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Posted by James Kobielus on December 21, 2011
Next best action is the proving ground for advanced analytics and big data; it’s also the infrastructure that provides analytics- and rule-driven guidance across one or more customer-facing touchpoints. You can find next best action at the heart of multichannel customer relationship management (CRM) initiatives everywhere. It’s even present in a growing range of back-office business processes such as order fulfillment and supply chain management.
Next best action will continue to develop as an overarching business technology initiative for many companies in the coming year. The market is emerging and is becoming aware of itself as a substantial new niche, in much the same way that the Hadoop market flowered in the past year.
Here are some of the highlights that Forrester anticipates in the next best action arena in 2012:
- The next-best-action market will continue to coalesce around core solution capabilities. Traditionally, next best action has been a capability embedded in your customer service, marketing, and other CRM applications. That remains the heart of the next-best-action solution market. However, the past several years have seen the development of a niche for next-best-action standalone infrastructure that you may deploy in conjunction with various CRM and back-office applications. In 2012, we will see more vendors converge on the next-best-action arena from various backgrounds, including predictive analytics, business process management (BPM), business rules management (BRM), complex event processing (CEP), decision automation, recommendation engine, and social graph analysis. Many established vendors will repackage and reposition their offerings in these segments under the banner of next best action in order to address hot new solution areas, including multichannel offer targeting, marketing campaign automation, and customer experience optimization.
- Data scientists will become the principal application developers for next best action. The process logic underlying next best action requires a layered approach to application development; at the very least, it encompasses a complex pattern of predictive propensity models, BPM orchestration models, and deterministic business rules, as well as human judgment at key interaction points. Developing, validating, maintaining, and updating this layered logic will demand that enterprises provision visual tooling, project-based collaboration, comprehensive governance, and pervasive automation to the data scientists who will become the principal application developers in this new world. In 2012, we will see vendors roll out more sophisticated development tooling specifically geared for complex next-best-action programs. We will also see enterprise data scientists bring BPM, BRM, CEP, and professionals from other key disciplines into their teams, along with their development tools and approaches.
- Real-world experiments will become the new development paradigm in next best action. The key use case of next best action is to allow companies to rapidly engage in real-world experiments in production applications: implementing different predictive propensity models in different channels, at different interaction points, using different call-center scripts and message contents, with different customer segments, and with other variables. Typically, next-best-action professionals use the results of these in-production experiments — such as improvements in response, acceptance, and satisfaction rates — to determine which next-best-action models work best in various scenarios. In assessing the efficacy of models in the real world, the core development practices are the ability to isolate key comparison variables through A/B testing and to iterate tests by rapidly deploying a challenger model in place of the former in-production champion model. In 2012, we will see enterprises place greater emphasis on real-world experiments as a fundamental best practice to be cultivated and enforced within their data science centers of excellence. Vendors will emphasize features in their development tools that facilitate real-world experiments, such as ensemble modeling , champion/challenger modeling, real-time model scoring, and automatic best-model selection.
Of course, next best action is such a broad, complex, and innovative new market that we can scarcely fit all of our predictions and analysis into a short blog post. Tune into Forrester’s deepening coverage of next best action in the coming year — and be sure to read our ample published research on the topic from the year gone by, starting with this.