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Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
Simplifying over complex processes with decision management
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Simplifying over complex processes with decision management

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Organizations are plagued by over-complex processes. Modeled in Visio or automated in a BPMS, the promises of business user involvement and agility are overwhelmed by this complexity. Managing …

Organizations are plagued by over-complex processes. Modeled in Visio or automated in a BPMS, the promises of business user involvement and agility are overwhelmed by this complexity. Managing decisions as well as processes is the answer. Webinar recording available here: http://decisionmanagement.omnovia.com/archives/59177

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  • One of the prime causes of over-complex processes is the inclusion of decision-making in process designs. Organizations that identify the decisions in their processes and manage them as peers – not part of the process but supporting it – find they can simplify process designs, increase agility and bring business users and IT into better alignment.This webinar will build on real case studies to show you how keeping decisioning and process entangled creates complexity, how to find decisions in your complex processes and how Decision Management delivers simpler, more manageable processes.
  • Simpler processes that are much easier to manage Higher employee productivity and resource utilization International travel wizardBillingTech support and troubleshooting
  • Faster, easier, independent changes to decision logic Higher employee productivity and resource utilizationHarness the power of analytics to make better decisionsAllow continuous improvement of decisions and results
  • Faster, easier, independent changes to decision logic Coordination of decisions across channels and products Higher employee productivity and resource utilization a leading French retailer of cosmetics, faced the challenge of multiple channels and overlapping marketing and loyalty offers. A customer might be eligible for a loyalty offer, have downloaded a web coupon and heard a “discount word” on the radio. This made it hard for retail staff to ensure the price was handled correctly at the point of sale. In addition, they needed a better way to get loyalty offers to the customer. Yves Rocher replaced their POS devices with Linux-based terminals and developed a rules-based system that allowed all the pricing rules to be defined by the marketing department and then downloaded into the terminals. All relevant offers are correctly combined at the point of sale. This system also takes the customer’s loyalty card and applies loyalty offers. Using purchases and loyalty history, it prints an incentive offer designed to bring the customer back to the store on the card itself—the cards are re-printable so the customer sees the offer that will be made when they return.
  • It is particularly easy to see how failing to identify explicit decisions over complicates a business processThis example is from IDS-Scheer and shows how using the usual branching and related structures of a process design can become terribly complex. Not only is this hard to read and use but any change to the decision making logic impacts the process design and adds complexityIn contrast the same process with the complexity of the decision encapsulated in a decision service is simpler, easy to manage and can now be changed independently of the decision logic.
  • Problem: process changes when decisions are madeSolution: Put the customer or transaction firstDecide first, process secondBuild a process based on a decisionPut the customer/transaction at the center
  • At its heart a decision is a choice, a selection of a course of action. A decision is arrived at after consideration and it ends uncertainty or dispute about something.Decisions are made only after considering various facts or pieces of information about the situation and participants.Decisions select from alternatives, typically to find the one most profitable or appropriate for an organization.Decisions result in an action being taken, not just knowledge being added to what’s known.//Image copyright © iStockphoto.com/Alex Slobodkin
  • Every process is full of them.[click]In some cases, it’s a straightforward Yes-No choice.[click] In other cases, it’s a choice involving the selection and combination of multiple possibilities.
  • Every process is full of them.[click]In some cases, it’s a straightforward Yes-No choice.[click] In other cases, it’s a choice involving the selection and combination of multiple possibilities.
  • When something is put on a worklist it is often because someone must make a decisionBranches that lead to other branches, gateways connected to other gatewaysSteps that have procedures, cheat sheets, especially when they follow data gathering steps, are often decision-makingAny time someone must ask for an approval or escalate to level 2 then there is potential for a decision to improve things
  • Eligibility decisions are classic operational decisions.Because they must answer the question “Is this customer/prospect/citizen eligible for this product/service” they are made over and over again and they should be made consistently every time.These decisions are rules-based with rules coming from policies and regulations.These decisions often occur early in a process as the remainder of the process should only take place if the subject is, in fact, eligible.These decisions are typically clear cut and easy to define but they can be overly narrow if an eligible/not-eligible decision is made when a broader choice would be more appropriate.
  • Calculations are usually, but not always, operational. These decisions are overwhelmingly rules-based in that a set of rules exist that determine the result of the calculation.Calculation decisions often blur between the two and some mix might be appropriate.Calculation decisions have often been embedded in code but identifying and separating them makes them easier to manage.
  • Some risk based decisions are one-off,the risk of doing business in a new country say but these decisions are not common.When risk matters, the decisions made based on that risk are typically customer-centric and thereforeoperational decisions.Examples include credit risk, retention risk, late delivery risk or insurance risk.For these kinds of decisions there is typically a big gap between the value of a good decision and the value of a bad one. For instance a good credit card decision might result in a few hundred dollars of profit while a bad one results in an immediate loss of $10,000To bring risk into these decisions there is typically use of analytics – to predict the risk, for instance - as well as rules Rules might be policies but these decisions are often regulated and regulatory rules must be applied also.These kinds of decisions allow a strategic risk to be effectively applied and thus managed in the context of operational processes.
  • One challenge in operaitonal decisions is focusing on so-called micro decisions
  • How many decisions are involved in sending a letter to a some customers?One view says a couple of decisionsWhat to put in the letter and who receives itA more complete view says that you have also made a decision for each customer to receive or not receive the letter. If you sent a letter to 10,000 customers, you just made 10,000 micro decisionsAdding a new option to your IVR system means deciding that everyone who calls will hear the option. changing your website means deciding that every visitor will see something new…Many strategic decisions can only be implemented if many supporting micro decisions are also made.
  • Analytics simplify data to amplify its valuePredictive Analytics turn uncertainty into usable probability
  • Why manage decisions independently of process? What’s the advantage? There are several…
  • Begin!Identify your decisionsHidden decisions, transactional decisions, customer decisionsDecisions buried in complex processesDecisions that are the difference between two processesAdopt decisioning technologyAdopt business rules approach and technologyInvestigate data mining and predictive analyticsThink about adaptive controlThink about Decisions and ProcessesLearn, understand and teach the differenceThink about their independent lifecyclesManage them both equally
  • Decision Management Solutions can help youFind the right decisions to apply business rules, analyticsImplement a decision management blueprintDefine a strategy for business rule or analytic adoptionYou are welcome to email me directly, james at decision management solutions.com or you can go to decision management solutions.com / learn more. There you’ll find links to contact me, check out the blog and find more resources for learning about Decision Management.
  • Transcript

    • 1. Simplifying over-complex processes<br />James Taylor,<br />CEO<br />
    • 2. Your instructor<br />Independent consultant working with clients to help automate and improve decisions<br />Spent the last 8 years developing the concept of Decision Management<br />20 years experience in all aspects of software including time in FICO, PeopleSoft R&D, Ernst & Young<br />Blogger, speaker, writer<br />james@decisionmanagementsolutions.com<br />2<br />©2010 Decision Management Solutions<br />
    • 3. The challenge of over complex processes<br />Case studies in process complexity<br />Simplifying processes with decision management<br />Finding decisions in your processes<br />Not just simpler, smarter too<br />Wrap and next steps<br />
    • 4. The one slide you need<br />Complex processes are costly and not agile<br />Unmanaged decisions cause process complexity<br />Managing decisions makes processes more agile<br />Managing decisions makes processes smarter<br />Business rules drive decisions<br />Processes and decisions are complementary<br />… but not the same<br />4<br />©2010 Decision Management Solutions<br />
    • 5. The challenge of complex processes<br />
    • 6. The benefits of BPM<br />Improves process quality<br />Improves the customer experience<br />Engenders continuous process improvement<br />Reduces costs<br />Improves business agility<br />Gartner survey reported by Jim Sinur, 2009<br />6<br />©2010 Decision Management Solutions<br />
    • 7. ©2010 Decision Management Solutions<br />7<br />Complexity is the enemy<br />Harder to assure process quality<br />Customers don’t like long processes<br />Hard to find places to apply learning<br />More expensive<br />Hard to make changes safely, reducing agility<br />
    • 8. Case studies in process complexity<br />
    • 9. Making the right decision at the start of the call turns long, costly processes into straightforward, customer-pleasing<br />interactions.<br />Fortune 20 Call Center <br />9<br />©2010 Decision Management Solutions<br />
    • 10. Immediately identifying which claims should be fast tracked, which referred for fraud investigation and which reviewed by a claims adjudicator results in clear, simple sub-processes<br />North American Life Insurer<br />10<br />©2010 Decision Management Solutions<br />
    • 11. Cross-channel coordination ensures that all relevant offers, including loyalty programs, are combined at the point of sale, with consistent pricing rules applied.<br />International retailer<br />11<br />©2010 Decision Management Solutions<br />
    • 12. A graphical example<br />“before”<br />“after”<br />12<br />©2010 Decision Management Solutions<br />
    • 13. ©2010 Decision Management Solutions<br />13<br />Complexity from multiple processes<br />30 similar processes or just one?<br />
    • 14. Simplifying processes with decision management<br />
    • 15. ©2010 Decision Management Solutions<br />15<br />Identifying decisions<br />A choice, a selection<br />Made after consideration <br />Results in action not just knowledge<br />
    • 16. Should we decline or approve <br />this application?<br />Decisions can be choices<br />16<br />©2010 Decision Management Solutions<br />
    • 17. What price, terms and conditions<br />should we offer this customer?<br />… or combinations of possibilities<br />17<br />©2010 Decision Management Solutions<br />
    • 18. Decision Management<br />A business discipline that builds on existing enterprise applications to<br />put data to work<br />manage uncertainty<br />increase transparency<br />give the business control<br />18<br />©2010 Decision Management Solutions<br />
    • 19. ©2010 Decision Management Solutions<br />19<br />Steps to decision management<br />3 stages to better operational decisions<br />Create a “closed loop” between operations and analytics to measure results and drive improvement<br />Design and build independent decision processes to replace decision points embedded in processes <br />Identify the decisions (usually about customers) that are critical to your operational processes<br />
    • 20. BEFORE<br />©2010 Decision Management Solutions<br />20<br />A simple example without decisions<br />
    • 21. AFTER<br />Decision:<br />What type <br />of applicant is this?<br />©2010 Decision Management Solutions<br />21<br />The same example with a decision<br />
    • 22. Clarity and transparency are needed<br />22<br />©2010 Decision Management Solutions<br />
    • 23. ©2010 Decision Management Solutions<br />23<br />Separation adds agility<br />Matched change cycle<br />Variable change cycle<br />Stable business process<br />
    • 24. Finding decisions in your processes<br />©2010 Decision Management Solutions<br />24<br />
    • 25. Finding decisions<br />25<br />©2010 Decision Management Solutions<br />
    • 26. Decisioning words<br />©2010 Decision Management Solutions<br />26<br />Choose<br />Select<br />Calculate<br />Determine<br />Assess<br />Validate<br />Find the question…<br />
    • 27. Eligibility decisions<br />Is this customer/prospect/citizen eligible for this product/service?<br />They are made over and over again<br />They should be made consistently every time.<br />They are rules-based<br />27<br />©2010 Decision Management Solutions<br />
    • 28. Calculations<br />What is the correct price/rate for this product/service?<br />Calculations are usually operational<br />They are overwhelmingly rules-based<br />The rules are generally fixed and repeatable<br />Calculations are often embedded in code<br />28<br />©2010 Decision Management Solutions<br />
    • 29. Risk-based operational decisions<br />How risky is this customer and what should we do about it?<br />Risk is acquired one customer, one transaction at a time<br />A big gap between the value of a good decision and the value of a bad one<br />To assess risk in these decisions requires analytics to predict the risk<br />29<br />©2010 Decision Management Solutions<br />
    • 30. Opportunity-based operational decisions<br />How profitable might this customer be?<br />Customer-centric.<br />Cross-sell and up-sell decisions for example<br />Little difference between good and bad decisions<br />Analytics predict response, opportunity, potential<br />These must change rapidly to take advantage of competitive and market circumstances<br />30<br />©2010 Decision Management Solutions<br />
    • 31. Micro decisions<br />How many decisions are involved in sending a letter to 10,000 customers?<br />Just a few design decisions <br />Or 10,000 one micro decision per customer<br />Many strategic decisions can only be implemented if many supporting micro decisions are also made<br />31<br />©2010 Decision Management Solutions<br />
    • 32. Gather policy application data<br />Validate application<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />32<br />©2010 Decision Management Solutions<br />
    • 33. Gather policy application data<br />Validate application<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />33<br />©2010 Decision Management Solutions<br />
    • 34. Gather policy application data<br />Validate application<br />Decision:<br />Is this application complete and correct?<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />34<br />©2010 Decision Management Solutions<br />
    • 35. Gather policy application data<br />Validate application<br />Decision:<br />Is this the type of vessel we insure?<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Decision:<br />Is this application<br />a high fraud risk?<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />35<br />©2010 Decision Management Solutions<br />
    • 36. Gather policy application data<br />Validate application<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />36<br />©2010 Decision Management Solutions<br />
    • 37. Gather policy application data<br />Validate application<br />Decision:<br />How risky?<br />Eliminate<br />unqualified applicants<br />Decision:<br />What coverage?<br />Conduct physical inspection<br />Decision:<br />What price?<br />Underwrite policy<br />Decision:<br />What exclusions?<br />Complete new business processing<br />Vessel underwriting example<br />37<br />©2010 Decision Management Solutions<br />
    • 38. Gather policy application data<br />Validate application<br />Eliminate<br />unqualified applicants<br />Conduct physical inspection<br />Underwrite policy<br />Complete new business processing<br />Vessel underwriting example<br />38<br />©2010 Decision Management Solutions<br />
    • 39. Not just simpler, smarter too<br />
    • 40. Analytics simplify data<br />to amplify its value<br />©2010 Decision Management Solutions<br />40<br />
    • 41. Analytics have real power<br />CustomerRetention<br />CampaignResponse<br />AcquisitionRates<br />Online<br />Conversion<br />Fraud<br />Crime<br />WastedSpend<br />Risk<br />41<br />©2010 Decision Management Solutions<br />
    • 42. HighIncome<br />High income,low-moderate education<br />*<br />Moderate-high educationlow-moderate income<br />*<br />Low-moderateincome, young<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />Education<br />*<br />*<br />High<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />Age<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />*<br />Moderate education,low income, middle-aged<br />*<br />*<br />High<br />Low education,low income<br />Rules address what might happen<br />Analytics help you understand why and when<br />Analytics drive better decisions<br />42<br />©2010 Decision Management Solutions<br />
    • 43. Closed-loop decisioning<br />43<br />©2010 Decision Management Solutions<br />
    • 44. Closed-loop decisioning<br />44<br />©2010 Decision Management Solutions<br />
    • 45. Wrap up and next steps<br />
    • 46. Why manage decisions independently<br />Faster, easier, independent decision logic changes<br />Coordination across channels, products<br />Simpler processes that are easier to manage<br />Higher productivity and resource utilization<br />Analytic insights for making better decisions<br />Continuous improvement of decisions and results<br />46<br />©2010 Decision Management Solutions<br />
    • 47. Risks and benefits<br />With Decisions<br />Without Decisions<br />Decisions an afterthought<br />Decisions buried in process<br />Process becomes complex<br />Inconsistency of rules likely<br />Decisions only evolve with process<br />Hard to share decisions<br />Decisions first class object<br />Decisions linked not buried<br />New process is simplified <br />One version of rules<br />Independent process & decision changes<br />Decisions (and Decision Services) are reusable<br />47<br />©2010 Decision Management Solutions<br />
    • 48. Action Plan<br />48<br />©2010 Decision Management Solutions<br />
    • 49. The one slide you need<br />Complex processes are costly and not agile<br />Unmanaged decisions cause process complexity<br />Managing decisions makes processes more agile<br />Managing decisions makes processes smarter<br />Business rules drive decisions<br />Processes and decisions are complementary<br />… but not the same<br />49<br />©2010 Decision Management Solutions<br />
    • 50. Decision Management Solutions<br />Decision Management Solutions can help you<br />Focus on the right decisions<br />Implement a blueprint<br />Define a strategy<br />For assistance, to find out more or if you have questions<br />decisionmanagementsolutions.com/learnmore<br />©2010 Decision Management Solutions<br />50<br />

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