Successfully Implementing Knowledge-Based IT

Successfully Implementing
Knowledge-based IT
Integrating BPM and Rules-Based Technologies

© 2016 Vizuri – All Rights Reserved
Joe Dickman – SVP, Vizuri
Business leader working with organizations to understand
how to leverage innovation for increased business agility.
Specializes in insurance, healthcare, financial service,
retail, and logistics.
Ken Spokas – Technical Director, Vizuri
Technology and Subject Matter Expert working with
organizations to evaluate architectural approaches, design
extensible solutions, and introduce innovative technologies
to improve business agility.
Introductions

What will we learn today?
• How efficiencies can be gained through
the alignment and integration of
Business Process Management (BPM) with
Business Rules Management Systems (BRMS)
• Discuss practical and field-proven approaches
that take a more holistic approach at defining
business processes that affect business across
the the enterprise

Building a Bridge between Goals and Outcomes
Building this bridge
has some challenges
• The challenges we expect to encounter by implementing
BPM and Rules-Based systems are:
– Shared Vocabulary
– Formally defined rules and processes
– Business and IT Champions
– 360 degree feedback loop
– Organizational visibility across the entire business

What the business envisioned
…and what IT delivered...
Expectations vs. Outcomes
Business groups and IT
require new positions to
be defined that ”bridge”
the communication gap.

What is Knowledge-based IT?
A knowledge-based system (KBS) focuses on systems that
use knowledge-based techniques to support human
decision-making, learning and action1
Knowledge-based IT (KB-IT) is the application of KBS
techniques with information technology
• Design process
• Models and methods
• Software tools
• Decision-support mechanisms
• Digital representation, and
• System architectures
Source: Fujita, H., & Lu, J. (2012). Knowledge-based Systems,Volume(31), pp. 1-211.

What is Knowledge-based IT?
IT Solution where Knowledge is a first class citizen
– Business Rules and Process boundaries are clearly defined
– Goals drive the solution, not the IT restrictions
Change can be accommodated quickly without being
impeded by IT limitations
– The process knowledge definition and concept model should
”outlive” any technical implementation
– Decouple the concept model and process definition from the
underlying implementation to create business agility

BPM, business processes and rules
• BPM provides a systematic approach
to making an organization's workflow
more effective, efficient, and capable of
adapting to ever-changing business
conditions
• A business process is an activity or set
of activities that will accomplish a specific
organizational goal
• A business rule management system (BRMS) enables
organizational policies, and the operational decisions
associated with those policies, to be defined, deployed,
monitored and maintained separately from core
application code

Value of BPM and Rules Technology
• Unlock Rules from underlying
technology
• Enforce business processes and
rules consistently
• Ensure compliance to
organizational and regulatory
requirements
• Gain visibility into business operations
• Enable decision management in real-time through algorithmic
approaches
• Eliminate the business risks associated with “Adverse
Selection”

When should you use a Rules Engine?
Complex Problems
• Highly conditional
• Logic prone to change
• High-level of subject matter
expertise required
• Goal is new, still being defined
Traditional code approach not working well
• Problem is too fragile to approach
procedurally
• Analyst needs insight into implementation

What is your definition of BPM Automation?
BPM Automation has many different meanings based
on stakeholders viewpoint. It can be:
• an Oversight engine
loosely defines and manages
a business process,
• an Orchestration engine
manages low-level
interactions between
systems, or
• a Platform
manage the lifecycle
of documents.
BPM Suite

When should you use BPM?
BPM Suite
AHA!

The Nature of BPM Automation
When considering the implementation of BPM Automation
keep in mind that it’s a “declarative” approach
• Processes represent the definition, structure, and flow of
linked tasks, but should not include any implementation
• Majority of task work should be conducted outside of the
process definition and invoked (e.g. asynchronous
messaging, web services, etc.)
• Processes spend the overwhelming majority of their time
“sleeping” while waiting on a signal or human task to
complete

When should you use BPM?
A primary goal is often to define a unified “body of
knowledge” across the organization
• Increase organizational agility
• Document processes to identify gaps
and critical dependencies
• Protect Intellectual Capital
• Reduce Complexity
• Provide insight into implementation
• Improve IT Outcomes
• Collect Key Performance Indicators
• Support Contingency Planning

Compliance, Audit, and Policy Related Business Processes
• Insurance
– Underwriting
– Claim Adjudication
• Healthcare
– Standards of Care
– Plans of Action
• HIPAA
• SEC Finance Disclosure
• Mortgage Lending
• Government Agencies
Related Business Case Examples

Dynamic Insurance Questionnaire Example
Use Case

BPM tools manage the Business Process and BRMS tools
focus on Liability Management
• Identification and application of
claims rules improves
actuarial tables and underwriting
accuracy
• BRMS technology supports the
identification of high-risk groups
• Mitigate adverse selection during
underwriting and fraud detection
in claim submission processes
Insurance Rules-Based Dynamic Questionnaire

Dynamic Questionnaire – Single Page Web Application

Dynamic Questionnaire Design
Question
Definitions
Answers that
trigger question
state
Validation
Feedback
Rate
Calculation
The design utilizes a BPM Process workflow
dynamically driven by a Rules domain

Questionnaire Requirements
Questionnaire representsa Process that utilizes a Rules Domain
to present,collect, and evaluate responses
• QuestionnaireDefinition
– Powers the view (order, type, required, validation, etc.
– Questions can be added/updated without coding
• DynamicQuestion State
– Answers may hide/show/change questions
• ValidationFeedback
– Simple validation (e.g. correct data type, required values, etc.)
– “Do Not Bind” decision points (i.e. State not covered)
– Risk categorization
• Rate Calculation
– Based on information collected, risks and attributes, what is the “Policy Rate
Standards become
critical enablers at the
data, process, and
infrastructure level

Organizing Rule Sets
Identified Phases that Rules should be grouped in
1. QuestionnaireConstruction– Define“blank” questionnaire
2. QuestionDisplay – Changes to questions based on answers
3. Feedback – Validationmessages/errors for answers
4. RatingCalculation– Policy cost determination
• Categories can be co-located at design time
• Can execute in isolationat run time
• Share a common domainmodel…

Domain Model – Nouns of the Rules
Question
• Generic QuestionHolder
• Describes displayorder, data type, is required, etc.
• Hierarchical: “sub-questions”
Propertyand Address
• Holders for answers with highlyspecific attributes
(e.g. roof age, has swimmingpool, zip code, etc.)
• Allowsexpressive rule authoring for display phase

Domain Model – An Interlude
“Generic” Answer Model
• When $answer : Answer (questionid == 15, interger > 25)
• Then…
“Specific” Answer Model
• When $property: Property (roofAge >25)
• Then…

© 2016 Vizuri – All Rights Reserved© 2015 Vizuri – All Rights Reserved
Quote Message
• Generic holder for feedback on answers
• Different severities: INFO, WARNING, ERROR
• Optionallytiedto a specificdata point
Quote
• Simpleholder for calculatedpremium
Domain Model – Nouns of the Rules continued

Anatomy of an actual rule
1. Attributes– names, properties, descriptions, etc.
2. When – Conditionthat activatesrule
3. Then – Consequence occurs when activated
• Basically, a disconnected ”if then” statement
• Declarativenature promotes breaking a problem down
• Singularly focused, powerful as a group
Rules Authoring – Technical Rules

Implementation Best Practice Recommendations

Not tied to a specific TechnologySolution
But a specific “type” of technology solution
– Business Process Management (BPM) Products
– Business Rules Management Systems (BRMS)
Products
Tools must support the ability to be Declarative in
nature, not the typical Imperative coding styles

Best Practices From the Field
Get Organized All Around!
Both IT and Business Need Coordinated Discipline
1. Take an inventory of the AS-IS problems and solutions
2. Get Commitment!
3. Build a common way to describe things
4. Decompose the problem appropriately
5. Build with quick iterations
6. Continually monitor, adapt and improve
A little discipline at each step pays off in both the short and
long term!

Step 1: Take an Inventory – Business Side
Does the problem lend itself to using Knowledge Based IT by exhibiting
inherent complexity of the business logic:
– Problem is by nature highly conditional (e.g., many
permutationsof inputs).
– Problem requiresa high-level of Subject Matter
Expertise (SME).
– “Maturity” of problemdefinition (i.e., is this still being
figured out).

Does the problem lend itself to using Knowledge Based IT by requiring
visibility:
– Need for insight into execution (e.g., why did we get X
answer with Y inputs).
– Need for all interested stakeholdersto understand
implementation.

consistency:
– Need for problemto be well understood by all
stakeholders.
– Concept Model exists and is agreed upon by all
stakeholders.

agility:
– Business logic changes unpredictably(i.e., “off-cycle”
changes required).
– Business logic changes need to be made quickly.
– Currentimplementation is “fragile” (i.e., changes cannot
be made with confidence).

Make a reportcard on how applicable each factor is:

Step 1: Take an Inventory – IT Side
Assess the implementation on the following high-level criteria:
• The critical business logic is consistent throughoutits lifecycle within the
project.
– Minimal “translation” layers as it is harvested, implementedand tested.
• This lifecycle provides an acceptable degree of agility for the project’s
release cycle.
– Change is quick to introduce and doesn’t require restructuringof code.
• The implementation of the logic is visible to those who are responsible for it.
• Pure form in a clear and concise manner to non/semi-technicalresources

Step 1: Take an Inventory – IT Side
Prioritize improvements on a combination of severity and effort

Step 2: Get Commitment
Need all stakeholders to make a sincere commitment to improve:
• The more managementbuy-in, the more hope of project success
– Time-boxed modernizationeffort (typically3 to 5 years)
– Appetiteto continuesupport of center of excellence beyond inception
• Need influential champions on both Business and IT side
– IT left alone will mangleKnowledgeIT to look like traditional IT
– Business left alone will make sweeping changes without bound

Step 3: Get Synchronized
All stakeholders must be able to communicate effectively:
• Common Vocabulary
– Non-ambiguous,understood by all
– Understood, or in a central reference
– Composes the “ConceptModel”
• Business Rules succinctly defined in near human language
– Not necessarilyexecutable
– Closest to real language the better, but avoiding ambiguity
• High level “happy path” processesmodeled visually

Step 4: Plan IT Implementation
Build systems that effectively separate the plumbing from Knowledge:
• Select frameworksthat support declarative logic and processes
– Business Process Management (BPM) platforms that can build
upon formal process definitions
– Business Rules Management Systems (BRMS) that can model and
execute logic in near natural language formats
• Make sure they supportmultiple concurrentversions of
decisions/processes
• Consider small, precise toolsrather than all-in-one solutions
– Wrap interactions in business-centricAPIs

Decompose the solution in appropriate layers:
• BPM projects for instance, are best conceptualized in a tiered
approach:
– Idealistic (non-executable)Process Definition
– Complete (executable) Process Implementation
– Enterprise Integration Management(EIM) Layer

Decompose the components of the solution in appropriate size:
• Currentbuzzword is “microservices”
• Making a concerted effort to avoid monolithic solutions
• Sized to swap out components without disrupting others
• Can be harder to get this right than you may think!

Step 5: Iterate Quickly
Build as quickly as possible, with many feedback loops:
• Choose agile software development methodology
– Time boxes iterations to several weeks
– Show and tell at the end of every iteration
• Create throw-away user interfaces that illustrate the intent
• These spark buy-in and feedback
• Often become part of the more permanentsolution
• Achieved through exposing the complexity through a business
centric interface that can be mocked before fully implemented

Step 6: Monitor, Adapt and Improve
Build the system so that it exposes the important details:
• Processesmust be defined in terms of Key PerformanceIndicators
(KPIs)
– Select frameworksthat expose these metrics
– Make dashboardsso they can be continually monitored
• Rules should be auditable from a business perspective
– Must explain why a particular decision was made
– Simulation environment comparing results of 2 different versions
of the rule set is invaluable in enabling business to have the
confidence to continually improve the rules

Summary
Build the system for visibility, consistency and agility at each stage:
– Design
• common vocabulary and formal definition
– Implementation
• understandable from non-technical individuals
• Enables ability to change quickly
– Execution
• can determine how an outcome was determined
– Improvement
• necessarymetrics are exposed to drive change

© 2016 Vizuri
Joe Dickman
Vizuri
joe.dickman@vizuri.com
Ken Spokas
Vizuri
ken.spokas@vizuri.com
Thank You
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Successfully Implementing Knowledge-Based IT

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