Not everything is easy. I analyzed data for decision-making for many years using advanced techniques such as predictive modeling, machine learning and even influence diagrams. With the rush to pervasive BI we often forget about the need for truly sophisticated analysis to aid in complex decision making. I’m talking about decision support for critical strategic initiatives such as managing a portfolio of investments, preparing for terrorist threats, or modeling sales spending for drug marketing when dealing with competing products. In other words, analysis of dynamic situations where multiple outcomes are possible.
Past performance is not a guarantee of future results
What is constant is that the world does not remain constant. The future is dynamic, change is expected and traditional BI can only take you so far in the decision game. Often, it is necessary to determine a series of plausible futures or explore the consequences of possible decisions. DecisionPath [www.decpath.com] a Boston based company uses the “past performance” phrase above to drive home some of the limitations of BI. I had a very interesting briefing with Richard Adler, the CTO of DecisionPath, the other week. He correctly pointed out the following:
BI technology helps to examine the past and today and how we got there
Predictive analysis is useful if the future doesn’t change, which of course it will, necessitating updating the models (if possible).
BI can provide high quality input into decision-making, but it doesn’t provide the whole picture because the world is dynamic.
BI does not actually support the process of decision-making (i.e., actively enabling or enhancing it). Think about the word process here.
DecisionPath offers a product called ForeTell that helps to develop and test decisions. ForeTell combines various complementary simulation techniques in one framework. So, whereas a software vendor might provide some of these techniques, DecisionPath has put them together in one framework that works together with BI systems to model, simulate, and explore possible decision outcomes and test alternative decisions. Here is an illustration, provided by DecisionPath, that describes the relationship between BI and ForeTell:
This is not your ma and pa BI and it clearly not for everyone. DecisionPath has made good inroads in the government, pharmaceutical, and financial sectors where complex analysis is the norm. However, alternative decisions with complex tradeoffs exist in all industries to some degree so certainly the approach is applicable to a wider range of verticals than those listed here.