Performance Management and Agility James Taylor, CEO About me Independent consultant working with clients to help automate and improve decisions Previously a VP at Fair Isaac where I developed the concept of Decision Management 20 years experience in all aspects of software including time in PeopleSoft R&D and at Ernst & Young Blogger, speaker, writer [email protected] The one slide you need Performance Management measures and monitors supports people who make decisions But systems make decisions too Decision Management makes system decisions explicit The combination builds cockpits not dashboards AGENDA 1 2 3 Performance Management or Performance Monitoring The pilot analogy From dashboards to cockpits with Decision Management Performance Management or Performance Monitoring? ©2009 Decision Management Solutions5 The power of performance management Greater agility Understand drivers Better decisions Manage risk Control performance Manage opportunities Control Understanding ©2009 Decision Management Solutions 6 The barriers to performance Greater agility Understand drivers Better decisions Manage risk Control performance Manage opportunities Control  People  Computers Understanding  Macro  Micro ©2009 Decision Management Solutions 7 Reality check People don’t make many of the decisions in your business Systems do Risk and opportunity do not come only in strategic lumps But operationally, one transaction, or one customer at a time ©2009 Decision Management Solutions 8 The pilot analogy The business executive as fighter pilot But cockpits have controls not just dials And planes have auto pilots And pilots learn on simulators Decision Management Automates decisions So your systems have an auto pilot Exposes how decisions are made So you have knobs and dials Allows for simulation So you can experiment and learn ©2009 Decision Management Solutions 14 From dashboards to cockpits ©2009 Decision Management Solutions 15 Decision Management is A business discipline that builds on existing enterprise applications to put data to work manage uncertainty increase transparency give the business control ©2009 Decision Management Solutions 16 5 principles of decision management Little decisions add up so focus on operational decision making The purpose of information is to decide so put your data and analytics to work You cannot afford to lock up your logic so externalize it as business rules No answer, no matter how good, is static so experiment, challenge, simulate, learn Decision Making is a process so manage it ©2009 Decision Management Solutions 17 Decisions drive actions A choice, a selection Made after consideration Results in action not just knowledge ©2009 Decision Management Solutions 18 The business value of decisions Type Strategy Tactics Operations Low Economic impact High “Making information more readily available is important, but making better decisions based on information is what pays the bills.” James Taylor & Neil Raden Smart (Enough) Systems 20 Business rules for agility, transparency If customer is GoldCustomer and Home_Equity_Loan_Value is more than $100,000 then college_loan_discount = 0.5% If member has greater than 3 prescriptions and prescription’s renewal_date is less than 30 days in the future then set reminder=“email” If patient’s age is less than 18 and member’s coverage is “standard” and member’s number_of_claims does not exceed 4 then set patient’s coverage to “standard” Analytics add business insight Business Intelligence Descriptive Analytics X X X X X X X X How do I use data to learn about my customers? What has been happening in my business? Knowledge - Description X Optimization/Simulation X X X X X X X Predictive Analytics X X X X X X X X XX X X X XX XX X X X XXX X X X X XXX X X X X XX X X XX X X X X X X X X X X X X X Who are my best/worst How are those customers customers? How do I turn likely to behave in the future? my data into rules for better How do they react to the decisions? myriad ways I can “touch” them? How do I leverage that knowledge to extract maximum value from my marketing investments? Action - Prescription 22 Reduce time-to-action Business event Decision latency Action taken Delivering Decision Management 3 stages to better operational decisions Identify the decisions (usually about customers) that are most important to your operational success Design and build independent decision processes to replace decision points embedded in operational systems Create a “closed loop” between operations and analytics to measure results and drive improvement ©2009 Decision Management Solutions 24 The Decision Management technology stack Business Process Management Web Services Visualization BI In-database Analytics Database Data Warehouse Decision Service Descriptive Analytics Predictive Analytics Optimization Business Rules Enterprise Platform Adaptive Control Performance Management KPIs Action plan Identify your decisions Adopt decisioning technology Think cockpit not dashboard Shameless commerce Decision Management Solutions can help you Focus on the right decisions Implement a blueprint Define a strategy For assistance, to find out more or if you have questions decisionmanagementsolutions.com/learnmore ©2009 Decision Management Solutions 27 Thank you! James Taylor, CEO [email protected] www.decisionmangementsolutions.com/learnmore