Event processing and decision management: Best practices, best outcomes

Events, decisions, actions: They happen all day long, every day, across business processes and at different levels in the organization.

The ultimate business goal in all this activity: staying competitive, agile and responsive to changing market conditions. Setting strategy and establishing best practices for decision management and event processing can help organizations obtain more agile, precise and consistent results.

In reality, though, experts say few companies set strategy or create best practices for decision management and event processing. That’s because the adoption of those disciplines, and even business process management itself, typically remains at early stages, with executive management just starting to get on board.

Nevertheless, those same experts say strategy and best practices are necessary to optimize outcomes as well as save time and money.

The good news, which we’ll explore in this issue of ebizQ’s Business Agility Insights e-zine: There’s no time like the present to get started.

“Companies can learn from those who have already gone down this path,” says Wayne Eckerson, industry consultant and director of research at ebizQ’s parent company TechTarget.

So what is decision management? Author and consultant James Taylor, CEO of Decision Management Solutions, uses this definition: “Decision management is a business discipline and technology stack that builds on existing enterprise applications and IT infrastructure, leveraging data to manage uncertainty, increase transparency and give the business control of their systems. Decision management is a framework for implementation of business rules, data mining and predictive analytics.”

At the core of decision management is what’s called operational decision management—that is, the decisions that are routinely made day in and day out by employees for operations to run effectively.

Meanwhile, event processing, or the management of events, is ingrained in business process. Examples of business events: purchase orders, address changes, credit card transactions and the delivery of a package—to name just a few--are carried out by employees. As with decision management, setting strategy and best practices for event processing can add value to how organizations handle events, such as offering better customer service or responsiveness, for example.

Event processing--and situational awareness--can help companies be more agile by using real-time data to make decisions and take action much faster. Competitors who are able to make decision faster are more competitive.

Widely viewed as a fast-growing area of opportunity, decision management combines software and expertise to automate and improve decisions making within critical business systems, says Cheryl Wilson, a program manager at IBM.

Decision management—which is less of technology than a business discipline--uses complex event processing (CEP), business process management (BPM) and business rules, says Mike Gualtieri, principal analyst at Forrest Research. In other words: Decision management doesn’t map to one technology; it maps to multiple technologies.

“When it comes to decision management, companies want two things: They want to make good decisions, and they need decision management to scale across the organization,” Gualtieri says.

To attain these two objectives, companies need strategy, best practices, and technology.

First on the to-do agenda is strategy, which sets a foundation for clear business outcome. “Strategy allows the organization to fast forward and communicate clearly with C-level executives about what they’re trying to do short-term and long-term,” says IBM Fellow Kerrie Holley.

Strategy must link to an expected outcome. “This might be a tough conversation, but the downside of not setting strategy and best practices is a disconnect between what the CEO wants and what is being done operationally,” Holley says.

Experts say that, today, most companies are not systematic about decision management and event processing. For companies set on improving that situation, industry experts offer best practices based on lessons learned across industries:
1. Automation.Determine what decisions can be automated and will benefit most from automation. You should have a good rationale for doing decision management and event processing. Examine the upside of doing one or the other—or the downside of not doing them.

2. Value. Begin with high-value decisions or highly variable decisions.

3.Scale. Start small with a particular process or application in a pilot setting. This helps prevent matters from quickly becoming complicated.

4. Rules. When developing rules, do so in conjunction with the business people or the representative of the business policy.

5. Prototype. Build a prototype and show it to the business people at run-time. Have users confirm that the prototype contains the right indicators, and that the right events have the right indicators. This approach provides information on whether the approach needs to change and can help sell the project to C-level executives.

Some additional advice from the experts:

--Determine whether the organization has the data to make the necessary decisions.

--Look into acquiring an analytic tool to create a decision model.

--Conduct decision management and event processing at the same time as the process and data modeling.

READER FEEDBACK: Does your organization have an event processing or decision management strategy in progress? If so, ebizQ editors would like to hear about your experience. Contact Site Editor Anne Stuart at editor@ebizq.net.

About the Author

Lynn Haber is a Boston-area freelance writer who specializes in writing about business and technology. Contact her at lthaber@comcast.net.

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