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Real-time or Right-Time

This article on real-time v right-time by Jim Ericson made me think about how this topic plays out in an EDM context. The key issue it seems to me is to establish which moves towards real-time offer real business value and which do not.

I thought I would start with an old example of improving the time it takes to do something and how only certain improvements make a difference.

  • Let's say I am a bank and it takes my competitor 5 days to make a loan decision (this is an old story, no-one takes 5 days anymore). If I can move my loan decision closer to real-time I should gain a competitive edge, right?
  • Well, perhaps not. If I reduce my time to decide to say three days my customer still has to leave the branch and come back some days later. They probably won't see a gain of a couple of days as critical (unless they have some deadline).
  • What if I can reduce it to one day - just have them come back tomorrow? Well, perhaps.
    What if I can reduce it to a few hours - come back later today? Still probably not that compelling.
  • But what if I can reduce it to say 10 minutes and say "why don't you have a cup of coffee and I'll get you the answer in a few minutes"? Now I would say you can a compelling competitive edge. You have not reduced it to real-time but to the right-time to make a difference.

Clearly some decisions need to be taken in real-time - routing a phone call to working equipment when something fails is only useful if it does not delay the call for instance - but many more decisions can be taken closer to real-time for a significant business benefit without having to become really "real-time".

Before deciding how fast to try and make a decision, one should try and see what the potential benefits of such an acceleration might be. If I can only contact customers by snail mail, for instance, it is probably not very advantagous to decide on the best offer to make them in less than a day. If they are on my website there might be huge value in deciding on the best cross-sell before they leave the site.

This benefit analysis needs to be multi-dimensional. It does no good, often, to improve the speed of a decision if it becomes less precise or harder to change in response to business conditions. A concept called Decision Yield, which measures Precision, Consistency, Agility, Speed and Cost can be a good way to ensure that a sufficiently holistic approach is taken.
Having figured out the potential benefits of improvement and the balance of different aspects of the decision, assessing the cost and difficulty can continue. It is also important to consider the potential benefit of increased speed, increased precision and so on. If you are already getting cross-sell success rates well in excess of the industry average, making your offer more targeted may not help. Reducing the time to take a decision may not make a difference to your business unless it helps you improve a customer interaction in some way.

One story that illustrates the value of moving to "right-time" decisioning is Unitrin's Kemper Auto and Home Group's use of Fair Isaac decisioning technology to deliver underwriting decisions to the point of contact with a customer, typically an agent.

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