James Taylor's Decision Management

James Taylor

Putting uncertainty to work in your systems

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Gary Cokins had a post recently titled "Are Performance Management and “Uncertainty Management” Synonymous?' in which he discussed performance management and uncertainty management. He makes the great point that the purpose of analytics should be to deal with uncertainty, not just analyze the past. He goes on to give a great example of a company analyzing their data to see what might help them predict which customers were a retention risk and how valuable this was.
What he does not really discuss is how to put this uncertainty to work in operational systems. Having figured out what predicted retention risk - having turned that uncertainty into a probability - the company had to put it to work. They did this by identifying a decision - whether or not to make a retention offer to a particular customer - by embedding that decision in their process(es) and by making that decision based on the analytic model they had developed. Without the decision point in the operational processes they would have got far less value. They would have gained understanding certainly but they would not have been able to take the thousands of small retention actions that made a difference.

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James,

Managing with uncertainty is hugely important to enterprise systems.

I think there is a need for a discussion of how to measure the accuracy of the uncertainties.

My particular interest is in quantifying process flow uncertainties. For example, what is the probability that the enterprise will need to ship more than 10,000 widgets this month?

But for this statement to be of operational value (to the supply chain in this case), the enterprise needs to have confidence in its accuracy.

How do you or your reader's think the accuracy of statements of quantified uncertainty should be measured?

Also, do folks distinguish approaches in measuring the accuracy of uncertainties of populations (e.g., people requesting increases in credit lines) vs. uncertainties of process flows (e.g., probability that 90% of loans currently in pipeline will be processed within next 28 days)?

Look forward to the discussion ...

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James is one the leading experts in enterprise decision management, a published author and a principal of Smart (enough) Systems LLC. His blog discusses the use of decision management technologies like predictive analytics and business rules to deliver agility, improve business processes and bring intelligent automation to SOA.

James Taylor

James Taylor blogs on decision technologies for ebizQ, and is also a consultant on business analytics, decision management, rules, and process management. He works with clients to identify and bring to market advanced decision management solutions that will better solve their business needs. Taylor is widely considered a leading expert and visionary in enterprise decision management, and has recently authored a book, available here. For more information please contact Mr. Taylor at james@smartenoughsystems.com.


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