Operational decision management top 10 use cases
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Operational Decision Management - Top 10 Use Cases. Bálint Tóth IBM Hungary. Common Themes that Signal a good fit for ODM. Frequency of rule changes. Frequency of rule changes. Frequency of rule changes. Frequency of rule changes. Frequency of rule changes.

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Operational decision management top 10 use cases

Operational Decision Management- Top 10 Use Cases

Bálint Tóth

IBM Hungary


Operational decision management top 10 use cases

Common Themes that Signal a good fit for ODM

  • Frequency of rule changes

  • Frequency of rule changes

  • Frequency of rule changes

  • Frequency of rule changes

  • Frequency of rule changes

  • Frequency of rule changes

  • Rules are hard to manage/buried in applications

  • Need for increased business user involvement

  • Need for increased business user involvement

  • Need for increased business user involvement

  • Need for increased business user involvement

  • Need for increased business user involvement

  • Need to boost straight-through processing

  • Need to boost straight-through processing

  • Need to boost straight-through processing

  • Need to boost straight-through processing

  • Lack of consistency of rules across applications and channels

  • Lack of traceability / auditability

  • Lack of traceability / auditability


Operational decision management top 10 use cases

Top Ten ODM Scenarios …

Credit & Loan Approvals

Claims Processing

Underwriting

Compliance & Reporting

Dynamic Pricing & Bundling

Fraud Detection

Eligibility Determination

Cross-sell, Up-sell & Product Recommendations

Customer Insight & Loyalty Programs

Customs & Border Control


Credit and loan approvals ibm operational decision management use case

Credit and Loan Approvals IBM Operational Decision ManagementUse Case


Key challenges in credit and loan approvals

Key Challenges in Credit and Loan Approvals

Lenders face numerous obstacles to grow revenue profitably

Slow manual processes

for loan approval

Low customer satisfaction

Credit & Loan Approvals

Changing regulatory

requirements

Error-prone processes

Challenging system integration


Areas for improving competitiveness in credit loan approvals

Areas for Improving Competitiveness in Credit & Loan Approvals

Loan Origination

Discerning Credit Quality

Mortgage Refinancing

  • Reduce time and cost by increasing straight-through processing

  • Provide customers immediate visibility into the current state of their loan application

  • Predict a borrower’s willingness and capacity to repay

  • Assess value of collateral quickly and accurately using common standards

  • Ensure complex credit criteria are consistently applied

  • Continuously evaluate the type of credit and the limit extended to existing customers

Key credit approval challenges addressed by

operationalizing business decisions


Operational decision management top 10 use cases

Benefits of Using Operational Decision Management


Operational decision management top 10 use cases

Sample Credit & Loan Approval Decisions

Examples of Business Rules, Rule Flows and Decision Tables


Novagalicia bank

Novagalicia Bank

Improve product processing through automation of routing rules

Challenges

  • Routing of product requests to decision-makers required over 173 different business rules

  • Rules changed daily, and maintaining the routing systems to keep up with these changes was taking too much time

Solution

  • Business rules were implemented within the BRMS system as a group of reusable services

  • Systems leveraged the new services, executing each request in under 30 milliseconds

  • Various channels were supported including Web and branch systems

Benefits

  • Time to implement changes to routing rules went from days to hours

  • Overnight processing of 200,000 non-payments completes in only 14 minutes vs hours previously

  • Business users are able to manage the business rules themselves

Software Offerings:

IBM Operational Decision Management

9


Claims processing ibm operational decision management use case

Claims Processing IBM Operational Decision ManagementUse Case


Key challenges in claims processing

Key Challenges in Claims Processing

Insurance providers face numerous obstacles to grow revenue profitably

High claim processing costs

including claims leakage

Lengthy claims processing cycle with manual practices

Claims Processing

Lack of transparency throughout the claims process and need to show compliance

Inaccurate claims assessment & delayed settlements

Inability to align adjuster skill set with claim complexity


Improving competitiveness in claims processing

Improving Competitiveness in Claims Processing

Healthcare Claims

Resource Efficiency

Customer Retention

  • Health care reform is leading to retail purchasing models which demand error-free, real-time processing of claims

  • Use business rules to quickly identify straightforward claims to be routed for immediate settlement with little or no human intervention

  • Use rules systems to consistently handle all customer touch-points consistently for increased customer satisfaction.

Key trends driving decision management solutions


Operational decision management top 10 use cases

Benefits of Using Operational Decision Management


Operational decision management top 10 use cases

Sample Claims Processing Decisions

Examples of Business Rules and Decision Tables


Worksafe victoria

Worksafe Victoria

Improves efficiencies and productivity in their agents

Challenges

  • Too many manual processes led to long settlement cycles

  • Needed to improve accuracy and timeliness of payments to treatment providers

  • Must ensure the correct outcome for the organizations and providers served

Solution

  • Over 2000 complex business rules automate the invoice processing from validation, adjudication, payment and settlement

  • Business users manage the rules themselves in collaboration with IT

Benefits

  • Improved processing throughput by 300%

  • Reduced payment cycle time from 30 days to 1 day

  • Increased straight-through-processing rates from 40% to over 80%

Software Offerings:

IBM Operational Decision Management

“[Agents] have been given the ability to do the higher valued work that they've wanted to do in the past. Now, we can actually get them to actively manage claims, actively manage our clients to ensure that they get the best outcome as well as us..”

15


Underwritting ibm operational decision management use case

Underwritting IBM Operational Decision ManagementUse Case


Key challenges in underwriting

Key Challenges in Underwriting

Insurance providers face numerous obstacles to grow revenue profitably

Inability to assess risk accurately leading to mispriced rates

Low straight-through-processing leading to higher costs

Underwritting

Inability to create flexible risk tiers to match customer segmentation

Inability to roll out new insurance products quickly

Aging pool of experienced underwriters


Improving competitiveness in underwriting

Improving Competitiveness in Underwriting

Focus on Higher Value Add

Process Automation

Micro-segmentation

  • Many insurers are moving towards micro-segmentation:

  • Finding the 18-year-old male drivers who aren’t bad drivers then selling to them at a better price

  • The next generation of underwriters are focusing on the value-added activities of analyzing, selling, negotiating and managing relationships

  • Automated underwriting solutions are expanding to deliver policies in a cost-effective manner

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Underwriting Decisions

Examples of Business Rules, Rule Flows and Decision Tables


A canadian property casualty insurance group

A Canadian Property & Casualty Insurance Group

Improves speed to market and transparency across lines of business

Challenges

  • Many manual practices and hard coding of rules created inflexible processes

  • Performance issues in existing systems due to use of a rating engine for underwriting

  • Lack of consistency across processes in different lines of business

Solution

  • Implemented an e-commerce foundation for common service delivery.

  • Business rules automate the underwriting process (P&C, Auto), quoting, product selection and application flow

  • Rule execution performance is in mili-seconds

Benefits

  • Reduced time-to-market of new products and services by over 50%

  • Improved automated pass-through rates by 80%

  • Greater consistency, control and auditability of how business rules are being enforced and their impact

Software Offerings:

IBM Operational Decision Management

“We selected IBM because of its ease-of-use, advanced rule management capabilities for business and IT users, and tight integration in a service-oriented architecture.”

20


Compliance and reporting ibm operational decision management use case

Compliance and Reporting IBM Operational Decision ManagementUse Case


Key challenges in compliance and reporting

Key Challenges in Compliance and Reporting

Businesses face numerous challenges to comply with regulations and internal policies

Need for transparency and reporting with audit trails

Inability to quickly implementcomplex regulatory changes

Compliance and Reporting

Inability to show why specific transactions were authorized

Need to reduce workload and manual touch points

Need for common compliance enforcement across lines of business


Improving competitiveness in compliance reporting

Improving Competitiveness in Compliance & Reporting

RiskAwareness

TimelyActions

Regulations

Technology

  • Companies integrate risk and compliance considerations into all decision-making

  • Regulatory pressures force financial firms to re-think the value of technologies used to operate effectively and manage risk

  • Technology brings a new economic system that redefines relationships between bankers, customers, partners and regulators

  • Firms make actionable, optimized and timely decisions to comply by keeping risks at anticipated and acceptable levels

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Compliance and Reporting Decisions

Examples of Business Rules, Rule Flows and Decision Tables


A uk pharmaceutical company

A UK Pharmaceutical Company

Accelerating compliance with the Sunshine Act of 2010

Challenges

  • Sunshine Act mandates disclosure of financial payments to physicians and teaching hospitals

  • Requires manipulation of multiple complex rule sets in a rapidly changing regulatory climate.

  • Since preexisting state laws remain, companies must deal with various standards of reporting concurrently

Solution

  • Integrates multiple reporting systems for logging promotional expenses and then verifies and transforms them into a single database

  • BRMS extracts the data for state reporting, determines what data is appropriate and uploads that data for report generation

Benefits

  • Compliance managers can define and maintain the decisions and rules that apply to the Act, reducing the amount of time and effort required to update systems

  • The sales force has the ability to proactively manage its promotional spending so that it does not exceed its limits and risk noncompliance.

Software Offerings:

IBM Operational Decision Management

25


Dynamic pricing and bundling ibm operational decision management use case

Dynamic Pricing and Bundling IBM Operational Decision ManagementUse Case


Key challenges with dynamic pricing and bundling

Key Challenges with Dynamic Pricing and Bundling

Businesses face numerous obstacles to growing revenue profitably

Inability to roll out new pricing plays quickly

Inability to use customer data to create the right bundle for each customer

Dynamic Pricing and Bundling

Inability to assess the impact of new product bundles on profitability

Inability to accurately calculate price for complex product bundles

Streamline and scale pricing systems to improve consistency of quotes


Improving competitiveness in dynamic pricing and bundling

Improving Competitiveness in Dynamic Pricing and Bundling

Dynamic Packaging has Perceived Value

Dynamic Pricing Creates Opportunities

  • Nearly one-fourth of all online travel buyers have bought travel combinations with nearly 80% creating the package themselves

  • Using the richest information possible – what they buy; how much they spend, how competitors book – dynamic pricing allows online companies to tailor prices to an individual’s spending inclination

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Dynamic Pricing and Bundling Decisions

Examples of Business Rules, Rule Flows and Decision Tables


Accovia inc

Accovia Inc.

Enables dynamic packaging and pricing for travel industry customers

Challenges

  • Consumers are demanding more options and control over their travel choices

  • Pre-packaged and pre-priced products are waning

  • Tour planning, pricing and booking take place in an increasingly dynamic environment where travellers package and manage their own tours

Solution

  • Booking engines can now calculate pricing in real-time as customers design their individualized packages

  • Specialists develop strategically important seasonal offerings using complex rules

  • Business users deploy tactical responses to daily fluctuations in pricing

Benefits

  • Enhances customer satisfaction by enabling booking engines to meet traveler demand for real-time dynamic packaging and booking

  • Speeds time to market, reducing the time required to build new products from months to weeks

  • Increases pricing competitiveness

Software Offerings:

IBM Operational Decision Management

30


Fraud detection ibm operational decision management use case

Fraud Detection IBM Operational Decision ManagementUse Case


Key challenges in fraud detection

Key Challenges in Fraud Detection

Financial institutions & insurance providers face numerous challenges to handle fraud

Increased fraud costs due to undetected fraud activity

Need a systematic approach to handle fraud

Fraud Detection

Inability to quickly adapt to new fraud patterns

Reduce workload on fraud investigators

Inability to effectively prioritize potential fraudulent activity


Improving competitiveness in fraud detection

Improving Competitiveness in Fraud Detection

More Technology Investments Required

Growing Incidence of Fraud

Automation Critical

  • An estimated 10 percent of all U.S. P&C claims are fraudulent, so reducing fraud by as little as one or two percentage points can push millions of dollars to a carrier's bottom line

  • Technology solutions can help avoid the time and labor-intensive processes associated with manual fraud detection

  • Business Rules technology will help notify legitimate customers of fraud and taking immediate action to prevent fraudsters from succeeding.

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Fraud Detection Decisions

Examples of Business Rules


A large korean insurance company

A Large Korean Insurance Company

Boost profitability by identifying fraudulent claims quickly and accurately

Challenges

  • No effective and expeditious method of detecting and preventing fraud across over one million policyholders

  • Company profits were eroding with the rapid growth in policies due to costs of manual processes

Solution

  • Scans thousands of claims in real-time, assessing them for legitimacy or fraud based on 800 different factors

  • Applies business rules, predictive analytics and knowledge models against historical data, detecting patterns and ranking them in order of likely fraudulence.

Benefits

  • Realize $1.4 billion in additional profits, while reducing liability fees by nearly 12 percent

  • Accelerate fraud detection process by 50 percent using automated claims processing

  • Reduce inspection time for 10,000 cases from 2 weeks to 1 day

Software Offerings:

IBM Operational Decision Management

“Moving forward, we anticipate that the solution will continue to help reduce the amount of fraud by millions of dollars on an annual basis

35


Eligibility determination ibm operational decision management use case

Eligibility Determination IBM Operational Decision ManagementUse Case


Key challenges with eligibility determination

Key Challenges with Eligibility Determination

Social services providers face obstacles to deliver the right benefits to the right people

Inability to roll out new benefit programs to citizens quickly

Inability to handle complex, changing eligibility conditions

Eligibility Determination

Inability to prove regulatory compliance during enrollment

Reduce the cost of enrollment into social programs

Need to streamline eligibility determination to improve citizen experience


Improving competitiveness in eligibility determination

Improving Competitiveness in Eligibility Determination

Aging Population Generating Demand

Lower Costs of Maintenance

Error-prone Processes

  • For government caseworkers, the challenge of administering numerous benefit programs can be daunting and error prone

  • Rules-based systems are simpler to maintain than custom-developed systems and opens up change maintenance by business users

  • Social security agencies worldwide are focusing on streamlining eligibility determination, case management and benefits delivery

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Eligibility Determination Decisions

Examples of Business Rules, Scorecards and Rule Flows


Junta de castilla y le n

Junta de Castilla y León

Improves administration of social services

Challenges

  • New laws and regulations for dependent peoples were driving the need to re-engineer its IT systems for implementing programs

  • New social benefits needed to be offered with precisely defined eligibility criteria

  • Customer service was lacking

Solution

  • External business rules are used to provide a decision service to score applications and assess eligibility

  • Automates the processing of most of the paperwork, while centrally managing rules associated with eligibility

Benefits

  • Faster delivery of social benefits requiring less interaction between citizens and the administration

  • Transparent decisions through consistent scoring of eligibility criteria across all the agency’s centers

  • Empowerment of policy managers that allows them to review, validate and maintain policies directly

Software Offerings:

IBM Operational Decision Management

40


Cross sell up sell product recommendations ibm operational decision management use case

Cross-sell, Up-sell, Product RecommendationsIBM Operational Decision ManagementUse Case


Cross sell up sell and product recommendations

Cross-Sell, Up-Sell and Product Recommendations

Challenges to growing revenue profitably with complex products and services

Self-service portals lack fidelity to make good product recommendations

Inability to connect offers to the right customer segments

Cross-Sell, Up-Sell and Product Recommendations

Inadequate training to cross-sell complex financial products

Improve pre-qualification to increase up-sell accuracy

Inability to cross-sell effectively without a single view of the customer


Improving competitiveness in cross sell up sell product recommendations

Improving Competitiveness in Cross-sell, Up-sell, Product Recommendations

Online Technology Spending Increasing

Need Comprehensive Customer View

Know Your Customer Needs

  • Agents are given the ability to push relevant, timely, and personalized offers to the right customer at the right time

  • Need value-added metrics and analytics around the customer's risk, profitability, preferences and satisfaction level

  • Understanding what your customers needs are, before blindly sending them emails and credit card offers leads to customers feeling valued

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Product Recommendation Decision

Examples of Business Rules, Decision Tables and Rule Flows


Bnp paribas

BNP Paribas

Enables personalized offers to their customers through any channel

Challenges

  • Cross-sell and up-sell opportunities were not taken advantage of due to critical data in silos across departments

  • Customer loyalty was difficult to maintain due to inconsistencies in service across local branches, web or mobile phone

Solution

  • Using business rules, the bank can precisely define highly variable decision logic with respect to eligibility and pricing

  • Business users are provided with comprehensive governance capabilities to effectively manage large numbers of interrelated rules

Benefits

  • Enables bank to personalize offers through any channel based on each customer’s profile

  • Reduced time to market for new products from weeks to days

  • Improved competitiveness with the ability to flexibly and rapidly evolve offers based on market conditions and new regulatory requirements

Software Offerings:

IBM Operational Decision Management

45


Customer insight and loyalty ibm operational decision management use case

Customer Insight and LoyaltyIBM Operational Decision ManagementUse Case


Key challenges with customer insight and loyalty programs

Key Challenges with Customer Insight and Loyalty Programs

Businesses face numerous obstacles to retain and gain new customers

Inability to gain customer insight from disjointed loyalty programs

Inability to quickly roll out new promotions

Customer Insight and Loyalty Programs

Inability to make selective and personalized customer touches

Need to simplify administration of loyalty programs

Need to reduce the cost and workload to run new promotions


Improving competitiveness in customer insight loyalty programs

Improving Competitiveness in Customer Insight & Loyalty Programs

Campaign Fatigue

Targeted Promotions

Customer Centricity

  • Fifty-four percent of consumers surveyed said they are thinking of leaving loyalty programs of brands that offer low-value incentives, impersonal engagements and a rash of irrelevant messages

  • Many organizations don’t apply customer data across all facets of their business - they have not committed to putting the customer at the center of their purpose

  • 20% of consumers that belonged to a loyalty club had never received a personalized offer. 73% said they were targets of promotions for products that they already owned

Key trends driving decision management solutions


Operational decision management top 10 use cases

Customer Loyalty Decisions

Examples of Business Rules and Rule Flows


A beauty care retailer

A Beauty Care Retailer

Meets customer’s expectations by better understanding their needs

Challenges

  • Paper-based loyalty program offered limited visibility into the buying activities of its customers

  • Manual processes were slow to capitalize on sales opportunities

  • Customers and store staff frequently found promotions confusing and difficult to use

Solution

  • New loyalty program captures sales data in real-time enabling a rapid response to new trends

  • Using business rules this retailer automates rewards and promotion management to offer customers the best promotions at checkout

  • Promotions are uniquely targeted based on customers individual buying histories

Benefits

  • Keeps decision makers better informed with real-time visibility into sales trends and customer buying patterns

  • Improves customer satisfaction with an automated targeted promotions system

  • Standardizes promotion efforts across 1500 retail locations

Software Offerings:

IBM Operational Decision Management

50


Customs and control ibm operational decision management use case

Customs and Control IBM Operational Decision ManagementUse Case


Key challenges with customs and border control

Key Challenges with Customs and Border Control

Governments face the need to protect their borders while facilitating trade

Pre-screen travelers for red flags before date of travel

Pre-validate customs declarations before goods arrive at borders

Compliance and Reporting

Deploy border control resources efficiently and prioritize security threats

Provide e-file customs checks for large exporters and importers

Apply new border crossing procedures into operation quickly


Improving competitiveness in customs border control

Improving Competitiveness in Customs & Border Control

Pre-Screened Traveler Programs

Automated Traveler Processing

Security vs Privacy

Our privacy laws and our conceptions of privacy cannot withstand the technological change that is happening and the cyber conflict that is developing

  • There will be an increase of automated pre-screening of travelers – technology to determine membership and real-time verification will be required

  • Virtual Officers are an expanding trend to process trusted traveler applicants and they flag questionable interviews for a follow-up interview with human officers

Key trends driving decision management solutions


Operational decision management top 10 use cases

Sample Customs and Border Control Decisions

Examples of Business Rules, Decision Tables and Rule Flows


Swiss customs

Swiss Customs

Automates plausibility analysis for customs declarations

Challenges

  • Importers and exporters are constantly trying to cheat the customs system that uses 700 business rules to determine plausibility of a declaration

  • Over 1500 different systems are required to be interconnected to the automatic declarations system

  • System must process 200,000 declarations per day

Solution

  • The new E-dec system stores all business rules in a central repository allowing customs professionals to create and adapt plausibility rules.

  • Business rules also generates detailed reports available to clients on the web site to ensure clients understand what is required to make a correct declaration

Benefits

  • Business rules used within the plausibility analysis are reused by several different clearance processes thus increasing the efficiency of administration

  • Customs professionals can administer the rules directly thus guaranteeing flexibility and speed in adaptation of the rules

Software Offerings:

IBM Operational Decision Management

55


Why operational decision management

Why Operational Decision Management?

Agility

  • Operationalize policy changes in days versus months

  • Decrease cost of implementing business practices, policies & regulations

Efficiency and Productivity

  • Improve straight-through-processing

  • Involve business users for change requests with built-in governance

Decision Quality and Precision

  • Implement more fine-grained, targeted decisions

  • Perform what-if and impact analyses prior to deployment

Consistency

  • Automate and consistently enforce decision policies

  • Ensure policies and associated semantics are consistent across channels

Transparency, Auditability, Compliance

  • Track what decisions were made and why (runtime)

  • Track what policies were changed and by whom (rule management)


Operational decision management top 10 use cases

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