EDM and interesting business technology trends

(Posted by guest blogger, James Taylor)

I saw this interesting report on the McKinsey Quarterly "Eight business technology trends to watch" and, as many McKinsey Quarterly reports do, it made me want to write something by way of follow-up. It was a great list of topics and is worth reading for sure but four of them really made me think about the role of EDM or enterprise decision management in these trends.

4. Extracting more value from interactions

This topic has a couple of interesting EDM angles. Firstly they make a note about there being more automation of simple transactions. While this is true, the use of EDM to manage and automate decisions allows the automation of more complex ones too. For instance, no-one would regard insurance underwriting as a "simple transaction" yet a growing number of insurance companies are, indeed, automating this thanks to the ability of business rules, predictive analytics and adaptive control to handle the decision making at the heart of the transaction. The McKinsey folks imply that a lot of automation is done but I think most companies are still scratching the surface when it comes to the proper automation of decisions and thus of the transactions that include those decisions.

The report goes on to discuss how to add more value to interactions that are more complex and this is squarely in the realm of decision support kinds of systems you might think. In fact I believe that interactions can be improved by freeing those managing the transactions from a certain amount of decision making. Instead of giving them data and asking them to figure out the value of a customer, why not tell them? Instead of asking them to analyze plans to offer the best one why not tell them? There is also much to be gained by having them put their expertise into the decision ("this customer is upset","this complaint is a reasonable one") and having that become part of the automation. EDM can help with these interactions, not just with transactions.

5. Expanding the frontiers of automation

This is clearly a bit of a "gimme" where EDM is concerned. In particular, though, I thought their discussion of the value of interconnected decisions was relevant. Making decisions at one stage of a customer lifecycle while considering later stages is clearly both expanding the frontiers of automation and an intensely useful activity. Their general focus on "customer service" and other broad areas also resonated with me as these are the areas that benefit for consistent decision making across channels, across time and across staff - one of the key benefits of an EDM approach. As McKinsey said there is substantial headroom for more automation of repetitive tasks. They correctly note the possible impact on customers so make sure you are not just using automation to mindlessly drive down costs.

6. Unbundling production from delivery

The unbundling of production from delivery leads to many interesting things. The report talks about billing for use in ever smaller increments which, of course, leads to micro decisions especially for micro pricing decisions. There is also a need to manage complex decision making in trade-offs when companies make their assets available for others to use as now potential competitors are using the same services a company uses itself - think about Amazon and its cloud computing for instance.

7. Putting more science into management

The big one. The report focuses on an ever greater volume of information and the need to be more analytic about using it but there is also a clear link to automation. Indeed many of the examples of analytics in the report are using EDM to turn that analytic insight into operational excellence. After all, deep customer insight requires data but cannot be delivered to a complex business without operational execution also. Indeed more and more of the examples (amazon.com, the online recommendation engine, CapOne) use automation to deliver this value to their front line.

There is a lot going on in technology these days but organizations wanting to stay ahead of the curve should make sure that EDM is one of the tools they have available to exploit it.

Some links that seem relevant include:

• My review of Competing on Analytics
• Micro decisions

By the way, Ron Dimon also blogged about it here and he made a couple of good points too.

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Comments

[David Wright]

The one trend you didn't mention is "1.Managing relationships". It speaks to one of my other interests these days, Web 2.0 and its use for business as well as play. Don Tapscotts recent book "Wikinomics" covers this space well.

So, the $64,000 question: how do Web 2.0 and EDM relate, if at all?

[Carole-Ann Matignon]

Well I posted this - http://smartenoughsystems.com/wp/2007/12/03/web-20-social-media-and-decision-management/ - and that should give you a feel.
JT

[Venkat]

Interesting that you chose to highlight almost exactly the ones I wouldn't have :) I'd have picked 1, 2, 3 and 4. But that could be because of the particular problems I am working on at the moment. Here is my review of Competing on Analytics:

http://www.ribbonfarm.com/2007/07/22/book-review-competing-on-analytics/

Venkat