Thursday, October 29, 2009

Decision Management and the Cloud

Last week Predictive Analytics World brought together a fantastic collection of minds to share case studies and expertise. A theme echoed in multiple sessions and conversations was that analytics are a necessary but not sufficient ingredient for success. To succeed it is critical to have a strong alignment and integration of technology, processes and corporate strategy. Not an easy task but the ROI tends to be irresistible and mastering this act is at the core of Decision Management.

What does Cloud Computing have to do with effective Decision Management? Well, one of the most obvious aspects is better analytics. Cloud computing offers more storage and more processing power at lower costs. More computing power and more data for less money seems quite attractive. Furthermore, these characteristics make predictive analytics accessible to many more organizations and applications. I like to think about it as the democratization of predictive analytics made possible by Cloud computing.

But that is just one part of the story. Predictive Analytics on the cloud will succeed because of the Cloud's standards and open platforms. Operationalizing analytics behind the firewall of a large corporation can require the custom integration several layers of expensive software and in-house applications, e.g.: point of sales systems, call centers, databases, rule/workflow engines, analytic engines/models, etc. The cost and complexity of these projects can easily challenge the most optimistic ROI models.

Fortunately the Cloud is being designed precisely to simplify these scenarios. For example, let's consider, one of the leading Cloud platforms available today (along with Netsuite and Intuit among others). Salesforce simplifies integration because it has a rich API based on open standards. Salesforce has a powerful workflow engine to automate business processes a flexible data repository and native support of email, social and mobile channels. All of this functionality is available on demand on a pay as you go basis. Similar functionality is becoming more and more popular among cloud platforms but getting it on-premises is far more complicated.

The Cloud can deliver more powerful analytics and also help make them actionable. Now we just need alignment with the Corporate Strategy but we'll leave that for a future post.