Simpler, Smarter, More Agile Modeling Decision Requirements Taylor_Simpler... · •Can we use...

© Decision Management Solutions, 2013 1 DREAM event 2013

Simpler, Smarter, More Agile

Modeling Decision Requirements

James Taylor

CEO


Business Process From the C-Suite

Efficiency

Consistency

Cost Reduction


Smarter

Simpler

More Agile

What If…


Agenda

1 Business Rules Power

2 Business Rules Challenges

3 Smarter, Simpler, More Agile

4 Decision Management

5 Decision Requirements

6 Questions

7 Next Steps


BUSINESS RULES POWER


What Can Business Rules Do?

Personalize experiences

Detect Fraud

Create Loyalty

Target Cross-Sells

And more…


What Are Business Rules?

… statements of the actions you should take when certain business

conditions are true.

“

”


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);

}

}

}

Business Rules are critical

…but hard to manage


Business Rules Management


BUSINESS RULES CHALLENGES


Too Little Connection To Process

If customer is MultiProductCustomer

and Total_Insured_Value is more than $100,000

then next_policy_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”

…

…

A big bucket of rules sitting to one side.


…Or Too Much

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”

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 customer is MultiProductCustomer

and Total_Insured_Value is more than $100,000

then next_policy_discount = 0.5%

Spread like Nutella throughout the process


• Can we use business rules to make our processes simpler? Simpler

• Can we use business rules to make our processes smarter? Smarter

• Can we use business rules to make our processes more agile?

More Agile


SMARTER, SIMPLER, MORE AGILE


• Less complexity

• Fewer processes Simpler

Smarter

More Agile


Accept low-risk applicant

Decline high-risk applicant

Process medium-risk

applicant

Age<21

21<=Age<50

Age>50




Process medium-risk

applicant

Age<21

21<=Age<50

Age>50

Previous Heart Attack, Existing Cancer

Good Medical Record




Process medium-risk

applicant

Age<21

21<=Age<50

Age>50


Good Medical Record

New Customer

Long-standing Customer

1 or fewer Claims Multiple Claims




Process medium-risk

applicant

Age<21

21<=Age<50

Age>50


Good Medical Record

New Customer



No Class I or II sports

Class II sport

Class I sport




Process medium-risk

applicant

Age<21

21<=Age<50

Age>50


Good Medical Record

New Customer



No Class I or II sports

Class II sport

Class I sport

Embed decisions, add complexity


Process low-risk applicant

Process high-risk applicant

Process medium-risk

applicant

Low risk

Medium risk

High risk

Determine applicant type

Identify decisions for simplicity

Use business rules for clarity


• Less complexity


• Straight Through Processing

• Effective analytics Smarter

More Agile


Human Decision

Human Decision

Automated Decisions

Straight Through Processing

Manage Rules Handle Exceptions

Process

A

Process

B

Process

C

A B C

Don’t stop for decisions


Get Smarter With Analytics

Operational

Processes

Analytic

Systems

Decision

Use analytics

to improve

operational

processes


Complexity

Value

Automated

Decisions

Expert

Decisions Manual

Decisions


• Less complexity


• Straight Through Processing

• Effective analytics Smarter

• Separated change cycles

• Business ownership

More Agile


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

Different Change Cycles


Decisions Are High Change

Remain compliant

Update eligibility

Keep discount competitive

Change risk assessment

Keep deal terms appealing

Fight fraud effectively


DECISION MANAGEMENT


Simpler Processes

Decisions Are Central

Decisions are

central


Decision Management

• A business discipline and a technology stack

• That builds on existing IT infrastructure

• Enhancing business processes

• Increasing transparency and business control

• And leveraging analytics

• It is a proven framework for implementing business rules management systems


3 Steps

Identify and model

the decisions that

are most important

to your operational

processes

Design and build

independent

decision services

using business rules

to manage these

decisions

Create a “closed

loop” to measure

results and drive

improvement


Focus on Operational Decisions

Repeatable decisions

Non trivial decisions

With a measurable business impact

That are candidates for automation


DECISION REQUIREMENTS


Existing Techniques Don’t Work

Use Case

• Key steps are decisions

• Decisions not described

Process Model

• Opaque decision tasks

• Rules like Nutella

Requirements List

• Identify decision need

• Approach not captured

Architecture Model

• Deployment specificity

• Lack business content


Good Decision Requirements

Information

• What is needed?

• Where is it?

Knowledge

• How to make it

• How to improve it

Precision

• Exactly how?

• No technical details

Automation

• Fully automated?

• If not, how much?


Decision Modeling

1 • Identifies Decisions first

2 • Describes Decisions

3 • Puts Decisions in context

4 • Models Information, Knowledge

5 • Adds detail without complexity


BWTDIM

Begin With The Decision In Mind


Business Processes

Discover Decisions

Business Events

Legacy Systems

Business Intelligence Brainstorm

KPIs

Micro and hidden Decisions


Describe Decisions

• Define Decisions with

– A question

– Possible answers

Q: Which marketing offer should be presented to this customer during this interaction?

A: Any current, available marketing offer in the database


Put Decisions In Context

• Processes

– Processes require decisions

– Tasks execute decisions

• Events

– Trigger decisions

• Systems

– Implement decisions

• Organizational Units

– Make decisions

– Own decisions

– Are impacted by decisions

• Know which business processes will be improved by your rules

• Know when your decisions will be needed

• Know how you will have to deploy your rules

• Know who will have to believe or own the business rules


Map Decisions to KPIs

KPIs impacted by decision

Customer

Churn

Customer

Service Calls

Service

Availability

… …

What is the best up sell/cross-

sell for this customer? * * What is the price of this

service? * * Can this customer buy this

service? * * What retention offer should

we make this customer? * …


Information Requirements

• Decisions require Information

– “Determine Parts Availability” requires BOM and Inventory information

– “Validate Tax Return” requires Return and Citizen information

– “Refer claim for fraud” requires Claim and Provider information


Authority Requirements

• Decisions require Knowledge – “Reorder parts”

requires supplier capabilities and shortage risks – “Validate Tax Return”

requires Tax Regulations – “Refer claim for fraud”

requires likelihood of fraud


Different Types of Knowledge

Decision


Decompose the Decision

• Requirements for this decision:

– Knowledge • Guidelines, policy

• Expertise

• Regulations

• Analytic Models

– Information • Input, case, transaction data

• The results of other decisions


Decision Requirements

• Decisions can require Decisions

– Is this a good time to make an offer?

– Which product should the offer be for?

– How valuable an offer?

• These decisions must be made first


Repeat For Clarity


A Complete Definition

• Definition

• Question and Allowed Answers

• Links to KPIs and Objectives

• Context

– Processes, Events, Systems

– Organizational roles

• Decomposition

• Link to implementation


Manage Business Rules

Documented sources

Coherent rule groups

Ownership, volatility


Automation Boundaries


Impact Analysis


QUESTIONS?


NEXT STEPS


Decisions First

• Models Processes AND Decisions

• Find the decisions that matter

• Model their requirements

• Decisions first, rules second


Thank You

James Taylor, CEO [email protected]

decisionmanagementsolutions.com

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