FICO majors on decision management. This term is unfamiliar to many, but in a nutshell it is the use of technology to automate business decision making processes. For over half a century we have used information technology to automate the transactional activity in businesses, but these applications are to all intents and purposes dumb. They merely provide a framework for acquiring, managing and retrieving transactional information – electronic filing cabinets in essence.
Decision management, or perhaps more appropriately, decision automation, is a whole new ball game with the promise of not only making business processes more efficient, but making them more effective.
A number of technologies currently come under the umbrella of decision automation – optimisation, predictive analytics and business rule management. Optimisation, as the name suggests is concerned with finding the best use of resources, given a set of constraints and well defined objectives (maximise profit for example). It aids tremendously in the task of deciding how to deploy resources to the best effect. Predictive analytics on the other hand uses historical data to find patterns that might apply to future activity.
Applications are numerous and include the automation of decisions such as finding the best targets for a marketing initiative, deciding who might be a suitable customer for a loan, establish when a piece of machinery might fail, and so on. Finally business rule management provides a framework for structuring and employing deterministic business rules – don’t offer someone a ten per cent discount if they have previously been offered twenty per cent for example.
It is no coincidence that FICO delivers a framework that embraces all three modes of decision automation, and it is fairly unique in doing so. IBM and SAS also provide these technologies, but do not have the experience and integrated platform provided by FICO.
Historically FICO has delivered point solutions and hasn’t particularly majored on the overarching concept of decision automation. Fraud detection, customer analytics, credit rating and a number of other FICO applications have become de facto solutions in the financial services industry. However with the growing awareness that technology can be used to do more than store and retrieve data, and particularly its growing use as a mechanism for automating business decisions, means FICO has seen growing interest in the broader concept of decision management. To this end FICO is making its decision management platform available through FICO Analytic Cloud and enhancing its platform to embrace the management and integration of decision management solutions.
At the present time we are witnessing a period of infatuation with the promise that predictive analytics and particularly big data analytics imply. In reality however these technologies are just part of the decision automation solution that increasing numbers of large organisations need. A more mature top down approach would ensure integration and coordinated efforts, and FICO is well positioned to meet these needs as focus gradually shifts from process automation to decision automation.