models collecting dust? how to transform your results from interesting to impactful
DESCRIPTION
Data scientists sometimes lament, "Why can't I get anyone to use my predictions?" Great models that make accurate predictions are sometimes disconnected from organizational decision-making. This hurts the business and reduces the data scientists’ perceived value the within the organization. But it doesn't have to be this way. Leading expert James Taylor, author of Decision Management Systems: A Practical Guide to Business Rules and Predictive Analytics, has developed a practical approach you can use to improve adoption and elevate your organization.TRANSCRIPT
![Page 1: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/1.jpg)
Models Collecting Dust?
James TaylorCEO
![Page 2: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/2.jpg)
©2012 Decision Management Solutions 2
Your presenter – James Taylor
CEO of Decision Management Solutions
Works with clients to improve their business by applying analytic technology to automate & improve decisions
Spent the last 9 years championing Decision Management and developingDecision Management Systems
![Page 3: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/3.jpg)
ChallengesOr why your models are
gathering dust
![Page 4: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/4.jpg)
©2012 Decision Management Solutions 4
Knowing is not enough
Those who know first, win
Those who ACT first, winProvided they act intelligently
![Page 5: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/5.jpg)
It’s hard to communicate your value
5©2012 Decision Management Solutions
![Page 6: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/6.jpg)
Time to deploy models matters
6©2012 Decision Management Solutions
![Page 7: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/7.jpg)
Cottage industries don’t scale
7©2012 Decision Management Solutions
![Page 8: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/8.jpg)
Challenges with predictive analytics
Actions are needed not just predictionsBegin with the decision in mind
The business does not understand analyticsA business context for analytics
Analytic models age quicklyCottage industries don’t scale
Industrialize your analytic processes
8©2012 Decision Management Solutions
![Page 9: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/9.jpg)
Begin with the decision in mind
![Page 10: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/10.jpg)
Decision Management is the proven approach used to
manage decisions and apply predictive analytics effectively
11©2012 Decision Management Solutions
![Page 11: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/11.jpg)
©2012 Decision Management Solutions 12
3 Steps to Decision Management
DiscoverBuildImprove
![Page 12: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/12.jpg)
©2012 Decision Management Solutions 13
What is a decision?
Data is gathered, consideredA choice or selection is madeThat results in a commitment to action
![Page 13: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/13.jpg)
©2012 Decision Management Solutions 14
Different kinds of decisions
Strategic Decisions• Few in number, large impact• Should we acquire this company or exit this market?
Tactical Decisions• Management and control, moderate impact• Should we re-organize this supply chain, change risk management approach?
Operational Decisions• Day-to-day decisions that affect one transaction or customer• Best offer for this customer ?How risky is this loan? Is this claim fraudulent?
![Page 14: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/14.jpg)
©2012 Decision Management Solutions 15
Decisions are the focal point for risk
Risk is not acquired in “big lumps” but one transaction at a time
![Page 15: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/15.jpg)
©2012 Decision Management Solutions 16
Decisions maximize customer value
![Page 16: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/16.jpg)
Risk Opportunity
©2012 Decision Management Solutions 17
Three kinds of analytic decisions
Fraud
![Page 17: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/17.jpg)
©2012 Decision Management Solutions 18
Analytics power operational decisions
How do I…prevent this customer from churning?convert this visitor?acquire this prospect?make this offer compelling to this person?identify this claim as fraudulent?correctly estimate the risk of this loan?
It’s not about “aha” momentsIt’s about making better operational decisions
![Page 18: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/18.jpg)
Case: RetailerBusiness challenges Solution Benefits
Grocery chains are battling for market shareCustomer loyalty is essential for growthLoyalty to the brand, not a single store format
Tailored promotions integrated with loyalty programIntegrated system from back office to point of saleConsistently compelling offers across channels
Increased revenueDeep knowledge of customers across formatsMore effective promotional campaigns
19©2012 Decision Management Solutions
![Page 19: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/19.jpg)
A business context for decision making
![Page 20: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/20.jpg)
©2012 Decision Management Solutions 22
Candidate decisions
Determine if a customer is eligible for a loan
Calculate the discount for an order
Assess the risk of a transaction
Select the terms for a deal
Choose which claims to Fast Track
These are decision wordsThe system must answer a question each time
![Page 21: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/21.jpg)
©2012 Decision Management Solutions 23
Target decision-making on KPIs
The link between decisions and KPIs is critical
Operational decisions affect KPIs
KPIs measure operations
Strategy defines KPIs
![Page 22: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/22.jpg)
©2012 Decision Management Solutions 24
Decision to KPI mapping
KPIs impacted by improvement in decision
CustomerChurn
Customer Service Calls
Losses Retention Budget
KPI 5
What retention offer should be made? ↑ ↑ ↓ ?What initial price should be offered? ↑ ↑Should an intervention call be made? ↓ ↓Decision 3 ?…
![Page 23: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/23.jpg)
©2012 Decision Management Solutions 25
Decompose the decisioning
What is required to make decision?Guidelines, policy documentsHuman expertiseRegulationsExisting system logic
Data describing the caseExternal reference data
Predictive Analytic ModelsData Mining Results
The results of other decisions
![Page 24: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/24.jpg)
©2012 Decision Management Solutions 26
Decisions provide context
ProcessesActivities require decisions
EventsTrigger decisions
SystemsImplement decisions
Organizational UnitsMake decisionsOwn decisionsAre impacted by decisions
Know which business processes will be improved by your analytics
Know when your analytics might be calculated
Know how you will have to deploy your analytics
Know who cares about your analytics and who will have to believe them
![Page 25: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/25.jpg)
Case study: InsurerBusiness challenges Solution Benefits
Use analytics to improve underwriting
Embed analytics in claim processing application
Model and decompose decisionsMap decisions to systems and organizations
Find the decisions that could be impacted and refocused analytic effortConstrained analytic effort to ensure successful implementation
![Page 26: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/26.jpg)
Industrialize Analytics
![Page 27: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/27.jpg)
©2012 Decision Management Solutions 29
Embed Predictive Analytics
Decision
?
?
![Page 28: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/28.jpg)
In-database Modeling
In-database Scoring
Model Tuning
Data ManagementData PreparationData Visualization & AnalysisModelingModel ValidationDeployment and ScoringModel MonitoringModel TuningRepository
©2012 Decision Management Solutions 30
Analytic Insight Management
![Page 29: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/29.jpg)
©2012 Decision Management Solutions 31
Build decision-making components
Operational Systems
AnalyticSystems
Decision
![Page 30: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/30.jpg)
Case study: Cable TVBusiness challenges Solution Benefits
1.2M householdsMany single-product householdsWhole industry suffers from low loyalty and 20%+ customer churnIncreasing competition and changing regulations
Predictive analytics to predict churn, cross-sellBusiness rules use analytics and data to drive dynamic scriptsEmbedded in call center application to improve decision making
13-18% cross-sell hit rate on average
Up to 40% cross-sell success rate for some
Teams using the scripts have more sales
Reduced churn by 20-30%
32©2012 Decision Management Solutions
![Page 31: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/31.jpg)
Some Pitfalls and how to avoid them.
![Page 32: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/32.jpg)
©2012 Decision Management Solutions 34
Operational decisions are at the center
Business
Decision
![Page 33: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/33.jpg)
©2012 Decision Management Solutions 35
Don’t just create a decision point
![Page 34: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/34.jpg)
©2012 Decision Management Solutions 36
Create Continuous improvement
![Page 35: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/35.jpg)
Case: State dept of taxationBusiness challenges Solution Benefits
Paper tax returns increased costs and slowed responsesInformation system silosManual fraud detection and return review
Single central taxpayer databaseIntegrated systemSophisticated real-time predictive analytics
Recovered millions of dollars from dubious tax returnsIncreased collection of unpaid taxesDecreased number of questionable returnsIncreased customer satisfaction
37©2012 Decision Management Solutions
![Page 36: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/36.jpg)
Questions?
![Page 37: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/37.jpg)
©2012 Decision Management Solutions 39
Decision Management SystemsWhat if you could make your systems active participants in optimizing your business?
What if your systems could act intelligently on their own?
Decision Management Systems can do all that and more. This book shows how to integrate operational and analytic technologies to create more agile, analytic, and adaptive systems.
Discount Code: TAYLOR4389
For more information about this new release, visitwww.decisionmanagementsolutions.com/book
![Page 38: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/38.jpg)
In a Predictive Enterprise, analytics are…Pe
rvas
ive
Pred
ictiv
eA
ctio
nabl
e
Used in every transactionAt the point of contact/deliveryIn operational decision making
From reporting to prediction and forecastingData miningPredictive analytics and scoring
Decisions being made, actions being takenDecision Management SystemsDecision Support Systems
40©2012 Decision Management Solutions
![Page 39: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/39.jpg)
©2012 Decision Management Solutions 41
Begin with the Decision in mind
Find the decisions that matter to your business and model them
DiscoverBuildImprove
![Page 40: Models Collecting Dust? How to Transform Your Results from Interesting to Impactful](https://reader033.vdocument.in/reader033/viewer/2022061300/54c8df864a7959fd728b45c8/html5/thumbnails/40.jpg)
Create an Analytic Factory
42©2012 Decision Management Solutions