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James Taylor Decision Services S O A Symposium
- 1. 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
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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
© 2008, Smart (enough) Systems LLC. 4
© 2008 Smart (enough) Systems LLC. Page 2
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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
© 2008, Smart (enough) Systems LLC. 5
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
© 2008, Smart (enough) Systems LLC. 6
© 2008 Smart (enough) Systems LLC. Page 3
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SOA Symposium 2008
Decisions, Decisions, Decisions
© 2008, Smart (enough) Systems LLC. 7
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
© 2008, Smart (enough) Systems LLC. 8
© 2008 Smart (enough) Systems LLC. Page 4
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SOA Symposium 2008
Applications have evolved
Browser
User Interface
BPM Process Logic Services
Data
Enterprise
Database
© 2008, Smart (enough) Systems LLC. 9
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.
© 2008, Smart (enough) Systems LLC. 10
© 2008 Smart (enough) Systems LLC. Page 5
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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
© 2008, Smart (enough) Systems LLC. 11
Many Forces At Work
Business Business Business
IT Manages
Drives Rules Decisions
Change
Change
Central Distributed Business by Automated
Management Execution the Numbers Processes
© 2008, Smart (enough) Systems LLC. 12
© 2008 Smart (enough) Systems LLC. Page 6
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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.
© 2008, Smart (enough) Systems LLC. 13
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
© 2008, Smart (enough) Systems LLC. 14
© 2008 Smart (enough) Systems LLC. Page 7
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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
© 2008, Smart (enough) Systems LLC. 15
Consequences
Business Control of Decisions
Control and Integration
Externalization
Agility in Points for
from Legacy
Business Advanced
Applications
Processes Analytics
Isolation of Decisions
© 2008, Smart (enough) Systems LLC. 16
© 2008 Smart (enough) Systems LLC. Page 8
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SOA Symposium 2008
Decision Services in BPM
Processes become complex
when decision making is
mismanaged
Explicit decision services
simplify processes dramatically
© 2008, Smart (enough) Systems LLC. 17
Context
© 2008, Smart (enough) Systems LLC. 18
© 2008 Smart (enough) Systems LLC. Page 9
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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
© 2008, Smart (enough) Systems LLC. 19
The Evolution Of An Interaction
Automate Decision
http://www.f
Apply rules
Web
Segment customers
Predict risk, value
Call Center
Optimize decision
Email
Mobile
© 2008, Smart (enough) Systems LLC. 20
© 2008 Smart (enough) Systems LLC. Page 10
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SOA Symposium 2008
Business Rules Are Everywhere
Managed
Policy Manuals Business
Regulations
Rules
Experienced
Legacy Systems Personnel
Historical Data
© 2008, Smart (enough) Systems LLC. 21
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
© 2008 Smart (enough) Systems LLC. Page 11
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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
© 2008, Smart (enough) Systems LLC. 23
Predictive Analytics – Add Insight
40
30
20
10
Member renews
Member fails to renew
© 2008, Smart (enough) Systems LLC. 24
© 2008 Smart (enough) Systems LLC. Page 12
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SOA Symposium 2008
Business Rules and Decision Services
© 2008, Smart (enough) Systems LLC. 25
Impact May Take Time to Play Out
© 2008, Smart (enough) Systems LLC. 26
© 2008 Smart (enough) Systems LLC. Page 13
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SOA Symposium 2008
Use Adaptive Control to Continuously Improve
© 2008, Smart (enough) Systems LLC. 27
Adaptive Control Inside a Decision Service
© 2008, Smart (enough) Systems LLC. 28
© 2008 Smart (enough) Systems LLC. Page 14
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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
…
© 2008, Smart (enough) Systems LLC. 30
© 2008 Smart (enough) Systems LLC. Page 15
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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
© 2008, Smart (enough) Systems LLC. 31
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
© 2008, Smart (enough) Systems LLC. 32
© 2008 Smart (enough) Systems LLC. Page 16
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SOA Symposium 2008
Thank You
James Taylor
james@smartenoughsystems.com
http://www.smartenoughsystems.com
Blog: www.smartenoughsystems.com/wp
© 2008, Smart (enough) Systems LLC.
© 2008 Smart (enough) Systems LLC. Page 17