Decision, Process Management and Analytics

1. CONNECT WITH US:
IT: Customized to Your Advantage
A Business Trilogy
Decision, Process Management and
Analytics
Ryan Trollip &
Howard Webb
Public | Copyright © 2014 Prolifics
Process
Analytics

2. CONNECT WITH US:
Agenda
Ø Introduction
Ø Business Awareness & Process Management
Ø Decision Management & Examples
Ø Next Steps
2

3. CONNECT WITH US: 3
Process
Centricity
Time
Production
Automation
Office
Automation
TQM
ERP
E-Business
W. Edwards Deming
Joseph M. Juran
Business
Process
Management
Geary Rummler &
Alan Brache
Michael Hammer
Thomas Davenport
Roger Burlton
Business
Decision
Management
Howard Smith
Peter Fingar
Ron Ross
Barbera von Halle
Decision-Aware
Business Process
Management
Decisions
Analytics
Analytics
Some History

4. CONNECT WITH US:
Ø An awareness of the core components of the business
§ Business strategy
§ Business processes
§ Business decisions
§ Customer characteristics
§ Performance
§ Technology
Ø Gaining an understanding of:
§ How the organization delivers value (Business Process Management)
§ The complex decisions that determine business execution (Business Decision
Management)
§ Understanding historical, operational and future business characteristics
(Business Analytics)
q Customer buying patterns,
q Market conditions
q Regulatory impact
q Etc.
4
Decision-Aware Business Process Management

5. CONNECT WITH US:
The Business Trilogy
5
Business Processes
Advanced Analytics
Decision Management

6. CONNECT WITH US:
Business Process Management
6
Business Process Management (BPM) is a holistic management approach that
encompasses all aspects of a business including Strategy, People, Processes
and Technology, in order to deliver value to customers and other stakeholders.
BPM is about fundamentally changing the way
you view and manage your business
“Operational Transformation is the next frontier of business advantage.”
- Peter Fingar and Joseph Bellini

7. CONNECT WITH US:
Current Trends
7
“Broadly speaking, investing in better coordination and management of process work
has been on the rise, while incremental approaches are slowly declining, or at least
being integrated into larger, organization-wide BPM initiatives*.”
BPM
Six Sigma Lean Six Sigma
Enterprise architectureService-oriented architecture
*BPTrends, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com

8. CONNECT WITH US:
´ Redundant activities/duties
´ Misaligned incentives/
compensation
´ Isolated measurement model
´ Limited reuse
´ Multiple breakpoints
´ Multiple moments of truth
´ No cross-organization control
Corporate
Dept A Etc.Dept B
Departmental Silo
Perspective
Traditional
Hierarchical
Management
Customer Customer
8
Traditional Management Model

9. CONNECT WITH US:
The Customer Experience
Ø Discontinuous thinking leads to disjointed customer
experiences…
How many people or departments did I have to talk to in order
to get my issue resolved?
“Before I transfer you, is
there anything else I
can help you with?”
9

10. CONNECT WITH US:
´ Begin and end with the
customer experience in mind
´ Incentives based on end-to-
end process performance
´ Fewer handoffs, fewer
breakpoints
´ Few moments of truth
´ Process measures providing
visibility
Corporate
Function A Etc.Function B
Cross-Departmental
Perspective
Customer
Process 1
Process 2
Process 3Customer
10
Process-Oriented Model

11. CONNECT WITH US:
“At the heart of business process change is the notion of
discontinuous thinking – of breaking away from the
outdated rules and fundamental assumptions that
underlie operations. Unless we change these rules, we
are merely re-arranging the deck chairs on the Titanic.”
- Dr. Michael Hammer
Co-Author, Reengineering the Corporation
Changing the Business Model
11

12. CONNECT WITH US:
Recognize the Signs of Process Failure
Ø Even the best processes become out of date and require modification
Ø Strategy not embraced, not clearly articulated
Ø Unclear, limited communication mechanisms
§ Top down and bottom up
Ø Functional metrics (or none at all)
Ø Manual controls (checking and re-checking)
Ø Personal systems – Technology not keeping pace
§ Spreadsheets
§ Desktop databases
Ø Process workflow implemented through email systems
Ø Staff working excessive overtime
Ø Poorly or non-integrated systems
Ø Frequent reorganizations
12

13. CONNECT WITH US:
“We trained hard, but it seemed that every time we were beginning to
form up into teams, we would be reorganized.
I was to learn later in life that we tend to meet any new situation by
reorganizing; and a wonderful method it can be for creating the
illusion of progress while producing confusion, inefficiency, and
demoralization.”
Recognize the Signs of Process Failure (cont.)
- Petronius (c. 27-66 AD)
Aid to Nero - Emperor of Rome
13

14. CONNECT WITH US:
Business needs to become more Self Aware
Ø For example, in Psychology the Gestalt ‘Cycle of Awareness’ is
the notion that there is a process by which people start with a
PERCEPTION of their environment
Ø This is followed by an AWARENESS of their actual needs and
desires
14

15. CONNECT WITH US:
Ø Business should be no different
§ People have a PERCEPTION of how processes occur within their organizations
§ AWARENESS comes when we begin to examine those processes and find that
they may not operate anything like our perceptions
Ø We are often unaware of:
§ How long things actually take
§ How much waste we generate (time, cost, resources)
§ The opportunities we miss
§ Our customers’ opinions of our products or services are not what we thought
§ Our processes are not really aligned with our business strategy
§ How reliant we were on personal systems (e.g. spreadsheets, email)
§ The effect of losing a handful of key people. It could bring our business to a
standstill
Business Awareness
15

16. CONNECT WITH US:
Business Awareness (cont.)
Ø With new insights, business leaders can begin making decisions with
greater understanding, awareness and confidence
Ø We can better understand:
§ What needs to change to realize goals and objectives
§ Which areas of the business cause the greatest constraints on
performance
§ How best to apply technology
§ How to organize to achieve improved process execution
§ What needs to be done to ensure customer satisfaction
§ How to maintain a competitive advantage in today’s global market
§ How to react quickly and efficiently to opportunities and external threats
16

17. CONNECT WITH US:
Key Areas of Business Awareness
Strategy
Process
Performance
Customer
Change
Technology
17

18. CONNECT WITH US:
Ø Gain and share understanding of your business strategy, goals and
objectives
Ø Make strategy real from senior management through everyone in the
enterprise
§ Clarify, Communicate, Execute
Ø When decisions are made, whether it be a reorganization or
investment in new technology, FIRST understand how those
decisions:
§ Fit into the business strategy
§ Will help achieve the goals and objectives
Ø Strategy Awareness is when everyone in the organization can state
explicitly where you are going and:
§ Why their role is important
§ How they contribute to strategic success
Strategy Awareness
18

19. CONNECT WITH US:
Ø Process Awareness is to know how your processes ARE performed,
not just how you THINK they are performed
§ How long they take
§ How much they costs to execute
§ How many people are needed
§ What controls are in place
§ How standard the tasks are
Ø Before making any business or technology decisions:
§ Understand your processes
§ Model (visualize) them for clarification and communication
§ Verify what and how things are being done
Process Awareness
19

20. CONNECT WITH US:
Process Awareness (cont.): Models
Ø Processes are invisible
Ø They need to be modeled (visualized)
§ To understand and gain clarity
§ To communicate what is actually happening
§ As a baseline for change to understand where we are today
§ To provide direction for where you want to go
Ø Process models are the blueprint of your business
§ Would you build a house without a blueprint?
§ Why would you attempt to run a multi-million dollar business without one?
20

21. CONNECT WITH US:
“Give the power to manage and change processes to your business
process owners …and focus on how to enable faster change.”
Business Process Management –The Third Wave
- Howard Smith and Peter Fingar
Ø Initiate, encourage and back process change
Ø Understand what the process should do
Ø Promote process value
Ø Define and monitor process performance
Ø Work for the best interest of the enterprise (end-to-end process) not
just the department
Process Awareness (cont.): Owners
21

22. CONNECT WITH US:
Customer Awareness
Ø Look at your business through the eyes of your Customer…
§ Would you want to do business with your company?
§ Are you easy to do business with?
Ø What is your organization’s definition of a Successful Customer
Experience…is it the same as your customer’s definition?
Ø Design your process around your customer…they are the reason you
have a job
22

23. CONNECT WITH US:
How we see ourselves is often different than how our customers see us…
Customer Awareness (cont.)
23

24. CONNECT WITH US:
Ø Start looking Outside In vs. Inside Out
Ø Outside In thinking gives a whole new perspective on your business
Ø Does the customer care that we are doing this?
Customer Awareness (cont.): Change Your Perspective
‘The Outside-In Corporation’ – Barbara Bund
24

25. CONNECT WITH US:
Understand
what is
important to
your
Customers
Change Your Perspective
25

26. CONNECT WITH US:
Performance Awareness
Ø Performance Awareness is the discipline to identify key performance
indicators (KPI’s)
§ Measure process performance
§ AND tie it to continuous improvement
*Source: BP Trends, March 2014: “The State of BPM 2014”.
Are (Process) Performance
Measures Defined?*
2013
Never 14%
Occasionally 55%
Frequently 17%
Most Times 12%
Always 2%
26

27. CONNECT WITH US:
Performance Awareness (cont.): What to Measure
Ø Your customer doesn’t care about:
§ Your production costs
§ How many calls your call center can take per day
§ About your cool new data warehouse
§ Your organization structure
Ø They care about getting the products and services they
asked for, at a fair price, when they were told they would
get them…and when they need help, they get it
Ø Start with the Customer… Measure results not activities
27

28. CONNECT WITH US:
Ø Awareness that things over which you have no control are going to
change what you do
Ø No matter how good you think your business is today, things change
§ Market conditions change
§ Political environments change
§ Your processes become stale, under-performing
Ø Continually monitor your processes in the context of both
internal and external forces
§ Your competition is not sitting still…do you want your customers as badly
as they do?
§ Do you want someone else to take your job because the process needs
improving?
Change Awareness
28

29. CONNECT WITH US:
Ø Recognizing the need to change is a first step in recognizing the need
for Business Process Management
Change Awareness (cont.): The Need to Change
Internal Forces
External Forces
29

30. CONNECT WITH US:
Technology Awareness
Ø Technology Awareness requires a collaboration between business
and IT
Ø Business process change is enabled by technology
Ø Selecting the right technology means understanding what
technologies are available and how they can impact process change
Ø Business and IT must work as a team; business and technology
awareness
Ø Process oriented technologies are more likely to succeed, require
less maintenance and replacement long term
30

31. CONNECT WITH US:
Decision Management
& Real World Examples
31

32. CONNECT WITH US: 32
The Gap in Business Operations is Widening
Time to open a new account in retail banking
5 minutes – best
76 minutes – worst
Availability of loan funds
2 days – best
37 days – worst
Time for conditional mortgage approval
15 minutes – best in class
4 hours - median
Source: Boston Consulting Group, The “New New Normal” in Retail Banking, 2012

33. CONNECT WITH US:
Reinventing care process management with Smarter Process
Mobile care process app
Intelligent paging for patient consults based on doctor
proximity with direct access to latest diagnostic results
Health records in the cloud
Secure access to cloud-based
electronic health records to verify
complete patient health history
Big data diagnosis
Big data analytics on clinical procedure
benchmarks given patient history, to
determine optimal course of treatment.
i.e. type of knee replacement, or heart
valve replacement
Social collaboration between doctors
In context social collaboration between doctors
on the patient s care team enables quick,
relevant treatment information exchange and
treatment history
Rules for intelligent notification
Rules to trigger intelligent notifications
to appropriate specialists to get timely
input and approvals to proceed with
treatment plan
Process to manage patient flow
Automatic scheduling of operating room
resources, followed by recuperation,
specialist visits and physical therapy
Policy holder immediately sees authorization and
a map of approved providers in5 miles
Care process
management with

34. CONNECT WITH US:
Ø Decision Identification/Creation
Ø Decision Modeling
Ø Decision Optimization
Ø Decision Automation
Ø Decision Improvement
34
Discipline & Technology

35. CONNECT WITH US:
Ø Decisions are your IP
Ø Cost money to manage change
Ø Slow to change
Ø Often not visible
Ø Dispersed & duplicated, Inconsistent
Ø Lack of clear ownership
35
Why do I care?

36. CONNECT WITH US: 36
Difficult to Manage
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);
}
}
}

37. CONNECT WITH US: 37
Simple and Visible

38. CONNECT WITH US:
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);
}
}
}
38
Centralize Decisions

39. CONNECT WITH US:
Copyright ©2014 SAP. Reprinted with permission.
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possible
due
to
customer
lock
&1
6 3 is
Not
Eligible is Not
Eligible Closure
not
possible
due
to
account
lock
&1
7 4 is
Not
Eligible is Not
Eligible Closure
not
possible
due
to
card
lock
&1
Account
Closure
Simulation
Lock
Eligibility
s Conclusion Messages
Account
Closure
Simulation
Customer
lock
Account
Closure
Simulation
Account
Lock
Account
Closure
Simulation
Card
Lock
Status
Eligibility
Standard Approach to Modeling
39Public | Copyright © 2014 Prolifics

40. CONNECT WITH US: 40

41. CONNECT WITH US: 41Public | Copyright © 2014 Prolifics
Lower Cost of Development
Rework time
Rework
Effort
Development &
Unit Test
Technical
Design
Business
Requirements
Business
Objectives
Business
Objectives
Business
glossary,
process & logic
requirements
Technical
design
Effort
Project Charter Business design
document
Technical design
document
Coding
Code
documentation
Time
Integration &
Acceptance Test
Testing
Code
documentation
Development &
Unit Test
Technical
Design
Business
Requirements
Business
Objectives
Business
Objectives
Business
glossary,
process & logic
requirements
Technical
design
Project Charter Business design
document
Technical design
document
Coding
Code
documentation
Integration &
Acceptance Test
Testing
Code
documentation
Rework
Rework
Rework
Rework
In a classic development cycle, there are extensive handoffs from each
step in the process, creating potential disconnects… …and even greater
inefficiencies caused by inevitable rework cascading backward across the
entire cycle…

42. CONNECT WITH US: 42
Decoupling Decisions

43. CONNECT WITH US: 43Public | Copyright © 2014 Prolifics
Lower Cost of Development
Rework time
Rework
Effort
Effort
Time
Business
Objectives
Business
Objectives
Project Charter
Development with a Business Rules
Management System
Business glossary,
process & logic
design
Business design
document
Technical design
document
Business Rule
Authoring
Integration &
Acceptance Test
Testing
Code documentation
Rework
Rework
Rework
With a Business Rules Management System, using more Agile
Methodologies, the development lifecycle is shortened…
…and the amount of rework is reduced, improved quality and reducing
cost…

44. CONNECT WITH US: 44Public | Copyright © 2014 Prolifics
Lower Cost of Development & Speed time to market
Effort
The Decision Model in the Development
Process
Business
Objectives
Business
glossary, process
& logic design,
code generation,
testing
Project Charter
Code
documentation
Time
Rework time
Rework
Effort
Rework
With decision modeling development collapses to the minimum, speeding
up time to market…

45. CONNECT WITH US:
Ø Centralize Decision & Workflow
Ø Cache for performance (if necessary)
Ø SOA backbone
Decision
Management
Workflow
/ BPM
ESB / SOA
MDM
Cache
System System System
45
Reference Architecture
Monitor

46. CONNECT WITH US:
Ø Channels have different answers.. Sometimes conflicting.
Ø Inability to capture & act on
§ interesting behavior.
§ events, risk, etc.
Web
Call
Center
Branch
Channels
Customer Behavior & Cross Sell

47. CONNECT WITH US:
Ø Gain Consistency – Centralize Decisions
Ø Present Next best actions - Rules
Ø Better Recommendations – Predictive Analytics
Ø Recognize and save at risk customers – Analytics & Rule
Ø Recognize opportunities a the point of impact – Situational rules
47Public | Copyright © 2014 Prolifics
Customer Behavior & Cross Sell

48. CONNECT WITH US: 48
Analytics

49. CONNECT WITH US:
Ø Amazon E.g. Collaborative Filtering Algorithm
§ Cart
§ Purchased, rated, liked
§ Link to Others with the same pattern
§ Frequently bough together
§ Also bought
Ø Next best action & Updates
§ Account related actions
§ Urgent updates
Ø Recommender Systems
§ Retail, Facebook, Linked in etc.
§ People you may know, viewed also viewed, browsing history etc.
49
Customer Cross-Sell

50. CONNECT WITH US:
Customer cross-sell journey
Capture Predict Act
Customer Data
• Demographics
• Account Activity
• Product Holdings
• Channel Activity
• Information Requests
• Complaints
• …
Campaign Data
• Contact history
• Response/purchases
• Test campaigns
• …
Analyses
Predict who is likely to
respond, based on their
customer profile when
receiving the campaign
Scoring
Marketing
campaign
process
Key Performance
Predictors and
Campaign Results
Rank best 3
offers
Attitudinal Data
• Customer Surveys
• Twitter
• Discussion Forums
• Blogs
• …
Website
recommendation
engine
Sales campaigns

51. CONNECT WITH US:
Ø Customer hits information pages on the site
Ø Web interest captured in Product B
Decision
Management Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
Product A
Product B
Product C
Product D
…
Product B
Product A
Product C
Product D
…
51
Customer Behavior - Interest

52. CONNECT WITH US:
Region Interaction Customer
Group
Product Weight
NY
Web
Gold
Product A 1
Product B 2
Silver Product A 2
Otherwise 3
Model
Gold Product B 3
Silver Product A 4
Bronze Product A 5
Bronze Product B 6
RI External Gold Product A 2
52Public | Copyright © 2014 Prolifics
Allow for Change

53. CONNECT WITH US:
Ø External events change internal priorities based on rules/model
53
Decision
Management Workflow
ESB / SOA
MDM
Cache
Baby
Web
Call
Center
Branch
Product A
Product B
Product C
Product D
…
Product B
Product C
Product A
Product D
…
53
Use Case – External Events

54. CONNECT WITH US:
Ø Not interested in certain products
Ø Or tell me about it later
54
Decision
Management Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
Product B
Product C
Product A
Product D
…
Product B
Product C
Product A
Product D
…
6 Months
54
Use Case – Call Center

55. CONNECT WITH US:
Ø Workflow (BPM) kicked off by event
Ø Customer called
Ø Closed deal, update cache
55
Decision
Management Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
55
Use Case – 6 Months Later

56. CONNECT WITH US:
Ø Which product is more attractive to a wealthy customer?
Ø Who do we risk loosing most as a customer?
56
Decision
Management Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
Data
56
Improve

57. CONNECT WITH US:
Ø Each bank / Merchant has it’s own rules & process
Ø Problem detected in one, not another, visibility
Ø Tracking success of strategies
Bank Bank 2 Merchant
Fraud Service
57
The Trilogy in Fraud Detection

58. CONNECT WITH US:
Ø Centralize Decision & Process Management
Ø Leverage nexus, become more agile and efficient
Decision
Management Workflow
ESB / SOA
MDM
Cache
Bank Bank 2 Merchant
58
Trilogy, Fraud

59. CONNECT WITH US:
Ø Customer withdraws multiple times
ApproveDecline
Reason
Daily limit
Score
ExceededDecision
Management Workflow
ESB / SOA
MDM
Cache
Bank Bank 2 Merchant
59
Use Case - Fraud

60. CONNECT WITH US:
Business Processes
Analytics
Decision Management
60
The Business Trilogy

61. CONNECT WITH US:
Ø Scoping & Modeling Workshop
Ø ½ day General Assessment
§ Process
§ Analytics
§ Decision management
Ø Are you ready to change?
61
Next Steps

62. CONNECT WITH US:
Ryan Trollip
practice director, decision management
prolifics | office: (646) 380-2895 | mobile: (774) 641-3666
rtrollip@prolifics.com | yahoo IM: rtrollip_prolifics
Howard Webb
practice director, advisory & consulting
prolifics | office: (646) 380-2948| mobile: (314) 602-3341
Howard.webb@prolifics.com | yahoo IM: hwebb_prolifics
62
Contact Information