Simpler, smarter and more agile

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Simpler, smarter and more agile: Modeling decision requirements to simplify processes and effectively apply business rules.

Simpler, smarter and more agile: Modeling decision requirements to simplify processes and effectively apply business rules.

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  • 1. © Decision Management Solutions, 2013 1DREAM event 2013 Simpler, Smarter, More Agile Modeling Decision Requirements James Taylor CEO
  • 2. © Decision Management Solutions, 2013 2DREAM event 2013 Business Process From the C-Suite Efficiency Consistency Cost Reduction
  • 3. © Decision Management Solutions, 2013 3DREAM event 2013 Smarter Simpler More Agile What If…
  • 4. © Decision Management Solutions, 2013 4DREAM event 2013 Agenda 1 Business Rules Power 2 Business Rules Challenges 3 Smarter, Simpler, More Agile 4 Decision Management 5 Decision Requirements 6 Questions 7 Next Steps
  • 5. © Decision Management Solutions, 2013 5DREAM event 2013 BUSINESS RULES POWER
  • 6. © Decision Management Solutions, 2013 6DREAM event 2013 What Can Business Rules Do? Personalize experiences Detect Fraud Create Loyalty Target Cross-Sells And more…
  • 7. © Decision Management Solutions, 2013 7DREAM event 2013 What Are Business Rules? … statements of the actions you should take when certain business conditions are true. “ ”
  • 8. © Decision Management Solutions, 2013 8DREAM event 2013 public 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); } } } Business Rules are critical …but hard to manage
  • 9. © Decision Management Solutions, 2013 9DREAM event 2013 Business Rules Management
  • 10. © Decision Management Solutions, 2013 10DREAM event 2013 BUSINESS RULES CHALLENGES
  • 11. © Decision Management Solutions, 2013 11DREAM event 2013 Too Little Connection To Process If customer is MultiProductCustomer and Total_Insured_Value is more than $100,000 then next_policy_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” … … A big bucket of rules sitting to one side.
  • 12. © Decision Management Solutions, 2013 12DREAM event 2013 …Or Too Much 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” 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 customer is MultiProductCustomer and Total_Insured_Value is more than $100,000 then next_policy_discount = 0.5% Spread like Nutella throughout the process
  • 13. © Decision Management Solutions, 2013 13DREAM event 2013 • Can we use business rules to make our processes simpler?Simpler • Can we use business rules to make our processes smarter?Smarter • Can we use business rules to make our processes more agile? More Agile
  • 14. © Decision Management Solutions, 2013 14DREAM event 2013 SMARTER, SIMPLER, MORE AGILE
  • 15. © Decision Management Solutions, 2013 15DREAM event 2013 • Less complexity • Fewer processes Simpler Smarter More Agile
  • 16. © Decision Management Solutions, 2013 16DREAM event 2013 Accept low-risk applicant Decline high-risk applicant Process medium-risk applicant Age<21 21<=Age<50 Age>50
  • 17. © Decision Management Solutions, 2013 17DREAM event 2013 Accept low-risk applicant Decline high-risk applicant Process medium-risk applicant Age<21 21<=Age<50 Age>50 Previous Heart Attack, Existing Cancer Good Medical Record
  • 18. © Decision Management Solutions, 2013 18DREAM event 2013 Accept low-risk applicant Decline high-risk applicant Process medium-risk applicant Age<21 21<=Age<50 Age>50 Previous Heart Attack, Existing Cancer Good Medical Record New Customer Long-standing Customer 1 or fewer Claims Multiple Claims
  • 19. © Decision Management Solutions, 2013 19DREAM event 2013 Accept low-risk applicant Decline high-risk applicant Process medium-risk applicant Age<21 21<=Age<50 Age>50 Previous Heart Attack, Existing Cancer Good Medical Record New Customer Long-standing Customer 1 or fewer Claims Multiple Claims No Class I or II sports Class II sport Class I sport
  • 20. © Decision Management Solutions, 2013 20DREAM event 2013 Accept low-risk applicant Decline high-risk applicant Process medium-risk applicant Age<21 21<=Age<50 Age>50 Previous Heart Attack, Existing Cancer Good Medical Record New Customer Long-standing Customer 1 or fewer Claims Multiple Claims No Class I or II sports Class II sport Class I sport Embed decisions, add complexity
  • 21. © Decision Management Solutions, 2013 21DREAM event 2013 Process low-risk applicant Process high-risk applicant Process medium-risk applicant Low risk Medium risk High risk Determine applicant type Identify decisions for simplicity Use business rules for clarity
  • 22. © Decision Management Solutions, 2013 22DREAM event 2013 • Less complexity • Fewer processesSimpler • Straight Through Processing • Effective analyticsSmarter More Agile
  • 23. © Decision Management Solutions, 2013 23DREAM event 2013 Human Decision Human Decision Automated Decisions Straight Through Processing Manage Rules Handle Exceptions Process A Process B Process C A B C Don’t stop for decisions
  • 24. © Decision Management Solutions, 2013 24DREAM event 2013 Get Smarter With Analytics Operational Processes Analytic Systems Decision Use analytics to improve operational processes
  • 25. © Decision Management Solutions, 2013 25DREAM event 2013 Complexity Value Automated Decisions Expert Decisions Manual Decisions
  • 26. © Decision Management Solutions, 2013 26DREAM event 2013 • Less complexity • Fewer processesSimpler • Straight Through Processing • Effective analyticsSmarter • Separated change cycles • Business ownership More Agile
  • 27. © Decision Management Solutions, 2013 27DREAM event 2013 v1 v2 v3 v4 v5 v1 v2 v3 v4 v5 v1 v2 v1 v2 v3 v4 v5 v6 v1 v1 v2 v3 v4 v5 Stable Business Process Variable change cycle Matched change cycle Different Change Cycles
  • 28. © Decision Management Solutions, 2013 28DREAM event 2013 Decisions Are High Change Remain compliant Update eligibility Keep discount competitive Change risk assessment Keep deal terms appealing Fight fraud effectively
  • 29. © Decision Management Solutions, 2013 29DREAM event 2013 DECISION MANAGEMENT
  • 30. © Decision Management Solutions, 2013 30DREAM event 2013 Simpler Processes Decisions Are Central Decisions are central
  • 31. © Decision Management Solutions, 2013 31DREAM event 2013 Decision Management • A business discipline and a technology stack • That builds on existing IT infrastructure • Enhancing business processes • Increasing transparency and business control • And leveraging analytics • It is a proven framework for implementing business rules management systems
  • 32. © Decision Management Solutions, 2013 32DREAM event 2013 3 Steps Identify and model the decisions that are most important to your operational processes Design and build independent decision services using business rules to manage these decisions Create a “closed loop” to measure results and drive improvement
  • 33. © Decision Management Solutions, 2013 33DREAM event 2013 Focus on Operational Decisions Repeatable decisions Non trivial decisions With a measurable business impact That are candidates for automation
  • 34. © Decision Management Solutions, 2013 34DREAM event 2013 DECISION REQUIREMENTS
  • 35. © Decision Management Solutions, 2013 35DREAM event 2013 Existing Techniques Don’t Work Use Case • Key steps are decisions • Decisions not described Process Model • Opaque decision tasks • Rules like Nutella Requirements List • Identify decision need • Approach not captured Architecture Model • Deployment specificity • Lack business content
  • 36. © Decision Management Solutions, 2013 36DREAM event 2013 Good Decision Requirements Information • What is needed? • Where is it? Knowledge • How to make it • How to improve it Precision • Exactly how? • No technical details Automation • Fully automated? • If not, how much?
  • 37. © Decision Management Solutions, 2013 37DREAM event 2013 Decision Modeling 1 •Identifies Decisions first 2 •Describes Decisions 3 •Puts Decisions in context 4 •Models Information, Knowledge 5 •Adds detail without complexity
  • 38. © Decision Management Solutions, 2013 38DREAM event 2013 BWTDIM Begin With The Decision In Mind
  • 39. © Decision Management Solutions, 2013 39DREAM event 2013 Business Processes Discover Decisions Business Events Legacy Systems Business IntelligenceBrainstorm KPIs Micro and hidden Decisions
  • 40. © Decision Management Solutions, 2013 40DREAM event 2013 Describe Decisions • Define Decisions with – A question – Possible answers Q: Which marketing offer should be presented to this customer during this interaction? A: Any current, available marketing offer in the database
  • 41. © Decision Management Solutions, 2013 41DREAM event 2013 Put Decisions In Context • Processes – Processes require decisions – Tasks execute decisions • Events – Trigger decisions • Systems – Implement decisions • Organizational Units – Make decisions – Own decisions – Are impacted by decisions • Know which business processes will be improved by your rules • Know when your decisions will be needed • Know how you will have to deploy your rules • Know who will have to believe or own the business rules
  • 42. © Decision Management Solutions, 2013 42DREAM event 2013 Map Decisions to KPIs KPIs impacted by decision Customer Churn Customer Service Calls Service Availability … … What is the best up sell/cross- sell for this customer? * * What is the price of this service? * * Can this customer buy this service? * * What retention offer should we make this customer? * …
  • 43. © Decision Management Solutions, 2013 43DREAM event 2013 Information Requirements • Decisions require Information – “Determine Parts Availability” requires BOM and Inventory information – “Validate Tax Return” requires Return and Citizen information – “Refer claim for fraud” requires Claim and Provider information
  • 44. © Decision Management Solutions, 2013 44DREAM event 2013 Authority Requirements • Decisions require Knowledge – “Reorder parts” requires supplier capabilities and shortage risks – “Validate Tax Return” requires Tax Regulations – “Refer claim for fraud” requires likelihood of fraud
  • 45. © Decision Management Solutions, 2013 45DREAM event 2013 Different Types of Knowledge Decision
  • 46. © Decision Management Solutions, 2013 46DREAM event 2013 Decompose the Decision • Requirements for this decision: – Knowledge • Guidelines, policy • Expertise • Regulations • Analytic Models – Information • Input, case, transaction data • The results of other decisions
  • 47. © Decision Management Solutions, 2013 47DREAM event 2013 Decision Requirements • Decisions can require Decisions – Is this a good time to make an offer? – Which product should the offer be for? – How valuable an offer? • These decisions must be made first
  • 48. © Decision Management Solutions, 2013 48DREAM event 2013 Repeat For Clarity
  • 49. © Decision Management Solutions, 2013 49DREAM event 2013 A Complete Definition • Definition • Question and Allowed Answers • Links to KPIs and Objectives • Context – Processes, Events, Systems – Organizational roles • Decomposition • Link to implementation
  • 50. © Decision Management Solutions, 2013 50DREAM event 2013 Manage Business Rules Documented sources Coherent rule groups Ownership, volatility
  • 51. © Decision Management Solutions, 2013 51DREAM event 2013 Automation Boundaries
  • 52. © Decision Management Solutions, 2013 52DREAM event 2013 Impact Analysis
  • 53. © Decision Management Solutions, 2013 53DREAM event 2013 QUESTIONS?
  • 54. © Decision Management Solutions, 2013 54DREAM event 2013 NEXT STEPS
  • 55. © Decision Management Solutions, 2013 55DREAM event 2013 Decisions First • Models Processes AND Decisions • Find the decisions that matter • Model their requirements • Decisions first, rules second
  • 56. © Decision Management Solutions, 2013 56DREAM event 2013 Thank You James Taylor, CEO james@decisionmanagementsolutions.com decisionmanagementsolutions.com