Next Best Action: Its Leading Synonyms and Trailing Cynicisms
"Next best action” is a hot focus area under big data, advanced analytics, digital marketing, smarter commerce and other business imperatives. Enterprises have been doing next best action, in various forms, for years. Many companies continue to scale up and build out their next-best-action infrastructures, integrating a wide range of technologies.
But let's face it: next best action is a conversation killer, even among tech professionals. It's not that it's a forbidden–or even forbidding–topic. If you've been noticing, I've been peeling the layers of the next-best-action onion over serial blogposts. Hopefully, your eyes aren't totally teary by now and, perhaps, you've learned a thing or two.
The core issue is that some observers either refuse to accept that next best action is a well-defined market segment (unlike yours truly, who sees it taking greater shape all the time), or they accept it in spades but define it differently. Ah yes, this is the same sort of definition war that also makes big data a perilous paradigm for the pushy pundit. Many careers have been built on one or another set of ruling definitions, making it far too easy for discussions to develop a thick crust of cynicism as the pundits consider each other's vested interests with eyes a-jaundiced.
With all that as prelude, here is how your humble evangelist defines the core paradigm of next best action. I'm also throwing in the principal quasi-synonyms that often get tossed into this occasionally contentious conversation:
- Next best action: This refers to best practices for proactively guiding and optimizing any or all steps in one or more business processes.
- Next best offer: This is the core application of next best action in customer-facing processes, including outbound marketing campaign management and inbound sales processes. Next best offer may involve various degrees of decision automation (e.g., auto-generated offers presented in context of portal browsing session) and decision support (i.e, auto-scripted human behaviors that allow situational judgment, such as a call center agent trying to make sale to reluctant customer from a dynamically prioritized list of offers).
- Decision automation: This involves using programmatic elements, rather than humans exercising judgment, as next-best-action decision agents. It is enabled through "decision engines" of all shapes and sizes, including rules engines, workflow engines, and recommendation engines, and powered by business rules, advanced analytics, orchestration models, and other process content. Decision engines are usually set up to take as many automated decisions as they can in accordance with complex rulebases. They offload the most routine, repetitive, cut-and-dried decisions from human decision agents. But they still must escalate the “exception conditions” to people for manual resolution. Human beings, as “exception handlers,” are still very much in the loop on most automated business processes.
- Decision management: This is the practice of determining what blend of decision automation and decision support is necessary to optimize next best action to the business process(es) of interest: customer-facing, back-office, or some combination thereof. To the extent that it makes sense to maximize decision automation for next best action, you should automate decisions so that only the higher-value exception conditions are escalated to one or more humans for judgment-based responses. To the extent that decision support is necessary, you should leverage your business intelligence, collaboration, knowledge management and human workflow environments in your next-best-action environment.
- Interaction optimization: This is the practice of using next-best-action technologies to enhance both customer satisfaction and customer lifetime value, spanning one or more offers, interactions and experiences across all customer-facing channels, processes and roles.
- Business process optimization: This is the practice of using next-best-action technologies to optimize back-office outcomes (such as speed, efficiency, quality, agility, profitability, etc.), as well as (optionally) customer-facing outcomes such as retention, upsell, satisfaction, response and acceptance rates, etc.).
I've simply posited Koby's own pet definitions here. I'm sure I'll get a volley of great social discussion debating them all to the nth degree, both inside and outside of IBM. That's cool. Bring it on.
No need to invest too much in defending mere words. Solutions that deliver business outcomes are what truly matter. Better to invest in solutions.
Where are the next-best-action solutions? As I've noted in various contexts, you can implement next best action through functionality that comes embedded in an application, or through specialized infrastructure such as IBM SPSS Decision Management, or by integrating diverse technologies in-house or by engaging a professional services partner such as IBM Business Analytics and Optimization–or all the above.
Also, please note that several months ago we announced IBM Smarter Analytics Signature Solution – Next Best Action, focused on next best offer in marketing and customer service, with a keen focus on real-time analytics as the big data fuel. We look forward to discussing this with you all further, especially as IBM Information On Demand 2012 approaches.