Sometimes real progress in an area happens when no one’s looking. Remember the headlines and magazine covers in the 1980s about artificial intelligence (AI) and expert systems? There was lots of press, but there were very few production applications of automated decision making.

Today, however, the situation is reversed. Lots of companies now have automated decision systems in place, though they get relatively little visibility. Some applications employ what was once called AI technology (primarily rule-based); others are more algorithm-based. But they have a lot to do today with how you get a mortgage, an insurance policy, a price on an airline ticket, or even a price on that sweater you liked in the department store.

I believe we’ll be seeing lots more of these systems as time goes on. They will raise many interesting issues about where organizations will get their expertise, whether the systems can be overridden by humans, and how customers who don’t fit the standard mold can be well-served.

By the way, if you want to read more about automated decision systems, don’t bother going back to the AI hypesters. Instead, pick up Smart (Enough) Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions by James Taylor (not the singing one, but rather a VP of “enterprise decision management” at the software and data vendor Fair Isaac), Neil Raden (a frequent writer on business intelligence topics), and Barbara von Halle (a business rule expert). It’s not only a good book on the topic, it’s the only one.

If you only want an article-length version, Jeanne Harris of Accenture and I wrote one a couple of years ago called “Automated Decision Making Comes of Age” in MIT Sloan Management Review (free PDF of Accenture report version). It didn’t get much attention. But as I noted before, the fact that no one’s looking doesn’t mean that the next big thing isn’t happening!

HARVARD BUSINESS ONLINE RECOMMENDS:
A Brief History of Decision Making (HBR Article)
Optimize The Power Of Analytics to Drive Superior Performance and "Out-Think" Your Rivals (Collection)
Harvard Business Review on Making Smarter Decisions (Paperback)