Enterprise Decision Management - a Weblog

Posted by Guest Blogger and Decisions Podcast Host, Ian Turvill.

Fair Isaac has just published an article by me about the challenges faced by insurers when individual consumers face difficult economic conditions, such as higher interest rates and gasoline prices.& (See The 21st century insurer: Beyond price - Successful responses to shrinking opportunities.)

In it, I argue that many consumers will seek to lower their cost of auto insurance, because of the increased costs that they are facing on credit card debt, home payments, and, of course, filling their cars' gas tanks.

I recommend three EDM-based strategies that insurers can use to counter this effect.& These include:

1. Differentiating between those consumers who are truly price sensitive, and those who are not.& Insurers should reach out proactively to those consumers who want a better deal so that they are not poached away by other carriers.& I suggest insurers can make this distinction by relying on predictive analytics, including advanced behavioral and transaction analytics, applied to the existing portfolio of customers.
2. Capturing more premiums and fees from consumers by offering a broader range of value-added services.& Such services might include broader coverages, such as rental car replacement for a vehicle that is undergoing repair, or optional services, such as roadside assistance.& I propose the use of online pre-market offer testing of different policy choices, based on principles of Experimental Design, as a way of determining to whom which offer should be made.
3. Adopting alternative underwriting methods, such as " Share:  

   Posted by James Taylor at 11:08 AM | Comments (0)

   Helping computers make "better" decisions

   An interesting poll recently over on KDnuggetsas to whether computers can make better decisions by mining historical data than people can with intuition. The results seem to me to be split - some think yes, some think yes unless (as is common) the world continues to change and some say no. This debate is part of what drove the concept of Enterprise Decision Management - that the combination of rules (derivedfrom human experience or intuition) and analytics (derived from data) is the best way to automate and improve decision-making. Indeed if you read books on cognition you will often see discussions around how well-informed (analytically-enhanced) intuition is very effective in decision making. I blogged about this topic in my review of Blink and when I was discussing Larry Rosenberger's keynote at InterACT on the futureof analytics.

   

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   Posted by James Taylor at 9:48 AM | Comments (0)

   August 29, 2006

   Using EDM to stay a step ahead of fraud

   Nice article on Staying a Step Ahead of Fraud in Intelligent Enterprise today. Michael writes a nice summary of some of the approaches and technology used in the battle against fraud. Those of you paying attention will notice that "Falcon's key components are a Java-based predictive modeling engine based on a proprietary neural network and a Web-based workstation that card issuers use to createand maintain rules and change rule parameters". Falcon is, of course, an Enterprise Decision Management solution using business rules and analytics (neural networks are a form of analytic model) to decide how likely something is to be fraudulent and what to do about it. Likewise the solution MetLife developed brings together rules and analytics for a custom EDM solution. Indeed fraud is one of the most lucrative areas forapplying EDM and I have blogged about EDM and Fraud a few times.

   

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   Posted by James Taylor at 2:17 PM | Comments (0)

   Slugs with credit cards

   Banana Slugs, that is.

   My stepson and his girlfriend are both leaving for college in the fall and both applied to the same major bank for student credit cards.
   Both got offered the initial $600 credit line - clearly this is the amount the risk model comes up with if there is no credit file to draw on
   Both came in the mail with phone activation instructions
   My son's girlfriend was able to activate over the phone just like you would expect- call from the home phone etc etc.
   My son, however,was not - he was told to call the main customer service number. This started a long process:

   • The main customer service number told him he needed to bring multiple pieces of ID to a branch
   • He went into the branch, showed his ID to a (very helpful) member of staff and together they called the customer service number again
   • After being on hold etc the member of staff had to get the manager
   • She had to then prove she was the manager and look at the ID again
   • Then the customer service folks asked for another form of ID and my son ran off and got that
   • Everyone involved had to certify the IDs the branch staff then had to fax the IDs to the customer service folks
   • Lastly my son was told to go home and activate it from his home phone.

   What on earth could have made this necessary?

   Talking with my colleagues in the originations space the only thing we can think of is that he must have set off some sort of fraud flag - he may share a name with someone for instance (this is definitely not common), or the fact that he already had a card from the same bank through my account might have looked odd. Regardless it is hard to see what the bank gained from this besides a massive investment of their staff's time. I guess all these checks and balances fractionally increased their comfort level but,let's be blunt, it's a tiny credit line AND they already have his name, SSN, address etc on file from when I got him a card on my account!

   Now I know there is achallenge for banks to strike the balance between security against fraud and good customer service but really...

   Two things came out of this for me. The first is that no matter how nice and helpful your staff, if they are not empowered to make the decisions your customers need it won't matter - they will be unable to give good customer service and so your customers might take their business elsewhere. The second is that letting people know what's going on, explaining the process and perhaps acknowledging itwith a letteror a coupon to apologize for the extra steps would help a lot.

   

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   Posted by James Taylor at 2:10 PM | Comments (0)

   August 28, 2006

   Improving Performance Management, Strategic Alignment and Operational Execution

   I was reading this Financial Insights piece today - U.S. Bank Survey: Performance Management (subscription required) - and it struck me that there is a key role for Enterprise Decision Management to play in organizations as they try and do more with their performance management. According to Jeanne Capachin, research vice president, Global Banking,

   "There is no common road map U.S. banks are following to improve performance management capabilities, but all see investment in performance management as a key initiative and a foundation from which they can grow and manage their businesses more effectively"

   Like most reports on performance management approaches and technologies, this report focuses on how better access to information and analysis by all levels of management can improve decision-making. This is, of course, true. However it is only half the problem as management are not the only people who make decisions - the front line staff, the website, the ATMs, even the software that prints the monthly statements also make decisions, decisions about how to interact with customers. These people,and these systems, are not going to be able to usefully access "traditional" performance management tools no matter how well designed.

   What they need are prescriptive guidelines as to what action or actions to take at each point. These actions need to be informed by the customer value analysis done by management and the strategic targets set by management but they require an Enterprise Decision Management approach. You must focus on the automation and improvement of these high-volume, operational decisions not just on measuring and understanding their cumulative impact. Ideally the management team can use analytical tools and approaches to comparedifferent approaches, make the necessary trade-offs and then have their chosen approach rapidly and accurately implemented by the front-line. With front-line systems and staff focused on straight through processing and completing transactions satisfactorily first time, the strategic decisions of management must be turned into automated decisions. However, the time to market for new strategies must also be kept to a minimum. This means making it possible to automate front-line decisions in a way that allows managementto control and change them. This is the essence of EDM - operational automation and strategic alignment.

   So if performance management matters to you, so should EDM.

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   Posted by James Taylor at 12:29 PM | Comments (0)

   EDM - Enterprise DECISION Management

   ink rel="alternate" type="text/html" href="http://feeds.feedburner.com/~r/EnterpriseDecisionManagementWeblog/~3/17073972/edm_enterprise_.html" /> tag:typepad.com,2003:post-12429783 2006-08-28T11:01:22-07:00 2006-08-28T18:06:43Z

   In case any of you saw this Aite group report, EDM does not stand for Enterprise Data Management but Enterprise Decision Management. I don't know what they think they are doing, trying to hijack the acronym like this! Managing Risk...
   James Taylor

   In case any of you saw this Aite group report, EDM does not stand for Enterprise Data Management but Enterprise Decision Management. I don't know what they think they are doing, trying to hijack the acronym like this!

   Managing Risk beyond Market Data: Practical EDM Strategies for Improving Legal Entity Information
   Aite Group predicts that in 2007 improving customer data will be a top ten priority for most sell-side firms. Enterprise Data Management (EDM) vendors will move into this space to take market share from CRM installations over the next three years. On average, only 68% of customer data is accurate across most firms prior to an improvement exercise, but that number can increase to a near 90% accuracy following data cleansing projects.

   
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   Posted by James Taylor at 11:01 AM | Comments (0)

   August 25, 2006

   Pandora's box

   Music box that is. For those of you who have not seen it, Pandorais a music finding service developed by the Music Genome Project. This is a fascinating site and uses some fairly spiffy analytics to find music like the music you like. Both my partner and I have played with it and had a mixed experience. You can say "I like this" or "I don't like this" and the software will tell you why it selected a particular song, for example:

   "we're playing this track because it features a subtle use of vocal harmony, mild rhythmic syncopation, mixed acoustic and electric instrumentation, major key tonality and melodic songwriting"

   Now this is all very clever and it uses multiple song likes and dislikes to refine it's analysis. When my partner was using it she identified what I think is the problem - there is no way to apply rules on top of the analytics.It does not let you say "Yes, but I like this song DESPITE the syncopation" or "Stop recommending female vocalists" - you must rely only on tuning the analytic.As such, it makes it harder to refine your preferences than seems reasonable. It is the power ofcombining rules(preferences being one example of rules) with analytics that makes Enterprise Decision Management so powerful. Rules can often be great and analytics, like those in Pandora, very clever. Combining them will almost always result in a better decision.

   

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   Posted by James Taylor at 5:07 PM | Comments (0)

   Don't let your customers take their business elsewhere...

   I saw this article on destinationCRM - I'm Taking My Business Elsewhere - and a couple of the comments made in it really resonated with me:

   Forty-seven percent of the 1,000 U.S. consumers Accenture surveyed have stopped doing business with a company within the past year, despite continued investment in CRM technology by U.S. industries.

   So clearly investments in traditional CRM technologies are not getting it done. Now if, like me, you believe that one definition of insanity is "doing the same thing, the same way and expecting a different result" then clearly more CRM technology investments are not going to work.

   To rectify these problems, Wollan says the next wave of CRM investments will be driven not by the "need to have," such as in the late 1990s, or by the "need to cut costs," as in 2000, but by a need to improve the customer experience by adjusting to their interactions and demands. "Companies will focus on translating their existing service technology investments into satisfying experiences that keep customers coming back."

   It seems to me that companies trying to solve these problems need to think about new approaches, new technology to address these issues. I won't repeat myself as I haveposted before on little known ways to improve customer experience on my other blog and have a section on CRM/customer serviceon this one.

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   Posted by James Taylor at 2:37 PM | Comments (0)

   August 24, 2006

   Insurance Companies can outsource processes and differentiate them too

   Mark Cecere over at Forrester just published this piece Process-Oriented Insurance Will Drive BPO(subscription required) and he makes some great points about the potential for BPO in insurance. Regular readers of the blog will know that I believe strongly that Enterprise Decision Management and decision automation have a key role to play in BPO. Mark, in common with many writers on BPO, focuses on the valueof outsourcing commoditized processes. He says:

   [insurers] will identify processes that can be implemented with common systems and configured for local needs. This trend will increase the use of business process outsourcing (BPO) as carriers outsource non-differentiated processes.

   It seems to me that this is setting the bar unnecessarily low. A process may be differentiated because you execute the process differently but it may also be differentiated because you make decisions within it differently. how you handle claims may differentiate you from you competitors but does it do so because you process them differently or because you make decisions about which ones to pay, which ones to follow-up and which ones to deny differently? If it is because you take different decisionsthen you could still outsource the process as long as you control the decision. Indeed you may also have processes you want to outsource because you think they are well-defined but it turns out your business rules are different from anyone else's. Are you out of luck or could you still build an outsourcing relationship while getting the flexibility to control your business rules?

   How does one go about this. Well there are two ways. Firstly business process outsourcers can use a business rules approach to automate the key decision points in the process and give companies control of those decision points. That way a company can "customize" the process without compromising the basic repeatability of the process so key for cost effectiveness on the outsourcers part. Secondly companies themselves could use a business rules approach to automate decisions and make them available as web servicesfor the outsourcer to call whenever a decision is needed. These rules might cover escalation, routing for manual review, customer outreach or whatever. Anytime the process needs to make a choice before continuing, companies need the option to make that choice differently to ensure that your customers feel they are getting the service they deserve and not a "one size fits no-one" process (I posted on this beforeat outsourcingand business rules).

   Why does this approach work for everyone?

   • If a BPO vendor wants to provide a single set of processes and process options to multiple clients then they are going to have to let each client set the rules for decisions within those processes differently and that will be much easier if some of the services are rules-based and expose the rules to the clients for them to manage directly.
   • If BPO vendors offer more and more standard processes then those that allow their customers more easily to customize and manage the decision points within those processes will be the only ones not competing purely on a lowest cost basis.
   • If companies would use EDM to manage the key decision points within their processes then they would be able to outsource or insource processes much more freely, knowing that the key decisions which make their business different from their competitors were under their control.

   Mark goes on to say

   ...deploy systems that provide the flexibility to accommodate local needs without complex development efforts.

   And I would have to agree with him. This is why outsourcing needs decisioning and why this approach helps resist the commoditization of processes.

   BTW I posted on the future of insurance before and discussed how outsourced elements must be outsourced in a way that allows different companies to use those outsourced services slightly differently. There is, in fact, a whole section on the blog regarding Business Process Outsourcingand it is also possibleto outsourcesome of the decision-making to a Decision Service Provider. But that's a different conversation.

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   Posted by James Taylor at 10:38 AM | Comments (0)

   August 22, 2006

   The secret of capitalizing on customer insights

   This great McKinsey piece finally made it to the top of my reading stack last night - Capitalizing on customer insights (subscription required). As I read through the paper's description of the challenges of using information effectively in the context of more customer segments, more distribution channels, more store formats and more products I was struck by the potentialfor Enterprise Decision Management (EDM) in this context.

   The challenges in getting useful insight from a wide variety of data were well articulated.I particularly liked the concept of "cell-level insight" as it seemed to me to focus on the real challenge of very tightly targeted insight. The paper discusses an established Fair Isaac customer, Best Buy, as an example. One of the first things Fair Isaac did was help Best Buy hook up its revenue to individual customers, a key step to providing "cell-level" data. Lots more has gone on since and a couple of articles havebeen published on how Fair Isaac is working with Best Buy. This one in Viewpoints -Best Buy aims analytics at purchasing triggers - discusses the use of Peacock (an analytic modeling product) as a key part of the Best Buy targeting strategy and this article in Fair Isaac's Marketing Decisions Newsletter - BestBuy Plugs into the Power of Customer Centricity - discusses how the use of sophisticated analytics has helped Best Buy become more and more customer-centric.

   However it seems to me that this is necessary but may not be sufficient. Once one has "cell-level" insights or very finely grained ones, turning these insights into actions, especially in high-volume operational systems, is a second key barrier. Indeed the paper discussed the need to embed insights into "key decisions" to get value. I wonder if these "key" decisions are strategic or operational. A company could have strategic decisions that are key (launch this product, scale back this one) but it may also haveoperational ones that are key (what cross-sell offer to make to a given customer, how to up-sell on the website). Getting insight into these high-volume transactional systems is a whole different challenge. For instance, applying insight to the point of purchase for most retailers means automation thanks to the volume of decisions.Indeed one of the signs that you need to improve listed in the paper is that elaborate segmentation models are developed but not used to set channel strategies. This example of analyzingcustomers 30 ways while treating them only 3 is a classic "You need EDM" trigger. One of the three characteristics of an insights-driven company is that it can embed insights into front line decisions. This is the promise of EDM.

   The paper also explores the idea of vendor networks for improving insight by tying together different data sources, skills, services and analytics One interesting example of this is ScoreNet, Fair Isaac's approach to delivering integrated data, services, analytics and applications over a network.The paper talks a lot about the concept of merging internal company information with external sources of data to create more meaningful insight. ScoreNet can help customers with these "external data augmentation" challenges.However one of the issues in doing this is knowing what data might be relevant - something that requires data expertise in a vertical. Indeed Fair Isaac has done a lot of work "Collaborating with insights partners" by developing the kind of data consortia needed to drive down fraud in an industry for example. We call this being a Decision Service Provider or DSP and it is perhaps the logical end result of the process of capitalizingon customer insights.

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   Posted by James Taylor at 3:36 PM | Comments (0)

   August 21, 2006

   New Blog URL

   Well more change. We have moved the blog to www.edmblog.com and so would greatly appreciate y'all changing your links. The feed should have auto-corrected and the old links should work so let me know if either of these things is not true!

   Thanks
   

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   Posted by James Taylor at 5:12 PM | Comments (0)

   Operationalizing Decision Yield - selecting between investments

   A number of previous examples introduced Decision Yield, discussed how to develop questions to measure it and then how to operationalize it in a performance auditor by measuring performance over time.Decision Yield canalso be used when you have a variety of proposed decision-centric projects to help decide which one is most appropriate. If you are taking a holistic view of decisioning within your organization and trying to focus your energies on a small number of projects you will need a way to compare the likely or expected outcomes. Decision Yield is an ideal tool for this. To make this work you will have to be able to estimate the improvement likely in each of the five dimensions from each project. Clearly this can be challengingbut scoping each project should include some assessment of the hoped for improvements along with some idea of how likely or unlikely those improvements are.
   

   To make this work, you will also need to get stakeholders to assign weights as described above for each project (they will likely assign different weights to different projects remember). To show the trade-off matrix you need to plot each project to show three dimensions. The three dimensions are Decision Yield (the single numeric vale calculated from your scorecard for each project), estimated time to market (planned duration of the project from inception to delivery of improvement) and estimated investment(total investment - staffing, resources, cash etc). This will let you plot a universe of alternatives that can be considered. When considering decision-centric projects, Decision Yield may well be a better measure of value than other models given its consideration of all five dimensions of decisioning. Each project will have different trade offs in terms of time, cost and Decision Yield but at least by plotting them you can show decision makers the range of alternatives.

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   Posted by James Taylor at 4:18 PM | Comments (0)

   August 18, 2006

   US P

   ke a job for EDM! tag:typepad.com,2003:post-12234251 2006-08-18T11:45:00-07:00 2006-08-18T18:46:10Z

   Posted by Guest Blogger, Ian Turvill. (And uncharacteristically, short.) US property and casualty insurers can expect another year of overall industry underwriting profit in 2006, matching the results of 2004, according to a recent report from Conning Research and Consulting....
   IanTurvill

   Posted by Guest Blogger, Ian Turvill.& (And uncharacteristically, short.)

   US property and casualty insurers can expect another year of overall industry underwriting profit in 2006, matching the results of 2004, according to a recent report from Conning Research and Consulting.& However, Stephan Christiansen, director of research at Conning Research and Consulting, states that:& "

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   Posted by James Taylor at 11:45 AM | Comments (0)

   US P&C Underwriting Profitability to Dip? Sounds like a job for EDM!

   Posted by Guest Blogger, Ian Turvill. (And uncharacteristically, short.)

   US property and casualty insurers can expect another year of overall industry underwriting profit in 2006, matching the results of 2004, according to a recent report from Conning Research and Consulting. However, Stephan Christiansen, director of research at Conning Research and Consulting, states that: "Profitability continues through 2006, but slowing premium growth, rising loss costs and accumulating surplus will take their tool and the industry will again show combined ratios above 100% [i.e., unprofitable] in 2007 and 2008."

   The study highlights three specific - though I think related - reasons for this change "surplus accumulation, strong loss reserves, and strong cash flow". In other words, insurers are profitable, and so they will be tempted to lower their rates to capture greater share. And they will suffer as a result! This sounds like a job for EDM.

   When insurers use EDM to shift from a manual to an automated underwriting environment, they can enforce consistent application of underwriting rules, and they can prevent underwriters writing business at lower rates simply to capture share.

   But, if they do this, won't they lose out at the hands of more aggressive competitors? Not necessarily. If they combine this with custom analytics that allow a much more precise measurement of risk, and so attract the business they want, and turn away the business they don't.

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   Posted by James Taylor at 11:45 AM | Comments (0)

   The secret of business user rule maintenance

   I saw this post on rule templates over on The Road Hits The Rubber and it made me think about business users and the promise that business rules makes of allowing business users to maintain business rules. But here's the dirty little secret:

   Business users don't want to " Share:  

   Posted by James Taylor at 10:23 AM | Comments (0)

   August 16, 2006

   Gartner Report: Insurers Should Deploy Rules Engines for Underwriting

   Posted by Guest Blogger, Ian Turvill.

   James and I, along with our colleagues in Fair Isaac's insurance consulting practice, are often asked about the application of a range of tools, such as rating engines, product configurators, and (our favorite) rules engines, within the property and casualty industry.

   So it was great to see some of our thinking validated in a recent report from Gartner.&,nbsp, (&,quot,A Guide for Using Rule Engines, Rating Engines and Product Configurators for Property and Casualty&,quot,, August 9, 2006.)

   Let me get right to the point with one of the three major recommendations from the report.&,nbsp, Gartner indicates that insurers should:

   &,quot,Deploy a BRE to make decisions that are complex and that have a significant financial impact in areas such as underwriting, where rules can change frequently due to risk appetite or catastrophe scenario, and in areas of high compliance risk like renewals, cancellations and claims. This will enable better speed to market, avoidance of adverse risk selection and lower loss expense.&,quot,

   (With added emphasis from me in bold.)

   Enough said.

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   Posted by James Taylor at 8:35 PM | Comments (0)

   August 15, 2006

   What would YOU call the unit of Decision Yield?

   Ian Turvill and I were thinking about Decision Yield and wondering what the (unofficial) "unit" of Decision Yield should be. If you have ideas please send them to me or post them as comments and Ian and I will post about our favorites another day.

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   Posted by James Taylor at 11:57 AM | Comments (0) | TrackBack

   August 11, 2006

   Operationalizing Decision Yield - measuring performance over time

   A number of previous examples introduced Decision Yield, discussed how to develop questions to measure it and then how to operationalize it in a performance audit. If your concern with a decision is to ensure that you maintain orimprove the way you make a decision then measuring decision yield over time is a great way to do this. To track decision yield like this you will need to assign numeric values to the 5 dimensions to weight them so you can combine them into an overall score. You could track all five dimensions independently but it may be easier to bring a single combined score into your performance management environment and show management its current value, its trends etc in whatever format you use for key performance indicators..You can then assess each of the 5 dimensions on some regular basis to track the values and convert them to an indicator using these weights. For example: the weekly performance of an insurance underwriting system could be tracked using the Decision Yield of the "underwrite new policy" decision.

   You would likely use performance management or business intelligence tools to collect data to answer many of your questions (the more quantitative ones like number of quotes issued, number of policies written etc) and some kind of online questionnaire to capture qualitative information like typical response of prospects to the price quoted. Plugging these answers into a formula will allow you to generate a number that you can then track as a graph. Such a graph might show how a new website impacted Decision Yieldby reducing consistency or how a change in the regulations led to much higher rates of manual review and thus higher cost and lower Decision Yield. The graph will give you early warning of problems as you evolve and adapt the decisioning process that you use.

   You will need to consider different perspectives from different groups also. Below is an example of the kind of scorecard you can develop – allowing each group of stakeholders to weight each of the five dimensions. You typically measure a dimension in terms of how close to "best practice" you are and so this gives you a score of something from 0 to 1.00 where 1.00 is as good as it gets at present – remember that your score on a dimension should decrease if you do nothing. Applying the weights from your stakeholdersgive you a single number – something you can track on a dashboard as a Key Performance Indicator or KPI.

   An example scorecard showing how different organizations weight each aspect and a completed one showing the current value for such a Decision Yield suitable for plotting on a graph.
   

   A graph showing how the calculated Decision Yield value can be tracked over time to show rises, when the decision yield improves, and declines when something goes wrong. Dashboards and Business Activity Monitoring software can be used to determine when to respond to changes in Decision Yield. In the example we can see that the decision yield has risen steadily largely as a result of improvement in Speed. Precision jumped early and then stabilized while Consistency and Cost have remained fairly constant. Agilityhas fluctuated significantly including a large drop in the most recent period, something probably worth investigating. A graph like this can be a valuable tracking tool.
   

   In addition a radar chart could be used to plot current against target and trailing average results for example the graph below shows the same data as the one above, this time considering the average of the last 3 readings with the initial and target numbers. Again you can see that Speed, and to a lesser extent Precision, are the improvements being made at present.
   

   

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   Posted by James Taylor at 3:17 PM | Comments (0)

   Building a Hospital for the 21st Century

   The McKinsey Quarterly had a nice piece this week - US hospitals for the 21st century - which identified some key problems for . These include medical safety issues, high costs and increasing economic pressure. Drivers include Consumer-Driven Health Plans (CDHPs) and other High Deductible Health Plans (HDHPs). In order to respond the authors suggest that hospitals willneed to start thinking more like retailers -

   "they will start to resemble companies in other competitive service industries"

   So if a hospital starts to resemble other competitive serviceor retail companies, what will that mean? The report identifies a number of key issues and four, in particular, seemed to me to require an aggressive adoption of enterprise decision management as part of an IT strategy. Indeed some Commonwealth Fund research recently showed the potential for IT in health care. So how can EDM help build a hospital for the21st Century?

   • EDM is a key strategy to segmentation of customers when you have large numbers of them. As consumers want different things from their medical services it will be key for hospitals to segment them based on their needs, their desires and the way they are likely to respond. They will also need to consider how to include different types of insurance and payment mechanisms in this analysis. EDM offers an opportunity not just to use analytics to segment customers, but to apply this in high-volume, automated systemslike the web. A number of posts relate to segmentation including this one and this one.
   • A key to success identified in the report is the consistent execution of front-line tasks. Here again EDM shines. Not only do rules allow for potentially complex or impactful decisions to be automated, they also allow those who understand the impact of the rules to control them rather than surrendering this power to programmers. Hospitals are rightly nervous about automation of steps with medical (or financial) implicationsbut EDM allows for the control they need to be comfortable. It also allows for rapid change when new approaches or information become available and for the integration of analytics.
   • Drug safety is another big issue. The use of rules to manage drug interactions is increasingly well documented. There are challenges in building systems that work with physicians instead of against them but smart use of business rules technology is working to reduce medical errors.
   • Avoiding bad debts in this new, more complex world will also be a challenge. Hospitals can't turn away patients based on their financial status (unlike some of their competitors in healthcare delivery) so managing the payment process so as to avoid acquiring a mountain of bad debt will require rules and analytics applied at the point of care or check-in.

   Finally here's another posting about an article on retail healthcare and don't forget this podcast on some uses of business rules in healthcare and, if you are interested in how CDHPs and HDHPs can be managed using this technology, join me and SHPS next week for this Health Data Management webinar "I.T.Strategies for Consumer-Driven Health Care with SHPS"

   

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   Posted by James Taylor at 8:55 AM | Comments (0)

   August 10, 2006

   Operationalizing Decision Yield - Creating and Applying the Decision Performance Audit

   Posted by Guest Blogger, Ian Turvill.

   Yesterday, I described how you could - in theory - develop a set of questions to measure Decision Yield for any decision-making process.

   Today, I'm going to describe the practical application of those questions in creating a complete &,quot,Decision Performance Audit&,quot, to assess your organization's performance along the dimensions of Decision Yield and to identify specific areas for improvement.

   Define Your Scope:

   As I mentioned yesterday, Decision Yield cannot be meaningfully measured at the level of an overall industry.&,nbsp, Instead, when building a Decision Performance Audit that relies on the Decision Yield metric, it should be built at a level that is sufficiently specific and focused to be compelling to the business decision maker.

   There are many different ways to further divide up an industry.&,nbsp, &,nbsp,For example:

   • By industry segments, e.g., in telecommunications, wireline, wireless, MVNO, vs. ISP
   • By nature of products delivered, e.g., in banking, credit cards vs. savings accounts
   • By nature of the customers served, e.g., in long-distance telephony, consumer vs. commercial
   • By functional area, e.g., in insurance, underwriting vs. claims
   • By process, particularly where that process is considered by some in an industry to be “broken”, or requires complex coordination across multiple parts