James Taylor Decision Services S O A Symposium

© 2008 Smart (enough) Systems LLC. Page 1

Decision Services

SOA Symposium 2008

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© 2008, Smart (enough) Systems LLC.

Decision Services

A Pattern for Smarter Service-Oriented Systems

James Taylor Principal

Smart (enough) Systems LLC


Decision Services

SOA Symposium 2008

© 2008, Smart (enough) Systems LLC. 3

Why Smarter Systems?

Decision-MakingWell-DefinedIncreasingly

Complex

TimelinessDaysReal-time

Objectives Local

and clear

Complex

Trade-Offs

Regulations National and simple Complex and global

Changes to Strategy Every 3-5 YearsConstant

Operational Volume Low High


So What IS A Smarter System

Operational

Real-Time

Rapidly evolving - agile

Learning

Demonstrably Compliant

Cost-Effective

Business-Driven


Decision Services

SOA Symposium 2008


People Not MadeEmbedded

PeopleEmbedded

Not Made

New

Before

After

Larger boxes represent more decisions, by volume

Smarter Systems Make More Decisions


Different kinds of decisions

High-value,

low-volume

decisions

Medium-value,

medium-volume

decisions

Low-value,

high-volume

decisions

Low High

High

EC

ON

OM

IC IM

PA

CT

OF

IN

DIV

IDU

AL D

EC

ISIO

N

Low

DECISION VOLUME


Decision Services

SOA Symposium 2008


Decisions, Decisions, Decisions


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


Decision Services

SOA Symposium 2008


Applications have evolved

Data

Process Logic

User Interface

Enterprise

Database

BPM

Browser

Services


Evolution Completed

A self-contained, callable

service with a view of all

the conditions and actions

that need to be considered

to make an operational

business decision.Decision Services

A service that answers a

business question for other

services and processes.

What is a decision service?

Services


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


Central Management

Distributed Execution

Many Forces At Work

Business Drives

Change

IT Manages Change

Business by the Numbers

Automated Processes

Business Rules

Business Decisions


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.


Process Management

Standardizes processes

How should a process be carried

out?

Facilitates collaboration and

workflow

Process automation around

decision-making

Workflow definition and

management

Integration broker

Decision Management

Standardizes decision-making

What should the decision be

based on?

Facilitates decision automation

and maintenance

Replaces manual decision-

making within processes

Business rules definition and

management

Decision broker

Decisions and ProcessesComplementary but not the same


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


Consequences

Isolation of Decisions

Control and

Agility in

Business

Processes

Business Control of Decisions

Integration

Points for

Advanced

Analytics

Externalization

from Legacy

Applications


Decision Services

SOA Symposium 2008


Decision Services in BPM

Processes become complex

when decision making is

mismanaged

Explicit decision services

simplify processes dramatically


Context


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


The Evolution Of An Interaction

Automate Decision

Apply rules

Segment customers

Predict risk, value

Optimize decision

Web

http://www.f

Email

Call Center

Mobile


Decision Services

SOA Symposium 2008


Business Rules Are Everywhere

Experienced

Personnel

RegulationsPolicy Manuals

Legacy Systems

Managed

Business

Rules

Historical Data


Manageable Business Rules

Smart (Enough) Systems, Prentice Hall June 2007. Fig 4.3

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”


Decision Services

SOA Symposium 2008


Data Mining - Improve Rules

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Low-moderate

income, young

High

Income High income,

low-moderate education

Moderate-high education

low-moderate income

High

Moderate education,

low income, middle-aged

Low education,

low income

Education

High


Predictive Analytics – Add Insight

10

20

30

40

Member renews

Member fails to renew


Decision Services

SOA Symposium 2008


Business Rules and Decision Services


Impact May Take Time to Play Out


Decision Services

SOA Symposium 2008


Use Adaptive Control to Continuously Improve


Adaptive Control Inside a Decision Service


Decision Services

SOA Symposium 2008


Building Decision Services

Smart (Enough) Systems, Prentice Hall June 2007. Fig 5.1

Production

ProcessData

Warehouse

Operational

Data Store

Business

Rules

Predictive

Analytics

Decision

Service

Enterprise IT Infrastructure

Adaptive

Control


Known Uses

Recommendations

Next Best Action

Underwriting

Fraud Detection

Eligibility

Scheduling

Accounting Allocation

Billing

Dynamic Pricing

…


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


Smart (Enough) Systems – The Book

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

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.


Decision Services

SOA Symposium 2008

© 2008, Smart (enough) Systems LLC.

Thank You

James Taylor

[email protected]

http://www.smartenoughsystems.com

Blog: www.smartenoughsystems.com/wp

James Taylor Decision Services S O A Symposium

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