How to Innovate Risk Management and Customer Centricity

@jamet123 @RogerBurlton © 2016 Decision Management Solutions and Process Renewal Group
James Taylor, CEO
Decision Management Solutions
Roger Burlton, Managing Partner
Process Renewal Group
How to Innovate Risk Management and
Customer Centricity

@jamet123 @RogerBurlton © 2016 Decision Management Solutions and Process Renewal Group 2
Your Presenters
▶ James Taylor
▶ CEO of Decision Management Solutions
▶ Decision Management Solutions works with clients to
improve their business by applying analytic technology
to automate & improve decisions
▶ James has spent the last 14 years championing Decision
Management and developing Decision Management
Systems.
▶ Roger Burlton
▶ President of Process Renewal Group
▶ PRG provides services in BPM, business architecture and
culture change to help organizations improve their
business performance.
▶ Roger is a pioneer in business process transformation
starting PRG over twenty years ago and helping over 100
companies and agencies to transform themselves.
Business
Intent & Strategy
Enabling
Technology
Performance

AGENDA
▶ Maximizing Business Results
▶ Processes Are Not Decisions
▶ Risks Without Decisions
▶ Case Studies
▶ Processes and Decisions Together
▶ Questions
▶ Takeaways

Maximizing Business Results

Avoid And Mitigate Risk
▶ Regulatory and Ownership perspectives
▶ Compliance with external requirements and internal policies
▶ End to end processes integrity
▶ Operational risks typically occur at a decision point
▶ Security assurance / fraud avoidance
▶ “Knowing the client” means real-time data analysis

Provide The Best Customer Experience
▶ Customer perspective
▶ Fast time to market with products and services
▶ Insight, intimacy and service
▶ Simplicity, speed, and transparency
▶ End to end process integrity delivering value
▶ Digitization of end to end work

Improve Processes
▶ There is tremendous pressure on our Businesses: We have to act and decide faster and better
/ ROIValue
Return
Cost
Time to Break Even Time in Value
Sooner
Better
Cheaper
More Flexible

The ROI Of Managing Decisions
Accuracy
Consistency
AgilityLatency
Cost
More accurate risk management
More targeted customer treatment
More rapid response to business threats
Fewer missed opportunities
Policies applied across channels
Lower fines, audit & legal costs
More real-time responses
Higher rates of straight through processing
Lower staffing ratios
Less re-work
Sooner
Better
Cheaper
More Flexible

Processes Are Not Decisions

Processes Are Not Decisions
▶ Processes
▶ Flow oriented across roles
▶ Often sequential
▶ Interconnected to outcomes
▶ Stable in ‘what’
▶ Analytics about the process
▶ Decisions
▶ Declarative
▶ Hierarchical
▶ Logically “dense”
▶ Changeable
▶ Analytics change the decision
▶ Different Stakeholders
▶ Different Perspectives
▶ Different Measures

All Decisions Happen In A Process
▶ Decision Processes are not new but are growing in proportion and importance
▶ A PRG review of APQC frameworks shows that 20–30% of processes either make a
decision or are comprised of many sub decisions. Another 30–40% are involved in
providing the inputs to or knowledge for decision making.

Complex Process Models Hide Decisions
▶ Modeling decisions with gateways adds complexity
▶ Mixes process and decision and imposes sequence

Model Decisions As Well as Processes
▶ Separating Decisions
simplifies and stabilizes
Processes
▶ Modeling Decisions brings
clarity
Applicant Risk
U
Applicant Age
Medical
History Applicant Risk Rating
1
> 60
good Medium
2 bad High
3 [25..60] - Medium
4
< 25
good Low
5 bad Medium

Risks without Decisions

COMPLEX, FRAGILE PROCESSES

INSIGHT BUT NOT ACTION

INTENT WITHOUT EXECUTION

Case Study 1: Customer Experience

Industry comparisons
• auto adjudication rates are low
• confusion around what constitutes an acceptable deal
Observations on risk
• state regulator
• Business Process Architecture for Business Unit
Large areas of processes, decisions and rules unrecognized, unstructured and inconsistent
 Optimize ETE processes and align to outcomes, experience
 Incorporate new principles of:
• integrated modular and component decision structures
• progressive decisioning concepts to better support the customer journey
• Focus on customer moments of truth
• separation of internal duties
The Opportunity
The Challenge

Submit
application
for loan
Determine
credit score
Decide
credit
worthiness
Approve
loan
SlideconceptcourtesyofBusinessRuleSolutions,LLCwww.BRSolutions.com
Is the applicant eligible
for the loan?
Is the application
complete?
Is the credit score above
the minimum?
Are the loan risk
parameters in range?
• A service representative
must be assigned to a
received application not
yet completed.
• The applicant’s credit
score must be higher
than the minimum
published in the current
credit risk table.
• The monthly repayment
amount must be less
than 25% of the
applicant’s income.
• A application for a loan
greater than $1 million
must be approved by a
Vice President.
Component Progressive Decisioning

Process Redesign Moved Decisions
Some decisions move earlier
Some new decisions are created and made early
Some premature decisions that today result in downstream
changes are avoided
Some decisions can be made later therefore speeding the
approval decision

Case Study 2: Reducing Operational Risk

Case Study 2: Reducing Operational Risk
From processes to risk and performance to decisions to processes again
Acquire, construct and
manage real-estate
Design and build /
acquire real-
estate assets
Maintain
real-estate assets
Obtain and install
real-estate assets
Dispose
of real-estate
assets
1. built process architecture and work flow
2. found the decision processes
3. identified the decisions structure
4. mapped the material risks
5. mapped existing controls
6. examined control gaps
7. put in place missing controls (new process
steps and new decision models)
Develop &
Sign off
Detailed
Design
Conduct
Tender.
Recommend
Contractor
Detailed
Design
Signed off
Issue
Construction
Project
Approval
Form
BC & FP
Approved
Open
Project.
Issue POs
Construction
Approval Form
Issued
PO
for Design
Obtain
Construction
Permit
Approve
Contractor
Contract
Contractor
Construct
Facility
Construction
Permit
Approved
Contractor
Recommended
Contractor
Approved
Contractor
Contracted
PO
for Construction
Obtain
Occupancy
Permit
Relocate
Staff
Occupancy
Permit
Obtained
Facility
Furnished
Furnish
Facility
Open
Facility
Rectify
Deficiencies
Closeout
Financials
Staff
Relocated
Facility
Opened
Deficiencies
Rectified
Facility
Constructed
Financial
Closeout
Completed
FR-1.33
UA-2.17
C-1713
C-1212
UA-2.18
Detailed Design
Developed
Conduct
Warranty
Walk-
through
Warranty
Walk-through
Conducted
UA-2.18
C-1711
GAP-1.05
N-6
N-7

Case Study 3: Retail Banking Customer Next Best Action

▶ Every Channel
▶ Every Time
▶ 400M interactions/month

Key Elements
Decision

Processes and Decisions Together

Processes AND Decisions
▶ Decisions and Processes are well understood
▶ Process Models and Decision Models
▶ Decisions are linked to Processes
▶ Not buried within them
▶ New process is simplified and more robust
▶ Not fragile and yet not dumbed down
▶ Change is easier
▶ Because process & decision changes are independent
▶ Analytics drive outcomes
▶ They don’t just measure the process

Questions?

Takeaways
▶ Processes and Decisions
▶ Are different
▶ Are complementary
▶ Deserve their own models
▶ Are associated
▶ A focus on Processes and Decisions
▶ Manages risk more effectively
▶ Focuses on customers more directly
▶ Enables faster operational response
▶ Adds value to the process outcomes
/ ROIValue
Return
Cost
Time to Break Even Time in Value
Sooner
Better
Cheaper
More
Flexible

Thank You
For more on
Decision Management, go to:
decisionmanagementsolutions.com
@jamet123 @RogerBurlton © 2016 Decision Management Solutions and Process Renewal Group
James Taylor
james@decisionmanagementsolutions.com
Roger Burlton
Roger.Burlton@processrenewal.com

How to Innovate Risk Management and Customer Centricity

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