BPM and Decision                  Management for                 Smarter, SimplerJames Taylor,                   and More ...
The benefits of BPM             Operational Consistency              Customer experience                      Costs       ...
Complexity is the enemy             Harder to assure quality             Dislike long processes                 More expen...
AGENDA         1 2     What causes     complexity                      Eliminating                      complexity        ...
What causes complexity?
Age<21         Accept low-risk           applicant21<=Age<50         Process       medium-risk         applicantAge>50    ...
Age<21             Accept low-risk               applicant     Previous Heart Attack,                             Decline ...
Age<21             Accept low-risk               applicant     Previous Heart Attack,                                     ...
Age<21                          No Class I or II sports                                                          Accept lo...
Embedded decisions cause complexity      Age<21                          No Class I or II sports                          ...
Many similar processes cause complexity                       ©2012 Decision Management Solutions   11
Local exceptions cause complexity                       ©2012 Decision Management Solutions   12
Eliminating Complexitywith Decision Management
Case: Fortune 20 Call CenterBusiness challenges         Solution                BenefitsComplex manual              Identi...
Case: Government Agency                     ©2012 Decision Management Solutions   15
Case: Global ManufacturerBusiness challenges   Solution             BenefitsSupplier onboarding   Extract “Validate    50%...
Embedded decision complexity      Age<21                          No Class I or II sports                                 ...
Separate decision, simpler process                                       Low risk                                         ...
Decision Management is the  proven approach used to     manage decisionsindependently of processes
Decisions            Making choices or            selections and            taking action              ©2012 Decision Mana...
Benefits from independent decisions            Simpler                             Higher           processes             ...
Separation adds agilityMatched change cycle   v1       v2      v3             v4                    v5   v1       v2      ...
Decisions are high change components Regulations change   Change to keep eligibility                      decisions compli...
Case: Beauty RetailerBusiness challenges      Solution                 BenefitsInflexible loyalty       POS rules-based   ...
Decision Management            Systems
Suitable decisions Repeatable           Non trivial Measurable          Candidate  business               for   impact    ...
Operational decisions everywhere                       ©2012 Decision Management Solutions   27
Decision Management Systems…   Keep the             Are  decision in       transparent    mind              and agile     ...
3 Steps to Decision Management                         Discover                         Build                         Impr...
Business Rules
Manage the rules of decisions                Decision                           ©2012 Decision Management Solutions   31
Unmanageable business rulespublic class Application {private Customer customers[];private Customer goldCustomers[];...publ...
Clarity and transparency are needed            If customer is GoldCustomer             and Home_Equity_Loan_Value is more ...
The power of a BRMS Design Transparency Execution Transparency Collaboration Impact Analysis Platform for analytics       ...
Case: North American Life InsurerBusiness challenges    Solution                BenefitsRe-engineering         Manage     ...
Predictive Analytics
Three kinds of Predictive Analytics    Risk         Fraud Opportunity                        ©2012 Decision Management Sol...
Predictive Analytics turnuncertainty about the future into usable probabilities
Embed Predictive Analytics                 ?                 ?         Decision                       ©2012 Decision Manag...
Case study: Specialty InsurerBusiness challenges   Solution                 Benefits12,000 claims a       Business rules a...
A final thought
Begin with the Decision in mind              Find the decisions that              matter to your business              and...
Questions?              James Taylor, CEOjtaylor@decisionmanagementsolutions.com                                          43
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BPM and Decision Management for Smarter, Simpler and More Agile Processes

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How to use Decision Management, business rules and predictive analytics to simplify and improve business processes.

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  • BPM and Decision Management for Smarter, Simpler and More Agile ProcessesOne 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.James Taylor will build on real case studies to show you how streamlining decision management can deliver simpler, more manageable processes to enhance efficiency.
  • Harder to assure qualityCustomers don’t like long processesMore expensiveHard to make changes safelyHard to find places to apply learning
  • 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
  • Simpler processes that are much easier to manage Higher employee productivity and resource utilization International travel wizardBillingTech support and troubleshooting
  • 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
  • Payment methods Bank details Tax numbersWithholding taxBusiness partner roles DUNS numbersVendor returns
  • Decisions involve choices, selecting from alternatives and are critical to how we run our organizationsBetter decisions means making more effective, more profitable choices from those available – choices that improve what will happen in the future
  • Why manage decisions independently of process? What’s the advantage? There are several…
  • much of a typical mainframe system is static, works fine and needs no maintenance. Often only a small portion of the system is responsible for much of the maintenance work. My suggestion would be to find the COBOL that represents business decisions such as a pricing engine (what price is this product for this customer), eligibility logic (is this customer eligible for this offer or service), approval rules (can this claim be auto-approved) and replace those parts of the application with Decision Services.
  • [twitter]Focus #decisionmgt systems on repeatable, non-trivial, measurable decisions you want to automate[/twitter]RepeatableDefine timesSame informationDefined set of actionsConsistent measures of successNon trivialPolicies and regulationsDomain knowledge and expertiseAnalysis is requiredLots of data,Lots of actionsTrade-offsContinued changesMeasurable business impactCandidate for automation
  • What parts will the engineer need to repair this problem?What offer should we make when this person uses the ATM?Is this credit card fraudulent?
  • [twitter]4 principles of #decisionmgt systems-decisions,transparency,predictive,learning[/twitter]
  • Discover and Model DecisionsDesign and Implement Decision ServicesMonitor and Improve Decisions
  • So making decisions correctly will be hard unless we can pull all these rules together.Given this is how rules often look to start with, this is clearly going to be hard.But rules also change…Because your business policies doBecause your competitors doBecause the law doesBecause stock levels doBecause your services and products doBecause your customers doBecause your customers’ needs doSo we need something that will let us collect, manage and update the business rules that drive our decisions
  • [twitter]A business rules management system #brms is a gr8 platform for #decisionmgt systems[/twitter]
  • [twitter] analytics in #decisionmgt systems predict risk, fraud and opportunity[/twitter]Risk – credit risk, delivery risk, price risk. Some upside if get right, big downside if get wrongFraud – good fraud decisions really have no effect but bad ones are a loss e.g. credit card fraud or claims fraudOpportunity – not much of a downside but a degree of upside e.g. cross-sell or up-sell
  • The power of predictive analytics is their ability to turn uncertainty about the future into usable probability
  • Story about powerpoint modelRisks of models that are done separately and the need to put them to workPredictive models don’t DO anything, they just make predictionsRules make them actionableTaking the rules, for instance, that represent a segmentation and deploying them into a decision makes them actionable
  • Find the decisions that matter to your business and understand themDon’t start with your data, start with the decisions you need to improve
  • BPM and Decision Management for Smarter, Simpler and More Agile Processes

    1. 1. BPM and Decision Management for Smarter, SimplerJames Taylor, and More Agile CEO Processes @jamet123 #decisionmgt
    2. 2. The benefits of BPM Operational Consistency Customer experience Costs Business agility Continuous Improvement ©2012 Decision Management Solutions 2
    3. 3. Complexity is the enemy Harder to assure quality Dislike long processes More expensive Hard to change safely Hard to apply learning ©2012 Decision Management Solutions 3
    4. 4. AGENDA 1 2 What causes complexity Eliminating complexity 3 Decision Management Systems 4 5 6 Business Rules Predictive A final thought Analytics
    5. 5. What causes complexity?
    6. 6. Age<21 Accept low-risk applicant21<=Age<50 Process medium-risk applicantAge>50 Decline high- risk applicant ©2012 Decision Management Solutions 6
    7. 7. Age<21 Accept low-risk applicant Previous Heart Attack, Decline high- Existing Cancer risk applicant21<=Age<50 Process medium-risk Good Medical Record applicantAge>50 ©2012 Decision Management Solutions 7
    8. 8. Age<21 Accept low-risk applicant Previous Heart Attack, Decline high- Existing Cancer risk applicant21<=Age<50 Process medium-risk Good Medical Record applicantAge>50 New Customer 1 or fewer Claims Multiple Claims Long-standing Customer ©2012 Decision Management Solutions 8
    9. 9. Age<21 No Class I or II sports Accept low-risk applicant Class II sport Previous Heart Attack, Decline high- Existing Cancer risk applicant21<=Age<50 Class I sport Process medium-risk Good Medical Record applicantAge>50 1 or fewer Claims Multiple Claims New Customer Long-standing Customer ©2012 Decision Management Solutions 9
    10. 10. Embedded decisions cause complexity Age<21 No Class I or II sports Accept low-risk applicant Class II sport Previous Heart Attack, Decline high- Existing Cancer risk applicant 21<=Age<50 Class I sport Process medium-risk Good Medical Record applicant Age>50 1 or fewer Claims Multiple Claims New Customer Long-standing Customer ©2012 Decision Management Solutions 10
    11. 11. Many similar processes cause complexity ©2012 Decision Management Solutions 11
    12. 12. Local exceptions cause complexity ©2012 Decision Management Solutions 12
    13. 13. Eliminating Complexitywith Decision Management
    14. 14. Case: Fortune 20 Call CenterBusiness challenges Solution BenefitsComplex manual Identify and extract Consistent, accurateprocesses decisions from customer interactions processesCheat sheets and Decisions earlier inonline policy manuals Automate and processes simplify manage decisions interactionsIrritating repetition forcustomers E.g. Blackberry Empowered level 1 Email, Billing supportInconsistency of Issues, Internationalanswers Travel
    15. 15. Case: Government Agency ©2012 Decision Management Solutions 15
    16. 16. Case: Global ManufacturerBusiness challenges Solution BenefitsSupplier onboarding Extract “Validate 50% reduction intime consuming and Supplier” decision supplier onboardingmanual time Automate andStandard process manage using All local variationsacross 175 business rules supportedcountries—hundreds Genuinely global “Intelligent” self-of local exceptions process service applications3,000 supplierupdates a month
    17. 17. Embedded decision complexity Age<21 No Class I or II sports Accept low-risk applicant Class II sport Previous Heart Attack, Decline high- Existing Cancer risk applicant 21<=Age<50 Class I sport Process medium-risk Good Medical Record applicant Age>50 1 or fewer Claims Multiple Claims New Customer Long-standing Customer ©2012 Decision Management Solutions 17
    18. 18. Separate decision, simpler process Low risk Process low- risk applicant Medium risk Process Determine medium-risk applicant type applicant High risk Process high- risk applicant Class I Class II New # Age sports sports Heart Attack? Cancer? Customer? Claims Action <21 N N Low Risk <21 Y High Risk <21 Y N Medium Risk 21 - 50 Y High Risk 21 - 50 Y High Risk 21 - 50 N N Medium Risk >50 Y High Risk >50 N <2 Medium Risk >50 N >1 High Risk ©2012 Decision Management Solutions 18
    19. 19. Decision Management is the proven approach used to manage decisionsindependently of processes
    20. 20. Decisions Making choices or selections and taking action ©2012 Decision Management Solutions 20
    21. 21. Benefits from independent decisions Simpler Higher processes productivity that are and resource easier to utilization manage Easier to use Enables analytic continuous insights for improvement better of results decisions ©2012 Decision Management Solutions 21
    22. 22. Separation adds agilityMatched change cycle v1 v2 v3 v4 v5 v1 v2 v3 v4 v5Variable change cycle v1 v2 v1 v2 v3 v4 v5 v6Stable business process v1 v1 v2 v3 v4 v5 ©2012 Decision Management Solutions 22
    23. 23. 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 Change to keep selecting the changes right deal terms Fraudsters adapt Change the routing to focus on new fraud ©2012 Decision Management Solutions 23
    24. 24. Case: Beauty RetailerBusiness challenges Solution BenefitsInflexible loyalty POS rules-based Four-fold increase inprogram calculation of loyalty promotion agility discountsCostly and labor- 20% lift in sales inintensive campaign Automated loyalty one yearimplementation offers delivered Reduced costs through re-printableConfusing and time- card Improved customerconsuming for in-store experiencestaff Business definition and management of campaigns
    25. 25. Decision Management Systems
    26. 26. Suitable decisions Repeatable Non trivial Measurable Candidate business for impact automation ©2012 Decision Management Solutions 26
    27. 27. Operational decisions everywhere ©2012 Decision Management Solutions 27
    28. 28. Decision Management Systems… Keep the Are decision in transparent mind and agile Are Test, learn, predictive and improve not reactive ©2012 Decision Management Solutions 28
    29. 29. 3 Steps to Decision Management Discover Build Improve ©2012 Decision Management Solutions 29
    30. 30. Business Rules
    31. 31. Manage the rules of decisions Decision ©2012 Decision Management Solutions 31
    32. 32. 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); } }} ©2012 Decision Management Solutions 32
    33. 33. 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” ©2012 Decision Management Solutions 33
    34. 34. The power of a BRMS Design Transparency Execution Transparency Collaboration Impact Analysis Platform for analytics © Decision Management Solutions, 2012 34
    35. 35. Case: North American Life InsurerBusiness challenges Solution BenefitsRe-engineering Manage Clear where inlegacy systems and processes, decisions processes the rulesmanual processes and rules are appliedBusiness users Decompose decision Business and ITcollecting and points to understand collaborationmanaging business decisions improvedrules Map decisions to Focused vocabularyIT disconnect over vocabulary and and rule harvestingapplication of rules business rules efforts Map decisions to KPIs Traceability
    36. 36. Predictive Analytics
    37. 37. Three kinds of Predictive Analytics Risk Fraud Opportunity ©2012 Decision Management Solutions 37
    38. 38. Predictive Analytics turnuncertainty about the future into usable probabilities
    39. 39. Embed Predictive Analytics ? ? Decision ©2012 Decision Management Solutions 39
    40. 40. Case study: Specialty InsurerBusiness challenges Solution Benefits12,000 claims a Business rules and Loss ratio expensemonth predictive analytics from 14% to 11%Reduce staff by 25% Automatically identify 32% higherin a recession and subrogation subrogation returnslower expenses opportunities $10M/year additionalReduce fraud and Increase Fast Track subrogation returnsimprove subrogation rate from 2% to 22%
    41. 41. A final thought
    42. 42. Begin with the Decision in mind Find the decisions that matter to your business and focus on them as well as your processes. ©2012 Decision Management Solutions 42
    43. 43. Questions? James Taylor, CEOjtaylor@decisionmanagementsolutions.com 43

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