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ODM for Dummies

1. cccscsseseseetecteeeeeeeeensees Writing Your Decisions Down Business Rules 6 Finding a format for rules 00 0 0 eeececesseeeeseeteeeeseeseees Managing rules and events with ODM Grouping rules with ODM eeseeeesseeteeeeeeeeeeeeees Seeing What ODM Can Do for YOu cee eeeeeseeneeteeteeeeeeeeneee 9 Enabling rapid and agile change cccsesseetereees 10 Capturing the knowledge of your experts ROY TEUS n a E Ensuring Consistency ccceeeeteeeetee Refining and updating decisions Facilitating compliance Improving customer service s Solving Your Decision Problems with ODM Long slow change cycle s es Complex decision code seseeeseeseeeserssersresrsrsrresess Need for more straight through processing 14 Hard to find decision criteria Overworked IT staff Miscommunicated change requests No clear audit history sessssessesseerrrsrerrrrrrerersese These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited IY ODM For Dummies IBM Limited Edition Chapter 3 Looking under ODM s Hood 17 The Anatomy of an ODM Solution ccceccessesseeseeeeeeeeees 17 Rules and events management tools ccceeereees 18 Developer tools csccssccscscssesssssssesscescssccsecsencencees 19 Making ODM User Friendly ccccccceseeeseeteescceecn
2. Compliments of Operational Decision Management Learn to These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Operational Decision Management 30 DUMMIES A Wiley Brand IBM LIMITED EDITION by Steve Craggs and Brian Safron DUNMIE J A Wiley Brand These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Operational Decision Management For Dummies IBM Limited Edition Published by John Wiley amp Sons Inc 111 River St Hoboken NJ 07030 5774 www wiley com Copyright 2013 by John Wiley amp Sons Inc Hoboken New Jersey Published by John Wiley amp Sons Inc Hoboken New Jersey No part of this publication may be reproduced stored in a retrieval system or transmitted in any form or by any means electronic mechanical photocopying recording scanning or otherwise except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act without the prior written permission of the Publisher Requests to the Publisher for permission should be addressed to the Permissions Department John Wiley amp Sons Inc 111 River Street Hoboken NJ 07030 201 748 6011 fax 201 748 6008 or online at http www wiley com go permissions Trademarks Wiley the Wiley logo For Dummies the Dummies Man logo A
3. These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 2 Is ODM Right for You 3 based on shared rules as these rules improve and become more accurate all decisions using these rules will benefit raising overall quality of service Solving Vour Decision Problems with ODM As we discuss throughout the book rules are just mechanisms for expressing how a business operates and for enabling the business to change fast enough but in a governed way to keep up with the evolving business and regulatory environ ments ODM is fundamentally about enabling business preci sion and change How do you know whether ODM can bring that precision to your business Here are a few key problems that ODM may be able to help you solve Long slow change cycle If it takes too long to implement changes to your business policies ODM may be a solution How long is too long varies from business to business of course In our experience most organizations with hun dreds or thousands of business rules would like to imple ment changes in some of those rules on a weekly or perhaps monthly basis But we ve also found that it takes many orga nizations six to eight months to implement rule changes with full governance of course Complex decision code Code is great for structuring how an application performs its tasks but it s not as go
4. The Tip icon points out time or frustration saving ideas The Remember icon marks information that you should take from the discussion and file away in your brain even if you remember nothing else This icon highlights information that you don t need to know but may find interesting Pay close attention to anything that has a Warning icon Failure to heed this information could have serious conse quences for your business These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 1 What Is Operational Decision Management In This Chapter Managing your business by managing your decisions Organizing business rules eroa decision management ODM is a set of technologies and methods that allow you to automate your day to day business decisions without compromising their accuracy and effectiveness ODM lets you document implement change and govern the repeatable decisions that control your business operations It combines a system for managing business rules with a business rules engine to deliver agility and control in your day to day operations More to the point ODM is about making change easier and extending change control to business users who are respon sible for the business policies regulations and practices that run your business In this chapter we give you a broad overview of ODM Controlling the Decisions T
5. ments have been asked to do a lot more with a lot less ODM however creates a win win situation for business and IT Businesspeople can make the ongoing changes in business rules and IT can own the business rules application and ensure its integrity and performance This perfect division of labor lets everybody do what he or she is best at Miscommunicated change requests In the past you may have asked for a change and spelled out exactly what that change should be After several months of work IT finally implemented the change and it wasn t what you intended You may have tried to identify the source of the miscommunication but you probably couldn t stop the situa tion from happening again Mind you many business analysts working in IT understand the business well enough to implement what the business intended but not enough of them to prevent the inevitable fumbles that take place in the handoff ODM provides a safe and governed environment in which business users can create and update business rules directly without relying on IT thus eliminating or at least significantly reducing miscommunication No clear audit history You ve probably seen the classic interrogation scene in crime movies The police ask something like Where were you on the night of June 17 The suspect fakes a look of dismay and protests that it s impossible to remember a specific night six months ago Although they probably are
6. re comfort able enough with the tools to make changes with confidence We discuss user comfort further in Making ODM User Friendly later in this chapter For this reason ODM prod ucts make business user tools a priority and IT users also benefit from this ease of use Rules generally follow one of two simple formats see Chapter 1 depending on what sorts of decisions they re designed to address Also ODM products provide test and simulation tools to help business users deliver higher quality results as well as a full range of governance tools to ensure the right approvals are in place before deploying any rule These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited ANG L STy ORUN X 2 99 py Chapter 3 Looking under ODM s Hood 9 Users must have the correct authority and approvals before deploying any rule changes of course Governance is a key facet of ODM Developer tools ODM developer tools set up the environment in such a way that the business users can use it without seeing the hidden complexity The art of ODM is letting developers deal with all the tricky stuff leaving business users free to concentrate on doing what the business needs when it needs it Developers create the environment for business users in vari ous ways such as defining or importing data models defin ing the names that can be p
7. tronics companies have trained us to expect intuitive interfaces The need for intuitive interfaces extends to IT personnel who like elegant intuitive interfaces that don t force them to keep checking the user manual or online help These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 7 Ten Characteristics of Best in Class ODM Systems 39 Business Events Capabilities sA STY ky PALS AT An ODM system can listen for specific events a bank machine withdrawal a location change based on GPS or another positioning system or a person visiting a web page The ODM system can not only track these events but also correlate groups of events to identify patterns A credit card company for example might be interested to know that John Doe used his credit card on two continents within an hour An insurance company might like to know that three car insur ance applications were submitted in the past 72 hours for the same vehicle but at different addresses Rules that govern business events can play a pivotal role in an ODM system When you determine that an event or group of events of interest has taken place you can use business rules to decide what response is appropriate and to initiate action This process is often referred to as Detect Decide Act Business events enable you to detect a certain situation in real t
8. Calling the Rul ciscss ciscienesseccasssaveseasaseccas a R aS a 30 Changing the Rule ccc ccccscsseeseesceeseceeecneeesecneeneeeseeseeenes 31 Discovering Existing Rules ee seseeeeeseeteeeeeeeeaeeeeeeeeaeees 31 Chapter 6 Ten ODM Use Cases 33 Credit and Loan Approvalls c cccccccsseseececteceeeceseeseeeeeseeenes 33 Claims Processing amatar ara ass an E EERE 34 Underwriting eena cdgeacdag died ATE AE ARATE 34 Compliance and Reporting eseessseseeesessseeessrsreeesssseeeesssseee 34 Dynamic Pricing and Bundling ccc eccceeseeeteeeseeeeseeneens 35 Fraud Detection cccccssssscssssssssssessessesscssecsesesscesseesssssseeesens 35 Eligibility Determination c cccccecseesseceeseeeeceseceeeseeseeneens 35 These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Table of Contents Y Cross Sell Upsell and Product Recommendations 36 Customer Loyalty Programs cccccscesscssscsseeeeceseeseeeeeseeenes 36 Customs and Border Control cccccesccessesseeeeeeeeeseeeeeseeenes 36 Chapter 7 Ten Characteristics of Best in Class ODM Systems iiss ceca hares viewed sees 37 Management Capabilities cc ccccseeseeteescceeeneeeneeeseeneeees 37 Less Relianceon Wee cicinatinnd cacalianeniaanweaisd 38 Intuitive Interface Business Events Capabilities 0 0 0 0 cccccsesessceteceeeeneeeseetee
9. Mary Bednarek Executive Director Acquisitions Mary C Corder Editorial Director Publishing and Editorial for Consumer Dummies Kathleen Nebenhaus Vice President and Executive Publisher Composition Services Debbie Stailey Director of Composition Services Business Development Lisa Coleman Director New Market and Brand Development These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Introduction D any of this sound familiar Your business rules are hidden in your applications or processes and are hard to find and change You d like to automate your operational decisions assuming the solution was safe and reliable The system used to manage your business rules is hard to use and isn t accessible by your business experts IT is so backlogged that change requests often take months to implement If so Operational Decision Management ODM may be just what you need ODM is the evolution of business rules management It pro vides a complete easy to use system for automating day to day operational decisions and allows businesspeople and IT to collaborate on business rules by using an interface and a language that are comfortable and intuitive for both Simply put ODM is about change If rules and decisions don t ever need to change there s probably no need to put them in an ODM system But for rules that do change
10. They can easily use the ODM system to search for documentation and review change histories Collaboration One of the best ways to build confidence and accuracy is to be able to share your thoughts with others ODM allows business users to discuss and collaborate on proposed rule These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 3 Looking under ODM s Hood 2 changes which ensures that rules are high quality are based on pooled experience and also empower users to make the necessary changes without fear Your business users will take advantage of opportunities to collaborate only if the collaboration tools are easy to use and intuitive Therefore ODM tools work hard to provide business users the sort of collaboration environments that they may use in their personal lives Testing and Validation Simple rule changes and their consequences may seem obvious but are you really prepared to risk your business operations based on something that seems obvious ODM is designed to make business operations work consistently and accurately so it s no surprise that ODM products pro vide tools that help with testing and validating proposed rule changes One of the most valuable features allows users to simulate the new changes and see what would happen usually by building sample data for the rules to work from or by running a simu
11. if you don t feel you re going to get any returns from ODM read ing the rest of this book seems pointless doesn t it If so this chapter is for you Seeing What ODM Can Do for Vou Can ODM really help you automate your real time decisions in a precise and consistent way Can it deliver on the promise of allowing your business users to quickly yet safely make changes to your business rules The value of ODM comes from extracting the business rules that control your operations from wherever they re stored documenting them in clear concise form and then provid ing tools that allow you to review analyze model edit and deploy them to meet your dynamic business needs ODM provides a wide range of benefits Enabling rapid and agile change Your employees can write and edit your operational decisions as needed per haps in collaboration with other departments to ensure that the business can react quickly to both opportunities and threats These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 70 ODM For Dummies IBM Limited Edition Also operational change can be made quickly and directly by business experts which eliminates any application development backlog Capturing the knowledge of your experts for reuse Your automated systems can perform like your experts making decisions based on the experience and expertise or
12. lation against historical operational data By simulating the new rules and reporting on the results your users can identify and fix any unwanted effects and then move forward with the changes with greater confidence Ensuring security Although ODM makes it easier to make changes to business rules never forget that these rules control the operational decisions being made inside your company hundreds or thousands of times a day Yes the power to adjust operations quickly to take advantage of new opportunities or combat new threats is valuable but uncontrolled change could have serious repercussions on your business activities Therefore ODM products provide security and authorization mechanisms so that you always know who has the power to make specific changes and what approval procedures are in place for those changes These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 22 ODM For Dummies IBM Limited Edition These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 4 The Life Cycle of Rules In This Chapter Getting an overview of rules Understanding how business rules work Seeing how rules are made M anaging your decisions wisely helps you manage your business wisely and to do that you need rules which are simply your operational dec
13. rules that control pricing eligibility credit approvals claims process ing and so on ODM offers a proven solution to manage that change ODM not only allows you to automate your business rules but also it enables you to detect real time business events such as a person making a credit card charge and use rules to decide and automate the appropriate response or action to those events These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 2 ODM For Dummies IBM Limited Edition About This Book This book is written for readers who have varying levels of familiarity with ODM It doesn t focus on any particular ven dor s offering instead it talks about the features of ODM as a model for managing operational decision making This book isn t about offline business intelligence systems While those systems are very valuable the focus of this book is on automated decisions that can be executed in real time in conjunction with your business applications and processes Conventions Used in This Book Because ODM is for everyone not just the IT department we use the term business user to differentiate employees who don t work in IT from those who do Business users may be business or operational analysts managers process design ers and so on Icons Used in This Book ae You ll find these icons in the margins of this book
14. DM Use Cases In This Chapter Understanding how ODM helps repeatable decisions Looking at proven starting points for ODM A lot of your business involves repeatable decisions many of which you may want to improve Some may be automated but hard to change Others may be automated but not as well as you want Yet others may not be automated at all If you think your operational decisions may be good candi dates for ODM this chapter gives you ten proven entry points to help you get started Credit and Loan Approvals A generation ago lenders were in the driver s seat A bor rower went through the painful exercise of applying for a loan hoping that the lender would approve Today s borrow ers make five online loan applications before breakfast and although they may not get approval by lunch lenders will be fighting for their business by dinner Many loan decisions both consumer and commercial are based on or at least influenced by the speed at which lenders can grant approval Yet as we ve seen over the past few years inappropriate loan decisions can have disastrous results At the same time regulatory issues and fairness concerns put pressure on financial institutions to be consistent and audit able in their credit and loan approvals These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 34 ODM For Dummies IBM Limited Edition O
15. DM provides a way to automate much of the credit and loan approval process It can improve straight through processing send exception cases to experienced loan officers and pro vide an audit trail of all loan decisions that were made and the specific rules that were applied Claims Processing Business rules can help you manage much of the complex ity of claims processing The rules may be different for every state or region Coverage may differ depending on the details of a medical or dental procedure Workers compensation and social services claims may have a very different set of processing requirements Although ODM can t automate all claims processing it can free skilled employees to work on only those claims that require special attention Underwriting Assigning risk is a risky endeavor Price too low and you lose money Price too high and you lose business And if you take too long to price a policy a loan or anything else you may lose the business because your potential customer found another provider Underwriting involves a great deal of knowledge and data As mysterious as this expertise can sometimes seem it can be quantified which makes it a perfect candidate for business rules ODM can help you automate most of your underwriting decisions without sacrificing quality Compliance and Reporting Compliance is all about rules so it makes sense that ODM is the perfect technology to automate it No matter what t
16. LISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE FURTHER READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRIT TEN AND WHEN IT IS READ For general information on our other products and services or how to create a custom For Dummies book for your business or organization please contact our Business Development Department in the U S at 877 409 4177 contact info dummies biz or visit www wiley com go custompub For information about licensing the For Dummies brand for products or services contact Branded Rights amp Licenses Wiley com ISBN 978 1 118 67957 9 pbk ISBN 978 1 118 67978 4 ebk Manufactured in the United States of America 10987654321 These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Table of Contents Introduction 00 cc cee cece cece ee eee eeneaees 1 About THIS BOOK scscssssisdscsssecsaccevsccssvesscseedsodedessoassaseavoncssvcasesesaes Conventions Used in This Book Icons Used in This BOOKesnnessniasennnaniaca a Chapter 1 What Is Operational Decision Management 00cee cece cence 3 Controlling the Decisions That Control Your Business 3 Seeing how decisions are managed Putting the operational in ODM Managing Decisions with ODM
17. Reference for the Rest of Us The Dummies Way Dummies com Making Everything Easier and related trade dress are trademarks or registered trademarks of John Wiley amp Sons Inc and or its affiliates in the United States and other countries and may not be used without written permission IBM and the IBM logo are registered trademarks of IBM All other trademarks are the property of their respective owners John Wiley amp Sons Inc is not associated with any product or vendor mentioned in this book LIMIT OF LIABILITY DISCLAIMER OF WARRANTY THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETE NESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITU ATION THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL ACCOUNTING OR OTHER PROFESSIONAL SERVICES IF PRO FESSIONAL ASSISTANCE IS REQUIRED THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUB
18. The new offer might increase your volume but is that increase enough to make it worthwhile Managing your decisions lets you manage your business carefully Writing Vour Decisions Down Gusiness Rules After a while it gets rather tedious to talk about the record of how a business decision is made you need a shorthand way to notate business decisions That s the role of business rules usually called just rules These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 1 What Is Operational Decision Management 7 Key rules written down in business terms are valuable assets in themselves They become visible to the entire organization offering a single source of the truth for how business policies are executed in your business systems We cover rules in detail in Chapter 4 Here we briefly show you how rules work with ODM Finding a format for rules Rules are written in nontechnical terms so that they can be written viewed and edited by average business users Some rules may be in a natural language form such as these examples IF car is 4wd AND applicant is under 21 yrs old THEN add 30 to the insurance premium IF customer level platinum THEN discount 15 Other rules are in some other business accessible form such as a spreadsheet like decision table setting out rates against vehicle sizes and age ranges or a list
19. amp Chapter 4 The Life Cycle of Rules 25 a change in a business rule could take six months or more based on your application development cycle Your business can t wait that long can it To get back to the ballgame example see the preceding sec tion maybe you got soaked by rain at the game last weekend and now you want to add a decision criterion so you don t go to the game when it s likely to rain So you change your rule to add a rain criterion IF 2 adjacent tickets are available to the game in section 103 104 105 for less than 50 per ticket AND IF the chance of precipitation is less than 30 AND IF no relatives are visiting on the day of the game AND IF the low temperature on the day of the game is not less than 40 F THEN buy tickets to the game Weekends just got better Making regular changes Imagine that you make one or two changes to your rules every month The rule was fine to start with but after ten rounds of changes it s much better really reflecting the best practices of your company or organization Rules are hard to get perfect on the first try which is why many of your applications aren t as smart as they could be or should be But when they re done right they accurately reflect how your business does business Stepping through the Rulemaking Process Rulemaking activities break down into a set of logical steps We walk you through the process in this section These materials
20. are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 26 ODM For Dummies IBM Limited Edition Step 1 Decide what changes to make Something is prompting a change Perhaps your experts have spotted a way to give the competition a beating or the market landscape has shifted or a particular product line is going gangbusters It could be that your compliance officer has been reviewing your operational procedures and found that you aren t conforming to the latest regulatory changes Or maybe your analytical whiz kids are looking at historical trends and have anticipated some new trend Whatever the driver for change is you need to change your operational decision making as soon as possible You may have to alter a current rule such as a rate calculation or create a new one to help with decisions such as the optimal deal to offer a prospective client Step 2 Find relevant existing rules In setting up your ODM environment you established a library of groups and sets of rules covering your operational decisions Users want to see what rules already exist within the specific area then they can see which rules may need to be changed and where to add new rules But even if you don t remember where in the library the rule was stored you can use search terms and filters just like in a web search engine to find all the rules that match your criteria Step 3 Di
21. art of a rule expression such as customer number zip code or product type specifying how these names relate to actual system variables and specifying how the rules engine will invoke them when necessary Making ODM User Friendly The IT industry is good at tackling technical problems but it s always found a greater challenge in talking to business users IT personnel consistently misjudge how hostile technological solutions can seem to nontechnical people Even something as simple to developers as an explorer style library tree struc ture may be unfamiliar to business users If you want your business users to take advantage of the power of ODM by writing and changing the rules that control business operations you have to go beyond just not scar ing them with IT procedures and terminology You need to empower business users so that they re comfortable with the ODM rule authoring tools and confident in their ability to make the changes the business needs ODM products provide a range of tools and environments designed to make business users feel at home such as the following features Business oriented browse search facilities for navigating the rules library These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 20 ODM For Dummies IBM Limited Edition Documentation or contact information for rules Access to the ODM system from M
22. ary approvers are poised and ready to respond quickly The result You ve added value to your organization by changing the implementation of a busi ness policy quickly and flexibly Discovering Existing Rules Where are your current business rules While they may be in many places one way to approach the question is to think in terms of two types of rules 1 Those that are currently codified into an application or process 2 Those that aren t codified and that are in documents spreadsheets or the heads of your business experts gore One of the key ways that ODM helps is through the collabora tion and versioning features so your team can work together to document and iteratively improve your organization s rules In this rule discovery process it s often helpful to use a dedicated web based collaboration tool as a platform for sharing ideas and zeroing in on specific rules you want to automate and how they should be expressed You don t have to deploy all your rules at once you can roll them out in waves starting with the ones that will have the most busi ness impact These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 32 ODM For Dummies IBM Limited Edition These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 6 Ten O
23. ashion boutique and you re hoping for a surge in sales as all those fashion conscious teen agers get ready for the new school year Your daughter how ever tells you that she just ordered three new outfits from a competitor that s running a special back to school promotion 10 percent off a purchase of three or more items If only you had a way to change your business applications to make a competitive offer before any more damage is done Wait ODM saves the day Just change the decision on your billing discount to include a 15 percent discount for orders of three or more items The real beauty of using your decisions to manage your busi ness this way is that you don t need to look at the whole pro cess of selling clothes and accessories online You don t need to check the way the process works ask for new code to be written or distribute an urgent memo to the call center staff You just find the discount rate criteria and change them Part of managing your decisions however is looking at the impact of any changes In reality you may not want to make your new 15 percent off three or more items offer just to get the teenage back to school business After all cornering the market and making a loss on each transaction may not bea recipe for great success You may want to run your proposed deal against your sales for the same back to school period last year to see what it would have done to your profitability then
24. business performance information for study by your expert analysts Feedback from production operations is precisely the sort of input that pro duces maximum benefits for your business operations busi ness analysts can discuss new changes to make things even better continually improving your business performance These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 5 Getting Started with ODM In This Chapter Writing your first rule Deploying your rules into ODM Discovering existing rules J beautiful thing about getting started with ODM is that you can do it at your own pace At its core ODM is a system for externalizing business rules from your existing applications and processes Unlike many other types of IT sys tems ODM doesn t require a big bang approach By its very nature it s incremental What do we mean by saying that implementing ODM is incre mental Suppose that you have an application containing 5 000 business rules and about 1 000 of those rules need some flexibility built in You may need to change those 1 000 rules more frequently than the other rules or you may need to change them at different times from when you make changes in the application Perhaps the rules need to be read and modified by a wider group of people both business and IT users than is currently possible or you need additio
25. e key components of an ODM solution and how they relate to one another These components are The rules library an organized repository for all your rules Developer tools for setting up your rules environment and maintaining your rules application Rules and events management tools for browsing viewing editing saving modeling testing governing and deploy ing new and modified rules Aruntime engine that executes your rules within your operational environment as required These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 18 ODM For Dummies IBM Limited Edition Developer tools 1 Set up rules environment 2 Maintain rules application 3 Assign permissions and security parameters Rules and events management tools 1 Browse search 2 Author edit 3 Collaborate 4 Simulate 5 Test 6 Govern 7 Deploy Rules Library 1 Repository of rules and related assets 2 Versioning and change control 3 Audit trail and reporting Figure 3 1 The components of an ODM system Rules and events management tools To get the best bang for your ODM buck you need to liber ate your business users to respond quickly and accurately to market changes and opportunities If you expect your busi ness users to change how business operations work on their own however you have to make sure that they
26. eeeneeeseeeeees 19 Navigation search support ceeeceeseeseeeteeteeeeeeneees 20 Collaborations e i n R EE ER 20 Testing and validation essesseeeesesseeeesssseeerssssreeesssseee 21 Ensuring SECUTITY eee ceccctceceeeeeeeeeeeeceeseeeneeaeeneeensees 21 Chapter 4 The Life Cycle of Rules 23 Taking a Wider View of RuleS cccecsesseecceteceeeeeeeeeeseeees 23 Seeing How Business Rules Work c ccccsccecsessecseeeseeseeees 24 Writing a simple rule oo ccceceeeceteeeeeeteeteeeneeneees 24 Changing a rule oo ecccccceceseeeseeseeeeeeeeseeceeeseeneeeeenes 24 Making regular Changes cccccssccseseteeteeeeeseeeeeeeees 25 Stepping through the Rulemaking Process ccccesee 25 Step 1 Decide what changes to make eee 26 Step 2 Find relevant existing rules 0 0 0 0 eeeesenees 26 Step 3 Discuss and collaborate on the potential Changes ceccsesscesccsecneceeeeseeeseeseeseeenes 26 Step 4 Write or edit a rule ecceteseeteeteeeeeeees 27 Step 5 Simulate and test the rule eee 27 Step 6 Deploy the change ccceceeseesteeteeteeeeeeneees 28 Step 7 Monitor and report on the change 28 Chapter 5 Getting Started withODM 29 Replicating a Rule eee eccecccscceseseeeeseeseeeseeseeeaecneecneeeeeeeeees 29 Testing the Replicated Rule ccc cccceseseescetecneeeeeeeeeseeees 30 Deploying the Rue eccccccsccsseeseeeeesceeeeeeeesecneeeneenseeeeees 30
27. ees 39 Built in Governance and Change Management 39 Centralized Searchable Rules Repository cccceeeeees 40 Integrated Simulation and Testing cccccesceseereeeeeeseeees 40 Auditing and Reporting REUSE OF RULES sc cesncciessiansaretacoessearpsiavteaprdiescesveedioebansaennesieays Easy Integration with Other Solutions eessen 41 These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Publisher s Acknowledgments We re proud of this book and of the people who worked on it For details on how to create a custom For Dummies book for your business or organization contact info dummies biz or visit www wiley com go custompub For details on licensing the For Dummies brand for products or services contact BrandedRights amp Licenses Wiley com Some of the people who helped bring this book to market include the following Acquisitions Editorial and Composition Services Media Development Project Editor Carrie A Burchfield Editorial Manager Rev Mengle Business Development Representative Sue Blessing Senior Project Coordinator Kristie Rees Layout and Graphics Sean Decker Proofreader Susan Moritz Custom Publishing Project Specialist Michael Sullivan Publishing and Editorial for Technology Dummies Richard Swadley Vice President and Executive Group Publisher Andy Cummings Vice President and Publisher
28. ess rules in ODM to provide the same benefits that ODM provides to other applications These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Use ODM as a model for managing operational decision making Operational Decision Management ODM allows you to automate business rules detect real time business events and make the right decisions at the right times With Operational Decision Management For Dummies IBM Limited Edition you can discover all the components of ODM understand the benefits to your business and start planning your ODM journey e Automate your day to day business decisions don t compromise accuracy and effectiveness Get a system for managing business rules capture and codify the knowledge of your experts e Make change easier extend change control to business users e Decide if ODM is right for you find out if ODM can automate your real time decisions DUMMIES A Wiley Brand Open the book and find Making Everything Easier Go to Dummies com for videos step by step examples how to articles or to shop ISBN 978 1 118 67957 9 Part WSM14019 USEN 00 Not for resale
29. ey don t always have time to ask an internal expert for advice Nothing can make up for lack of experience ODM is designed to get that vital information out of your experts heads and into repeatable automatable rules Ensuring consistency ODM rules always produce predictable repeatable results Rules don t have off days they don t make mistakes they don t get upset and they execute your operational decisions the same way every time This consistency is good for the accuracy and predictability of your business operations and it s great for your customers and partners Consistency creates value throughout your operations Making repeatable and accurate decisions consistently can increase your sales maximize your profits and improve cus tomer satisfaction and retention These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 12 ODM For Dummies IBM Limited Edition Refining and updating decisions Business leaders love ODM because it helps them measure the outcomes of critical operational decisions If you discover that your rule will result in 80 percent exceptions for exam ple the rule won t achieve what you want If this rule causes delays for your customers you may want to look at the condi tions under which decisions are being referred to see whether you can relax the rule without harming operations Being able to si
30. hat s central ized from the start and that s easy to manage and search Search capabilities should be on a par with the top search engines on the web A good search function is the best way to promote reuse An insurance company for example may want to see whether any existing rules apply to sports cars in California An ODM search should be able to provide a list of rules that have the words sports car or California in the title body or metadata within seconds even when the repository contains 30 000 rules The search tool should be able to easily filter by parameters such as business rules or decision tables It also should be able to search by criteria such as rule status in production or preproduction or when the rule was last modified Integrated Simulation and Testing An important benefit of ODM is simulation capability Assuming that you re trying to maximize profit you want to answer questions about the effect of a price change before you implement the change rather than later ODM systems provide a user friendly but powerful way to run simulations You can simulate not only against sample data but also last week s or last month s data to see what results you would have had in the real world with a different set of rules Testing is also an important part of a successful ODM solu tion and it should be as easy to accomplish as possible An ODM system should be able to create a spreadsheet to facili tate test
31. hat Control Vour Business Everything your business does relies on decisions You have to decide what rate to charge a client for example and which supplier to use as well as when to reorder stock and make a specific investment It s fair to say that decisions control your business These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 4 ODM For Dummies IBM Limited Edition MBER ww g But who controls those decisions Think about your own organization Perhaps you have deci sions embedded in the applications that run your business maybe you rely on skilled staff members to make the right decisions or you may explain the decision making you want in corporate memos or an employee policy document In short your repeatable decisions may be scattered across a range of sources some automated and some manual with no guarantee of consistency and changing any of them can bea real headache This is where ODM comes in Seeing how decisions are managed The problem of handling a mishmash of decision making pro cesses is precisely what decision management is designed to solve It encompasses the tools and methods you need to gather your decisions together and manage any changes efficiently effectively and safely The decision management process involves three steps 1 Extract the decision making logic from wherever it resides today
32. hough absolutely necessary are just the beginning A decision engine is also an important part of the solution but to use a car analogy most of us wouldn t buy an engine that didn t have a good vehicle around it You might say that ODM attaches a transmission odometer brakes headlights seats and seatbelts to your decision engine Less Reliance on IT Business rules represent the business policies regulations and best practices related to your business These rules have too great an effect on the business for you to keep them locked in systems that only IT personnel can access or read We re not advocating that IT step out of the way and not be involved Given resource constraints and the speed at which change needs to take place however a partnership between business and IT makes sense Most IT departments would like to conserve resources by allowing business users to make routine changes to business rules assuming that those changes are made in a safe environment with the right checks and balances By providing the necessary checks and balances ODM enables business users to assume much of the responsibility for day to day rule changes It s a win win situation signifi cantly reducing IT s workload while enabling business policy changes to be made much more quickly and accurately Intuitive Interface Business people today expect tools to be intuitive partly because everyone is busy but also because consumer elec
33. icrosoft Office prod ucts such as Word and Excel Collaboration tools that enable users to discuss possible changes and get advice Simulation tools for checking out the effect of a proposed change We discuss some of these features in the following sections Navigation search support The Internet has changed us all it s second nature now to look up information in search engines Business users are no different If they can t find the rules and related information they need they won t be able to make the changes required ODM tools provide lots of support for navigating the rules library Using these tools feels as natural as surfing the web at home which is important As soon as users start to feel that things are getting too technical their confidence falls Providing easy to use search features and plug ins for popular business environments such as Microsoft Office goes a long way toward making the procedure less scary Imagine that your U S mail order firm ships a range of books to many locations throughout the world and that management just decided to waive the cost of shipping books domestically Business users will want to surf the rules library looking for rules governing delivery costs When they find the right sec tion they probably want to see whether specific rules already exist for domestic shipments and or nondigital books After the users find the right rules they may want help finding supporting information
34. ightly trivial example to illustrate how business rules work Writing a simple rule Suppose that you want to decide whether to go to the ball game this weekend with your significant other You might write a rule that states the following IF 2 adjacent tickets are available to the game in section 103 104 or 105 for less than 50 per ticket AND IF no relatives are visiting on the day of the game AND IF the low temperature on the day of the game is not less than 40 F THEN buy tickets to the game You may wonder why you d use a computer system to make such a simple decision The answer is simple You can make a decision like this in your head or in a spreadsheet program if you re making it only once a week But if you re making 1 000 decisions a day based on 100 rules or 10 000 decisions based on 1 000 rules you need some high tech help You may have this type of decision logic embedded in your existing applications This logic may help you determine product recommendations in your call center or it may deal with insurance regulations pricing or eligibility Changing a rule Business rules may change often much more often than your applications or processes do If the rules are buried in your applications they re pretty tough to change and making These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited MBER we
35. ime the associated business rules enable you to decide the appropriate response and then act Built in Governance and Change Management ar We know that governance isn t the most exciting topic but it s a crucial part of ODM You ll be using ODM to automate your corporate policies and regulations so you need a clear easy to use way to ensure that proper approvals have been granted for each new or updated rule One key advantage of ODM is that it provides a structured governance model because your rules are stored and man aged in a dedicated system and aren t intertwined into your applications and processes Another important aspect of business rule governance is change management The central repository in ODM is able to provide user friendly change management and version control that differentiates among prior versions of a rule the current version of the rule in production and the proposed new version of the rule that s in the process of going through These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 40 ODM For Dummies IBM Limited Edition approval The change management system can also store work in progress drafts of future proposed versions of the rule for example pricing and bundling rules for an upcoming holiday promotion Centralized Searchable Rules Repository An ODM system should provide a repository t
36. ing and to display test results visually for example These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 7 Ten Characteristics of Best in Class ODM Systems 4 Auditing and Reporting Imagine how nice it would be to be able to trace the life cycle of a decision quickly and easily That s part of what ODM offers a decision warehouse that provides easy access to all that information If you need to look back ten years in time the decision warehouse enables you to go to any information in your ODM deployment and generate the necessary reports You have a history of who wrote and approved each rule as well as a record of all the posted comments about that rule Then at runtime you can easily trace any automated decision to see why it was made The decision warehouse shows you the rules that were in place when the decision was executed and why the decision conformed to the business rules that were in effect at the time Reuse of Rules As you improve business rules over time you create valuable enterprise assets because your rules represent how your busi ness does business As rules become optimized their reuse becomes increasingly valuable Reuse can take place not only across multiple applications and business processes but also across channels The same rule can be called by web applica tions mobile applications and ca
37. ision making criteria written down so they can be automated in real time In this chapter we walk you through the life cycle of rules in ODM Taking a Wider View of Rules Rules that control operational decisions usually relate to parts of the business interaction being executed When an insurance eligibility decision needs to be made in the course of a claims process for example a rule clicks in and the approval or denial is registered into the process Of course sometimes the decision results in an exception that must be handled manually but rules are also good for identify ing those exceptions Sometimes however you need to do things a different way Instead of invoking a rule as part of a particular business transaction execution you may want to trigger it based on some sort of external event Maybe you want to automati cally reassign the stores to which your warehouse ships your inventory based on real time weather patterns or perhaps you want to take some action when a credit card is swiped or a particular section of your website is visited or clicked These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 24 ODM For Dummies IBM Limited Edition ODM systems typically incorporate support for event driven rules as well as the more common transaction driven approach Seeing How Business Rules Work In this section we use a sl
38. ll center applications for example Reuse across applications processes and channels can greatly increase your consistency in business operations and customer service at the same time it reduces the resources you need to develop applications processes and business rules Easy Integration with Other Solutions ODM complements virtually every type of business and tech nology solution but a few solutions integrate especially well with ODM These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 42 ODM For Dummies IBM Limited Edition 1 Business Process Management BPM is the best solu tion for managing processes that take place over time Processes managed by BPM may take anywhere froma few minutes to a few months or longer in some cases ODM on the other hand manages decisions that are made at a specific point in time Although ODM technically has a concept of flow that flow takes place in milliseconds and the end user isn t aware of it By contrast BPM is best at managing flows that take anywhere from minutes to months Working together the two technologies are a natural pair with BPM providing the long running solution and ODM making the specific operational decisions Business analytics is another key capability that works hand in hand with ODM allowing you to base your deci sions both on what you know such as business p
39. mulate and measure decision outcomes pro vides important input on how your business is running and gives you the information you need to improve efficiency and effectiveness Facilitating compliance Compliance officers love ODM When the rules controlling business operations are documented in understandable terms it s much easier to check them against corporate policies and external regulations ODM also enables the compliance officer to generate reports and keep an eye on compliance status without bothering your business users Because rules are nontechnical and easy to understand he or she can search the rules library and check sensitive rules without having to ask for help Improving customer service With ODM your automated systems can provide personalized customer service Your business rules can take into account everything you know about each customer to personalize your service For example you may not want to send an e mail offer to a customer for a product he purchased from you last week Or you may want to offer different banking products to each customer depending on his average account balance number of accounts and credit history Also a great irritation for customers is getting different answers to the same enquiry The consistency delivered by applying ODM to decision making ensures that you ll always give the same response which builds customer confidence and satisfaction Also because ODM managed decisions are
40. n t guilty of lawbreaking applica tions are no different from the suspects in those movies They don t have easily accessible memories of all the transactions that were executed on any given date or of the specific rules that were in place at the time of those transactions Suppose These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 16 ODM For Dummies IBM Limited Edition that a loan was denied on July 1 and three months later you need to provide proof that the loan was rejected based on company policy Can you easily audit the computer system that made the decision to determine the specific quantifiable reason for the rejection and the criteria that were used av With ODM you get a complete easily accessible audit trail that lets you trace your decision history throughout the life time of the application These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 3 Looking under ODM s Hood In This Chapter Viewing the components of an ODM system Making the system user friendly Ensuring security f you ve decided that ODM is for you perhaps as a result of reading Chapter 2 you re going to need to know what goes in an ODM system This chapter pops the hood to give you a look The Anatomy of an ODM Solution Figure 3 1 shows th
41. nal governance or auditability for the rules In this chapter you discover the process for creating rules in ODM and how rules are tested deployed invoked and changed Replicating a Rule Getting started is easy You import your data model or create a new data model for importation if necessary into an ODM system and then replicate one of those 1 000 existing rules These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 30 ODM For Dummies IBM Limited Edition You don t change it yet you merely replicate it in ODM The process doesn t take long because you don t have to write the entire rule yourself the ODM system provides a lot of help Drop down menus list options based on the data model you imported and the actions available at every point in the rule Autocompletion make the process easy and consistency checking alerts you to any potential problem We ve seen businesspeople who ve never been exposed to an ODM tool create a good rule in the first ten minutes Testing the Replicated Rule The next step is testing the replicated rule using the ODM tool s built in testing function As with any other automated function you need to create some test cases for which you already know the answer Testing can be done in a spread sheet that s set up to show you which test cases passed and which if any failed For any failure
42. nding why ODM is more than a rules engine Looking at how business events provide real time inputs Seeing the complementary solutions to ODM A t this point you may think that ODM is a cool busi ness solution but you may wonder if it makes sense to introduce another piece of software into your organization because IT already has too much complexity What we ve found with our clients however is that ODM actually reduces complexity and makes it easier for organizations to adapt to change by providing a balance of freedom and governance In this chapter we look at a few reasons why organizations invest in ODM Management Capabilities The key word here is management ODM implementations can have anywhere from a few hundred rules to 100 000 rules or more The management part of operational decision manage ment enables you to organize track catalog change govern simulate test audit reuse search for collaborate on and report on your business rules and operational decisions Essentially it means that an organized system is in place to These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 38 ODM For Dummies IBM Limited Edition manage the entire life cycle of all the rules in your enterprise whether you re on your first project or your twentieth Notice that we don t mention rule authoring and execution here Those functions alt
43. ne of the greatest obstacles to achieving higher rates of straight through processing was that computer sys tems couldn t make the fine grained decisions that human experts could ODM makes that situation somewhat obsolete As more and more routine decisions can be made without human intervention your straight through processing will increase and so will your profits Hard to find decision criteria It comes as no surprise that decision criteria were traditionally hard coded into applications In a sense that s what applications were for to automate business logic When changing business rules once a year was acceptable practice the situation was fine Today however the pace of business is much faster rolling out a new version of an application is harder and although develop ment has gotten faster and more agile most applications can t be updated on a weekly or even monthly basis If you keep your business rules separate from your appli cations you can have the best of both worlds With ODM applications can be updated on a sustainable timeline and business rules can be updated at the speed of business These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 2 Is ODM Right for You 15 Overworked IT staff Ever since the tech bubble burst in the early 2000s IT resources have been more heavily scrutinized and IT depart
44. od for communicating business poli cies In many instances the outcome intended by the busi ness unit isn t what was coded into the IT applications ODM simplifies rules by describing business policies and regulations in easy to read language which has an important added benefit IT users also can easily read and understand These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 14 ODM For Dummies IBM Limited Edition MBER we amp MBER N g the intent of a rule With as much as they have on their plates these days IT users typically don t have the time to learn to read multiple languages and applications If you want every body to interpret business rules the same way it makes sense to describe those rules in simple language that everybody in the company can read Need for more straight through processing Anything that can be automated effectively of course should be automated We all want to free people to do the things that people do best which means that computers should do what computers do best The benefits that can come from increasing straight through processing by just a few percentage points are enormous For example the improvement from automating 85 percent of eligibility deci sions compared to say 75 percent can mean millions of dol lars of profit and greatly improved customer satisfaction In the past o
45. of countries and their corresponding shipment surcharges Managing rules and events with ODM ODM is the evolution of business rules management The tech nology was designed to simplify the process of creating man aging changing and governing the rules that represent the inner workings of a business Some organizations use ODM to manage several hundred rules others use it to manage thousands or tens of thousands of rules ODM is designed to create and execute virtually any number of rules with high performance ODM can also capture patterns of real time business events such as a single person making withdrawals within a 15 minute period from two bank machines that are 1 000 miles apart analyzing those events and using rules to determine the appropriate action These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 8 wW ODM For Dummies IBM Limited Edition In ODM business rules are written in plain language not in computer code refer to Finding a format for rules earlier in this chapter and businesspeople can make most of the day to day changes to those rules As you see throughout the book the ability to make changes quickly yet safely is central to ODM Although many organiza tions spend a lot of time talking about how to align business and IT ODM is a tangible way to make that alignment real Grouping rules wi
46. p you safe Step 6 Deploy the change After your business users use ODM to find the rules that need to be changed kick some ideas around with colleagues make the changes and validate them against historical data the next step is introducing the changes to your business operations Despite the need for agility in responding to market changes you also have to ensure stability in your operations You don t want just anyone changing your business without proper authorization The ODM software interacts with your security systems to enable you to control the deployment process ensuring that the correct authorizations and approvals are in place and also preserving an audit trail see Chapter 3 Assuming that the changes pass all the checks and balances tests they re ready to be deployed Step 7 Monitor and report on the change At this point you may want to monitor the new decisions and changes to see how they behave in production as opposed to in the simulation environment While reporting isn t neces sary for all rules it s a good way to verify that the changes produced the expected results The best judges of whether a rule change works are the busi ness users who created that change in the first place ODM reporting tools can deliver measurement and performance information in user friendly fashion presenting the informa tion in a way that s easy to understand and digest Reporting also allows you to collect new
47. ractices policies and regulations and on what you can predict Typically you have two ways to create joint operational and analytical solutions one in which the analytics are used at design time and one in which analytics are calcu lated at runtime In the design time method analytics are used to create business rules for use by ODM At the time they re invoked these rules may be anywhere from days to months old The method is good for rules that don t rely on real time information from other systems such as a rule that predicts the occurrence of rare diseases when patients are admitted to a hospital The rule might say If the patient has x symptom and y symptom there is a xx likelihood that he or she has z disease By contrast a rule that requires near real time inputs from other systems would be one that predicts the likeli hood of default on a loan The decision would depend on recent updates such as adverse credit or risk informa tion made available in the past few days or hours Enterprise Service Bus ESB is an integration bus that serves as the core of most systems based on service oriented architecture This integration method provides message routing and transformation among other services This routing and transformation can be pro grammed into the ESB itself but is subject to the same limitations as business rules that are hidden in applica tions It s much more effective to externalize these busi n
48. re written in plain language and others are expressed in spreadsheet like deci sion tables see Chapter 1 but all are in a form that your These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited MBER ww g MBER KO g Chapter 2 Is ODM Right for You 7 employees can understand The ODM tools help them simu late and validate any changes to rules before deploying the changes Businesspeople can safely model govern and enact changes with minimal need to bother IT Any operational change that you make to catch a wave in the market or to tackle a growing threat has to start with your business teams The business analysts are the ones who have their fingers on the pulse of the market detecting any changes and thinking of ways to seize the initiative Capturing the knowledge of your experts for reuse Have you ever had a superstar in your company who s at least a demigod in her field This expert is involved in all the biggest and most important deals because she s done it all before and knows the business like the back of her hand If only you had a department full of clones of that expert you could always give the same response to a customer always make the optimum offer to a buyer and always know the right way to settle a claim with a policyholder Most companies don t work that way however Employees skill levels vary and th
49. recommendations Customer Loyalty Programs You d think that a good loyalty program would have no down side but many consumers are leaving these programs Many of the businesses who run loyalty programs really don t know their customers so they offer low value incentives imper sonal engagements and irrelevant promotions and messages Sometimes they even promote merchandise that customers have already bought and are unlikely to need again You don t have to be one of those businesses ODM can help you ensure that the promotions and messages you send to your customers are relevant so that your loyalty program keeps those customers satisfied and engaged Customs and Gorder Control Countries need to monitor and control the inflow of people and goods across their borders without slowing that move ment to a crawl Business rules can quickly evaluate thou sands of relevant criteria pertaining to security risks and customs declarations ODM systems can prescreen travelers and goods before they reach the border and evaluate border security and customs declarations in near real time ODM also enables rules to be updated easily yet safely so that changes in border regulations can be enacted quickly These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 7 Ten Characteristics of Best in Class ODM Systems In This Chapter Understa
50. s you check the rule to see where it didn t mirror your intent Based on what you find make changes and retest the rule until it passes Deploying the Rule Your next step is deploying the rule to the ODM runtime engine see Chapter 3 a high performance highly scalable environment that can accurately execute thousands of rules per second assuming you have the appropriate IT infrastruc ture in place Calling the Rule The final step of the process is calling the rule from the appli cation or process Now whenever the application needs to invoke this business rule instead of invoking the logic inside the application it invokes the business rule in the external ODM application These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Ry Chapter5 Getting Started with ODM 3 1 Changing the Rule Suppose that this rule pertains to eligibility requirements Two weeks from now your company s policy on eligibility changes meaning that you have to change that business rule Instead of making changes in the application which could take many months you simply make changes to the business rule in the ODM system Even with the necessary governance simulation and testing it s reasonable to think that you could deploy the new rule in one or two weeks You could deploy it even more rapidly if the necess
51. scuss and collaborate on the potential changes When the rules to be changed or created have been identi fied the ODM collaboration tools come to the fore Your users may want to discuss proposed changes with other experts to refine their thinking Collaboration has several important side effects When users consult other experts and take their views into account delivering a high quality result is easier These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 4 The Life Cycle of Rules 2 7 Identifying the last person who changed a rule can be useful because he or she may have helpful information to offer It provides a written record not only of when and by whom the rule was changed but also why it was changed Without in context collaboration communication about changes to a specific rule would take place in voicemails or e mails that wouldn t be maintained in the rule history for future reference Step 4 Write or edit a rule When your business users decide what changes are required and the best ways to make them they can use the ODM author ing environment to write new rules or edit existing ones The rules library and ODM search tools are invaluable for this pur pose the rule author can pull up the current copy of the rule see who changed it last and review any documentation Sometimes instead of creating a new r
52. such as an application business process spreadsheet policy manual or someone s brain 2 Put the decisions in a library so you can search for them to find the ones you want 3 Provide a way for people to view edit model and deploy new changes In short decision management creates order from chaos You can ensure responsible governance by using decision management tools to assure proper decision approval secure the library provide authorization for changes measure deci sion outcomes and create a feedback loop to identify further improvements and refinements What you get back are deci sions that are consistent predictable verifiable and efficient These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 1 What Is Operational Decision Management 5 Putting the operational in ODM Now that you know what decision management can do for your decisions you may be asking about the purpose of the operational part of ODM You may wonder whether that word is redundant added just to make the subject sound more mysterious It isn t as we show you in this section The decisions that run any business are often described as falling into two categories Strategic decisions Strategic decisions are important decisions that affect the future of your business such as whether to start selling your products in China or whe
53. th ODM If you think about one of your processes you can probably spot many decisions that control it If each of these decisions is a rule you could have thousands of rules How will you ever find the one you want One way is through a searchable rules repository Current technology makes it relatively easy to find any rule based on search parameters So even if you don t remember which folder contains a certain rule you can use search features to quickly find the rule you re looking for The decision management answer is to group related rules so that they re easier to find but don t worry if a rule s hard to find you can always use the search function Imagine a library which has sections so that you can quickly find the book you want Your business library might have pricing rules for household goods in one bookcase for example with rules for individual appliances on each shelf The idea is to make the organization intuitive and helpful for your employ ees so they can store the rules in the right place so others can find them later These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 2 Is ODM Right for You In This Chapter Considering the benefits of ODM Seeing how ODM might help your business B efore giving any more attention to ODM you may want to sort out whether it s worth the bother After all
54. ther to source more components locally These deci sions are likely to be made over a long period and take considerable thought and effort Operational decisions Operational decisions by con trast are repeatable decisions made as part of day to day business operations These decisions happen in real time as business interactions are being executed and they control the next step of the business process or deliver the final process outcome Typically you don t have time to think about them and unlike strategic deci sions they re good candidates for automation These operational decisions can have a massive effect on your business performance Because they re often executed many thousands of times a day they can make the difference between success and failure So you need these decisions to be accurate and predictable Managing them properly is essential Enter ODM Managing Decisions with ODM ODM offers more than just a way to automate repeatable deci sions It provides a management system to make sure that the decisions are consistent and correct These decisions are the virtual equivalent of levers and buttons that you can pull or press to change your operational execution These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 6 ODM For Dummies IBM Limited Edition MBER we amp avr Imagine that you run an online f
55. tient doctor and hospital By adding predictive analytics you can look for hidden patterns and rank them in order of likely fraudulence Although no system can detect all possible fraud ODM can automate the process of finding inconsistencies that may indi cate fraud Eligibility Determination Eligibility rules may be complex there may be a lot of them and they may differ across geographic borders but at the end of the day they re just rules ODM provides a tailor made environment that allows business users or IT personnel to update rules frequently and to implement fully governed changes in days or weeks instead of months These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 36 ODM For Dummies IBM Limited Edition Cross Sell Upsell and Product Recommendations The art and science of making good product recommenda tions is still relatively young but businesses are constantly improving their capability to make customized recommenda tions to individual customers Whether the recommendations are made by customer service reps over the phone in an office or online advances in technology and personalization enable you to get recommendations right more often and increase the odds that customers will be interested in those products ODM along with analytics helps you harness information to increase the effectiveness of your product
56. ule from scratch it may be productive to use an existing rule as a starting point If your company is just starting to do business in Austria for example you may require a specific set of rules to govern your operations there but those rules are probably going to look a lot like the ones you currently use in Germany Simply call up the German set of rules and make just those changes that reflect the differences in doing business in Austria Step 5 Simulate and test the rule Because changing the rules that control your decisions has such an effect on operations you need to be sure that your changes are going to work ODM solutions offer several ways to simulate and test your changes including running new rules against historical infor mation to see what happens Although this simulation can never be 100 percent accurate in predicting future perfor mance it should provide some rapid and valuable feedback on the changes allowing the rule editors to refine those changes if they don t behave as planned These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited 28 oDMFor Dummies IBM Limited Edition NING s L STy Ry Legs MBER N g It s extremely important to make sure that the changes you re testing don t get deployed without proper approvals into a live production system ODM provides full governance capa bilities to help kee
57. your best and most experienced employees Ensuring consistency ODM makes operational decisions predictable and repeatable Refining and updating decisions You can model mea sure collaborate on and refine your decisions to keep up with the needs of your business Facilitating compliance ODM provides a clear record of the rules governing business operations enabling greater collaboration and more effective compliance manage ment Decisions are documented in nontechnical lan guage and you can review them at any time making sure that they fit with corporate and regulatory policies Improving customer service ODM makes your customer service not only personalized and high quality but also consistent based on accurate repeatable rules based decisions We discuss these benefits in more detail in the following sections Enabling rapid and agile change Competition is cutthroat Companies must not only try to maintain market share but also push to find new markets and customers If you want to win in this dynamic and fast moving environment you have to be agile enough to stay ahead of the pack It can be hard work for your employees to turn their ideas into reality especially when they have to request changes through the overworked IT department ODM however puts the power of change into your employees hands allowing them to collaborate with IT and bypass cumbersome application development queues Some rules in ODM a
58. ype of regulations you re complying with an easy to use easy to change rule management system can greatly simplify the pro cess especially if you have a complex matrix of regulations to deal with with different regulations in each state or region ODM can also help you speed the reporting process so that many reports can be generated in real or near real time These materials are the copyright of John Wiley amp Sons Inc and any dissemination distribution or unauthorized use is strictly prohibited Chapter 6 Ten ODM Use Cases 35 Dynamic Pricing and Bundling Dynamic pricing and bundling strategies are often the best ways to find the sweet spot that enables you to make the sale and make a profit at the same time The perfect price today may not be the perfect price next week after all Your suppliers may be charging more your competitors may be lowering their prices or your demand may be changing Coming up with a pricing policy that keeps pace with a con stantly shifting market is difficult but so is continuously updating your IT systems to reflect those changes ODM pro vides a perfect vehicle for maintaining the rules that dictate your dynamic pricing and bundling Fraud Detection MBER we g Business rules can easily apply hundreds of validation criteria to reduce the chances of fraud In a medical claim for exam ple you can verify whether a certain procedure is valid for the specific combination of pa

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