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Interview with Fair Isaac VP James Taylor on EDM and Smart (enough) Systems

Say hello to Enterprise Decision Management, or EDM for short. EDM is the new buzzword that business rules folks are buzzing about lately.

It sounds like it was dreamed up by marketers to put a new spin on something that great companies have been doing all along, albeit probably manually. In fact, it’s a great acronym invented by James Taylor, Vice President of Enterprise Decision Management at Fair Isaac, to describe what their customers were essentially doing with Fair Isaac’s Blaze Advisor rule engine: Building smart rule-based systems to manage and automate decisions.

It turns out that all sorts of companies are using business rule engines to build EDM applications. James just figured this out first and gave it a great name. By now many of the leading BRE vendors are probably updating their marketing materials with the EDM buzzword.

(shameless plug – I just added EDM to the BIZRULES website in the decisioning solutions page.)

James just published a new book, along with co-author Neil Raden, about EDM and their ideas for building smarter systems. I had an opportunity to chat with James recently and interview him about his new book called, appropriately enough, Smart (enough) Systems. (see http://www.smartenoughsystems.com/wp/main

BIZRULES: Tell us about your new book, Smart (enough) Systems 

Taylor: The book is being published by Prentice Hall Professional, and it describes how companies can use the computer-based systems they have in place rather than purchasing new ones to build smarter systems - and how these systems can help companies thrive through Enterprise Decision Management.  

BIZRULES: Is the audience for the book IT or business people?

Taylor: Well yes. Seriously though, the book is aimed at people who sit on the intersection of business and technology. Business people who are familiar with the systems that support their business and who realize that their business IS their systems to a great extent. Technology people who care about the business problems their users are trying to solve and who have perhaps spent long enough supporting a particular line of business to understand the issues of the business.  

BIZRULES: Tell us a little bit about yourself and Neil.

Taylor: I have a background in development and product management and have spent the last few years working at Fair Isaac talking to customers, analysts and the market in general about how best to use business rules and predictive analytics to solve business problems. Neil is a consultant, author and speaker in Business Intelligence, Advanced Analytics, Decision Automation and the complex integration of information technology in organizations.

BIZRULES: How did you two you get the idea for the book?

Taylor: Well I have been writing about enterprise decision management and using business rules and analytics to make systems smarter for some time – particularly on my blog (www.edmblog.com) and in articles and white papers. It seemed to me that a book was needed to pull all the various threads around the topic together in one place. A book provides more space for developing themes than either articles or blogs and that was important. I met Neil while I was still thinking about how to go about it and it was clear that he was approaching the same problem from a different perspective and that the two of us would do a better job of the book than either of us would alone.

BIZRULES: What do you mean by "smart (enough) systems"?

Taylor: When we were picking a title we thought about the kinds of systems we were trying to help people build and realized that we were talking about embedding some “intelligence” into them but not in the sense of AI/Expert Systems intelligence. We were not proposing the use of some esoteric technologies to make “smart” systems (a term most IT people now regard as one of those things that never get any closer) but to make them just smart enough to be useful. Hence, smart (enough) systems.

BIZRULES: Are these systems "smart enough" to help you keep up with the competition, or are they "smart enough" to actually give you a competitive edge? 

Taylor: To some extent that depends on your competition. They are potentially able to give you a competitive edge, especially if you focus on the management of those decisions so that you can keep evolving and changing them over time. Even if your competitors try and copy you, your data and your know-how drive your decisions and so you will remain distinct. It’s also true that these kinds of systems let you standardize on ERP/CRM systems and process templates that everyone uses while still making you feel different from others who use the same systems – your decisions are different and so interacting with you is also different. Of course if you embed a poor strategy in your decisions then you will still be in trouble…

BIZRULES: What's the link between smart systems and EDM?

Taylor: Smart enough systems are what you need and EDM is a structured, proven approach to delivering those kinds of systems. EDM focused on the automation and improvement of decisions within information systems and it is his focus that enables you to make the systems that use those decisions smarter.

BIZRULES:  What are the differences or similarities between EDM and BRM (business rules management)?

Taylor: EDM builds on business rules management. If you think about how people make decisions, they use rules and their understanding of data. They combine regulations, policies, rules or thumb and the insight they get from reports and dashboards. EDM uses business rules and predictive analytics to replicate these two dimensions in automated decisions. You would not take a business decision today without considering what your data told you and your automated decisions should be no different. Business rules, however, are by far the best way to start automated decisions as they provide a mechanism to engage business users in their systems and to make the decisions agile, both critical in EDM.

BIZRULES: Where did the term EDM come from?  Is EDM more of an approach or strategy, or is it really software that you can buy or build?

Taylor: EDM came from a need to label something we saw happening – we saw people building systems that used business rules and predictive analytics to make complex, operational decisions and wanted a short hand way to describe the approach they were taking. EDM came from Enterprise – treating decisions as an enterprise asset – Decision – obvious – and Management – because it turns out that the management and constant improvement of decisions is the most important aspect because the right decision is a moving target. EDM is an approach enabled by COTS software and established methodologies – a new way to bring existing development tools to bear to solve problems more effectively.

BIZRULES: Is EDM the new term for BRE or BRMS? 

Taylor: Not really. A BRMS is a software product and EDM more or less requires you to use one. I do think that anyone serious about adopting a BRMS should be thinking about EDM as a framework for that adoption.

BIZRULES: EDM sounds like a type of application you would build using a BRMS or BRE. Are there any other types or classes of applications specifically designed to use BRMS technologies? Maybe Decision Support Systems (DSS) or Expert Systems (ES)? 

Taylor: One reason for EDM is to clarify the best use of BRMS – that of building decision services that answer business decisions for other services and applications. You can use business rules as a technology in a decision support system or to correlate events in a Complex Event Processing (CEP) environment or to control workflow in a BPMS but that is not the same. You can use business rules for lots of things but if you are going to invest in a BRMS to manage your rules then I think you should be thinking about decisions, decision services, decision management and, ultimately, EDM.

BIZRULES: Where does EDM fit into the architecture or structure of the corporation? i.e. how does it fit into an enterprise architecture framework?

Taylor
: EDM, like CRM, requires changes to an Enterprise Architecture, primarily in terms of requiring decisions to be treated as an important class of service. A company adopting EDM will need to reflect that in its Enterprise Architecture.

BIZRULES: I still remember CRM and SCM. Then came BPM and BRM. Now it's EDM. What comes next?  We're running out of letters!  

Taylor: EDA? I am sure we will continue to develop new TLAs to put handles on approaches as it is just too easy to do. I think EDM is very additive to all these other things, however. EDM makes for smarter processes (improving BPM), adds value to your use of BRM, makes it possible to automate customer treatment decisions for better CRM and so on.  

BIZRULES: Where do the decisions for EDM come from?

Taylor: From the diamonds in process diagrams, from the high-maintenance components of legacy systems, from the moments when you can treat customers individually, when you assess something, price something, validate something and much much more.    

BIZRULES: Yes, of course, many decisions are represented in the diamonds (i.e. decision points,) in process maps.  Many decisions come from the internal micro-decisions and macro-decisions that companies make. Do they also come from external regulations or rules as well?  

Taylor: The application of regulations is almost always through how decisions are made. What options are and are not allowed for instance. Thus, external regulations are often relevant and the point in your process where you must apply those regulations is a good candidate for a suitable decision point. Another reason business rules are such a great foundation is because they are so good at representing and managing regulated decisions.

BIZRULES: Are the decisions in EDM made by business rules?

Taylor: Business rules are almost always the foundation, they may be analytically derived and they may well use predictive analytic models too but business rules are the foundation.  

BIZRULES: How do you document or specify what the decisions are in EDM solution?

Taylor: Mostly using rules, decision or ruleflow, and analytic models. Typically decisions are going to be implemented using decision services and so will have additional service documentation and will have analysis artifacts linked to higher level concepts in your development approach.  

BIZRULES: Any link between EDM and SOA?

Taylor: Lots! One of the key concepts in the book is that of Decision Services, a class of service that is about making a decision, not about managing data or process or user interaction. Focusing on decision services, identifying them, and using EDM to manage them will make for a more effective SOA in the same way that thinking about BPM and SOA together will make your SOA better able to support processes.  

BIZRULES: Thanks James. Congratulations on your new book, and keep up the great work making systems smarter!

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