How to Build Decision Management Systems Part 2 Decision services
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The document discusses decision management systems, emphasizing the need to discover, build, and improve decisions through the use of analytical technology. It outlines the importance of managing business rules to enhance decision-making efficiency and accuracy while integrating predictive analytics for better operational outcomes. Additionally, it highlights the need for transparency and collaboration in decision-making processes to improve business agility.
![But most are unmanageable
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);
}
}
}
©2011 Decision Management Solutions 14](https://image.slidesharecdn.com/decisionmanagementsystemspart2decisionservices-111027130524-phpapp01/85/How-to-Build-Decision-Management-Systems-Part-2-Decision-services-15-320.jpg)
How to Build Decision Management Systems Part 2 Decision services
- 1. How to build Decision Management James Taylor Systems CEO Part Two: Decision Services
- 2. Your presenter – James Taylor CEO of Decision Management Solutions Works with clients to improve their business by applying analytic technology to automate & improve decisions Spent the last 9 years championing Decision Management and developing Decision Management Systems ©2011 Decision Management Solutions 1
- 3. Recapping Part I: Decision Discovery
- 4. A changing world Changing Scale Changing Expectations Changing Interactions ©2011 Decision Management Solutions 3
- 5. What are Decision Management Systems? Agile Analytic Adaptive ©2011 Decision Management Solutions 4
- 6. 3 Steps to Decision Management Discover Build Improve ©2011 Decision Management Solutions 5
- 7. Decisions Making choices or selections and taking action ©2011 Decision Management Solutions 6
- 8. Suitable decisions Repeatable Non trivial Measurable Candidate for business automation impact ©2011 Decision Management Solutions 7
- 9. Candidate decisions Determine if a customer is eligible for a benefit Validate the completeness of an invoice Calculate the discount for an order Assess the risk of a transaction Select the terms for a loan Choose which claims to Fast Track These are decision words The system must answer a question each time ©2011 Decision Management Solutions 8
- 10. Decision’s should be decomposed Can this customer buy this service? Customer Profile Is the service available where this customer lives? Is there capacity on Is the customer this service? eligible for this service? Geographical Availability Capacity and Eligibility rules Usage Purchase propensity ©2011 Decision Management Solutions 9
- 11. Build
- 12. Decision latency is a challenge Business event Decision latency Action taken © Decision Management Solutions, 2011 11
- 13. The rules of decisions matter Decision ©2011 Decision Management Solutions 12
- 14. What are business rules? “ … statements of the actions you should take when certain business conditions are true. ” ©2011 Decision Management Solutions 13
- 15. But most are unmanageable 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); } } } ©2011 Decision Management Solutions 14
- 16. Patterns inform decision-making 10 5 0 Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 ©2011 Decision Management Solutions 15
- 17. How to look forward? ©2011 Decision Management Solutions 16
- 18. Bring three groups together Business Decision ©2011 Decision Management Solutions 17
- 19. Build decision-making components Operational Systems Decision Analytic Systems ©2011 Decision Management Solutions 18
- 20. What do you need in a platform? Design Transparency Execution Transparency Collaboration Impact Analysis Platform for analytics © Decision Management Solutions, 2011 19
- 21. A Business Rules Management System Validation and Testing Verification Business Deployment Decision Simulation Rule Service Production Repository Application Rule Engine Design Rule Tools Management Applications Operational Database After Decision Management Systems, IBM Press 2011 ©2011 Decision Management Solutions 20
- 22. Clarity and transparency are needed 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” ©2011 Decision Management Solutions 21
- 23. Help the business to manage decisions I want to relax my underwriting policy I want to be able to promote a new product combination So you business-types want to be able to change your business rules? I need to add the new regulations No… ©2011 Decision Management Solutions 22
- 24. Why Manage Business Rules Reduce Costs • Fewer resources, less time to change decisions • Lower fines, legal costs from bad decisions • Reduced IT costs to implement decisions Improve Decision Making • Clear policies and procedures • Consistently applied across channels, systems • Increased accuracy from business users control Business Agility • More rapid response to business threats • Fewer missed opportunities • Faster time to market ©2011 Decision Management Solutions 23
- 25. Three kinds of analytic decisions Risk Fraud Opportunity ©2011 Decision Management Solutions 24
- 26. Predict Risk How risky is this customer’s application for service… And how should we price it? ©2011 Decision Management Solutions 25
- 27. Predict Fraud How likely is this claim to be fraudulent…. and what should we do about it? ©2011 Decision Management Solutions 26
- 28. Predict Opportunity What represents the best opportunity to maximize loyalty and revenue? And when should we promote it? ©2011 Decision Management Solutions 27
- 29. Predictive Analytics turn uncertainty about the future into usable probabilities ©2011 Decision Management Solutions 28
- 30. Embed Predictive Analytics ? ? Decision ©2011 Decision Management Solutions 29
- 31. ©2011 Decision Management Solutions 30
- 32. Lessons learned Managing decisions involves business rules and predictive analytics in combination More rules in the hands of business users improves agility and accuracy Predictive analytics are most valuable when they are embedded to inform individual transactions Legacy systems can be modernized without expensive rip and replace projects Processes can be simplified and made more agile if decisions are externalized ©2011 Decision Management Solutions 31
- 33. Learn More
- 34. Decision Management Systems What if you could make your systems active participants in optimizing your business? What if your systems could act intelligently on their own? Decision Management Systems can do all that and more. This book shows how to integrate operational and analytic technologies to create more agile, analytic, and adaptive systems. For more information about this new release, visit decisionmanagementsolutions.com/book ©2011 Decision Management Solutions 33
- 35. Check in for the other webinars How to Build Decision Management Systems Part 1 – Decision Discovery Recording available Part 2 – Decision Services Recording will be available Part 3 – Decision Analysis November 29, 10am Pacific ©2011 Decision Management Solutions 34
- 36. Questions?
- 37. Begin with the Decision in mind Discover Build Improve Find the decisions that matter to your business and model them ©2011 Decision Management Solutions 36
- 38. Find the rules of decision-making Discover Build Improve Analyze and manage the business rules that underpin your operational decisions ©2011 Decision Management Solutions 37
- 39. Embed Predictive Analytics Discover Build Improve Decision Build predictive analytic models and embed them in operational systems ©2011 Decision Management Solutions 38
- 40. Thank You James Taylor, CEO james@decisionmanagementsolutions.com 39