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Exception Intelligence

  Article published in DM Direct Newsletter
November 21, 2003 Issue
  By Nari Kannan

Recently, there have been several studies of companies that use business intelligence applications and tools. These studies detail the problems and progress associated with their deployments and integration. Business intelligence and analytical software packages are being purchased, integrated and used in an equal measure with in-house custom application development. A majority of companies are already using business intelligence and analytical packages, and those companies without an effort underway plan on initiating development within 18 months.

Even more interesting, these studies indicate that the predominant reason companies build their own business intelligence applications is because of missing (required) functionality in most packages. Business intelligence and analytical packages are refined and powerful, but it?s not surprising that volumes of data located in different parts of a company have created the need for the end user to sort through mountains of reports to get the actual required data. Most BI and analytical package vendors have moved recently to provide integration or data aggregation mechanisms.

However, there are some areas of business intelligence that traditional business intelligence or analytical packages do not adequately cover. Exception intelligence is one such area. Due to the heavy emphasis on data collection, data warehousing, aggregation, reporting and ad hoc analysis of business intelligence data, the time-sensitive nature of business intelligence has never been adequately explored.

Exception intelligence deals with getting the right information to the right person at the right time. If you have managed networks or systems or in a data center, you are familiar with how useful and indispensable, alerting and escalation process tools are. Data center managers do not want to be bothered with every entry in the log file, but they do want to know if certain thresholds have been crossed (for example, running out of disk space). If a production system comes down, they want to know immediately and if the person responsible is not available, the next person in the escalation list needs to be informed to take corrective action. Exception intelligence extends the same concept to any and all business processes.

You can argue that you can get the same information through regular business intelligence reporting and running the reports often enough. However in practice, this does not work. Nobody wants to read through a bunch of reports every morning to determine if action is needed on any exceptions. We would rather get an e-mail message when we need to take action on something. If we need to take action on many issues, we would prefer to get a summary report. If there are too many issues happening in real time that we need to know about, we would prefer a real-time dashboard that gets updated on the list of action items for us. This is where exception intelligence requires a different approach than other forms of business intelligence.

Exception intelligence need not be about business events that happen in real time. It can also be about events that were expected to happen but did not. Some examples of real-time events that happen in real time are inventory levels of a manufacturing-critical part reaching reorder levels or a business event in the processing of a loan application. For example, if a rate has not been locked within five days of the applicant being approved to lock the rate, an exception has been created and someone needs to be notified immediately to take action. Another example could be recognizing that a product or service contract comes up for renewal and payment has not been received. In this case exception intelligence needs to kick off an e-mail reminder to the appropriate sales person.

What have been the roadblocks to implementing exception intelligence so far? It is essentially recognizing real-time events as they happen. Your software applications need to be rewritten so that these events can be published as and when they happen, and other applications such as a notification engine could look for these events through subscriptions to the publish/subscribe frameworks. The other roadblock has been the lack of easy-to- develop and deploy tools that can set up events that are expected within deadlines.

Exception intelligence is most useful in businesses and applications that have the following characteristics:

  • Processing Silos ? Large companies that depend upon different groups to complete a business process. Shortening processing cycles in large companies saves money for the company. Insurance companies are very interested in shortening the cycles for processing auto insurance claims, especially if you have a rental car option. Every day the claim is not processed, they are paying for your rental car.
  • Business Processes that Involve Third Parties ? A home equity loan application process quite often involves many third parties along with the lender. Exception intelligence can help ensure tasks are completed and not delayed. This can close the loan quicker, saving the lender time and money, along with creating customer satisfaction.
  • Project or Business Process Management with Critical Paths ? Exception intelligence is crucial in cases where tasks on a business process critical path need to be monitored. If no action is taken on these tasks, the entire process falls behind schedule.

What are some of the benefits of exception intelligence?

  • Increased Revenues ? As anyone who has any experience in selling knows, every minute spent not closing a sale reduces the chances of closing the sale. From a purely theoretical point of view, this may not make much sense but practice teaches you that delay introduces many uncontrollable factors such as time for a competitor to introduce FUD (fear, uncertainty, doubt) or personnel changes at a customer (bringing the sales cycle back to the beginning), etc. Exception intelligence helps increase revenues with the right information provided to the right people at the right time so that they can act on them quickly.
  • Reduced Costs ? Shortening business process cycles cut costs. Getting exception intelligence about incomplete tasks spurs action with the right people at the right time. Productivity increases reduce costs of a product or providing a service.
  • Responsiveness to Prospects and Customers ? Network and system monitoring alerts help data center managers provide better service to their customers with their responsive attention to new problems. Exception intelligence achieves the same for business prospects and customers, whether they are internal (i.e., human resources representative making sure all business processes are followed up and completed for a new employee or an employee that is leaving the company) or external.

Business intelligence and analytics provide visibility to information aggregated from raw data that is not that useful for decision makers in its raw form. They help analyze what happened (post mortem) and make appropriate decisions going forward. Exception intelligence helps highlight business events as they happen only to the right people at the right time (enabling them to take the appropriate actions). Since they deal with the kind of information that current business intelligence and analytic tools don?t provide, they make a useful addition to a company?s Business intelligence tools and techniques arsenal. In our never ending quest to do the right things right, the time dimension of business intelligence is just as important as the intelligence. Exception intelligence provides precisely this edge.


For more information on related topics visit the following related portals...
Business Intelligence and Real-Time Enterprise.

Nari Kannan is the president and CEO of Ajira, a company designing and developing real-time business intelligence software tools. Kannon has 18 years of experience in information technology, starting out as a senior software engineer at Digital Equipment Corporation. He has since served variously as vice president of Engineering and chief technology officer of five Silicon Valley startup companies dealing with a variety of problems in IT consulting, automotive claims processing, human resources and logistics applications. He can be reached at nkannan@ajira.com or at (925) 487-1768.

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