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6/8/2011
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Pegasystems Taps Predictive Analytics

Pegasystems BPM 6.2 features a decision engine that helps a process management system spot up-sell, cross-sell, and cost-saving opportunities.

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Rules engines and predictive analytics are two technology options for speeding and automating decisions. Pegasystems BPM 6.2, a business process management suite upgrade announced this week, can use either approach.

Pegasystems is well known for its rules technology. But the key upgrade in BPM 6.2 is the integration of an analytic decision engine from Chordiant, which Pegasystems acquired in April 2010.

Predictive analytics are often a better choice than rules when process decisions involve subtleties and lots of variables. Customer interactions are a good example. That's when analytics can be applied to customer histories and key characteristics, such as past spending patterns, and products and services currently in use.

Chordiant used the predictive technology within its CRM applications to spot cross-sell and up-sell opportunities and customers at risk of dropping their accounts.

Rules are the way to go when automating high volumes of decisions that depend on policies, best practices, or regulation. Line-of-credit and loan approvals and insurance coverage and claim decisions are all cut-and-dry cases in point. If the rules are met--credit score above X, loan collateral percentage above Y--the loan gets approved.

Now that rules and predictive capabilities are both accessible from BPM 6.2, business process owners can bring rules, analytics, or a combination of the two into their processes from within the same process development and management environment. Prediction is likely to be used for tasks such as offer management. Mobile phone and broadband service providers, for example, could slash marketing costs by applying prediction to the customer churn problem, Pegasystems said.

"We have a cable customer that spends $3 billion per year on customer retention, and they figure they'll be able to save at least $150 million by using predictive analytics to tell them which customers are likely to retain their contracts," Russell Keziere, senior director of corporate marketing at Pegasystems, said in an interview.

In other words, if analytics can tell you that a particular customer is likely to renew whether you offer a steep discount or not, you could lead with a standard renewal offer rather than your sweetest deal.

Predictive capabilities might also come into play in processes involving fraud detection, collections, or customer-service case escalation, Keziere said.

Among other upgrades to BPM 6.2, Pegasystems has added options for users to build process models in Visio or in a thin-client, Web-based modeling interface. The suite also supports event-driven interactions, whereby users can define triggers for actions based on time, transaction patterns, or changes to forms, reports, or cases. Any time the defined condition occurs, you could receive a simple notification, or you could have the BPM system automatically launch a separate process, escalate a service case, initiate a quality-assurance step, or take any number of other actions.

These are the sorts of monitoring and automation capabilities BPM systems are known for. But with the combination of both rules and predictive analytics, Pegasystems says it can spot and respond to complex combinations of conditions and opportunities that other BPM systems might miss.

BPM 6.2 is set for release in July. Pricing was not disclosed.

Employees have more ways to communicate than ever, but until the mishmash of tools gets integrated, productivity will suffer. Also in the new, all-digital issue of InformationWeek: A buyer's guide to enterprise social networking. Download it now. (Free registration required.)

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