Legacy modernization with decision management and business rules

Legacy modernization with DecisionJames Taylor, Management and CEO Business Rules

Your presenter – James Taylor CEO of Decision Management Solutions Works with clients to improve their business by applying analytics and analytic technology to automate and improve decisions Spent the last 8 years developing the concept of Decision Management 20 years experience in all aspects of software including time in FICO, PeopleSoft R&D, Ernst & Young ©2011 Decision Management Solutions 2

AGENDA 1 2 The challenge of legacy systems The role of decisions in legacy 3 Modernizing with Decision Management challenges 4 5 6 The power of Improving Wrap and next business rules alignment and steps management agility systems

The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on extracting and modernizing decisions Use a business rules management system Externalizing decisions with business rules Improves alignment Improves agility Manages risk ©2011 Decision Management Solutions 4

The challenge of legacy systems

The business impact of legacy systems Fines and legal issues Regulations and rulings cannot be implemented Competitive weakness Lack of agility slows competitive response Policies are buried in code with a long change cycle The business has no real idea how the system works No learning going on Test and learn is not an option What you learn cannot be applied ©2011 Decision Management Solutions 6

Every option for change has issues Rip and replace Cost! Risk! Re-platform or To what? modernize Next generation legacy? Service-enable Better but Services as black boxes? ©2011 Decision Management Solutions 7

Case: State Agency Critical state budget component Legacy systems modified for 30 years On-line application and batch COBOL Minor changes required extensive programming Inconsistent interpretation of legislation Needed Rapid response to changing legislation Non-technical business experts engaged ©2011 Decision Management Solutions 8

The role ofdecisions in legacychallenges

Legacy systems make decisions They Determine if a customer is eligible for a benefit Validate the completeness of an invoice Calculate the discount for an order Assess the risk of a transaction Select the terms for a loan Choose which claims to Fast Track These are decision words The system must answer a question each time ©2011 Decision Management Solutions 11

Decisions are high change components Regulations change Change to keep eligibility decisions compliant Policies change Change validation to track new data requirements Competitors change Change the discount to remain competitive Markets change Change the assessment to manage risk Consumer behavior changes Change to keep selecting the right deal terms Fraudsters adapt Change the routing to focus on new fraud ©2011 Decision Management Solutions 12

Case: State Agency Key objectives Don’t require complete rewrite of legacy Usable by non-technical analysts Comprehensive business control It must run quickly and scale on all platforms Identified key decision – “What is correct fee” Externalized just that decision ©2011 Decision Management Solutions 13

Modernizing with Decision Management

Decision Management An approach or business discipline for automating and improving decision-making It improves day to day business results by Supporting Automating and Improving operational decisions It builds on existing enterprise applications to put data to work manage uncertainty increase transparency give the business control ©2011 Decision Management Solutions 15

Delivering Decision Management 3 stages to better operational decisions Create a “closed loop” between operations and Design and build analytics to independent measure results decision processes and drive to replace decision improvement Identify the points embedded in decisions (usually operational systems about customers) that are most important to your operational success ©2011 Decision Management Solutions 16

Decision Services remain in sync Conventional Approach Decision Management Other Systems CRM System CRM System Decision Service Frequent code changes Infrequent code changes Other Systems sor t ed=1: sor t ed=1: f or I y = I–I= y > 11; y –I t f or I y = I–I= y > 11; y –I t p ri n t ( y –Id ,y) : p ri n t ( y –Id ,y) : if [1a r r ayI y] < 1a rr ayI y -1]) t if [1a r r ayI y] < 1a rr ayI y -1]) t holder - [a rr a y[ y -1] | holder - [a rr a y[ y -1] | Iar ra yl y -1]) = 1 [y]) Iar ra yl y -1]) = 1 [y]) 1 a rr a y = holder 1 a rr a y = holder Programmers Programmers Frequent policy changes Policy Changes Business users Business users Smart (Enough) Systems, Prentice Hall June 2007 Fig 211 ©2011 Decision Management Solutions 17

Separation adds agility Decision making logic is most changeable Typical legacy system forces a complete release System v1 System v2 Decision v1 Decision v2 But only the decision needs to change And it needs to change more often v1 v1 v2 V3 V4 v5 ©2011 Decision Management Solutions 18

Clarity and transparency are needed If customer is GoldCustomer and Home_Equity_Loan_Value is more than $100,000 then college_loan_discount = 0.5% If member has greater than 3 prescriptions and prescription’s renewal_date is less than 30 days in the future then set reminder=“email” If patient’s age is less than 18 and member’s coverage is “standard” and member’s number_of_claims does not exceed 4 then set patient’s coverage to “standard” ©2011 Decision Management Solutions 20

What are business rules? “… a directive intended to influence behavior.” “… a formal expression of knowledge or preference, a guidance system for steering behavior (a transaction) in a desired direction.” “… statements of the actions you should take when certain business conditions are true.” ©2011 Decision Management Solutions 21

Unmanageable business rulespublic class Application {private Customer customers[];private Customer goldCustomers[];...public void checkOrder() { for (int i = 0; i < numCustomers; i++) { Customer aCustomer = customers[i]; if (aCustomer.checkIfGold()) { numGoldCustomers++; goldCustomers[numGoldCustomers] = aCustomer; if (aCustomer.getCurrentOrder().getAmount() > 100000) aCustomer.setSpecialDiscount (0.05); } }} ©2011 Decision Management Solutions 23

Manageable business rules If customer is GoldCustomer and Home_Equity_Loan_Value is more than $100,000 then college_loan_discount = 0.5% If member has greater than 3 prescriptions and prescription’s renewal_date is less than 30 days in the future then set reminder=“email” If patient’s age is less than 18 and member’s coverage is “standard” and member’s number_of_claims does not exceed 4 then set patient’s coverage to “standard”Smart (Enough) Systems, Prentice Hall June 2007. Fig 4.3 ©2011 Decision Management Solutions 24

A Business Rules Management System Validation Testing and Verification Decision Deployment Production Rule Service Application Repository Rule EngineDesign Rule Tools Management Applications Operational Database After Smart (Enough) Systems, Prentice Hall June 2007. Fig 6.6 ©2011 Decision Management Solutions 25

Why manage business rules Reduce Costs • Fewer resources, less time to change decisions • Lower fines, legal costs from bad decisions • Reduced IT costs to implement decisions Improve Decision Making • Clear policies and procedures • Consistently applied across channels, systems • Increased accuracy from business users participation Business Agility • More rapid response to business threats • Fewer missed opportunities • Faster time to market ©2011 Decision Management Solutions 26

Case: State Agency Business Sources Separated fee-specific rules from existing legislation Found inconsistent interpretation of rules Translation of documentation into rules Technical Sources Business rules embedded within code Multiple platforms / multiple interpretations Program documentation not current ©2011 Decision Management Solutions 27

Which would you rather maintain? ADD #2,+VCSDTFPD,RESULT=DTIN4A ADD #1,+ZW0DTFPD,RESULT=DTOUT4A CALL Z#SCMPDT,0,0,0,0,0,P2=DTIN4A,P3=DTOUT4A ADD #2,+VCSNEXPD,RESULT=DTIN5A ADD #1,+ZW0NEXPD,RESULT=DTOUT5A CALL Z#SCMPDT,0,0,0,0,0,P2=DTIN5A,P3=DTOUT5A SUB (ZW0NEXPD,#1),(ZW0DTFPD,#1),RESULT=ZW0#DAYS,PREC=DDD DO WHILE,(ZW0#DAYS,LT,ZL0DW090,DWORD) MOVE ZW0VALUE,2,WORD ADD #2,+VCSNEXPD,RESULT=ZC1DTIN CALL Z#SCMPDT,ZC1DTIN,(ZW0NXOUT),0,0,ZW0VALUE CALL Z#SCNVDT,(ZW0NXOUT),(ZW1NXDT) MOVE (VCSNEXPD,#2),ZW1NXDT,(4,BYTE) CONVTB ZW1NEXPD,(VCSNEXPD,#2),PREC=D,FORMAT=(6,0,I) CONVTD ZW0NEXYR,ZW1NEXPD+4,PREC=S,FORMAT=(2,0,I) IF (ZW0NEXYR,LE,ZL025,2) ADD ZW0NEXYR,ZL12000 ELSE ADD ZW0NEXYR,ZL01900 ENDIFwhile (the newExpirationDate of feeVehicle < the dateFeesReceived of feeVehicle + 90 days) do { the newExpirationDate of feeVehicle = the newExpirationDate of feeVehicle + 2 years} ©2011 Decision Management Solutions 28

Improving alignment and agility

Decision Management drives agility Explain what happenedAutomated yet agile response Rapidly add new checksBusiness control Act/ Detect Respond Communicate Decide Decision ResponseCommunicate new rules effectively Help business and IT collaborateManage change Analyze and test approaches ©2011 Decision Management Solutions 31

Case: State Agency Outcome 2,000+ rules stored in central repository 60,000+ transactions/day across batch and online Rules easily updated by non-technical business people Benefits Managed, demonstrable compliance Rapid response to policy changes ROI example First day there was an error Fix took 15 minutes v 2-8 hours: 87%-97% reduction ©2011 Decision Management Solutions 32

Analytics drive better decisions Rules address what might happen Analytics help you understand why and when * * * * * * * * * * * * * * * ** * * *** * * * * * * * *** ** * * * ** * * * * ** * * * * ** * * * ©2011 Decision Management Solutions 33

Wrap upand next steps

Action Plan 1 Analyze code to find decisions 2 Rework to isolate decision components 3 Analyze policies and regulations for rules 4 Use legacy code to verify rules 5 Redeploy rules as Decision Services 6 Retire the replaced code ©2011 Decision Management Solutions 37

The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on extracting and modernizing decisions Use a business rules management system Externalizing decisions with business rules Improves alignment Improves agility Manages risk ©2011 Decision Management Solutions 38

Decision Management Solutions Decision Management Solutions can help you Focus on the right decisions Implement a technology blueprint Build decisioning systems For assistance, to find out more or if you have questions james@decisionmanagementsolutions.com http://www.decisionmanagementsolutions.com http://jtonedm.com @jamet123 or @decisionmgt ©2011 Decision Management Solutions 39

Thank you! James Taylor, CEO james@decisionmanagementsolutions.comwww.decisionmangementsolutions.com/learnmo re

http://paper.li	33
http://a0.twimg.com	2
http://tweetedtimes.com	1

Legacy modernization with decision management and business rules

by Decision Management Solutions on Feb 17, 2011

Accessibility

Categories

Tags

Upload Details

Usage Rights

3 Embeds 36

Statistics

Legacy modernization with decision management and business rules — Presentation Transcript