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Implementing Decision Automation BI Projects July 13, 2007

Posted by Cyril Brookes in Decision Automation, General, Issues in building BI reporting systems.
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The feedback on my three earlier posts on specification guidelines for automated decision capability in BI systems has been both positive and heartening. My objective has been to show how these BI projects for operational business processes may be built relatively simply, and to generate enthusiasm for this among the legions of business analysts. You can indeed try this at home!

This post summarizes the major issues that received favorable comment and then deals briefly with profitability, feasibility and implementation techniques for these systems. It concludes the series of (now) four posts on decision automation for BI that commenced here.

I haven’t attempted to place this subject in its context, or to cite various examples of success or otherwise. Thomas Davenport, Jeanne Harris, James Taylor and Neil Raden have done this comprehensively in their recent articles and books.

You may recall, Dear Reader, the underlying principles for this methodology are:

Selecting the right targets is critical to success:

Doing the right thing is much better than doing things right (thanks Peter Drucker!). My prescription is to avoid trying to pick winners from the various business processes that may be candidates for BI automated decisions. Rather we should look to a different set of candidates as the start point.

Identify the controllable variables – the levers that are adjustable in the business process that can shift performance towards improvement

These are easy to pick. There are relatively few options available in most businesses, variables like changing prices, adjusting credit ratings, buying or selling stock or materials, approving or rejecting a policy proposal, etc. A more complete discussion is in my second post on this subject.

Only consider automated decision making BI systems where controllable variables exist

This is a no-brainer, I guess. It’s only possible to automate when automation is possible. If we can’t control the process when there’s a problem, because nothing is available to be done (e.g. we can’t raise prices if all customers are on fixed contracts), then don’t let’s start automating.

Segment the design processes into logical sub-projects so the project doesn’t run away uncontrolled

I suggest in the third post that the Herbert Simon style decision process elements are an effective segmentation. This allows focus on (say) finding problems and then on deriving the relationship between adjusting a control variable and the resultant outcomes.

Enough of a recap: here are some basic suggestions for project management.

Implementation of a decision automation project is always tricky. In most cases it is not possible to “parallel run” the new with the old, since only one option can be tried each time in real life, and comparison is not possible longitudinally.

I suggest that an iterative implementation is therefore appropriate. It should incorporate feasibility and profitability analyzes as well.

Referring to the more detailed methodology in the third post:

  • Build the status assessment and problem finding sections first, and leave the action part to the management.
  • Then design the diagnosis and alternative selection modules and instruct a human manager what to do (always leaving the override option, of course). This is simple as long as there is only one controllable variable available for the business process and only one KPI metric, or a set of related KPIs and metrics, that are out of specification, hence signifying the problem. If there are more than one of these, then it can (almost certainly will) become complex. Certainly it’s achievable, but there’s a good deal of modeling and use case analysis required that is beyond the scope of a blog post.
  • Finally, link the alternative action chosen to the automatic adjustment of the control variable(s) and you’re home free.

I hope, Dear Reader, you’ve been infected in some small way with the enthusiasm I have for automated decisions in BI applications. In many ways they are the most satisfying aspects of Business Analyst work, since you get to design the system, and then get to see it perform. Working on high level strategic projects is often more intellectually challenging, but you rarely get to have full closure, it’s the executive users who have that pleasure, often long after you’ve left the scene.

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Comments»

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