James Taylor Decision Services S O A Symposium

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James Taylor Decision Services S O A Symposium

  1. 1. Decision Services SOA Symposium 2008 This Presentation Courtesy of the International SOA Symposium October 7-8, 2008 Amsterdam Arena www.soasymposium.com info@soasymposium.com Founding Sponsors Platinum Sponsors Gold Sponsors Silver Sponsors Decision Services A Pattern for Smarter Service-Oriented Systems James Taylor Principal Smart (enough) Systems LLC © 2008, Smart (enough) Systems LLC. © 2008 Smart (enough) Systems LLC. Page 1
  2. 2. Decision Services SOA Symposium 2008 Why Smarter Systems? Real-time Days Timeliness Local Complex and clear Objectives Trade-Offs National and simple Regulations Complex and global Constant Every 3-5 Years Changes to Strategy Increasingly Well-Defined Decision-Making Complex Low High Operational Volume © 2008, Smart (enough) Systems LLC. 3 So What IS A Smarter System  Operational  Real-Time  Rapidly evolving - agile  Learning  Demonstrably Compliant  Cost-Effective  Business-Driven © 2008, Smart (enough) Systems LLC. 4 © 2008 Smart (enough) Systems LLC. Page 2
  3. 3. Decision Services SOA Symposium 2008 Smarter Systems Make More Decisions People Not Made Before Embedded After Not Made People Embedded New Larger boxes represent more decisions, by volume © 2008, Smart (enough) Systems LLC. 5 Different kinds of decisions High ECONOMIC IMPACT OF INDIVIDUAL DECISION High-value, low-volume decisions Medium-value, medium-volume decisions Low-value, high-volume decisions Low Low High DECISION VOLUME © 2008, Smart (enough) Systems LLC. 6 © 2008 Smart (enough) Systems LLC. Page 3
  4. 4. Decision Services SOA Symposium 2008 Decisions, Decisions, Decisions © 2008, Smart (enough) Systems LLC. 7 Decision Services – A Pattern  Automated decision systems have been a common element of Financial Services application portfolios for some time  With the advent of SOA and component architectures, the idea of a separate Decision Service has become widely accepted  As the cost of technology has fallen and awareness increased, the approach has been validated © 2008, Smart (enough) Systems LLC. 8 © 2008 Smart (enough) Systems LLC. Page 4
  5. 5. Decision Services SOA Symposium 2008 Applications have evolved Browser User Interface BPM Process Logic Services Data Enterprise Database © 2008, Smart (enough) Systems LLC. 9 Evolution Completed What is a decision service? Services A self-contained, callable service with a view of all the conditions and actions that need to be considered Decision Services to make an operational business decision. A service that answers a business question for other services and processes. © 2008, Smart (enough) Systems LLC. 10 © 2008 Smart (enough) Systems LLC. Page 5
  6. 6. Decision Services SOA Symposium 2008 Problem  Some business services implement decisions  These services must follow policies and regulations  These services must be easy to change  These services must be driven “by the numbers”  These services simplify business processes  These services often replace high-change elements of legacy applications © 2008, Smart (enough) Systems LLC. 11 Many Forces At Work Business Business Business IT Manages Drives Rules Decisions Change Change Central Distributed Business by Automated Management Execution the Numbers Processes © 2008, Smart (enough) Systems LLC. 12 © 2008 Smart (enough) Systems LLC. Page 6
  7. 7. Decision Services SOA Symposium 2008 The Solution ENTERPRISE DECISION MANAGEMENT is an approach for automating and improving high-volume operational decisions. Focusing on operational decisions,  it develops decision services  using business rules to automate those decisions,  adds analytic insight to these services using predictive analytics  and allows for the ongoing improvement of decision-making through adaptive control and optimization. © 2008, Smart (enough) Systems LLC. 13 Decisions and Processes Complementary but not the same Process Management Decision Management  Standardizes processes  Standardizes decision-making How should a process be carried What should the decision be out? based on?  Facilitates collaboration and  Facilitates decision automation workflow and maintenance  Process automation around  Replaces manual decision- decision-making making within processes  Workflow definition and  Business rules definition and management management  Integration broker  Decision broker © 2008, Smart (enough) Systems LLC. 14 © 2008 Smart (enough) Systems LLC. Page 7
  8. 8. Decision Services SOA Symposium 2008 Applicability  Large numbers of policies or regulations apply  Policies and regulations that change a lot  Decisions that require business domain knowledge to understand  Decisions that are complex or have complex interactions  Decisions that the business insists on owning  Decisions requiring analytic insight  Some Combination © 2008, Smart (enough) Systems LLC. 15 Consequences Business Control of Decisions Control and Integration Externalization Agility in Points for from Legacy Business Advanced Applications Processes Analytics Isolation of Decisions © 2008, Smart (enough) Systems LLC. 16 © 2008 Smart (enough) Systems LLC. Page 8
  9. 9. Decision Services SOA Symposium 2008 Decision Services in BPM  Processes become complex when decision making is mismanaged  Explicit decision services simplify processes dramatically © 2008, Smart (enough) Systems LLC. 17 Context © 2008, Smart (enough) Systems LLC. 18 © 2008 Smart (enough) Systems LLC. Page 9
  10. 10. Decision Services SOA Symposium 2008 Delivering Decision Management Identify Decisions • Micro decisions • Hidden decisions Automate Decisions • Define business rules • Empower business owners Analytic Insight • Analytically improve the rules • Add predictive insight Continuously Improve • Test and learn with adaptive control • Simulate and Optimize over time © 2008, Smart (enough) Systems LLC. 19 The Evolution Of An Interaction  Automate Decision http://www.f  Apply rules Web  Segment customers  Predict risk, value Call Center  Optimize decision Email Mobile © 2008, Smart (enough) Systems LLC. 20 © 2008 Smart (enough) Systems LLC. Page 10
  11. 11. Decision Services SOA Symposium 2008 Business Rules Are Everywhere Managed Policy Manuals Business Regulations Rules Experienced Legacy Systems Personnel Historical Data © 2008, Smart (enough) Systems LLC. 21 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” © 2008, Smart (enough) Systems LLC. 22 Smart (Enough) Systems, Prentice Hall June 2007. Fig 4.3 © 2008 Smart (enough) Systems LLC. Page 11
  12. 12. Decision Services SOA Symposium 2008 Data Mining - Improve Rules High Income High income, low-moderate education * * Moderate-high education Low-moderate * * * * * income, young * * * low-moderate income * * * * * * * * * * * * * * * * * * * * * * * ** Education * High * * * * * * * * * * * * * * * * * Moderate education, * low income, middle-aged High Low education, low income © 2008, Smart (enough) Systems LLC. 23 Predictive Analytics – Add Insight 40 30 20 10 Member renews Member fails to renew © 2008, Smart (enough) Systems LLC. 24 © 2008 Smart (enough) Systems LLC. Page 12
  13. 13. Decision Services SOA Symposium 2008 Business Rules and Decision Services © 2008, Smart (enough) Systems LLC. 25 Impact May Take Time to Play Out © 2008, Smart (enough) Systems LLC. 26 © 2008 Smart (enough) Systems LLC. Page 13
  14. 14. Decision Services SOA Symposium 2008 Use Adaptive Control to Continuously Improve © 2008, Smart (enough) Systems LLC. 27 Adaptive Control Inside a Decision Service © 2008, Smart (enough) Systems LLC. 28 © 2008 Smart (enough) Systems LLC. Page 14
  15. 15. Decision Services SOA Symposium 2008 Building Decision Services Predictive Analytics Decision Service Production Data Business Process Warehouse Rules Enterprise IT Infrastructure Adaptive Operational Control Data Store © 2008, Smart (enough) Systems LLC. 29 Smart (Enough) Systems, Prentice Hall June 2007. Fig 5.1 Known Uses  Recommendations  Next Best Action  Underwriting  Fraud Detection  Eligibility  Scheduling  Accounting Allocation  Billing  Dynamic Pricing  … © 2008, Smart (enough) Systems LLC. 30 © 2008 Smart (enough) Systems LLC. Page 15
  16. 16. Decision Services SOA Symposium 2008 Wrap Up  Smarter Systems are Needed  Systems must make more decisions  In an SOA world this means Decision Services  Decision Services are a pattern  Well proven  Built on existing technology  Compatible with Rules Centralization  Ready for analytics © 2008, Smart (enough) Systems LLC. 31 Smart (Enough) Systems – The Book The book is full of insightful examples of problems solved by applying Enterprise Decision Management across various industries and outlines a practical and incremental method for implementing the technology.  How key business trends impact the decision-making process  Why organizations need systems smart enough to cope with these trends  How decision automation can make their systems smart enough  How to translate decisions into a corporate asset and competitive advantage  The ROI and business impact of better decisions and smarter systems  The core concepts and technologies needed and how they work together © 2008, Smart (enough) Systems LLC. 32 © 2008 Smart (enough) Systems LLC. Page 16
  17. 17. Decision Services SOA Symposium 2008 Thank You James Taylor james@smartenoughsystems.com http://www.smartenoughsystems.com Blog: www.smartenoughsystems.com/wp © 2008, Smart (enough) Systems LLC. © 2008 Smart (enough) Systems LLC. Page 17

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