James Taylor Decision Services S O A Symposium

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

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



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


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


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
Browser

User Interface

BPM Process Logic Services

Data
Enterprise
Database


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.



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


Many Forces At Work

Business Business Business
IT Manages
Drives Rules Decisions
Change
Change

Central Distributed Business by Automated
Management Execution the Numbers Processes



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.


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



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

Business Control of Decisions

Control and Integration
Externalization
Agility in Points for
from Legacy
Business Advanced
Applications
Processes Analytics

Isolation of Decisions



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

http://www.f
 Apply rules
Web
 Segment customers
 Predict risk, value
Call Center

 Optimize decision
Email

Mobile



Decision Services
SOA Symposium 2008

Business Rules Are Everywhere

Managed
Policy Manuals Business
Regulations
Rules

Experienced
Legacy Systems Personnel

Historical Data


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


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


Predictive Analytics – Add Insight

40

30

20

10

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

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
 …



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
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



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.


James Taylor Decision Services S O A Symposium

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