The document discusses operational decision management (ODM) and best practices for increasing agility and visibility with decision automation. It describes how decisions are found throughout business processes in areas like insurance, banking, healthcare, and more. Automating decisions can simplify processes by extracting business rules and encapsulating them in decision models. This allows for centralized management of decisions independent of processes. The document advocates using analytics to continuously improve decisions and processes over time through predictive analysis and optimization. It provides an example reference architecture and use cases for automating customer-related decisions to improve cross-selling based on behaviors and external events.

1. The Mindset of Decision-Making:
Best Practices to Increase Agility
and Visibility with Operational
Decision Management (ODM)
Ryan Trollip
Practice Director, Decision Management

2. Agenda
 Decision Management & Automation
 Why now?
 Decisions and Process (BPM)
 Practical Decision Automation
 Innovation & Optimization
 Decision Automation Example

3. Decision Management
& Automation
3

4. Decisions Everywhere
Horizontal: best/appropriate price, cross-sell/ up-sell recommendations, loyalty promotions,
exception identification, risk/fraud assessment, straight-through processing approvals
 Claim
• Validation
• STP approval
• Exception routing
 Policy/Underwriting
• Eligibility
• Risk
• Pricing
 Annuity
• Recommendation
• Commissioning
• Payout calc.
 Loan
• Eligibility
• Risk
• Pricing
 Account
• Cross-sell
• Fraud/Alerts
 Credit Card
• Mkg Offers
• Fraud
• Credit limit
 Patient Care
• Drug interaction risk
warnings
• Follow-up alerts
 Member
• Services
recommendation
• Eligibility
• Benefit calculation
 Provider
• Patient eligibility for
services
 Benefits
• Eligibility
• Calculations
 Tax Payer
• Classification
• Audit flagging
 Citizen
• Program(s)
recommendation
 Land/Permits
• Conveyance
processing
• Contract compliance
 Service Mgmt
• Service prioritization
• SLA alerts
• Maintenance alerts
• Order configuration
Insurance Banking Healthcare Government Energy/Util./Telco

5. Decision Management -
Discipline Vs. Technology
 Decision Identification/Creation
 Decision Modeling
 Decision Optimization
 Decision Automation
5

6. Why do I care?
 Decisions are your IP
 Costs money to manage change
 Slow to change
 Often not visible
 Dispersed & duplicated, Inconsistent
 Lack of clear ownership
6

7. Difficult to manage!
public 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);
}
}
}

8. Simple & Visible

9. Centralize
9
public 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().ge
tAmount() > 100000)
aCustomer.setSpecialDiscount
(0.05);
}
}
}

10. Why now?
10

11. Nexus of forces
Mobile Financial App
Sign in to mobile financial app to access
personal financial data
In-context social recommendations
See social recommendations in financial
app for banks. Initiate account opening
from app
Secure cloud-based personal data
Financial app populates cloud based
personal financial data into bank’s
account opening steps
Customer propensity with big data insight
Bank combines customer data with big data benchmarks on
external data to determine customer propensity for specific
products offered during account opening – i.e. offer money
market, credit cards?
Rules for credit limits & up-sell
Automatic decision points on credit
limits and approval levels. Determine
post account opening offers – migrate
401K account transfers?
Process for approvals & orchestration
Streamlined process to combine activation
and approval routing for recommended
products – checking accounts, overdraft
protection line of credit and money market
Account is activated and funded
before customer logs off
Account opening with

12. The gap in business operations is widening
Time to open a new account in retail banking
5 minutes – best
76 minutes – worst
Availability of loan funds
2 days – best
37 days – worst
Time for conditional mortgage approval
15 minutes – best in class
4 hours - median
Source: Boston Consulting Group, The “New New Normal” in Retail Banking, 2012

13. Drivers to Externalize Rules
 Maturity of technology
 Nexus of forces
 Customer expectations
 Competition
 Customer Centricity
13

14. Decisions in Process
(BPM & Workflow Automation)
14

15. Simplify Business Processes
 Complexity leads to
 Us doing the wrong things
 Losing sight of the customer
 The customer losing interest in us
“Simplicity is the ultimate sophistication” Leonardo da Vinci
 Simplifying business processes means enabling and
managing business decisions
 Extract business rules from business processes
 Encapsulate business rules in decision models
 Enable ownership of processes and decisions

16. Accept low-risk
applicant
Decline high-
risk applicant
Process
medium-risk
applicant
Age 21 to 75
Age 16 to 21
Age over 75

17. Accept low-risk
applicant
Decline high-
risk applicant
Process
medium-risk
applicant
Previous Accident,
Existing Infraction
Good Record
Age 21 to 75
Age 16 to 21
Age over 75

18. Accept low-risk
applicant
Decline high-
risk applicant
Process
medium-risk
applicant
Previous Accident,
Existing Infraction
Good Record
New Customer
Long-standing Customer
1 or fewer Claims Multiple Claims
Age 21 to 75
Age 16 to 21
Age over 75

19. Accept low-risk
applicant
Decline high-
risk applicant
Process
medium-risk
applicant
Previous Accident,
Existing Infraction
Good Record
New Customer
Long-standing Customer
1 or fewer Claims Multiple Claims
Car Type
Custom Car
Sports Car
Age 21 to 75
Age 16 to 21
Age over 75

20. Accept low-risk
applicant
Decline high-
risk applicant
Process
medium-risk
applicant
Previous Accident,
Existing Infraction
Good Record
New Customer
Long-standing Customer
1 or fewer Claims Multiple Claims
Car Type
Custom Car
Sports Car
Decisions in process/apps cause
complexity
Age 21 to 75
Age 16 to 21
Age over 75

21. Process low-
risk applicant
Process high-
risk applicant
Process
medium-risk
applicant
Low risk
Medium risk
High risk
Determine
applicant type
Identifying decisions simplifies them

22. Process Simplicity
22

23. Practical Decision Automation
23

24. Signals for Decision Management
 Scale
 Agility
 Transparency
 Ownership
 Precision & Consistency

25. Which Decisions?
 Repeatable
 Non-Trivial
 Measureable Business Impact
 Frequency of change

26. Automation Complexity
If x = 1
Then Y = X
Manual
Decisions
Expert
Decisions
Simple
Decisions

27. Decision Words
 Determine if a customer is eligible for a product
 Validate the completeness of an application
 Calculate the discount for an order
 Assess which driver is high risk
 Select the terms for a loan
 Choose which loan to Fast Track

28. Innovate & Optimize
28

30. Use Analytics to Improve
30

31. 31
Why? - Prescriptive
Deeper Analysis of Trends & Patterns
• Analysis and Exploration
• Ad-hoc Query
• Trend and Statistical Analysis

32. 32
What should we be doing? Predictive
Foresight to Plan & Allocate Resources
• What-If Analysis
• Predictive Analysis

33. ANALYTIC-DRIVEN ORGANIZATIONS are distinguished
by their ability to leverage …
All perspectives
Past (historical, aggregated)
Present (real-time)
Future (predictive)
At the point
of impact
All decisions
Major and minor
Strategic and tactical
Routine and exceptions
Manual and automated
All information
All information
Transaction data
Application data
Machine data
Social data
Enterprise content
All people
All departments
Experts and non-experts
Executives and employees
Partners and customers
33
All Processes
Operational
Management
Etc.

34. 34
Optimization

35. Decision Automation Example
35

36. Reference Architecture
 Centralize Decision & Workflow
 Cache for performance (if necessary)
 SOA backbone
36
Decision
Management
Workflow
/ BPM
ESB / SOA
MDM
Cache
System System System

37. Customer Behavior & Cross Sell
 Channels have different answers.. Sometimes conflicting.
 Inability to capture & act on
 interesting behavior.
 events, risk, etc.
37
Web
Call
Center
Branch
Channels

38. Customer Cross-Sell
Capture Predict Act
Customer Data
• Demographics
• Account Activity
• Product Holdings
• Channel Activity
• Information Requests
• Complaints
• …
Campaign Data
• Contact history
• Response/purchases
• Test campaigns
• …
Analyses
Predict who is likely to
respond, based on their
customer profile when
receiving the campaign
Scoring
Marketing
campaign
process
Key
Performance
Predictors and
Campaign
Results
Rank best 3
offers
Attitudinal Data
• Customer Surveys
• Twitter
• Discussion Forums
• Blogs
• …
Website
recommendation
engine
Sales campaigns

39. Use Case - Customer Behavior - Interest
 Customer hits information pages on the site
 Web interest captured in product/service B
39
Decision
Management
Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
A
B
C
D
…
B
A
C
D
…

40. 40
Use Case – External Events
 External events change internal priorities based on
rules/model
40
Decision
Management
Workflow
ESB / SOA
MDM
Cache
Baby
Web
Call
Center
Branch
A
B
C
D
…
B
C
A
D
…

41. 41
Use Case – Call Center
 Not interested in certain products
 Or tell me about it later
41
Decision
Management
Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
B
C
A
D
…
B
C
A
D
…
6 Months

42. 42
Use Case – 6 Months Later
 Workflow (BPM) kicked off by event
 Customer called
 Closed deal, update cache
42
Decision
Management
Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch

43. 43
Improve
 Which product is more attractive to a wealthy customer?
 Who do we risk loosing most as a customer?
43
Decision
Management
Workflow
ESB / SOA
MDM
Cache
Web
Call
Center
Branch
BIG
Data

44. Approach
 Identify
 Analytics and other techniques to identify what needs improving
 Model
 Models visualize, simplify and clarify business understanding
 Automate
 Automate complex decisions, processes and models
 Manage
 Automation is great… But the more complex the more difficult to
manage/change
 Specialization of systems workflow, Modeling, BRMS, CRM, ECM etc.
 Good management of decisions and process is key to flexibility and efficiency
 Improve
 Analytics used to improve processes and decisions
44

45.  5 things to remember about Decision Management:
 Decisions are independent of process
 Brings agility, visibility, consistency, centralization of decisions
 Makes process simpler & smarter
 Decouples decisions from the development lifecycle
 Allows the business to manage their own decisions
Wrap-up

46. Next Steps
 See Operational Decision & Process Management in action
 Learn what’s possible with Prolifics Offerings & Combination
offering By Prolifics & Decision Management Solutions
 Discovery Workshop
 Application Assessment
 Iteration 1
 Decision Modeling Training
 Implement a 10 week quick start
46

47. Ryan Trollip
practice director, decision management
prolifics | office: (646) 380-2895 | mobile: (774) 641-3666
rtrollip@prolifics.com | yahoo IM: rtrollip_prolifics