. 153
Event-Based and Stored Data	p. 153
Characteristics of Predictive Analytic Models	p. 154
Modeling Techniques	p. 155
Lift	p. 159
Scorecards	p. 160
Variables	p. 162
Standards	p. 162
Technology for Managing Data and Analytic Models	p. 163
Operational Databases	p. 164
Data Warehouses	p. 164
Content Management Systems	p. 165
Search Engines	p. 165
Business Intelligence and Performance Management	p. 165
Stream-Processing-Engines	p. 166
Repositories	p. 166
Data Preparation Tools	p. 166
Modeling Tools	p. 167
Model Deployment	p. 168
Automated Tuning	p. 168
The Model Development Process	p. 170
Determine the Desired Outcome	p. 171
Determine Data Requirements	p. 172
Prepare the Data	p. 172
Conduct Data Mining and Analysis	p. 174
Develop the Model	p. 174
Validate the Model	p. 174
Deploy the Model	p. 174
Tune the Model	p. 175
Business Rules	p. 177
Architectural Overview	p. 177
Concepts in Business Rules	p. 178
Business Rules	p. 180
Rule Syntax	p. 181
Decision Flows	p. 182
Patterns	p. 184
Rule Sets	p. 184
Rule Set Metaphors	p. 186
Execution Modes	p. 187
Semantics and Business Rules	p. 190
Metadata and Business Rules	p. 191
Model-Driven Design and Business Rules	p. 192
Rule Standards	p. 193
Business Rules Technology	p. 194
Repositories	p. 194
Design Tools	p. 197
Business User Rule Maintenance Applications	p. 198
Rule Templates	p. 200
Deployment Management	p. 203
The Rule Development Process	p. 204
Rule Development	p. 204
Rule Validation and Testing	p. 206
Rule Maintenance	p. 209
Rule Deployment	p. 209
Adaptive Control	p. 213
Architectural Overview	p. 213
Concepts in Adaptive Control	p. 216
Champion/Challenger Approach	p. 216
Experimental Design	p. 217
Optimization Techniques	p. 219
Decision Models	p. 222
Efficient Frontier	p. 222
Business Simulation	p. 225
Adaptive Control Technology	p. 225
Modeling Tools	p. 225
Optimization Engine or Solver	p. 226
Production Environment	p. 227
Simulation/Testing Environment	p. 228
Tools for Business Users	p. 228
The Adaptive Control Process	p. 229
Champion/Challenger Setup	p. 229
Experimental Design	p. 230
Decision Analysis	p. 230
Optimization Model Design	p. 231
Simulation	p. 232
Readiness Assessment	p. 235
Overview of Readiness Assessment	p. 235
Business and IT Collaboration	p. 236
Data Readiness	p. 236
Analytic Understanding	p. 238
Willingness to Change	p. 240
Management Focus on Operations	p. 243
Getting There from Here	p. 245
Themes in EDM Adoption	p. 245
Adopting EDM	p. 247
Piecemeal Approach	p. 248
A First Business Rules Project	p. 249
A First Analytic Project	p. 260
Building Critical Foundations for EDM	p. 268
Local Decision Management	p. 273
Integrating Rules and Analytics	p. 274
Using Champion/Challenger	p. 284
Expansion	p. 287
Improve the Decision Management Foundations	p. 288
Overlapping and Adjacent Problems	p. 291
Broaden the Analytic Base	p. 295
Manage Scenarios	p. 300
Steady State: Enterprise Decision Management for Real	p. 301
What SmartEnough Logistics Did	p. 309
Readiness Assessment	p. 309
Using Pieces	p. 310
Decision Management	p. 311
Expansion	p. 312
EDM Adoption	p. 312
Extending EDM	p. 313
Integrated Decision Models	p. 313
Time-Sequenced Decisions	p. 314
Automated Modification of Decisions	p. 315
Bringing Text into the Mainstream	p. 315
Independent Agents	p. 316
EDM and the IT Department	p. 317
Complementing, Solving, and Enabling	p. 317
Decision Services and the EDM Ecosystem	p. 321
Concepts in Deploying Decision Services	p. 322
Deployment Process	p. 323
Complementing Your IT Architecture	p. 325
Building on SOA	p. 326
Completing Application Decomposition	p. 329
Avoiding Brain-Dead Processes	p. 330
Better Decisions, Not Just Better Data	p. 335
Using Customer Interests and Social Media	p. 339
Solving IT Problems	p. 340
Ending Maintenance as You Know It	p. 340
The Requirements Tar Pit	p. 343
Channel Consistency	p. 344
Multiplatform Consistency	p. 345
Commodity Enterprise Applications	p. 346
Enabling IT Capabilities	p. 349
Self-Service	p. 349
Making Mobile Matter	p. 350
Smart Event Processing and Business Activity Monitoring	p. 351
Model-Driven Engineering	p. 353
Smart Outsourcing	p. 354
Corporate Performance Management	p. 355
Extending Your Software Development Life Cycle to Support EDM	p. 357
General Approach to Adapting an SDLC	p. 357
Rational Unified Process and UML	p. 360
Agile Approaches	p. 363
Closing Thoughts	p. 367
Recap: Smart Enough Systems	p. 367
Why Now?	p. 368
What Next?	p. 370
Decision Yield as a Way to Measure ROI	p. 373
Overview of Decision Yield	p. 373
Measuring Decision Yield	p. 376
Develop Questions to Assess Decision Performance	p. 376
Calculate Your Yield for the Five Dimensions	p. 379
Compare Your Decision Yield to Others	p. 379
Using Decision Yield to Drive Planning	p. 381
Conduct a Decision Audit	p. 382
Optimize Decision Performance over Time	p. 384
Evaluate Specific Opportunities	p. 386
Closing Thoughts	p. 388
Index	p. 389
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

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