Good Tip: Prescriptive v. Predictive Business Rules
cheryl wilson 270003VHSH firstname.lastname@example.org | | Tags:  business-analytics brms predictive-analytics decision-management bpm business-rule-management business-rules
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I’m stealing an educational morsel from a recent guest post on the Impact blog titled – Next Generation Rules and the Business Brain – written by Ryan Trollip, a solution architect and decision management practice director at Prolifics. In the post he takes on the challenge of understanding where and when to use business rule management systems, especially in relation to other overlapping technologies like BPM and Analytics.
The bit I’m “borrowing” is the difference between Prescriptive and Predictive business rules. I think this characterization does a nice job of setting up the standalone need for rules and the need for rules and the appropriate complementary technology. In this case, Analytics.
In Ryan’s words:
“I like to put rules into two categories, predictive and prescriptive. Prescriptive rules come from sources such as regulatory requirements imposed on the business, general business guidelines, product specific design outcomes, marketing campaign design etc. An example: ‘If the age of the customer is less than 18 then classify the customer as minor.’ Predictive rules, in this categorization would typically result from analytics. I like to think of the predictive analytics source as the R&D department for a rules system. Segmentation is a common use of analytics in understanding for example the customer base and predicting the propensity for certain behaviors. For example, ‘if the net worth of a customer is more than 500,000 then designate the customer as level 5.’ In this example the level of the customer may have been determined by analytics based on past behaviors or based on surveys or other information gathering exercises. This classification may well be refined using other factors for example geographic location to arrive at certain final outcomes like offering a certain level of service, determining an APR, product eligibility or targeting a certain mix of products to the customer.”
To read Ryan’s full post, click here.