More intelligent processes - choices and results
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In processes, as in life, the choices you make matter. A keynote presentation to IBM's Impact comes to you event in Paris 2010.
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More intelligent processes - choices and results
- 1. More Intelligent Processes Choices and Results James Taylor, CEO Decision Management Solutions
- 2. In processes as in life, the choices you make affect your results.
- 3. What price, terms and conditions should we offer this customer? Should we decline or approve this application?
- 4. These choices are your strongest points of leverage for improving your process results.
- 5. In day-to-day operations, choices are made in enormous numbers, adding up to a big impact on your bottom line.
- 6. Another word for “choices” is “decisions.” My topic and area of expertise is the discipline called:“Decision Management.”
- 7. Decision Management principles Explicitly identify the decisions in your operational processes Manage these decisions independently of your processes using business rules and analytics
- 8. Example:Underwriting a vessel Gather policy application data Validate application Eliminate unqualified applicants Conduct physical inspection Underwrite policy Complete new business processing
- 9. Example:Underwriting a vessel Gather policy application data Validate application Eliminate unqualified applicants Conduct physical inspection Underwrite policy Complete new business processing
- 10. Example:Underwriting a vessel Gather policy application data Validate application Decision: Is this application complete and correct? Eliminate unqualified applicants Conduct physical inspection Underwrite policy Complete new business processing
- 11. Example:Underwriting a vessel Gather policy application data Validate application Decision: Is this the type of vessel we insure? Eliminate unqualified applicants Conduct physical inspection Decision: Is this application a high fraud risk? Underwrite policy Complete new business processing
- 12. Example:Underwriting a vessel Gather policy application data Validate application Eliminate unqualified applicants Conduct physical inspection Underwrite policy Complete new business processing
- 13. Example:Underwriting a vessel Gather policy application data Validate application Decision: How risky? Eliminate unqualified applicants Decision: What coverage? Conduct physical inspection Decision: What price? Underwrite policy Decision: What exclusions? Complete new business processing
- 14. Example:Underwriting a vessel Gather policy application data Validate application Eliminate unqualified applicants Conduct physical inspection Underwrite policy Complete new business processing
- 16. Simpler processes that are much easier to manage
- 17. Higher employee productivity and resource utilization
- 18. Analytic insights for making better decisions
- 20. Before Decision Management Promotional decision logic hardwired into systems for different channels. No visibility or access for marketing experts. Making changes is slow and costly. Web Call center Email Mobile
- 21. After Decision Management Promotional rules shared across all channels. Marketing experts have visibility and control. Making changes is quick and inexpensive. Web Call center Decision logic Email Mobile
- 22. Coordination of decisions European cosmetics company Cross-channel coordination ensures that all relevant offers, including loyalty programs, are combined at the point of sale, with consistent pricing rules applied.
- 23. Simpler processes, more productive employees US mobile telephone company Making the right decision at the start of the call turns long, costly processes into straightforward, customer-pleasing interactions.
- 24. Example: Process simplification BEFORE AFTER Decision: What type of applicant is this?
- 25. Better decisions from analytic insights French international retailer Unifying product data across its wide range of retail operations was the first step in obtaining uniquely valuable analytic insights into customer purchasing behavior.
- 26. HighIncome High income,low-moderate education * Moderate-high educationlow-moderate income * Low-moderateincome, young * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Education * * High * * * * * * * * * Age * * * * * * * * Moderate education,low income, middle-aged * * High Low education,low income Combined power of rules and analytics Rules address a wide range of things that might happen Analytics probe deeper to understand why and when they happen
- 27. Continuous decision improvement US state tax authority Tax returns are many and auditors are few. Using analytics to decide “Who should we audit next?” focuses resources where they are likely to have the largest financial impact.
- 35. “ Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake. ” Peter Drucker
Notas del editor
- As Craig and Stéphane have very ably communicated this morning, the choices you make about how you implement business process management affect the results you achieve.Allow me to add another message to this: You also need to be concerned with the choices that are made inside your business processes, as these will also greatly affect your results.What do I mean when I say “choices”?
- Every process is full of them.[click]In some cases, it’s a straightforward Yes-No choice.[click] In other cases, it’s a choice involving the selection and combination of multiple possibilities.
- So there are many pointsthroughout business processes where a choice has to be made to determine what is going to happen next. And, just as the choices we human beings make affect the results we get, so the choices made inside business processes affect the results produced by that process. In fact, these choices are strong points of leverage for improving the results of your business processes. Why? …
- …Because these choices aren’t just made once, but in enormous numbers. In aggregate, the make a big impact on the bottom line.
- So far I’ve been using the word “choices” because I wanted us to start out by thinking about what’s happening at these crucial points of business processes, not about another technology discipline.But, of course, another word for “choices” is “decisions.” And I’m going to be talking to you this morning about a discipline called “Decision Management.”
- These are, in my view, the two important principles in Decision Management
- Why manage decisions independently of process? What’s the advantage? There are several…
- Faster, easier, independent changes to decision logic Coordination of decisions across channels and products Vodafone Spain relies heavily on promotions to drive growth and loyalty management programs to reduce churn. With promotions hard-coded into multiple systems, it was hard and expensive to keep promotions consistent and up to date. Vodafone Spain extracted critical promotion decisions and implemented a business rules management system so that marketing, who understood the segmentation, could manage the promotion rules themselves. With real-time monitoring of promotion performance, these same teams can make immediate adjustments to ensure continuous differentiation.
- Faster, easier, independent changes to decision logic Coordination of decisions across channels and products Higher employee productivity and resource utilization a leading French retailer of cosmetics, faced the challenge of multiple channels and overlapping marketing and loyalty offers. A customer might be eligible for a loyalty offer, have downloaded a web coupon and heard a “discount word” on the radio. This made it hard for retail staff to ensure the price was handled correctly at the point of sale. In addition, they needed a better way to get loyalty offers to the customer. Yves Rocher replaced their POS devices with Linux-based terminals and developed a rules-based system that allowed all the pricing rules to be defined by the marketing department and then downloaded into the terminals. All relevant offers are correctly combined at the point of sale. This system also takes the customer’s loyalty card and applies loyalty offers. Using purchases and loyalty history, it prints an incentive offer designed to bring the customer back to the store on the card itself—the cards are re-printable so the customer sees the offer that will be made when they return.
- Simpler processes that are much easier to manage Higher employee productivity and resource utilization International travel wizardBillingTech support and troubleshooting
- Faster, easier, independent changes to decision logic Coordination of decisions across channels and products Harness the power of analytics to make better decisionsAllow continuous improvement of decisions and results Churn minimzedBrand loyalty growsRepeat customA leading European retailer had a vision of delivering compelling promotional offers based on each consumer’s unique profile that was integrated with existing loyalty programs. As a first step, they brought all data together across retail formats and across channels to reveal customer purchasing patterns. By tracking transaction history, the company can obtain analytic insights on not only which products customers buy, but which promotions they are most likely to respond to, who its most profitable customers are, what products they buy now, and what products they would be willing to buy if the incentive was right
- Faster, easier, independent changes to decision logic Higher employee productivity and resource utilizationHarness the power of analytics to make better decisionsAllow continuous improvement of decisions and results
- Why manage decisions independently of process? What’s the advantage? There are several…
- Why manage decisions independently of process? What’s the advantage? There are several…