Business Rules at PlayTelecom, Banking, Insurance: coping with change while making

better business decisions faster

Emmanuel SchweitzerTechnical Sales Specialist, schweitz@fr.ibm.com

Version 2.0 EN

Agenda

• ILOG and Business Rules in a Nutshell– WebSphere ILOG Product Portofilo– What are Business Rule and why are they useful for you?

• Telecommunications: Loyalty at SFR– An agile point-based rewards system

• Retail Banking: Risk Management– Streamlining behavioural risk management at a large retail bank

• Insurance: Commissioning– Streamlining commission payments at several insurances

• Conclusion

ILOG AND BUSINESS RULES IN A NUTSHELL

Introduction

4

How can clients increase productivity and allocate

resources more efficiently?

How can clients embrace change, empower people and drive greater profits?

How do clients, respond to challenges

in today’s business climate?

How can clients make business processes more dynamic yet manageable?

Powerful Business Rule Management System

Advanced Suite of Optimization Tools

Innovative Visualization Tools

Efficient Supply Chain Management

Adapt and respond dynamically, automating process-based decisions with business rule management

Produce the best possible action plans & schedules, enhancing abilities to explore alternatives, understand trade-offs, and respond to changes in business operations

Transform insight into action, enhancing collaboration for smarter role-based business decisions

Optimize supply chains, design & planning tools for improved efficiency and productivity

WebSphere ILOG Portfolio

WebSphere ILOG

Issues

• Rules are hidden in code or isolated within the organization

• Changes are hard to track and maintain over time

• Rules used by systems have to be programmed and require IT resources

• Duplication and multiple versions of the same rules

• Lack of auditability, traceability

• Decision changes cannot be easily tested or simulated

• Rules are hidden in code or isolated within the organization

• Changes are hard to track and maintain over time

• Rules used by systems have to be programmed and require IT resources

• Duplication and multiple versions of the same rules

• Lack of auditability, traceability

• Decision changes cannot be easily tested or simulated

Decisions used in operations = “business rules”

Where Business Rules Exist

ApplicationsDocuments

ProcessesPeople

Business change drives IT agility

Where Business Rules Exist

ApplicationsDocuments

ProcessesPeople

Business Rule Management System

Rules are Defined, Maintained and Simulated

Rules are Deployed, Executed and Monitored

Rules are Managed and Stored

Rule Repository

User Tools

Rule Server

The Smarter Approach: Facilitating Change with BRMS

8

Design

Construct

Test

Analyze

Author

Validate

Manage and Monitor

Deploy

Platform upgrade

Change Request

Deploy

Analyze

Author

Validate

Deploy

Change Request

Analyze

Author

Validate

Deploy

Rule Management Lifecycle

Design

Construct

Test

Deploy

Software Development Lifecycle

Change Request

Analyze

Author

Validate

Deploy

Functional enhancements

> 4-6 months

< 1 month

Rule and Software Development Lifecycles

LOYALTY AT SFRTelecommunications

BRMS Success at SFR – Loyalty Management

Situation

Aging legacy Campaign management and loyalty solution Strong Quality of Service constraints

8 million loyalty accounts, contribution to Mobile Renewal program Multi-channel approach required

56% owned by Vivendi, 44% by Vodafone 18 million clients with 34% market share and 8.6 billion revenue (2006) Retention and churn management a major goal for SFR in a mature market

ARPU

ARPU

TimeTimeService activationService activation Service deactivationService deactivation

Client RevenueClient Revenue

Client lifetimeClient lifetime

AcquisitionAcquisition

RetentionRetentionProspectProspect ProspectProspect

BRMS Success at SFR – Loyalty Management

Goals

Create a robust IT system to support SFR loyalty program’s growth objectives

Revamp the SFR point system engine enabling it to meet new business requirements

Support for new programs for earning and burning points

Reward clients based on their value: € points Reward clients based on their loyalty: years points Promote new usage types

– Burn of points for trials of new services– Burn of points for terminal renewal

Segment high value customers and push specific loyalty events and campaigns– GCR Status segmentation– Statutory advantages– Targeted marketing and communication campaigns

Need for a robust and lasting solution– 8 million accounts with a target of 20– Up to 15.000 terminal renewals per day– Multi-channel (Self-care, Customer Service, Distributors)

New usage– New populations (prepaid, corporate)– Aggregation at multiple levels (group, client, line)– New point accrual means

BRMS Success at SFR – Loyalty Management

Solution

« Garantie Carré Rouge » loyalty program implemented

BRMS solution based on 80 rules developed Cap Gemini & ILOG

ILOG consulting for requirements gathering, modeling, architecture & performance audits

Vs. packaged solution– Turnkey, in use with other clients, matter expertise as editor and integrator…– Imposed roadmap, proprietary data model, no source code/black box, cost and delay

9 month till delivery, about 1 year till production use– Software editor present at all phases of the project– Use of third party for integration

Attention points– Performance tests and tuning– Change management for the authoring/maintenance of the rule base and associated parameters

Point EnginePoint Engine

GUI ModuleGUI Module Purging ModulePurging Module Reporting ModuleReporting Module

Rule EngineRule Engine

Batch ModuleBatch Module Business Services ModuleBusiness Services Module Mail OrderMail Order

WAP/WEBWAP/WEBV&SV&S

GCRGCRGingerGinger

GCCPGCCP

ORIANORIAN DWHDWHCRMCRM

SAPSAP

CegedimCegedim

TIMORTIMOR

BRMS Success at SFR – Loyalty Management

Benefits

Flexibility of BRMS approach

Solution 30% cheaper than package

Development and deployment time (- 2/5 months) quicker than package

Si Il y a un événement de facturation sur la ligneAlors Créditer la ligne de 10 points par euro de type Standard de durée 36 mois

Si Il y a un événement de facturation sur la ligneAlors Créditer la ligne de 10 points par euro de type Standard de durée 36 mois

Definitions set ‘billing event’ to a billing event in the events of the lineWhen the type of ‘billing event’ is in { « voice », « SMS », « MMS » }Then Credit the line with ( 10 * the price of ‘billing event’ ) points of type Standard and duration 36 months

Definitions set ‘billing event’ to a billing event in the events of the lineWhen the type of ‘billing event’ is in { « voice », « SMS », « MMS » }Then Credit the line with ( 10 * the price of ‘billing event’ ) points of type Standard and duration 36 months

RISK MANAGEMENTRetail Banking

• One of the 5 Retail Banks in Europe

– Deployed for 13,000 users

– 9 million customer accounts• Private individuals

• Small businesses

• Behavioural Risk Management project– Improve customer advisor productivity

– Better risk detection and management

– Automate action recommendations

Success in Risk Management – Major Retail Bank

• “High risk customer profile” process:

• Benefits:– Manage 200 risk management profiles in 7 categories

– Allow business users to manage & understand the risk profiles

– Gain 1 hour/day/advisor

Get High Risk ProfilesWhen logging in

4,000,000 events on9,000,000 accounts4,000,000 events on9,000,000 accounts

NightNight

400,000 High Risk profiles about 5% of customers400,000 High Risk profiles about 5% of customers

Advisor’s working dayAdvisor’s working day

Get explanationsAnd actions plan

13,000 advisors2,500 branches13,000 advisors2,500 branches

50,000 letters per day

50,000 letters per day

Get list of lettersFor a customer

Update actions plan

Success in Risk Management – Major Retail Bank

Application Architecture

BackendBackendDataflows

Counterpartconsolidation

Risk Situation Handling Batch

Event generationRule Service

Event generationRule Service

Situation HandlingRule Service

Situation HandlingRule Service

Data Access

Rule Execution Server

Follow-up Servlet

Interactive follow-upRule Service

Interactive follow-upRule Service

Data Access

Rule Execution Server

AdvisorWorkplace

AdvisorWorkplace

Risk Database

Counterpartindicators

Counterpartindicators EventsEvents Risk situationsRisk situations

Rule RepositoryRule Repository

Rule ExecutionServer

RuleAppsRuleApps

Rule TeamServer

ScenarioRepositoryScenario

Repository

Rule ScenarioManager

• 7 Rule Services sharing 400 business rules – 3 Batch programs (6,700 events/sec)

– 4 TPs (1 Transaction < 10 ms)

• Deployed on WebSphere 6.1 on z/OS USS– Online using Web Contained and CICS Transaction

Gateway

– Batch written in Java with JDBC Binding

Copyright© 2008 - ILOG, Inc., All Rights Reserved

Technical, SOA Architecture

App. 9 monthsApp. 9 months

Overall phasing

Client ProgramClient Program

Program Kick-offProgram Kick-off Design & SpecsDesign & Specs IntegrationIntegration Validation/UATValidation/UATOther phasesOther phases

BRMS Sub-projectBRMS Sub-project

Kick-offKick-off Design andSpecs

Design andSpecs ImplementationImplementation Assembly and

sub-validationAssembly andsub-validation

Assistanceto IntegrationAssistance

to Integration

App. 5 monthsApp. 5 months

I E C T

COMMISSIONINGInsurance

Business Rules for Commissioning

• Commission networks in growth and competitive markets• Steer the network

– Commissioning, over-commissioning, bonuses

– Sales campaigns: product launch, promotions,…

• Manage general and specific contractual provisions– Attach rules to contracts, products or networks

– Commission throughout the life-cycle of a contract (different events)

• Create a link between commissions and their calculation components– Conformity and SOX

– Amount verification, validation and explanation

• Reduce errors in commissioned amounts and enhance brand image with distributors

CalculationPreparation Validation

• Data enrichment

• Eligibility

• Grouping

• Formulas, rates, scopes

• Conditions and priorities

• Over-commissionning

• Global Validation

• Identifying singularities and notification

• Payment Orders generation

Where Rules Apply in the Process

Events to becommissionned

Business Rules Capabilities for commissioning

• Make rules understandable by business staff– Express rules in a business language and in dedicated design

environments

• Centralize the management of rules in a repository– Defines hierarchies and priorities– Group rules– Control the execution flow

• Change swiftly rules in production• Audit and analyze the impact of rules and their

interaction• Simulate rules and perform « what if » scenarios

Illustration: rules for business people

Illustration: Audit for more controlCheck

Business Partner

Compute Pension

Commission

Compute Savings

Commission

Compute Life

Commission

VAT Computation

General Ledger

Assignment

Goals

Standardize on one commissioning Decision Service for all Business Lines Improve Time to market – service initiative Commissioning : capital asset Improve Tracability and auditability

Benefits

Better Commissioning change management Improve process time better services External network retention customer retention less failures improved service quality Extended process automation

Solution

BRMS part of the new software architecture JRules for Commissioning Services with 1st Pilot in Dec 07 Dvpt incremental com services, on a 3 years plan Set-up BRMS task force in parallel (Underwriting, Claims, ...)

Situation

Generali France: 14.2 B€ vs Generali Group 64 B€ Classic organisation by Business Line ( life, non-life, health,..) Deployment of a new software architecture 17 different commissioning applications/modules

Success at Generali – CommissioningInsurance

CONCLUSION

Conclusion• Applicability of technology to all decisioning logic • Fastest time to business value and lowest total cost of ownership• Empowerment for business teams and IT teams• Synchronised full life-cycle management of all business rules and decision logic

• Next steps– Check IBM’s website for more material :http://www.ibm.com/software/websphere/products/business-rule-management/

– Discuss your business case one on one, illustrate with appropriate references

– Build a solution outline together through a Discovery Workshop

Emmanuel Schweitzer

schweitz@fr.ibm.com