If you are starting up a real time decisioning implementation do yourself, the project and your organization the justice of including an entire workstream around simulation. Why? Well, not having the ability to simulate your enterprise decisions is (in many ways) analogous to not having a window to see out of, an altitude gauge, radar, etc. while flying say a Boeing 747. If your flying 50 tons of aircraft you probably want to know (or have an idea) what is going to happen when you when push a button, turn the wheel, etc.
To say simulation in the real time decisioning space is a big topic is probably a huge understatement. However, for the purposes of this post we believe there are several areas of focus that are simply must haves for any real time decisioning implementation.
Micro & Macro results. The solution must provide users the ability to analyze results for individual customers (Micro) as well as large groups of customer aggregations (Macro). They each have very different purposes. Micro generally is used for basic understanding of the fundamental operations of your decisions i.e. how a customer is treated and why. Whereas, on the other hand, Macro results allow the users to understand the impact the entire decisioning program has on the organization across relevant dimensions e.g. financial, inventory, utilization, etc.
Integration with Business Planning. Whether you’re talking retention, cross sell, work routing or whatever… the realty is that the business logic that governs your enterprise decisions impacts your organizations’ assets. Naturally, this means that before your system goes live everyone involved should have a good idea on the magnitude of that impact. This sounds like common sense but I’ve not seen it done properly to date. For example, if you’re dealing with a retention implementation in which your organizations is literally investing money into targeted customers during the interaction then the system is literally giving away money. In this cases the business planning integration would be with Marketing Budgets & Finance. The system must be aware of budget allocation and burn rate in a proactive and controlled manner.
Accuracy. This is largely about the data that is used within the simulations. The main challenge here, especially in large organizations, is to have simulations run on environments that are identical to the production (or live) environment. This can be an enormous challenge (and thus expensive) due to the complexity of the technical infrastructure in a production real time environment. HOWEVER, back to the Boeing 747 analogy; would you pilot a plane like that if you couldn’t see, didn’t know your altitude etc. even though those instruments may be costly? Of course not.
Proactive Business Process. Ensure that simulation is embedded in the change management process of your enterprise decision management. Tactically, this means that no change (e.g. to fundamental rules/logic) should ever be put into production without a view from a simulation activity. This will ensure that the organization has even a chance to understand what changes were responsible for positive vs. negative results. All too often simulation is a reactive activity that is invoked after a disaster or severe issue to try to understand the cause. Specifically the result of doing this bit correctly would likely include things like regression and unit testing on a standard set of data.
Build a Control Group. Lastly but certainly not least, ensure that the project creates a sustainable capability for a control group. Without proper experimental design principles (such as a statistically relevant control) the project will struggle to understand and report on the ROI of the system. Additionally, control groups are fundamental to the organization’s ability to improve customer interactions over time.
The above points are not intended to be exhaustive. However, these areas are key in having an effective simulation capability. That said, all to often simulation is an after thought because, from a pure functional perspective, you don’t have to have simulation capability to go live. Similarly, you don’t need to be able to see to fly but it can be fairly dangerous to do so…
