Brainstorm - Smarter Simpler More Agile Processes

Using Business Rules to Make Processes Smarter, Simpler and More Agile James Taylor CEO Decision Management Solutions June 2009

James Taylor  Independent consultant working with clients to : Find the right decisions to apply business rules, analytics Implement a decision management blueprint Maximize the value of existing technology investments  Passionate advocate of decision management  20 years experience in all aspects of software 2 © Decision Management Solutions, 2009

The One Slide You Need  Current business conditions require smarter, simpler and more agile processes  Making business processes simpler, smarter and more agile requires managed, automated decisions  Business rules are the best platform for automated decisions  Analytics, not just your policies and expertise, must influence operational decisions  Decisions take time to play out so you must test and learn  Decision Management is the business discipline that best leverages business rules and puts analytics and optimization to work in every transaction 3 © Decision Management Solutions, 2009

Businesses Are Facing Complex Challenges Real-time Days Timeliness Complex Straightforward Objectives Trade-Offs Local and simple Regulations Complex and global Very High Low Uncertainty Constant Every 3-5 Years Changes to Strategy Increasingly Well-Defined Decision-Making Complex Low High Operational Volume 4 © Decision Management Solutions, 2009

Businesses Must Respond  Manage Uncertainty  Ensure Compliance  Improve Agility  Cut Costs  Resource Efficiency  Core Application Value 5 © Decision Management Solutions, 2009

Business Process Management Delivers  Manage Uncertainty  Process simulation and impact analysis  Ensure Compliance  Run processes exactly as documented  Improve Agility  Easier workflow and processes changes  Cut Costs  Avoid coding changes to multiple applications  Resource Efficiency  Measure and adapt human workflow  Core Application Value  Share processes across the enterprise 6 © Decision Management Solutions, 2009

But More Is Possible  Manage Uncertainty  Predict and test the future  Ensure Compliance  Demonstrate compliance in every action  Improve Agility  Give business users control with stable processes  Cut Costs  Lower maintenance costs and fewer manual reviews  Resource Efficiency  Focus people on higher value tasks  Core Application Value  Modularize and modernize 7 © Decision Management Solutions, 2009

When All You Have Is A Hammer Everything Looks Like A Nail 8 © Decision Management Solutions, 2009

These Things Are Not The Same Process Decision  Business users determine  Business users determine sequence actions  Based on business policies  Based on and services regulations, policies, expertise, a nalytics  Rapidly model, assemble, deploy, gov  Rapidly define and evolve the ern services behavior of a service  Reuse business processes  Reuse business rules across and services services  End-to-end visibility of  Visibility within critical business business process services 9 © Decision Management Solutions, 2009

A Vessel Underwriting Example Gather Policy Application Data May include customer visits, collection of forms, etc. Validate Policy Completeness Triggers more data gathering process Triggers rejection steps Reject Bad process Applicants Conduct Physical Calculate risk and determine Inspections price, may trigger exception handling Underwrite Policy  Process Tasks  Decision Tasks Process Paperwork 10 © Decision Management Solutions, 2009

Decision Management A business discipline that builds on existing systems and processes to create processes that: handle uncertainty support business objectives are flexible and business-led are compliant and easy to change are data-driven and constantly improve 11 © Decision Management Solutions, 2009

Five Keys To Decision Management Predictive Analytics Business Rules and Optimization Operational Decisions Adaptive Control Decision Analysis and Simulation 12 © Decision Management Solutions, 2009

Delivering Decision Management Decision Discovery Decision Services Decision Analysis 13 © Decision Management Solutions, 2009

ALL Decisions Matter “Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake.” Peter Drucker 14 © Decision Management Solutions, 2009

Decisions, Decisions, Decisions 15 © Decision Management Solutions, 2009

Better Results From Operational Decisions 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Test Group 1 Test Group 2 Test Group 3 Blanket Personalized 16 © Decision Management Solutions, 2009

Business Rules Drive Decisions Decision Regulations Policy History Experience Legacy Applications 17 © Decision Management Solutions, 2009

Process Rules are Not Decision Rules  Flow control, routing  Analyst/IT ownership  Governed as part of Business the process  Lifecycle dependent Process on process lifecycle Rules Business Process Decision Point  Business decision making Tasks  Analyst/LOB Manager ownership  Governed by the business  Independent lifecycle Decision Rules After Gladys Lam, BRSolutions 18 © Decision Management Solutions, 2009

Rules reduce IT costs Non-Programmers No IT resources to Manage Rules make updates 5 months ROI 10-20x not 30 months v hard coding 19 © Decision Management Solutions, 2009

Analytics Have Power Customer Online Acquisition Campaign Retention Conversion Rates Response Fraud Wasted Crime Risk Spend 20 © Decision Management Solutions, 2009

Straight Through Processing Eliminated many Underwriters manual reviews manage rules 8 Point Reduction in Combined Ratio Focus on book Improved risk management, agents management 22 © Decision Management Solutions, 2009

Closing The Loops Information Evaluate Results Reaction Decision Update Refine Decision Rules, Models Action Business & Analytic Experts Simulate Create Impact Challengers Customer 25 © Decision Management Solutions, 2009

Risk and Benefits Process without Decisions Process with Decisions  Decisions an afterthought  Decisions first class object  Decisions buried in process  Decisions linked not buried  Process becomes complex  New process is simplified  Inconsistency of rules likely  One version of rules  Decisions only evolve with  Independent process & process decision changes  Hard to share decisions  Decisions (and Decision Services) are reusable 26 © Decision Management Solutions, 2009

Action Plan  Identify your decisions Hidden decisions, transactional decisions, customer decisions Decisions buried in complex processes Decisions that are the difference between two processes  Adopt decisioning technology Adopt business rules approach and technology Investigate data mining and predictive analytics Think about adaptive control  Think about Decisions and Processes Learn, understand and teach the difference Think about their independent lifecycles Manage them both equally 29 © Decision Management Solutions, 2009

The One Slide You Need  Current business conditions require smarter, simpler and more agile processes  Making business processes simpler, smarter and more agile requires managed, automated decisions  Business rules are the best platform for automated decisions  Analytics, not just your policies and expertise, must influence operational decisions  Decisions take time to play out so you must test and learn  Decision Management is the business discipline that best leverages business rules and puts analytics and optimization to work in every transaction 30 © Decision Management Solutions, 2009

More on Decision Management jtonedm.com decisionmanagementsolutions.com smartenoughsystems.com ebizq.net/blogs/ decision_management brcommunity.com/taylor.php james@decisionmanagementsolutions.com 31 © Decision Management Solutions, 2009

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Brainstorm - Smarter Simpler More Agile Processes

by Decision Management Solutions on Jul 01, 2009

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