Friday, December 30, 2005

The Rules of Business Just Changed. Again. How Fast Can You Change? THE STATE OF THE BUSINESS RULES MARKET 2006

THE STATE OF THE BUSINESS RULES MARKET 2006
By Rolando Hernandez, CEO, BIZRULES. 12/30/2005

SHORT TERM OUTLOOK

Business rules automation is starting to revolutionize business.

In the next year or two, business rules automation is going to, pardon the pun, change the rules of the game. It is going to literally and figuratively rewrite the rules of business.

If your competitor uses rule engines, that means they can change their business rules on-the-fly without having to recode and recompile. They can change their rules instantly, you know with zero time-to-market, as the business changes, as the world changes, as customers change, as regulations change... If they can keep up with change, they can stay in the game.

If your company doesn't use rule engines, that means you have to go through IT to change your business rules. You have to get a programmer to change the code, test it, debug it, recompile it, test it, debug it, recompile it, etc. It's going to take you a while to change the rules. It might take a few weeks or more likely a few months to change the business rules in the systems, as the business changes, as the market changes, as customers change, as regulations change... If you can't keep up with change, you're out of the game. You lose.

They win.

LONG TERM OUTLOOK

In the long run (2006-2010), Business Rules Management will prove to be just as valuable to the enterprise as Business Rules Automation.

Knowledge Management (knowledge acquisition, knowledge retention, knowledge engineering) and Knowledge Automation will also prove to be just as valuable to the enterprise as Business Rules Management and Business Rules Automation.

THE STATE OF THE BR MARKET IS THE EMERGENCE OF THE BUSINESS RULES CENTER OR EXCELLENCE (BR COE)

Once awareness of the value of business rules management and the ROI of business rules automation reaches the board room, the enterprise will reach the stage where they are ready to establish the Business Rules Center of Excellence.

As enterprises start to realize significant ROI with individual (departmental)business rules automation applications, they will want to build & deploy more applications in other business areas and business functions.

Then they will begin to look for enterprise-wide opportunities to leverage rule engines. As the number of rule-based applications expands across the enterprise, they will focus more and more on standards, best pratices, and formal proven methodologies for building declarative rule-based applications.

ENTERPRISES WILL TREAT BUSINESS RULES AS AN INITIATIVE, LIKE SIX SIGMA AND DIGITIZATION

Just like enterprises latched on to Six Sigma as the approach or solution to quality, smart enterprises will treat business rules as the approach or solution for time to market, downsizing, compliance, and offshoring.

  • Time to market (rules enable faster business change)
  • Downsizing (rules harvesting and knowledge acquisition captures and retains knowledge before it is lost)
  • Compliance (rules automation automates controls that prevent and detect risks)
  • Offshore systems development costs will be reduced and minimized by enabling business users to write and change their own business rules instead of a programmer

ENTERPRISES WILL DEPLOY BUSINESS RULES TECHNOLOGY TO REDUCE RISING OFFSHORE SYSTEMS DEVELOPMENT COSTS AND ENABLE FASTER CHANGE

Yes, you read that correctly. Just as the enterprise looked to offshoring as the solution for rising systems development costs, the enterprise will look to business rules automation and business rules management as the solution to rising offshore development costs and time.

By enabling business executives to manage and change the business rules in the applications, they eliminate the code/test/debug/recode cycle. They don't have to go to IT (onshore or offshore) for change - they can change the rules themselves.

So the need for programmers, both onshore and offshore, will be reduced as the enterprise deploys business rule applications.

ENTERPRISES WILL DEPLOY RULES-BASED AND KNOWLEDGE-BASED TECHNOLOGY TO REDUCE OFFSHORE CALL CENTER COSTS AND IMPROVE CUSTOMER SERVICE

Yes, you read that correctly. Just as the enterprise looked to offshoring call centers as the solution to rising customer service costs, the enterprise will look to business rules automation and knowledge automation (expert systems) as the solution to rising offshore development costs and improving customer service delivery.

The great thing about democracy and commerce and competition is the relentless drive to improve productivity, reduce costs, and improve service delivery.

Thus, just as many programmers overseas and here will be replaced by business rule engines, many call center operators here and overseas will be replaced by Artificial Intelligence rule engines and knowledge-based expert systems that will give the right answer every time, 24/7.

AI-based self-service customer support websites will emerge, and people will love them. They will get the right answer every time. No more different answers depending on what agent you talked to. No more waiting on hold forever. Expert answers. Instant gratification.

(c) copyright Rolando Hernandez 2005

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2 Comments:

At Wednesday, January 04, 2006 12:53:00 PM , James Taylor said...

Rolando
An excellent summary - I could not agree more! The customers, journalists and analysts I talk to all provide little proof points of your predictions.
JT
http://edmblog.fairisaac.com

 
At Wednesday, March 01, 2006 8:33:00 AM , James Owen said...

Read the article - it's OK "except" (now, you just knew that was coming, didn't you?) that the industry tends to "over sell" the idea that the business users can write their own rulebase without guidance from a KE. That is no more acceptable than having the business users write their own database, and a rulebase is FAR more complicated than a database. Real intelligence always is more complicated. Perhaps we need to stress the the "eventual control" of the rules is in the hands of the business analysts and the "addition, changes, etc." are in the hands of the business analysts. But, the design and construction of the rulebase (OK, read BRMS) is the domain of the KE.

BTW, James Taylor of Fair Isaac is an acquaintenance of mine - most times we agree, but I'm not quite sure that I agree with him and some and his marketing of BRMS as the be-all and end-all of rulebased system problems in the past. I'm thinking that if expectations are not properly handled, we could be headed for another "winter of discontent" in the AI industry. :-( BTW, congratulations on Version 6.x of Blaze Advisor. :-)

 

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