Legacy                modernization with                         DecisionJames Taylor,                 Management and     ...
Your presenter – James Taylor CEO of Decision Management Solutions Works with clients to improve their business by applyin...
AGENDA         1 2     The challenge of     legacy systems                        The role of                        decis...
The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on e...
The challenge of legacy               systems
The business impact of legacy systems Fines and legal issues  Regulations and rulings cannot be implemented Competitive we...
Every option for change has issues Rip and replace      Cost!                      Risk! Re-platform or       To what? mod...
Case: State Agency Critical state budget component Legacy systems modified for 30 years  On-line application and batch COB...
The role ofdecisions in legacychallenges
What is a decision?   Data is gathered, considered   A choice or selection is made   That results in a commitment to actio...
Legacy systems make decisions They  Determine if a customer is eligible for a benefit  Validate the completeness of an inv...
Decisions are high change components Regulations change          Change to keep eligibility                             de...
Case: State Agency Key objectives  Don’t require complete rewrite of legacy  Usable by non-technical analysts  Comprehensi...
Modernizing with   Decision Management
Decision Management An approach or business discipline for automating and improving decision-making It improves day to day...
Delivering Decision Management 3 stages to better operational decisions                                                   ...
Decision Services remain in sync                    Conventional Approach                                                 ...
Separation adds agility Decision making logic is most changeable Typical legacy system forces a complete release        Sy...
The power of  business   rulesmanagement  systems               ©2011 Decision Management Solutions                       ...
Clarity and transparency are needed            If customer is GoldCustomer             and Home_Equity_Loan_Value is more ...
What are business rules? “… a directive intended to influence behavior.” “… a formal expression of knowledge or preference...
Business rules drive decisions                Decision                              Regulations   Policy    History       ...
Unmanageable business rulespublic class Application {private Customer customers[];private Customer goldCustomers[];...publ...
Manageable business rules                         If customer is GoldCustomer                          and Home_Equity_Loa...
A Business Rules Management System Validation             Testing    and Verification                                     ...
Why manage business rules        Reduce Costs        • Fewer resources, less time to change decisions        • Lower fines...
Case: State Agency Business Sources  Separated fee-specific rules from existing  legislation  Found inconsistent interpret...
Which would you rather maintain?           ADD #2,+VCSDTFPD,RESULT=DTIN4A           ADD #1,+ZW0DTFPD,RESULT=DTOUT4A       ...
Improving alignment and                 agility
The business agility cycle         Act/                                        Detect       Respond     Communicate       ...
Decision Management drives agility                                                   Explain what happenedAutomated yet ag...
Case: State Agency Outcome   2,000+ rules stored in central repository   60,000+ transactions/day across batch and online ...
Analytics drive better decisions                       Rules address what might happen          Analytics help you underst...
Continuous improvement in decisions                      ©2011 Decision Management Solutions   34
Continuous improvement in decisions                      ©2011 Decision Management Solutions   35
Wrap upand next steps
Action Plan      1        Analyze code to find decisions      2   Rework to isolate decision components      3   Analyze p...
The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on e...
Decision Management Solutions Decision Management Solutions can help you  Focus on the right decisions  Implement a techno...
Thank you!                      James Taylor, CEO   james@decisionmanagementsolutions.comwww.decisionmangementsolutions.co...
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Legacy modernization with decision management and business rules

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Many organizations' agility and responsiveness is hamstrung by their legacy systems. Replacing them wholesale is impossible but the constraint they impose on the business is unacceptable. In this session James Taylor, CEO of Decision Management Solutions, will show how you can use Decision Management and business rules to avoid replacing the whole application while still maximizing agility and improving business alignment.

What you will learn:

How decision components are often the highest change, most difficult to maintain pieces of legacy applications
How Decision Management builds on SOA by externalizing decisions from legacy systems
How a business rules management system dramatically decreases maintenance costs
Why modernizing this way improves business alignment and agility
Webinar recording available at:
https://decisionmanagement.omnovia.com/archives/71756

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Legacy modernization with decision management and business rules

  1. 1. Legacy modernization with DecisionJames Taylor, Management and CEO Business Rules
  2. 2. Your presenter – James Taylor CEO of Decision Management Solutions Works with clients to improve their business by applying analytics and analytic technology to automate and improve decisions Spent the last 8 years developing the concept of Decision Management 20 years experience in all aspects of software including time in FICO, PeopleSoft R&D, Ernst & Young ©2011 Decision Management Solutions 2
  3. 3. AGENDA 1 2 The challenge of legacy systems The role of decisions in legacy 3 Modernizing with Decision Management challenges 4 5 6 The power of Improving Wrap and next business rules alignment and steps management agility systems
  4. 4. The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on extracting and modernizing decisions Use a business rules management system Externalizing decisions with business rules Improves alignment Improves agility Manages risk ©2011 Decision Management Solutions 4
  5. 5. The challenge of legacy systems
  6. 6. The business impact of legacy systems Fines and legal issues Regulations and rulings cannot be implemented Competitive weakness Lack of agility slows competitive response Policies are buried in code with a long change cycle The business has no real idea how the system works No learning going on Test and learn is not an option What you learn cannot be applied ©2011 Decision Management Solutions 6
  7. 7. Every option for change has issues Rip and replace Cost! Risk! Re-platform or To what? modernize Next generation legacy? Service-enable Better but Services as black boxes? ©2011 Decision Management Solutions 7
  8. 8. Case: State Agency Critical state budget component Legacy systems modified for 30 years On-line application and batch COBOL Minor changes required extensive programming Inconsistent interpretation of legislation Needed Rapid response to changing legislation Non-technical business experts engaged ©2011 Decision Management Solutions 8
  9. 9. The role ofdecisions in legacychallenges
  10. 10. What is a decision? Data is gathered, considered A choice or selection is made That results in a commitment to action ©2011 Decision Management Solutions 10
  11. 11. Legacy systems make decisions They Determine if a customer is eligible for a benefit Validate the completeness of an invoice Calculate the discount for an order Assess the risk of a transaction Select the terms for a loan Choose which claims to Fast Track These are decision words The system must answer a question each time ©2011 Decision Management Solutions 11
  12. 12. 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 changes Change to keep selecting the right deal terms Fraudsters adapt Change the routing to focus on new fraud ©2011 Decision Management Solutions 12
  13. 13. Case: State Agency Key objectives Don’t require complete rewrite of legacy Usable by non-technical analysts Comprehensive business control It must run quickly and scale on all platforms Identified key decision – “What is correct fee” Externalized just that decision ©2011 Decision Management Solutions 13
  14. 14. Modernizing with Decision Management
  15. 15. Decision Management An approach or business discipline for automating and improving decision-making It improves day to day business results by Supporting Automating and Improving operational decisions It builds on existing enterprise applications to put data to work manage uncertainty increase transparency give the business control ©2011 Decision Management Solutions 15
  16. 16. Delivering Decision Management 3 stages to better operational decisions Create a “closed loop” between operations and Design and build analytics to independent measure results decision processes and drive to replace decision improvement Identify the points embedded in decisions (usually operational systems about customers) that are most important to your operational success ©2011 Decision Management Solutions 16
  17. 17. Decision Services remain in sync Conventional Approach Decision Management Other Systems CRM System CRM System Decision Service Frequent code changes Infrequent code changes Other Systems sor t ed=1: sor t ed=1: f or I y = I–I= y > 11; y –I t f or I y = I–I= y > 11; y –I t p ri n t ( y –Id ,y) : p ri n t ( y –Id ,y) : if [1a r r ayI y] < 1a rr ayI y -1]) t if [1a r r ayI y] < 1a rr ayI y -1]) t holder - [a rr a y[ y -1] | holder - [a rr a y[ y -1] | Iar ra yl y -1]) = 1 [y]) Iar ra yl y -1]) = 1 [y]) 1 a rr a y = holder 1 a rr a y = holder Programmers Programmers Frequent policy changes Policy Changes Business users Business users Smart (Enough) Systems, Prentice Hall June 2007 Fig 211 ©2011 Decision Management Solutions 17
  18. 18. Separation adds agility Decision making logic is most changeable Typical legacy system forces a complete release System v1 System v2 Decision v1 Decision v2 But only the decision needs to change And it needs to change more often v1 v1 v2 V3 V4 v5 ©2011 Decision Management Solutions 18
  19. 19. The power of business rulesmanagement systems ©2011 Decision Management Solutions 19
  20. 20. 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” ©2011 Decision Management Solutions 20
  21. 21. What are business rules? “… a directive intended to influence behavior.” “… a formal expression of knowledge or preference, a guidance system for steering behavior (a transaction) in a desired direction.” “… statements of the actions you should take when certain business conditions are true.” ©2011 Decision Management Solutions 21
  22. 22. Business rules drive decisions Decision Regulations Policy History Experience Legacy Applications ©2011 Decision Management Solutions 22
  23. 23. 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); } }} ©2011 Decision Management Solutions 23
  24. 24. Manageable business rules 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”Smart (Enough) Systems, Prentice Hall June 2007. Fig 4.3 ©2011 Decision Management Solutions 24
  25. 25. A Business Rules Management System Validation Testing and Verification Decision Deployment Production Rule Service Application Repository Rule EngineDesign Rule Tools Management Applications Operational Database After Smart (Enough) Systems, Prentice Hall June 2007. Fig 6.6 ©2011 Decision Management Solutions 25
  26. 26. Why manage business rules Reduce Costs • Fewer resources, less time to change decisions • Lower fines, legal costs from bad decisions • Reduced IT costs to implement decisions Improve Decision Making • Clear policies and procedures • Consistently applied across channels, systems • Increased accuracy from business users participation Business Agility • More rapid response to business threats • Fewer missed opportunities • Faster time to market ©2011 Decision Management Solutions 26
  27. 27. Case: State Agency Business Sources Separated fee-specific rules from existing legislation Found inconsistent interpretation of rules Translation of documentation into rules Technical Sources Business rules embedded within code Multiple platforms / multiple interpretations Program documentation not current ©2011 Decision Management Solutions 27
  28. 28. Which would you rather maintain? ADD #2,+VCSDTFPD,RESULT=DTIN4A ADD #1,+ZW0DTFPD,RESULT=DTOUT4A CALL Z#SCMPDT,0,0,0,0,0,P2=DTIN4A,P3=DTOUT4A ADD #2,+VCSNEXPD,RESULT=DTIN5A ADD #1,+ZW0NEXPD,RESULT=DTOUT5A CALL Z#SCMPDT,0,0,0,0,0,P2=DTIN5A,P3=DTOUT5A SUB (ZW0NEXPD,#1),(ZW0DTFPD,#1),RESULT=ZW0#DAYS,PREC=DDD DO WHILE,(ZW0#DAYS,LT,ZL0DW090,DWORD) MOVE ZW0VALUE,2,WORD ADD #2,+VCSNEXPD,RESULT=ZC1DTIN CALL Z#SCMPDT,ZC1DTIN,(ZW0NXOUT),0,0,ZW0VALUE CALL Z#SCNVDT,(ZW0NXOUT),(ZW1NXDT) MOVE (VCSNEXPD,#2),ZW1NXDT,(4,BYTE) CONVTB ZW1NEXPD,(VCSNEXPD,#2),PREC=D,FORMAT=(6,0,I) CONVTD ZW0NEXYR,ZW1NEXPD+4,PREC=S,FORMAT=(2,0,I) IF (ZW0NEXYR,LE,ZL025,2) ADD ZW0NEXYR,ZL12000 ELSE ADD ZW0NEXYR,ZL01900 ENDIFwhile (the newExpirationDate of feeVehicle < the dateFeesReceived of feeVehicle + 90 days) do { the newExpirationDate of feeVehicle = the newExpirationDate of feeVehicle + 2 years} ©2011 Decision Management Solutions 28
  29. 29. Improving alignment and agility
  30. 30. The business agility cycle Act/ Detect Respond Communicate Decide Decision Response After Gartner Inc ©2011 Decision Management Solutions 30
  31. 31. Decision Management drives agility Explain what happenedAutomated yet agile response Rapidly add new checksBusiness control Act/ Detect Respond Communicate Decide Decision ResponseCommunicate new rules effectively Help business and IT collaborateManage change Analyze and test approaches ©2011 Decision Management Solutions 31
  32. 32. Case: State Agency Outcome 2,000+ rules stored in central repository 60,000+ transactions/day across batch and online Rules easily updated by non-technical business people Benefits Managed, demonstrable compliance Rapid response to policy changes ROI example First day there was an error Fix took 15 minutes v 2-8 hours: 87%-97% reduction ©2011 Decision Management Solutions 32
  33. 33. Analytics drive better decisions Rules address what might happen Analytics help you understand why and when * * * * * * * * * * * * * * * ** * * *** * * * * * * * *** ** * * * ** * * * * ** * * * * ** * * * ©2011 Decision Management Solutions 33
  34. 34. Continuous improvement in decisions ©2011 Decision Management Solutions 34
  35. 35. Continuous improvement in decisions ©2011 Decision Management Solutions 35
  36. 36. Wrap upand next steps
  37. 37. Action Plan 1 Analyze code to find decisions 2 Rework to isolate decision components 3 Analyze policies and regulations for rules 4 Use legacy code to verify rules 5 Redeploy rules as Decision Services 6 Retire the replaced code ©2011 Decision Management Solutions 37
  38. 38. The one slide you need Legacy systems have negative business impacts Not all parts of a legacy system are equal Focus on extracting and modernizing decisions Use a business rules management system Externalizing decisions with business rules Improves alignment Improves agility Manages risk ©2011 Decision Management Solutions 38
  39. 39. Decision Management Solutions Decision Management Solutions can help you Focus on the right decisions Implement a technology blueprint Build decisioning systems For assistance, to find out more or if you have questions james@decisionmanagementsolutions.com http://www.decisionmanagementsolutions.com http://jtonedm.com @jamet123 or @decisionmgt ©2011 Decision Management Solutions 39
  40. 40. Thank you! James Taylor, CEO james@decisionmanagementsolutions.comwww.decisionmangementsolutions.com/learnmo re

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