What's Decision Management got to do with Business Process Management?
cheryl wilson 270003VHSH firstname.lastname@example.org | | Tags:  business-events process process-improvement business-rules optimization management bpm decision-management business business-analytics brms operational-decision-maki... decision-automation
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There’s some confusion surrounding the roles of business rule management, business events processing and business analytics, especially when it comes to business process management. These decision management technologies can be used individually or in combination to accelerate process improvement; each bringing a set of unique capabilities to the table. For this post, we’ll attempt to clarify their special roles in making processes more responsive, more intelligent and more automated.
Let’s start with a business scenario.
A healthcare insurance company has made a significant investment in streamlining its claims processing and adjudication system, anticipating improved employee productivity through re-designed processes and automated orchestration using BPM. After a year of using the BPM-orchestrated process, the company has significantly reduced the average time to process a claim and has increased its provider network (and the corresponding number of claims) without additional headcount in its claim processing division – great news.
Six months later, an auditing team uncovers a previously undetected multimillion dollar billing fraud scheme; they also discover that this fraud is increasing in frequency. This bad news is a result of the following problems with the claims processing system:
This is a decision management problem.
"Define Decision Management, again."
Decision management is a growing practice of combining software and expertise to automate and improve decision-making within critical business systems. It involves both being able to make the best possible decision at the current moment based on data and situational context, as well as being able to use data to discover insights that can be used to continually improve and automate decisions over time. Examples of decision management applications include: product and promotional offers, case and customer prioritizations, and fraud determinations.
These decisions may be fully automated, for example, through an online application or a self-service point-of-sale system, or they may be used to provide decision support to people, for example, through a customer relationship management (CRM) system used at a call center, branch or store location, or in the back office.
Three primary technology areas fit within the Decision Management approach as shown in the following table. While these three technologies areas are highly complementary, they can be used separately or together as part of a decision management solution. Each area brings a different focus and strength to automating and improving operational decisions.
As they relate to process improvement, the technologies of business rules, events and analytics have key roles to play. These technologies can be used to streamline process design and execution, enable more responsive actions within processes, as well as to enforce consistency across different processes that are subject to common business policies and/or regulatory requirements.
"Explain the differences between Business Rules, Events and Analytics."
Business rules and business events provide key operational capabilities for automating and managing decisions. While they have proven their value individually, these technologies are highly complementary, and both focus on enabling intelligent and responsive decision automation.
By using these two technologies together, organizations can flexibly create solutions that can detect and react to defined data patterns as they occur and provide the appropriate decision response based on a variety of factors, including an organization’s business policies and best practices or regulatory requirements.
For more information about how business rules and events can improve the timing and quality of operational decision-making, read the white paper: Working Smarter Through Intelligent, Responsive Decision Automation
Business analytics provide key analytical capabilities that bring additional insight and oversight to improve complex decision-making. The types of analytics are as follows:
In a nutshell, here are the key distinctions between business rules, events, analytics and process management:
To learn more about using business analytics together with BPM for better business results, read the white paper: Using Business Process Management and Business Analytics Together for Smarter Work.
"What's the advantage of having Rules and Analytics together?"
Integrating a BRMS with predictive analytics and advanced reporting technologies allows for predictive models to be used as part of a rule-based, automated decision. This improves decisions related to areas such as risk, fraud and propensity-to-buy. Predictive analytics help uncover changes to consumer behavior or market dynamics, which is essential in determining how an organization should be running its business.
Predictive analytics don’t, however, ensure that operational systems behave optimally to meet the organization’s requirements. This is where business rules come in, providing a different but complementary set of capabilities. The following table compares and contrasts business rules and predictive analytics.
Another way of improving the intelligence of rule-based decision automation is to combine the execution audit trail from the BRMS with data from other applications and processes. By aggregating data and making it available as highly meaningful dashboards and reports, organizations can more easily determine business performance, trends and potential problems. This information enables subject matter experts within an organization to determine where business rules may need to be refined, or to recommend where further analysis is required in order to improve rules.
"Finally, how does Decision Management improve Process Management?"
The decisions that matter the most to business processes are operational decisions such as those that determine eligibility, manage risk or detect customer opportunities. By automating and improving these opportunity- and risk-based decisions – especially the higher volume ones that change frequently and need to be made quickly or through an automated channel – you can significantly and continuously improve process outcomes, such as cross-sell/upsell acceptance rates, straight-through processing or first call resolutions.
BPM is used to define and orchestrate the various tasks and services that comprise the end-to-end business process, whereas the BRMS manages and executes automated decisions at specific points in the process. In most cases, BRMS is exposed to BPM through web services that are invoked by the process to make a decision that has direct influence on how the business operates. BRMS is not just a technology to do simple routing rules inside a business process, but is instead used to automate complex, highly-variable decisions that take place at different points in a process or across different processes within an organization.
A central focus of decision management is to improve the alignment between business requirements and IT systems, and to keep this alignment flexible and continuous to adapt to changing business needs. This in turn enables business agility, and allows processes to be continually improved over time.
By combining BPM with decision management capabilities, you can:
The need for improved processes requires the ability to easily and quickly change the decisions that drive them – decisions that can help processes maximize efficiency, make employees more productive, and improve interactions with customers, partners or suppliers. Rules, events and analytics bring critical capabilities for making processes more responsive, more intelligent and more automated, all of which can bring competitive advantage.
We hope this helped to clear up any lingering or nascent confusion around these complementary technologies. If not, let us know!