Simplifying Complex Processes with Decision Management

@jamet123 #decisionmgt © 2016 Decision Management Solutions
James Taylor
CEOSimplifying Complex Processes
with Decision Management

@jamet123 #decisionmgt © 2016 Decision Management Solutions 2
AGENDA
▶The challenge of over complex
processes
▶Case studies in process complexity
▶Simplifying processes with decision
management
▶Finding decisions in your processes
▶Not just simpler, smarter too
▶Wrap and next steps

The One Slide You Need
▶Complex processes are costly and not agile
▶Unmanaged decisions cause process complexity
▶Managing decisions makes processes more agile
▶Managing decisions makes processes smarter
▶Business rules drive decisions
▶Processes and decisions are complementary
▶… but not the same

The Challenge Of Complex Processes

Process Complexity Is The Enemy
▶Harder to assure process quality
▶Customers don’t like long processes
▶Hard to find places to apply learning
▶More expensive
▶Hard to make changes safely, reducing agility

Case Studies In Process Complexity

Fortune 20 Call Center
▶Making the right
decision at the start of
the call turns long,
costly processes into
straightforward,
customer-pleasing
interactions.

North American Life Insurer
▶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

International Retailer
▶Cross-channel
coordination ensures
that all relevant offers,
including loyalty
programs, are combined
at the point of sale,
with consistent pricing
rules applied.

A Graphical Example
“before”
“after”

Complexity From Multiple Processes
▶30 similar processes or just one?

Simplifying Processes With Decision
Management

Identifying Decisions
▶A choice, a selection
▶Made after consideration
▶Results in action not just knowledge

Decisions Can Be Choices
▶Should we decline or approve this application?

… Or Combinations Of Possibilities
▶What price, terms and conditions should we offer
this customer?

Decision Management
▶Decision Management allows an organization to control,
manage, and automate the repeatable decisions at the heart
of its business by effectively applying business rules and
advanced analytic technology.
▶Decision Management:
▶Improves accuracy
▶Delivers consistency
▶Increases agility
▶Reduces decision latency
▶Reduces costs
▶It is a proven framework
for implementing Business
Rules Management Systems
and Predictive Analytics

3 Stages Of Decision Management

Complex Processes Hide Decisions

Managing Decisions Simplifies Them
▶Separating Decisions
simplifies Processes
▶Modeling Decisions and
managing Business Rules
brings clarity

Separation Adds Agility
21
v1 v2 v3 v4 v5
v1 v2 v3 v4 v5
v1 v2
v1 v2 v3 v4 v5 v6
v1
v1 v2 v3 v4 v5
Stable business process
Variable change cycle
Matched change cycle
Process Decision

Finding Decisions In Your Processes

Finding Decisions
Worklists
Extreme
Branching
Procedures,
cheat
sheets
Approvals,
escalations

Decisioning Words
▶Choose
▶Select
▶Calculate
▶Determine
▶Assess
▶Validate
▶Find the question…

Eligibility Decisions
▶Is this customer/prospect/citizen eligible for this
product/service?
▶They are made over and over again
▶They should be made consistently every time.
▶They are rules-based

Calculations
▶What is the correct price/rate for this
product/service?
▶Calculations are usually operational
▶They are overwhelmingly rules-based
▶The rules are generally fixed and repeatable
▶Calculations are often embedded in code

Risk-based Operational Decisions
▶How risky is this customer and what should we do
about it?
▶Risk is acquired one customer, one transaction at a
time
▶A big gap between the value of a good decision and
the value of a bad one
▶To assess risk in these decisions requires analytics to
predict the risk

Opportunity-based Operational Decisions
▶How profitable might this customer be?
▶Customer-centric.
▶Cross-sell and up-sell decisions for example
▶Little difference between good and bad decisions
▶Analytics predict response, opportunity, potential
▶These must change rapidly to take advantage of
competitive and market circumstances

Micro Decisions
▶How many decisions are involved in sending a letter
to 10,000 customers?
▶Just a few design decisions
▶Or 10,000 one micro decision per customer
▶Many strategic decisions can only be implemented if
many supporting micro decisions are also made

Vessel Underwriting Example
Gather policy
application data
Validate application
Eliminate
unqualified applicants
Conduct physical
inspection
Underwrite policy
Complete new
business processing

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing
Decision:
Is this application
complete and
correct?

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing
Decision:
Is this application
a high fraud risk?
Decision:
Is this the type of
vessel we insure?

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing
Decision:
What exclusions?
Decision:
What coverage?
Decision:
How risky?
Decision:
What price?

Gather policy
application data
Eliminate
Conduct physical
inspection
Underwrite policy
Complete new
business processing

Not Just Simpler, Smarter Too

Analytics Have Real Power
Customer
Retention
Campaign
Response
Acquisition
Rates
Online
Conversion
Fraud CrimeWasted
Spend
Risk

Analytics Drive Better Decisions
**
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Analytics help you understand why and when
Rules address what might happen

Closed-loop Decisioning

Wrap Up And Next Steps

Why Manage Decisions Independently
▶Faster, easier, independent decision logic changes
▶Coordination across channels, products
▶Simpler processes that are easier to manage
▶Higher productivity and resource utilization
▶Analytic insights for making better decisions
▶Continuous improvement of decisions and results

Value From Processes And Decisions
Process is simplified, robust
Independent process & decision changes
Decisions are reusable
Decisions are easily modeled
Analytics drive decision-making
Process is complex, brittle
Decisions only evolve with process
Hard to share decisions
Hard to model decisions precisely
Hard to apply analytics
PROCESS AND DECISIONPROCESS ONLY

Action Plan
• Hidden decisions, transactional decisions, customer
decisions
• Decisions buried in complex processes
• Decisions that are the difference between two processes
Identify your
decisions
• Adopt business rules approach and technology
• Investigate data mining and predictive analytics
• Think about adaptive control
Adopt
decisioning
technology
• Learn, understand and teach the difference
• Think about their independent lifecycles
• Manage them both equally
Think about
Decisions and
Processes

The One Slide You Need
▶Complex processes are costly and not agile
▶Unmanaged decisions cause process complexity
▶Managing decisions makes processes more agile
▶Managing decisions makes processes smarter
▶Business rules drive decisions
▶Processes and decisions are complementary
▶… but not the same

Decision Management Solutions
▶Original co-submitter of DMN
▶Fortune 500 clients in insurance, banking,
manufacturing, telecommunications,
travel and leisure, health care,
health management, and retail
▶James Taylor, CEO, industry expert
▶Extensive decision management resources
▶Widely cited independent research
▶White papers
▶Live educational webinars

Decision Management Solutions
▶Training
▶We are the most
experienced decision
management and decision
modeling trainers in the
world
▶Trained over 800 people
worldwide to date
▶We specialize in helping
organizations become self
sufficient in Decision
Management
▶DMN-based, future-
proofing your investment
▶Consulting
▶Fortune 500 clients in
insurance, banking,
manufacturing,
telecommunications,
travel and leisure, health
care, health management,
and retail
▶Widely cited research,
white papers, webinars

Thank You
@jamet123 #decisionmgt © 2016 Decision Management Solutions
For more on
Decision Management, go to:
decisionmanagementsolutions.com

Simplifying Complex Processes with Decision Management

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