Instrumenting Your Enterprise for Maximum Predictive Power

By James Kobielus

Business is all about placing bets and knowing if the odds are in your favor.

As I noted in my most recent Forrester report, business success depends on your company being able to visualize likely futures and take appropriate actions as soon as possible. You must be able to predict future scenarios well enough to prepare plans and deploy resources so that you can seize opportunities, neutralize threats, and mitigate risks.

Clearly, predictive analytics can play a pivotal role in the day-to-day operation of your business. It can help you focus strategy and continually tweak plans based on actual performance and likely future scenarios. And, as I noted in a recent Forrester blog post, the technology can sit at the core of your service-oriented architecture (SOA) strategy as you embed predictive logic deeply into data warehouses, business process management platforms, complex event processing streams, and operational applications.

The grand promise of predictive analytics—still largely unrealized in most companies—is that it will become ubiquitous, guiding all decisions, transactions, and applications. For the technology to rise to that challenge, organizations must move toward a comprehensive advanced analytics strategy that integrates data mining, content analytics, and in-database analytics. Already, we’ve sketched out a vision of “Service-Oriented Analytics,” under which you break down silos among data mining and content analytics initiatives and leverage these pooled resources across all business processes.

You may agree that this is the right vision but have doubt about whether there is a practical, incremental roadmap for taking your company in that direction.  In fact there is, and it starts with re-assessing the core of most companies’ predictive analytics capability: your data mining tools. As you plan your predictive analytics initiatives, you should avoid the traditional approach of focusing on tactical, bottom-up project-specific requirements. You should also try not to shoehorn your requirements into the limited feature set of whatever modeling tool you currently happen to use.

To become a fully predictive enterprise, you will need to take both a top-down and bottom-up approach to your data mining initiatives. From the top-down, it’s all about building and integrating alternate models of how your business environment is likely to evolve internally and externally. In our recent report on advanced analytics, Boris Evelson, Leslie Owens, and I sketched out the many business processes that can be enriched by predictive analytics.

So how do you instrument your company to become more predictive? For starters, assess whether your analytics tools support the following capabilities for developing, validating, and deploying predictive models:

• Model multiple business scenarios: You should be able to build complex models of multiple, linked business scenarios across different business, process, and subject-area domains, using such key features as strategy maps, ensemble modeling , and champion-challenger modeling.
• Incorporate multiple information types into models: You should be able to develop models against multiple information types, including unstructured content and real-time event streams, while leveraging state-of-the-art algorithm in sentiment analysis and social network analysis.
• Leverage multiple statistical algorithms and approaches in models: You should be able to develop models using the widest, most sophisticated range of statistical and mathematical algorithms and approaches, including regression, constraint-based optimization, neural networks, genetic algorithms, and support vector machines.
• Apply multiple metrics of model quality and fitness: You should be able to score and validate model quality using multiple metrics and approaches, including quality scores, lift charts, goodness-of-fit charts, comparative model evaluation, and auto best-model selection.
• Employ multiple variable discovery and assessment approaches: You should be able to build and validate models using various approaches for variable discovery, profiling, and selection, including decision trees, feature selection, clustering, association rules, affinity analysis, and outlier analysis.

How is this different from predictive analytics as usual? Traditionally, most predictive modeling specialists focus on the latter three capabilities: statistical algorithms and approaches, model quality and fitness, and variable discovery assessment. Most models are built in narrowly scoped business or subject domains—such as customer analytics for marketing campaign management—and only against structured data sources (such as relational tables). Traditionally, few predictive analytics projects have entailed modeling of multiple business scenarios across diverse domains--such as sales, marketing, customer service, manufacturing, and supply chain-- though in the real world these business processes are often quite interconnected. Also, many data mining initiatives fail to incorporate information from unstructured sources—such as text in call-center logs—though this content may be as important as what comes relational databases and other structured sources.

It’s very important to build multi-scenario predictive models against complex information sets, but becoming a fully predictive enterprise demands much more. To instrument your organization for maximum predictive power, you should also tool your advanced analytics to support the following capabilities:

·         DW-integrated data preparation: To speed up and standardize the most time-consuming predictive modeling project tasks, you should be able to leverage your existing data warehouse, extract transform load, data quality, and metadata tools to support a full range of data preparation features. These features include the ability to discover, acquire, capture, profile, sample, collect, collate, aggregate, deduplicate, transform, correct, augment, and load analytical data sets.

·         Deep application and middleware integration: To deliver models deeply into whatever heterogeneous SOA-enabled platform you happen to use, your predictive analytics tool should deploy on and/or integrate with a wide range of enterprise applications, middleware, operating platforms, and hardware substrate. You should be able to deploy models seamlessly into your data warehouse, business intelligence, online analytical processing, data integration, complex event processing, data quality, master data management, and business process management environments. And to play well in your SOA, your predictive modeling tools should support application programming interfaces, languages, tools, and approaches such as Web services, Java, C++, and Visual Studio, as well as emerging languages such as SQL-MapReduce and R.

·         Consistent cross-domain model governance: To avoid fostering an unmanageable glut of myriad models, your predictive analytics solution should support a wide range of tools, features, and interfaces to support life-cycle governance of models created in diverse tools. At the very least, your tools should enable model check in/check-out, change tracking, version control, and collaborative development and validation of models. To realize this promise, it should support a full range of tools, standards, and interfaces for import and embedding of models from other tools, as well as export and sharing of models to other environments.

·         Flexible model deployment: To execute modeling functions--such as data preparation, regression, and scoring—on the widest range of data warehouses and other platforms, your tools should support in-database or embedded analytics. And to scale to the max, your predictive analytics tools should deploy models to massively parallel data warehouses, software-as-a-service environments, and cloud computing fabrics.  Your advanced analytics tools should also support development of application logic in open frameworks—such as MapReduce and Hadoop—to enable convergence of data mining and content analytics in the cloud.

·         Rich interactive visualization: To deliver their precious payload—actionable intelligence—your advanced analytics tools should support interactive visualization of models, data, and results. Ideally, you should be able to visualize all of this in your preferred business intelligence tool, or in the predictive modeling vendor’s integrated visualization layer. Of course, you have every right to expect the full range of visualization techniques--histograms, box plots, heat maps, etc.—regardless of who provides the visualization layer.

As you can see, this goes well beyond data mining as usual. Forrester has a slightly different perspective on the development of the predictive analytics market than you’re likely to get from other sources. We see a robust, flexible, SOA-enabled data mining tools as the centerpiece of advanced analytics for fully predictive enterprises. The competitive stakes are too great for businesses to take the traditional silo-mired approach when implementing this mission-critical technology.

What do you think?

Efficiency, Sustainability, And Digital Natives Accelerate Paper’s Path To Digital

  By Sheri McLeish

As people spend more time consuming information digitally at home and at work, reliance on paper continues to decrease. But how far are we across the Digital Divide? In 1975, George E. Pake, then head of Xerox Corp.’s Palo Alto Research Center, predicted that in 1995 his office would be completely different: “There will be a TV-display terminal with keyboard sitting on his desk. I’ll be able to call up documents from my files on the screen, or by pressing a button. I can get my mail or any messages. I don’t know how much hard copy I’ll want in this world.”

Thirty-five years later Pake’s vision largely came true for iWorkers, who today toggle between laptops, smart phones, and other devices to create, consume, and manage information. But an interesting thing happened along the way. With the initial rise in popularity of email and the Internet in the late 1990s, there was actually a bump in paper usage, not a decrease. People printed out their emails, receipts for e-purchases, documents, presentations – you get the idea. In fact, the World Wildlife Fund reported that some 10,000 sheets of paper are used each year by the average office worker in Western industrialized countries.

The other challenge faced by businesses has been the explosion of content types. Firms today need to support and coordinate multiple inbound and outbound channels. For processes like customer onboarding, paper persists due to lack of integration or reliance on paper by customers, partners, and staff. Today only a quarter of enterprises report that 25-50% of their customers are fully paperless, according to a recent Forrester Information Capture survey. Eighty-seven percent of firms have, are in the process of, or are planning to implement or upgrade information capture technology in their companies. The No. 1 investment area? No surprise here: integrating with enterprise apps.

This ongoing effort to remove paper from processes is driven by good, solid business reasons: For each sheet of paper used there are costs for purchasing, storage, copying, printing, labor, postage, disposal, and recycling. The ROI for capture investments is one of the most straight-forward for a technology investment. Driven by cost savings, increased productivity, and improved access and retention of electronic documents, companies continue to invest steadily in information capture to support business processes like registration, invoicing, and contract management.

Most Content Now Born Digital
But there’s another other huge driver of paper reduction in the enterprise: the iWorker. I know I still have a few piles of paper lingering at the office and more at home, but I haven’t looked at that stuff in years. I use my smart phone for a shopping list; I seem to have a hard time locating pens because I so rarely use them.

And I’m not unique. Forrester believes that well over two-thirds of content created today originates digitally. Consider:

• In our Forrester Workforce Analysis Survey, Q2 2009, 79% responded that they use word processing tools, and 60% report using word processing daily.
• Spreadsheets have similar but slightly lower use, with about half of information workers using spreadsheets daily.
• From the same study iWorkers are shown to be pretty happy with word processing tools – 82% indicate high satisfaction

This high level of satisfaction and ongoing use of tools to work with content in digital form supports the notion that most of the content being handled by iWorkers today is in electronic formats. And this will accelerate as Millennials who were “born digital” make up greater proportions of the workforce.

It’s Getting Easier To Be Green
Paper reduction also fits into the Green mindset. Along with embracing digital authoring tools, iWorkers indicate a strong desire to reduce paper in the workplace (75% strongly agree) and recognize the benefits of digital content such as facilitating quicker distribution and ability to reuse content. Paper-based or whiteboard content from collaborative work sessions increasingly are moving to the digital realm. During a tour of EMC’s storage manufacturing facility last week several of the process efficiencies touted were tied to digitizing information collection, including a widescreen digital whiteboard on the shop floor to replicate a physical whiteboard and an application that provides electronic access to the state of components as they are being tested, a task that previously required the technicians to walk through the test rooms and write down the information to then be inputted.

Custom development to automate and digitize manual processes remains core to ongoing process improvement. But for more informal content development, eventually iWorkers will take for granted originating this content digitally. Today adoption of wikis and blogs is still nascent, with under 10% of information workers using these tools. But as collaborative environments become more accessible via Web-based platforms like the Google Wave, Novell’s Pulse, IBM/Lotus Live, and Microsoft’s SharePoint and Office 2010, it will become even easier to live fully in a digital world of content.

Holdouts Hindered By Real Hurdles
There will be exceptions to the digital rule, however. Content captured via paper forms or that isn’t well supported for electronic input, such as math formulas or diagrams, will persist until better user interfaces make even these uses obsolete on paper. Most iWorkers today are not provisioned a stylus and tablet PC, so doing a first pass on paper or on a whiteboard remains faster even if eventually these drawings need to be captured digitally.

And there will be other holdouts as well: In an interview with NPR earlier this year, one of our era’s most prolific novelists James Patterson admitted he does all of his writing in longhand before turning it over to an assistant to be typeset. But in college classrooms, often the best barometer for what’s to come, more and more professors are allowing laptops and electronic note taking tools to be used in class. And as we look even further ahead, consider that penmanship has taken a backseat to keyboarding in the elementary curriculum at many schools. So for the class of 2025, Forrester predicts that their offices may not be just sans paper, but without a pen too. I guess that puts me ahead of the curve.

What about you? Are you farther along the paperless trail at home or at work? What’s driving paper reduction in your firm? What’s holding you back?

Is BAM Relevant In The Age of Lean Processes?

By James Kobielus

In any dynamic business environment, the last thing you want is to indulge in navel-gazing. If you’re finely attuned to monitoring internal processes, but are not adept at responding to breaking events or anticipating the future, you will find yourself marginalized in the new global economy.

In a turbulent world, the most successful companies are those that stay lean--in other words, trimmed of excess overhead, fit for new challenges, and flexible enough to evolve rapidly. Forrester advises customers to make their business processes leaner, through such measures as reducing the number of steps, routing paths, participants, decision points, milestones, and revisions. As you do, you will find concomitant improvements in speed, cost, quality, and customer satisfaction.

Clearly, you can’t do that well if you don’t have, at the very least, the means to monitor a wide range of business processes in unified dashboards, reports, and other applications. That’s where traditional business activity monitoring (BAM) tools, which are a key component of most business process management (BPM) environments, play a critical role. However, critical as BAM may be, it is often deployed in a predominantly navel-gazing process-tracking capacity (remember what that “M” stands for) and, as such, is as much part of the problem as the solution.

Why? Well, for starters, most BAM environments are deployed in conjunction with specific vendors’ BPM platforms--hence can only track the subset of business processes that run on those platforms. But, even more limiting, BAM dashboards are often the stand-alone province of process administrators. Only in a handful of  BAM-using organizations do alerts and metrics escalate beyond the process administrator level and trigger the necessary human and automated workflows necessary to respond to breaking issues--or nip them in the bud before they can become issues.

To stay relevant, BAM needs to evolve in the age of lean processes so that it can become a tool for business agility at all levels. Next week, Forrester BPM analyst Clay Richardson and I will do a podcast on this very topic. In  that podcast, and in a joint presentation that Natalie Petouhoff and I will do at Forrester Business and Technology Forum in Chicago in October, I’ll sketch out a vision for the next-generation of BAM (which I half-jokingly call “uber-BAM”).

Here is a rough sketch of the maturity levels of BAM's evolution to realize this vision:

• BAM Level 1: Business activity monitoring: This is today’s BAM baseline. Essentially, it combines BPM with business intelligence (BI), interactive dashboarding, and complex event processing to deliver process metrics to consoles used solely by human process administrators.
• BAM Level 2: Business action mobilization: This is the BAM level that many forward-looking users and vendors have implemented. It combines all Level 1 functionality with business rules engines (BRE) to drive sophisticated human and automated workflows in response to breaking events. It puts the “immediate action loop” into the BAM equation.
• BAM Level 3: Business adaptability management: This is the promise of truly lean uber-BAM, and is found only in a vanguard of visionary  business environments. It combines all Level 2 functionality with embedded predictive-analytics models, which are developed and maintained by business process architects and/or subject-matter process experts. Continuously mining historical and real-time metrics, these in-process analytics drive automated “recommendation engines” that adapt coordinate response to changing conditions. Recommendation engines enable human and automated decision agents to seize opportunities and neutralize threats well ahead of the curve.

Going forward, this new vision of BAM’s evolution and promise will inform Forrester’s coverage of process agility and optimization.

BI, Analytics, And CEP: Some Fruitful Potential Follow-Ons From Software AG’s Acquisition Of IDS Scheer

 by James Kobielus

Yes, of course, Software AG is buying IDS Scheer primarily for the latter’s ARIS family of business process management (BPM) tools. I’ll leave it to my Forrester colleagues who focus on BPM--on both the IT and TI sides of the house--to call out the ramifications for Software AG’s positioning in that market.

But, believe it or not, this deal will also launch Software AG into the growing markets for business intelligence (BI), analytics, and complex event processing (CEP) solutions. We bet you didn’t realize that IDS Scheer has ARIS solutions in these fast growing markets, but in fact they do--and they’re continue to evolve those offerings.

It’s no surprise that IDS Scheer’s BI, analytics, and CEP offerings supplement and extend its BPM portfolio. Its CEP solution, ARIS Process Event Monitor, supports business activity monitoring (BAM). Its analytics offerings, ARIS Process Performance Management and ARIS Performance Dashboard, support visualization, dashboarding, scorecarding, drilldown, and alerting on process key performance indicators (KPIs), both historical and real-time. And its forthcoming BI offering, ARIS MashZone, will support self-service user development of reports, dashboards, and other views of process and business metrics.

IDS Scheer has little market share in these non-core segments. And the vendor is no immediate threat, by itself or under its future corporate parent, to the leaders in the BI, analytics, and CEP segments. Indeed, its forthcoming mashup-oriented BI offering only provides a subset of the features available from market leaders such as SAP Business Objects, IBM Cognos, and MicroStrategy. But the fact that Software AG will soon be able to provide its own offerings in those segments, rather than rely wholly on partners, represents an important step in its attempt to field a full service oriented architecture (SOA) solution stack.

As noted in a blog entry a year and a half ago, BI is the crown jewel in any comprehensive SOA solution portfolio. SOA suites cannot be considered feature-complete unless they incorporate a comprehensive range of BI features. This acquisition continues the ongoing SOA solution build-out strategy that motivated Software AG to acquire webMethods in 2007.

But it’s not clear yet whether Software AG plans to flesh out its BI, analytics, and CEP strategies going forward and thereby confront SAP, Oracle, IBM, Microsoft, and other SOA full-stack vendors head-on in these segments. It is also unclear how much effort or expense Software AG would incur in extricating the IDS Scheer offerings from the larger ARIS portfolio in order to make them more general-purpose and less BPM-centric. Nevertheless, Software AG will at the very least have a strong set of enabling technologies to support any such strategy in the near future.

What’s most exciting, and potentially differentiating, about the Software AG/IDS Scheer BI portfolio is the combination of CEP with mashup and an in-memory architecture to support truly real-time, interactive analytics. In other words, Software AG/IDS Scheer could take a page out of the book of another SOA full-stack vendor: TIBCO and its Spotfire product group. In doing so, Software AG/IDS Scheer would also be well-positioned to duke it out with SAP, IBM, Microsoft, and Oracle, all of which are beginning to emphasize in-memory CEP-enabled BI strategies. As we noted in a report from late 2008, in-memory architectures are coming to dominate the BI arena. Likewise, Forrester has called attention in to the growing adoption of CEP for truly real-time BI.

Whether Software AG capitalizes on the opportunity to expand its SOA solution stack into BI remains to be seen. Considering that it took Oracle more than a year to publicly declare how it will position BEA’s CEP and data federation technologies within its own SOA stack, we may have to wait a while before Software AG and IDS Scheer craft an equivalent roadmap--if they ever do.

But if they wait too long, the newly merging vendors may find that the dynamic SOA, BI, and CEP markets have passed them by.

Great News For The Process World—A Sea Change Is Coming

By Connie Moore

I've been working in the Business Process Management field for long time. How long? How's this—I remember when there wasn't any BPM—it was all just workflow. Plus, I remember when there wasn't any continuous improvement or Agile vs. Waterfall, it was just big bang Business Process Reengineering.

I've also been working in the content management and collaboration space for a long time. How long? I remember when people who tracked document imaging (me included) didn't know what document management was. And I remember when Lotus Notes and Groupwise defined the collaboration space, and nobody thought for two seconds about Microsoft.

Why do I ramble on through technology's memory lane? It's because I want to set the stage for what I'm about to write.

For years I've been talking about the need to marry structured processes with ad hoc processes. More than that, I've said we need to look at work from the worker's perspective, and tackle all the work that the person does. Instead of carving off the structured process and automating just that, and then leaving all that other work for the information worker to figure out how it gets done, I've argued that we should look at work holistically.  We should very deliberately add that chaotic, messy ad hoc world of work to our structured processes, and stop relying on information workers to mentally and physically (through cut and paste) integrate all their collaboration tools with structured processes. After all, haven't you heard the complaints about information overload from stressed-out workers?  Yep, me too—and we could do a lot to make that headache disappear by giving workers a highly contextual workplace that is powered by BPM.

But I've been a voice crying in the wilderness. I'm not kidding.  Whenever I would talk about collaboration with BPM vendors, they would somehow think I was talking about straight through processes between companies. That's collaboration, right???  And whenever I would talk about BPM with content and collaboration vendors, they would look at me blankly and mumble something about using simple workflow for approving documents.  It felt like two disconnected worlds that desperately needed to find each other.

In the past three months, I've noticed a huge sea change.

• It first hit me when I visited Salesforce.com in April.  One of the major, high-buzz topics of conversation that day was about integrating Facebook and Twitter with Salesforce's application.  The very fact that an application vendor was taking integration with Web 2.0 tools so seriously was an eye-opener.  Things were definitely heating up on the integrating collaboration with structured processes frontline.

• Then, I went to SAP's SAPPHIRE conference. The same thing happened. SAP showed applications that integrated information-rich visual data from Business Objects with its structured processes. Admittedly, this was more of a BI focus than a collaboration focus, but still, it marked the convergence of structured processes with more people-designed, visual information.

• Today, I attended the Workflow Management Coalition's Process.gov event and got firsthand validation that organizations have really started to integrate the structured and ad hoc worlds. Michael Ruiz from Deloitte demonstrated an application for the US Navy that supports Marine Domain Awareness.Situational awareness is the key concept behind this app. By integrating BPM with chat, e-mail, workflow, context sensitive collaboration, mobile messaging, picture messaging, wikis and data, the Navy can provide a highly contextual world for military analysts that automates every aspect of the job. It was an amazing demonstration of how process becomes more powerful when married with all the other people-oriented tools information workers use every day. 

I think a sea change is coming in the process world. Yes, straight through processes have their place.  And yes, BPM tackles many back office, transactional processes that don't have a heavy or even moderate collaboration angle.  But there's a huge world of work out there that involves e-mail and BI reports and documents—and we will truly put a dent in productivity time sinks if we can somehow get our arms around the entire world of work—not just that part that involves swim lanes, role activity diagrams and BPMN. Let's go work!

Dislocation Intelligence In A Brutal Economy

By James Kobielus

It's painful to see the auto, newspaper, construction, financial services, and so many other formerly vibrant sectors of the world economy go down the proverbial tubes. One of the most nauseating realities is when millions of people lose their jobs, homes, and communities in a seeming blink.

I grew up in the perpetually recessionary Detroit area. I'm attuned to the regional dislocations that come from depending too much on an industry that has seen better days. Abandoned storefronts, dilapidated housing, vacant lots, tumbleweed-quiet city streets--all of it evidence of a growing ghost town, telltale signs of a marginal economy that depends on government programs, private charity, and low-wage service jobs. During my college years, I was a policy analyst with an urban coalition in downtown Detroit, and I could see that the slide was long-term and nigh irreversible.

Even in relatively well-off areas such as Washington DC, where I've spent close to a quarter-century, we’re not immune to serious economic dislocations. The National Capital Region, so reliant on federal spending, is likely to feel the brunt of whatever cuts Obama will almost certainly make to close this massive deficit. And even here you can’t escape dislocations in sectors that we all depend on, such as retailing, as evidenced by, for example, the ex-Circuit City big boxes that seem even bigger and boxier now that they’re totally empty.

In recent years, corporations have adopted location intelligence solutions to support their market-entry strategies, such as adding new stores and waging marketing campaigns. They also use these tools--essentially, geographic information systems coupled with predictive modeling--to optimize their footprint in existing markets. And to a lesser extent, they also use location intelligence to plan their exit strategy of closings and retrenchments. But when departures are hasty--such as any Chapter 11 proceeding--all we’re left with are vast tracts of vacant real estate, plus many formerly employed people who must find a way to survive amid ruins. Imagine how a General Motors or Chrysler bankruptcy will hit Detroit--it will be a liquidation to rival Hurricane Katrina in its devastation of a major city.

Dislocation intelligence is something that the leaders of the auto companies--and the Obama administration--should exercise when making the tough decisions to restructure this critical industry. People’s pain should be factored into decisions to close and relocate plants, so that, for example, whole cities--such as Flint, Toledo, and Janesville--can make a smooth exit from over-reliance on this one industry. As part of that effort, urban planners should consider the infrastructure that remains behind, so that, for example, whole regions of a city are not suddenly deprived of hospitals, grocery stores, and other basic amenities. Imagine you’re on welfare and have to somehow go 10 miles to buy a loaf of bread.

Mapping tools are just tools, not salvation. Detroit long ago passed a point of no return. The US auto industry will never recover the manufacturing jobs that attracted people from all over the world to southern Michigan, northern Ohio, and other regions.

But we as a country should try to smooth over these economic dislocations so that they don’t completely wipe some places off the map.

Can BPM Keep You From Getting Fired?

 By Clay Richardson

Okay, I have to admit it:  “My name is Clay and I am a political junkie.” They say the first step to recovery is admitting that you have a problem. I am also a policy geek and I love watching C-SPAN.By now, I’m sure you’re wondering “What the heck does this have to do with I&KM pros?”

I believe last Wednesday’s House Hearing on Madoff and the SEC should be required viewing for all I&KM Pros – particularly for those of you that want to understand how BPM can keep you from getting fired.

If you caught the hearing in its entirety on C-SPAN (I had a front-row seat on my couch, thanks to being taken down by a nasty flu-like virus last Wednesday – this will become relevant a little later), you saw the whistleblower, Harry Markopoulos, rip into the SEC, FINRA, and other industry regulators. Mr. Markopoulos raised numerous red flags to the SEC about Madoff’s Ponzi scheme over an eight year period.

Pulling no punches, Mr. Markopolos called the SEC "incompetent" and FINRA "crooks" to their faces – senior representatives from both organizations were in the audience listening to the hearing and waiting for their opportunity to respond.  Following Mr. Markopoulos’s testimony, I thought "Hey, its time to get some popcorn, the fight’s on!" Then I recalled why I was home in the first place – sick, right? 

After a little break, the House brought out the SEC heads for their grilling.  I was particularly taken by the grilling given to the heads of SEC Compliance and SEC Enforcement.  My naïve assumption was that these people would have reasonable answers about why Madoff’s $50B Ponzi scheme fell through the cracks.  Boy, was I wrong!  They had not a single coherent answer.  In fact their collective answer was (I am summarizing here for them): "I don’t understand my own process."

Rep. Gary Ackerman completely went off on all of the SEC heads testifying at the hearing.  Based on Ackerman’s response, I hope all of the SEC heads started job hunting immediately following the hearing.  There is no doubt left in my mind that they will all be fired summarily (looks like I moved too slow on getting this blog post out).

After watching the hearing, I thought to myself "These people could have avoided being fired if they had simply implemented a good BPM solution."  Here are my Top 3 suggestions on how BPM could have kept them from getting fired (or at least kept them from appearing incompetent on C-SPAN):

Job Saver #1, Transparency – During the hearing, the SEC was grilled numerous times regarding specifics on how their compliance and enforcement processes worked.  For example, several congressmen asked "How many red flags does it take before action is taken?"  None of the SEC heads could answer this question.  Implemented properly, BPM provides the transparency needed to answer these types of questions.  Or at least it allows you to say, "We did not consider red flags as part of the process, and here is why…"  The other benefit of BPM is that the SEC's visual process for enforcement and compliance could have been published on the web for all to see.  Then, the SEC heads could have answered, "…as outlined in our current process, published on the Web…"  This would have helped them demonstrate the greatest degree of transparency.  I believe there is an opportunity here for process-wiki vendors (e.g., Lombardi Blueprint, Itensil, etc.)...

Job Saver #2, Business Rules – Many of the congressmen also asked about escalation rules for investigations in addition to several other "rules" related failures that allowed Madoff’s scheme to go undetected.  My immediate thought was that most of the rules discussed could easily have been captured by a rules engine to automatically escalate and route processes accordingly.  One of the congressmen asked "Do you give additional weight to tips coming from highly credible sources, like Mr. Markopoulos?"  The SEC responded, "Yes, we do.  However, we have to look at the history of the source."  The SEC's response left me thinking this is not a "rules" governed process – in other words "you are credible, if we think you are credible."  No, there should be documented and institutionalized rules that govern whether a source is credible.

Job Saver #3, Workload Management – Finally, one of the congressmen asked "How many fraud tips do you get in a given year?"  The SEC response:  "We get over 100,000 and there is no way we can chase down each and every one…"  I thought this was the most telling response.  In other words, the SEC was saying "We could not catch Bernie Madoff because we had too many fraud tips coming in..."  Using BPM, they could have automatically identified tips that had a high chance of fraud and routed these tips to be vetted by staff members with the appropriate expertise.

I&KM pros should take note!  If you have internal processes that are compliance-related (or otherwise), BPM is ideally suited to provide the transparency needed to make you look good in front of Congress, ahem, I mean key stakeholders,  that have hard charging questions when things go haywire.

After the House Hearing on Madoff and the SEC wrapped up, I finally decided I was sick enough to take myself to the doctor.  However, instead of going to my family practitioner, I decided to check out the “Minute Clinic”, CVS’s in-store quick clinic.  My experience there was the exact opposite of the fiasco I had just seen on C-SPAN.  I left the doctor thinking "The SEC could learn a thing or two from the Minute Clinic about how good processes work…"

In my next blog I will share more about my positive process experience at the "Minute Clinic"…

Meet One-On-One With Forrester Analysts At Our Business & Technology Leadership Forum 2008

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William Band
Research coverage for Business Process & Applications professionals
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Matthew Brown
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Peter Burris
Research coverage for Technology Product Management & Marketing professionals
Enterprise marketing platforms, marketing automation, high-tech, application development
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Bobby Cameron
Research coverage for CIOs
IT governance, risk, and compliance; the marketing of IT; serving the business; security and risk
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Marc Cecere
Research coverage for CIOs
Designing IT organizations, changing the culture of an IT organization, IT strategic planning
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Patrick M. Connaughton
Research coverage for Business Process & Applications professionals
Supply chain management services, supply chain management applications, enterprise mobility, RFID
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Alex Cullen
Research coverage for CIOs
IT organization; IT strategy, planning, and governance; organizational design and change management, IT management
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Boris Evelson
Research coverage for Information & Knowledge Management professionals
Information and knowledge management, business intelligence, OLAP, data warehousing
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Chip Gliedman
Research coverage for Business Process & Applications professionals
Customer relationship management, help desk/service desk, customer service and support, packaged applications
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Paul D. Hamerman
Research coverage for Business Process & Applications professionals
ERP, human capital management, financial management, business performance solutions
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Brian W. Hill
Research coverage for Information & Knowledge Management professionals
eDiscovery, archiving, records and retention management, enterprise content management (ECM)
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Bradford J. Holmes
Research coverage for Vendor Strategy professionals
Tech marketing tools and best practices; government, high-tech, tech marketing strategies
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Rob Karel
Research coverage for Information & Knowledge Management professionals
Information and knowledge management, integration technologies, metadata management, extract
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Rob Koplowitz
Research coverage for Information & Knowledge Management professionals
Information Workplace, collaboration strategy, collaborative platforms, SharePoint
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George Lawrie
Research coverage for Business Process & Applications professionals
Retail information technology; consumer goods supply chain; pricing, promotions, and revenue optimization; collaborative processes such as trade promotions management and sales; and operations planning
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Sharyn Leaver
Research coverage for Business Process & Applications professionals
Packaged applications, business process management, ERP, application strategy and selection
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Craig Le Clair
Research coverage for Information & Knowledge Management professionals
ECM, BPM, output management, document processing services
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Pete Marston
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Customer relationship management, sales force management, software-as-a-service, outsourcing
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Kyle McNabb
Research coverage for Information & Knowledge Management professionals
Information and knowledge management, document imaging, eForms and information capture, enterprise content management
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Thomas Mendel, Ph.D.
Research coverage for Vendor Strategy professionals
Product portfolio strategies, mobile services, business service management, data center management
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Connie Moore
Research coverage for Information & Knowledge Management professionals
Information and knowledge management, business process optimization, IT organization, enterprise content management
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Leslie Owens
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Information and knowledge management, taxonomy and classification, enterprise search platforms, text mining and analytics
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Natalie L. Petouhoff, Ph.D.
Research coverage for Business Process & Applications professionals
Customer service and support, customer experience, customer experience management, business strategy for customer experience
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Lisa Pierce
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Voice services, telecommunications services by region, remote access infrastructure, networking
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Tom Pohlmann
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Business models, high-tech, corporate strategy, tech sector economics, product and solutions strategies
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Stephen Powers
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Information and knowledge management, digital asset management, enterprise content management, Web content management
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Stefan Ried, Ph.D.
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Enterprise architecture, Service-oriented architecture, application platforms and programming strategy; application development
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Ted Schadler
Research coverage for Information & Knowledge Management professionals
Real-time collaboration tools (instant messaging, presence, document sharing, etc.), cloud-based collaboration and email, mobile collaboration tools and applications, virtual worlds for the enterprise
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Claire Schooley
Research coverage for Information & Knowledge Management professionals
eLearning, information and knowledge management, videoconferencing, Web conferencing, enterprise collaboration, new workforce, retiring workforce
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Scott Tiazkun
Research coverage for Business Process & Applications professionals
Financial management; governance, risk, and compliance; financial management applications; security and risk
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Zach Thomas
Research coverage for Business Process & Applications professionals
Human resources management applications, compensation, recruitment strategies, packaged applications
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Tim Walters, Ph.D.
Research coverage for Information & Knowledge Management professionals
Web content management, enterprise content management, digital asset management, information and knowledge management
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R "Ray" Wang
Research coverage for Business Process & Applications professionals
Enterprise apps and ERP, software contract negotiations, software partnerships and ecosystems, customer data integration
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Doug Washburn
Research coverage for IT Infrastructure & Operations professionals
Green IT, IT organization, IT infrastructure and operations, IT management
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Gil Yehuda
Research coverage for Information & Knowledge Management professionals
Enterprise Web 2.0 and Social Computing; collaboration strategy, tools, and culture; virtual communities of practice; virtual team collaboration
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Microsoft Unchains Content For The Blind With DAISY XML Word Add-In

By Sheri McLeish

Microsoft's release this week of the free Word add-in for DAISY XML is great news for blind consumers, as it opens the door for easy conversion of Word documents to digital "talking books." Forget about the criticism that was leveled at Microsoft that its foray into disability-related technology was in part fueled by self-interest to gain ISO approval for its Office Open XML standard (which it finally did receive April 1). Today, only a fraction of published works have been made available for the 180 million blind or visually impaired people worldwide. Microsoft's efforts will help not only writers and publishers make their work more accessible, but be a boon for businesses, schools, governments, and other agencies that can now convert their Word docs to talking books.

The "Save as DAISY XML" add-in was created through an open source project with Microsoft, Sonata Software Ltd., and the Digital Accessible Information SYstem (DAISY) Consortium. DAISY provides a framework to create a talking book format. With increased regulations to make content accessible — it's a requirement in the US for school textbook publishers to provide copies of books in DAISY format, for example — the Word add-in is a welcome complement other text-to-speech technologies. The challenge for earlier technologies to convert text-to-voice was providing a navigation capability similar to how a sighted person might scan a document, by title, chapter, or skipping around to points of interest. DAISY-formatted content provides a reading experience that most closely approximates how sighted people read print. The free tool creates a "Save as Daisy" option within Word 2007 and 2003. The files can then be "read" aloud by speech synthesizers, paired with audio narration, and used to create electronic Braille.

Microsoft isn't alone in trying to make the printed word more accessible to the blind. Adobe has a Read Out Loud feature for PDF. Both approaches use the hierarchical organization of structured documents to deliver voice translated content. But Microsoft's approach takes advantage its new Office Open XML format, and through this add-in is aggressively embracing accessibility. The competing Open Document Format (ODF) doesn't support the same accessibility demands, and these are the things that matter to a business when evaluating standards and file formats.

And for those at Microsoft involved with the DAISY XML add-in for Word, it really isn't just about standards: Microsoft Word's product manager Reed Shaffner has said, "Working in this area is by far the most rewarding part of my job — It's not like service packs and Word aren't fun .... it's just that thought of making technology usable for more people really makes me happy." Now, thanks to Microsoft's efforts to make the DAISY XML add-in widely available, a whole lot of other folks are going to be made happy too.

BI's New Frontiers In 2008 And Beyond

By James Kobielus

Business intelligence (BI) remains one of the most vital and innovative sectors of the data management arena. The past year saw BI achieve a new degree of importance in the solution portfolios of users everywhere. In fact, BI has begun to play into a much broader range of enterprise IT planning and deployment decisions than ever before. What follows are the most important trends that will continue to transform the BI industry, and add a new degree of complexity into decisions confronting CIOs, enterprise architects, and information and knowledge management professionals:

• BI becoming SOA’s crown jewel: The past year has seen a rash of headline-grabbing M&A deals in the BI arena, with Oracle’s acquisition of Hyperion, SAP’s deal for Business Objects, and IBM’s pending takeover of Cognos—not to mention acquisitions of smaller BI and corporate performance management (CPM) application vendors by most of those firms. It’s far too easy to misinterpret these recent events as just more of the same M&A-stoked empire-building that we’ve come to expect from large IT solution vendors. What’s driving this recent industry consolidation—which is sure to continue in 2008--is growing vendor recognition that BI is the crown jewel in any comprehensive service-oriented architecture (SOA) solution portfolio. Though Oracle and SAP (and, to a lesser degree, IBM) already had decent BI wares in their respective SOA portfolios, none of them were on any enterprise’s short list of name-brand BI solution providers—until, that is, each of them decided to grab a leading BI pure-play. SOA suites cannot be considered feature-complete unless they incorporate a comprehensive range of BI features.
• BI evolving into tailored business analytics: CPM—sometimes called “business analytics”—is rapidly becoming a key competitive front in the BI wars. Increasingly, BI/CPM vendors are offering tailored solutions for a dizzying range of horizontal business requirements and vertical industries. Vendors’ continued profitability also hinges on their ability to provide the professional services necessary to create, customize, and support business analytics for each vertical industry’s and specific customer’s unique requirements. Without a doubt, we’ll see further verticalization of product and service offerings by CPM vendors in 2008, which will provide a necessary hedge against the inevitable creep of commoditization into such horizontal analytics segments as financial, human resources, sales and marketing, and supply chain management.
• BI going truly real-time through complex event processing: Complex event processing (CEP) promises business agility through continuous correlation and visualization of multiple event-streams. However, CEP has heretofore been conspicuously missing from the mainstream BI arena, necessitating stovepipe CEP implementations that are only loosely integrated with enterprises’ existing visualization, reporting, dashboarding, information modeling, metadata, and other BI infrastructure components. That will change big-time in 2008, as most leading BI vendors start to partner with CEP pure-plays, or acquire them outright, in order to strengthen their support for real-time event-driven applications. Indeed, we expect IBM to ramp up its CEP/BI integration now that it is acquiring both CEP pure-play AptSoft and BI/CPM vendor Cognos. AptSoft will also figure into IBM’s business process management (BPM) portfolio in support of closed-loop BI and business activity monitoring (BAM). We also expect to see SAP/Business Objects, Oracle/Hyperion, SAS Institute, Microsoft, Information Builders, and MicroStrategy venture into the CEP arena in the coming year. Likewise, it’s very likely that the newly independent Teradata, which has taken the lead in real-time data warehousing (DW), will snatch up a CEP vendor to build out its real-time BI portfolio.
• BI bundling with DW appliances: Appliances have even begun to take up permanent residence at the heart of the enterprise data center: in the DW and BI infrastructures. Increasingly, vendors are focusing on integrating, packaging, and pricing their DW/BI products as pre-configured, modular appliances for quick deployment. These appliances consist of processing, storage, and software components that have been prepackaged, preconfigured, and pre-optimized for core DW/BI functions such as multidimensional online analytical processing (OLAP) queries, bulk data loading, and online archiving. The past year saw a growing range of DW vendors—including such DBMS powerhouses as IBM, Oracle, and Microsoft—reorient their DW/BI go-to-market strategies around the appliance model. In turn, leading BI vendors such as Business Objects and Cognos made a big push into the appliance arena. In 2008 and beyond, more and more DW vendors will pre-integrate BI solutions—their own and/or those of their partners—into their appliances. Increasingly, DW/BI appliances will be tailored, packaged, and priced for many market segments and deployment scenarios.
• BI goes collaborative: Collective intelligence is an organization’s most precious asset. Traditionally, the BI industry has offered little to directly address one of the most critical components of group IQ: the collaboration environment. Instead, most BI applications focus on delivering targeted reports, analytics, dashboards, multidimensional visualization, and other key data to individual end users in isolation, rather than to larger business teams. In the past year, though, the BI industry has begun to roll out more collaboration features in their products—such as Microsoft with their new Office PerformancePoint Server 2007 solution--or, at the very least, to begin talking about new collaboration features to expect in the coming year. In 2008 and beyond, we expect to see the BI, collaboration, and knowledge management segments converge. Likewise, we expect to see such interactive Web 2.0 technologies as AJAX, blogs, wikis, and social networking revolutionize the BI experience. Many BI vendors now realize that decision support environments should allow users to access intelligence wherever it may reside, be it in data warehouses or in the heads of remote colleagues.

Going forward, Forrester will increasingly focus on the cross-synthesis of BI with all of these solution areas. We will provide best practices, methodologies, and tools to help customers sort through the myriad issues.