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Business Rules Management Systems Managing Complex Decisions in your Organisation - Simply. Richard J.D. Collard Senior Industry Lead WW Business Development SME - Transactional Fraud, AML & Risk richard.collard@uk.ibm.com +44 7917 612896. - PowerPoint PPT Presentation
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Business Rules Management SystemsManaging Complex Decisions in your Organisation - Simply
Richard J.D. CollardSenior Industry LeadWW Business DevelopmentSME - Transactional Fraud, AML & Riskrichard.collard@uk.ibm.com+44 7917 612896
Business Rules Management System - What Is It????!!!!!!
• BRMS - more than a Rules Engine• Enabling & Complementary Component & Technology• In SOA, BPM or Stand-alone• Empowers Business-users• Provides Ability to make Complex Decisions
– Consistently, Simply and Quickly • Externalises & Makes Business Logic Available to
Business-users• Hard-coded Business Logic becomes redundant • Benefits for IT and Lines of Business
Validation
Pricing
EligibilityValidation Rules
Eligibility Rules
Pricing Rules
Why use Business Rules with BPM?
Business Rules
• Automate key decisions in Business Processes by Externalising Business Logic
• Simplify the Business Process structure
• Are invoked from the Business Process as standards-based Services
• Are quicker to modify than the Business Process orchestration
Engage and Support Separate Life Cycles
BPM and BRMS do not typically share the same velocity of change. Business rules typically require more frequent and more rapid
change cycles than a process.
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BPM Alone BPM + BRMSDecision Support
Business Decision Making
Human Automated / Assisted
Decision Maintenance
Process re-engineering Rules updates
Decision change cycle
Months Days
Decision Ownership IT IT + Business
Decision Sharing Cut and Paste Central Repository / TDS
Scalability < 50 Rules (when rules enable)
Thousands
Supported decisions Routing •Business Decisions•Task allocation•Dynamic routing
Combining BPM & BRMS
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Issues
• Rules are hidden in code or isolated within the organization
• Changes are hard to track and maintain over time
• Rules used by systems have to be programmed and require IT resources
• Duplication and multiple versions of the same rules
• Lack of auditability, traceability
• Decision changes cannot be easily tested or simulated
• Rules are hidden in code or isolated within the organization
• Changes are hard to track and maintain over time
• Rules used by systems have to be programmed and require IT resources
• Duplication and multiple versions of the same rules
• Lack of auditability, traceability
• Decision changes cannot be easily tested or simulated
Business rules are crucial to operational systems, and they change over time. The
traditional (ad hoc) approach of dealing with rule changes leads to…
Traditional Approach for Managing Decision Change
Reduced organizational agility Reduced employee productivity Increased load on IT
Where Business Rules Typically Exist
Applications
ProcessesPeople
Documents
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Where Business Rules Typically Exist
Applications
ProcessesPeople
Documents
Business Rule Management System
Rules are Defined, Analyzed
and MaintainedUser Tools
Rules are Stored and
Shared
Rule Repository
Rules are Deployed, Executed
and MonitoredRule Server
Manage and Automate Decision Logic with BRMS Eliminate decision silos Make decision logic
accessible to Business and IT Implement fine-grained,
context-specific logic
Business Rules Made Simple Customizable vocabulary specific to
your organization, industry, application etc….
Supports language localization Integrates with external data
sources e.g. list of countries Drop-down lists for customized
domain data Templates facilitate new rule
creation
Flexible Rule Management for Business Users
Rule Solutions for Office
Text-based (point-and-click + guided
editing)
Graphical representations
Technical Environment Business Environment
Production Environment
Deployrules
Deployrules
Web-based console to monitor & control rule execution
Rule Execution ServerSingle node or cluster(J2SE & J2EE compliant)
SystemAdministrator
Decision Validation ServiceTesting & Simulation framework
Rule Team ServerWeb-based Application for Rule Maintenance
RuleManager
Rule StudioEclipse-based Rule IDERule Service design & development
RuleDeveloper
Rule
Repository
IBM ILOG JRules BRMS Product Components
Benefits of a BRMS Approach
• Reduce time and resources required to deploy changes
• Author and maintain rules using non-technical language
• Express decision logic with increased precision
• Make decisions based on specific context
• Increase decision automation
• Improve visibility and understanding of how decisions control systems
Lower maintenance costs; respond quickly to change
Business experts can manage and validate decision logic
Increase profitability of product, pricing and promotional offerings
Customize decisions when possible, standardize if needed
Improve process efficiency
Ensure compliance; enable sharing/re-use of decision logic
What does it enable? What is the value?
BRMS
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Precise, Automated Process Decisions with WebSphere ILOG BRMS
Horizontal: Best/appropriate price, Cross-sell/ up-sell recommendations, Loyalty promotions, Exception identification, Risk/fraud assessment, Straight-through processing approvals
Insurance Banking Healthcare Government Energy/Util./Telco
• Claim• Validation• STP approval• Exception routing
• Policy/Underwriting• Eligibility • Risk• Pricing
• Annuity• Recommendation• Commissioning• Payout calc.
• Loan• Eligibility• Risk• Pricing
• Account• Cross-sell • Fraud/Alerts
• Credit Card• Mktg Offers• Fraud• Credit limit
• Patient Care• Drug interaction
risk warnings• Follow-up alerts
• Member• Services
recommendation• Eligibility• Benefit
calculation• Provider
• Patient eligibility for services
• Benefits• Eligibility• Calculations
• Tax Payer• Classification• Audit flagging
• Citizen• Program(s)
recommendation
• Land/Permits• Conveyance
processing• Contract
compliance• Service Mgmt
• Service prioritization
• SLA alerts• Maintenance
alerts• Order
configuration
Selection of clearing channels –
Minimizing C&S costs
• Consistent selection of least-cost channel (by consolidating all routing decisions in a centralized decision service)
• Rapid adaptation to price changes (e.g. new pricing scheme of channels, “on us” settlement channel after acquisition)
Semantic validation of messages
• Increase straight-through processing• Separate valid messages that can be processed in STP from
messages that need exception handling
Use case Customer Description
ILOG BRMS customers in payments
Pricing
• JRules-based pricing engine for all payments products• Differentiated pricing and complex bundle pricing• Reduction of time-to-market for pricing policies from 6
months to 10 days• ING Belgium considers its business as unique and cannot
manage its pricing policies using a package
Validation of account numbers
• Increase straight-through processing (country-specific validation rules)
• Integration with EPP-based payments hub• Other use cases being analyzed: customer-specific
conditions for corporates
Use case Customer Description
ILOG BRMS customers in payments
Anti-Money Laundering Top-10 US Bank
• Rule service performing country-specific AML checks
• Integration with EPP-based payments hub• Standard-based (ISO20022) service definition
Card fraud detection
• Fraud patterns captured as business rules to react quickly to new fraudulent behaviors
Online fraud detection
Global e-Auction • Fraud patterns captured as business rules to react
quickly to new fraudulent behaviors
Merchant-level fraud detection
• Merchant-level fraud detection provided as a value-added service to banks
• Business rules as a way for TSYS to exploit value by extracting knowledge from huge volume of card transactions
Use case Customer Description
ILOG BRMS customers in card and online payments
Message validation, calculation of merchant fees & internal routing
• 150M transactions processed in a 8 hour time window• Shorter time-to-market for new products• Specific rules for various regions
Clearing and Settlement System
• Expose business policies for validation, interchange and pricing
• Speed of change; defect analysis, handling late change• Flexibility; ability to re-order rules or change flows
quickly• Quicker learning curve for new starters
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Using BPM and BRMS Together
Chose the claims process as the best target for Nordic-level unification and automation
Combination of WebSphere Process Server and WebSphere ILOG JRules was based on the positive results from a test project in Finland:
Decreased the cost of claims incurredIncreased of customer satisfaction through faster turnaroundSubstantial savings of employee work
Uses of BRMS in this solution: Claims submission validation Decision automation for liability and compensation Payment calculation Straight-through processing determination Manage and automate decision variation across countries,
processes and systems Accelerate implementation of decision changes
Case Study: European P&C Insurance Company
Société Générale – Customer Risk Management
• SG : Major French retail bank, 9M+ customers, 2500 Branches, 13,000 branch advisors
• Branch Advisors spend 1,5 hr each day to understand their customer’s account situation and make decisions on what to do next
• They apply their own knowledge to decide which customer situation to fix first and how to fix it
• There is a fairly high turnover of staff, so there is little control on this knowledge
• The Bank’s Management needs to understand how many and which situations are solved, handled, and which ones may become critical
• Management has identified there is a possibility to reduce risk, whilst improving the advisors’ productivity and support
Project High-level Specification
• Identify risky situations on customer groups• A risky situation is
– An non compliant situation that requires an action from the bank– It is generated, modified, closed upon reception of an event– It applies to an individual or to a service– It stays open until resolution
• Risky situations are presented to branch advisors on a daily basis to help them– analyze the level of customer risk– assess which decisions should be taken.
• Assist Branch Advisors by recommending a course of action– Explanations– Integrated rule based pre built customer letters, « click and send » – Integrated interview management– Notification of actions to other applications
• Build an history of actions taken by the advisor for each customer• Provide a synthetic presentation of all open situations, by level of urgency/priority• Provide a synthetic view of open situations at the Branch level
Business case & targeted ROI
• “High risk customer profile” process:
• Benefits:– Manage 200 risk management profiles in 7 categories– Allow business users to manage & understand the risk profiles– Gain 1 hour/day/advisor
Get High Risk ProfilesWhen logging in
4,000,000 events on9,000,000 accounts4,000,000 events on9,000,000 accounts
NightNight
400,000 High Risk profiles about 5% of customers400,000 High Risk profiles about 5% of customers
Advisor’s working dayAdvisor’s working day
Get explanationsAnd actions plan
13,000 advisors2,500 branches13,000 advisors2,500 branches
50,000 letters per day
50,000 letters per day
Get list of lettersFor a customer
Update actions plan
Société Générale – Risk Management
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Situation
Long time spent each day by branch officers to assess customer and account situations requiring actions
Complexity of cases and related actions Inconsistent operations leading to unmanaged situations
Goals
Solution
Service Oriented Architecture sharing 400 business rules 7 rule services ( Batch and Transaction processing programs) detecting and managing
400,000 high risk customer cases Determine status and priority of the risky situations Recommend and explain client actions to branch financial advisors Generate personalized mails as actions ( 100,000 to 200,000 mails per day)
Benefits
Manage 200 risk management profiles in 7 categories Allow business users to manage and understand the risk profiles Gain 1 hr/day/advisor (13,000 advisors in 2,500 branches)
Improve risk detection and management Increase branch financial advisor efficiency managing risk profiles Automate action recommendations
Improve risk detection and management Increase branch financial advisor efficiency managing risk profiles Automate action recommendations
BNP Paribas - Project OPRA Business Requirements
• Offer and Product Repository Applications• BNPP wanted to improve its understanding and management
of the multiple banking offers that were being made to customers
• A - Flexible solution to allow definition of banking offers with• B - Ability to understand relationship between offers and• C - Determine conditions for appropriate, ethical sale• Requirement to allow Client Advisors to look into the product
catalogue and filter by customer eligibility and profile with differential pricing tariffs applied
• Need to distribute offers to operational systems – mainframe and distributed
BNP Paribas - Project OPRA Implementation
• OPRA is based on IBM InfoSphere MDM Server for Product Information Management and……..
• …….IBM WebSphere ILOG JRules / BRMS• InfoSphere MDM Server provides offer authoring and relationship
management…….• ….thereby ensuring offer package compatibility, base tariff
enforcement and conditional eligibility• ILOG BRMS provides the capability for BNPP to model eligibility
and pricing rules• The SOLUTION allows BNPP to build / maintain a catalogue of of
product / offer packages while managing collaborative processes associated with implementation / deployment of Business Rules
BNP Paribas - Project OPRA Benefits
• OPRA is based on IBM InfoSphere MDM Server for Product Information Management and……..
• …….IBM WebSphere ILOG JRules / BRMS• Together providing:• Improved Time-To-Market for new products and services• Ability for non-technical users to generate and manage offers• Accurate and complete view of offer / product information• Multi-channel servicing initiatives• Personalised offerings• Evolution of offers according to market dynamics• Reduced likelihood of mis-selling
03/02/09 26
Automating decisions along a payments flow
RoutingProduct
configurationValidation
Fee calculation
• Validation & auto-repair
• Validation of account numbers (country-specific rules)
• Determine product and configure payment attributes based on instructions and customer profile
• Least-cost routing in CSM selection
• Customer preferences
• CSM operational constraints, e.g. type of payments supported, cutoff times …
• Real-time charge calculation
• Monthly discount calculation
• Payment bundles• Agreement and customer-specific conditions
SLA-based exception mgt
Approval rules
SEPA DD
• Customer-specific and SLA-based limits
• Determine what to do next upon an exception
• Automate SLA conditions
• Mandate management
Accounting & reconciliation
• Example: How to reverse a cancelled payment that is part of a batch
Customer Success – Simplifying the Process
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Customer Process Pains BPM - Decision Service
Results
Loan Origination
• Highly manual process
• Delays arose as applications were routed through approvals via interoffice mail
• Lengthy approval turnaround time
• WebSphere ILOG BRMS to handle a variety of business logic for a IBM BPM-orchestrated process:
- Routing - Compliance - Scoring & rating
• Cost savings – $1.5M over 5 years
• 15 days to 1 approval time reduction
• Improved staff focus and satisfaction
Social benefits eligibility
• Fragmented systems with inconsistent data meant decisions to grant benefits were not consistent from one center to another
• Several departments
but no clear “interface” for the citizens
• IBM BPM to manage the application process end-to-end
• ILOG JRules to determine the eligibility of applicants to social benefits
• Better service delivered to the citizens: fewer interactions required, clear and fair application process
• Consistency of eligibility decisions: same criteria and rules applied across all agencies and centers
• Transparency and auditability: eligibility rules can be reviewed and validated by non-technical users
Capital Markets
Insurance T & T etc..Banking
e-Gov
IBM ILOG Customers.........................
The Value of Simplification
Five Ways to Fast ROI With BRMS
Cost reduction1. Reduced application
development and maintenance2. improve payments margins3. Improved regulatory
compliance
Revenue generation4. Provide value-added services5. Faster time-to-market
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Using the Right Tools for Different Types of RulesIntegration with other Components & Services
Rules Types Rule ExamplesWhere are
Rules Defined?
Right Tool
Business Event Stream Pattern-Match
Event pattern: person on the CIA watch list, purchases chemicals , purchases a one-way plane ticket, uses cash.
Event-stream specific
Business Events(CEP)
Process Flow / Task Assignment
Assign loan review task to the Underwriter with the lowest number of tasks-in-queue.
Process specific BPM
Process Monitoring (SLAs)
Trigger notification / process when “Response Time” KPI for Final Approval task exceeds maximum threshold value.
Process specific BPM-BAM
Variable, Complex Business Decisions
and Policies
Best Offer (pricing and promotions), Eligibility Determination, Risk Assessment and Mitigation, Straight-through Processing Determination
Decoupled from
applicationsBRMS
Business Event Processing/BRMS Combined Use Case - Retail
Promotional Offers• Use BEP to detect opportunity
– Customer with regular history of book purchases visits website after 3 months absence
– Customer browses to 2 successive book categories with no shopping cart activity Raise opportunity alert
• Use BRMS to determine/decide whether to offer a targeted special, and if so, for what– Apply customer information against promotions rule-set– Determine best offer (e.g., no shipping charges for any
purchases in the next 1 hour)
Anti-Money Laundering• Use BEP to detect situation at risk
– Successive near net-zero cash deposits/transfers– Absence of previous history of this pattern, or special
circumstances • Use BRMS to determine if a genuine violation, no problem, or a
“watch”– Evaluate customer history and events data against fraud score
and regulatory policies– Evaluate overriding factors– If not an actual violation, determine likelihood that activity is
suspicious set watch or investigate status
Business Processing & BRMS Combined Use Case - AML
BRMS for Legacy Applications
Rules are generated as
COBOL copybook for execution in
IMS, CICS, batch
Business Rule Management System
Rules are Defined, Analyzed
and MaintainedUser Tools
Rules are Stored and
Shared
Rule Repository
New in v7.0• Simplified creation of Business Object Model for
COBOL applications• Enhanced ability to import, verbalize and
manage the business model for the COBOL project
• Additional JRules rule authoring capabilities for generation of enhanced COBOL code
• Increased agility for management of automated business decisions in COBOL applications
• Improved visibility of decision logic• Enables progressive application modernization strategy
• Increased agility for management of automated business decisions in COBOL applications
• Improved visibility of decision logic• Enables progressive application modernization strategy
Business Initiative Presentation to Agricorp
DEPLOY
JRules and Lombardi Teamworks: Standards-based Integration
Windows/Unix/Linux Server
Communication Interface / ESB
Rule Execution
Server
Interface Flexibility: Web Services Messaging Java APIs
Teamworks Process
Map to JRules Rule Services via standard Teamworks Integration Services
Rule
Management
User Tools
Rule Repository
FileNet BPM/ECM & WebSphere ILOG BRMS
Windows/Unix/Linux Server or Mainframe
Web Services / APIsMessaging Queues
FileNet Business Process
Rule Studio
Rule Execution
Server
Business Rule
Management
Rule Repository
Multi Platform Support:
• Java/J2EE• z/OS•.NET
Integration Flexibility
• Web Services• Messaging• Java/.NET APIs
Rule Team Server
Deploy
FileNet Content Management
ContentRepository
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