Business Rules at Play
Telecom, Banking, Insurance: coping with change while making
better business decisions faster
Emmanuel Schweitzer
Technical Sales Specialist, schweitz@fr.ibm.com
Version 2.0 EN
Agenda
• ILOG and Business Rules in a Nutshell
– WebSphere ILOG Product Portofilo
– What are Business Rule and why are they useful for you?
• Telecommunications: Loyalty at SFR
– An agile point-based rewards system
• Retail Banking: Risk Management
– Streamlining behavioural risk management at a large retail bank
• Insurance: Commissioning
– Streamlining commission payments at several insurances
• Conclusion
Introduction
ILOG AND BUSINESS RULES
IN A NUTSHELL
How can clients embrace
change, empower people
and drive greater profits?
How can clients make
business processes
more dynamic yet
manageable?
4
How can clients increase
productivity and allocate
resources more
efficiently?
How do clients,
respond to challenges
in today’s business
climate?
WebSphere ILOG Portfolio
Powerful Business Rule
Management System
Advanced Suite of
Optimization Tools
Adapt and respond
dynamically,
automating processbased decisions with
business rule
management
Produce the best possible
action plans & schedules,
enhancing abilities to
explore alternatives,
understand trade-offs, and
respond to changes in
business operations
WebSphere ILOG
Efficient Supply
Chain Management
Innovative
Visualization Tools
Optimize supply
chains, design &
planning tools for
improved efficiency
and productivity
Transform insight into
action, enhancing
collaboration for smarter
role-based business
decisions
Business change drives IT agility
Decisions used in operations = “business rules”
Where Business Rules Exist
Issues
• Rules are hidden in code or isolated
within the organization
• Changes are hard to track and
maintain over time
Documents
Applications
• Rules used by systems have to be
programmed and require IT resources
• Duplication and multiple versions of
the same rules
• Lack of auditability, traceability
People
Processes
• Decision changes cannot be easily
tested or simulated
The Smarter Approach: Facilitating Change with BRMS
Where Business Rules Exist
Business Rule Management System
User Tools
Rules are
Defined,
Maintained
and
Simulated
Documents
Applications
Rules are
Managed
and Stored
Rule Repository
People
Processes
Rule Server
Rules are
Deployed,
Executed
and
Monitored
Rule and Software Development Lifecycles
Functional enhancements
Platform upgrade
Software Development Lifecycle
Design
Construct
Test
> 4-6 months
Design
Construct
Test
Deploy
Manage and Monitor
Deploy
Validate
Author
Analyze
< 1 month
Deploy
Deploy
Validate
Author
Analyze
Deploy
Validate
Author
Analyze
Validate
Author
Analyze
Rule Management Lifecycle
Change
Request
8
Change
Request
Deploy
Change
Request
Telecommunications
LOYALTY AT SFR
BRMS Success at SFR – Loyalty Management
 56% owned by Vivendi, 44% by Vodafone
 18 million clients with 34% market share and 8.6 billion revenue (2006)
 Retention and churn management a major goal for SFR in a mature market
ARPU
Acquisition
Client Revenue
Client lifetime
Prospect
Prospect
Retention
Service activation
Situation


Service deactivation
Aging legacy Campaign management and loyalty solution
Strong Quality of Service constraints
 8 million loyalty accounts, contribution to Mobile Renewal program
 Multi-channel approach required
Time
BRMS Success at SFR – Loyalty Management
Goals

Create a robust IT system to support SFR loyalty program’s growth objectives

Revamp the SFR point system engine enabling it to meet new business requirements

Support for new programs for earning and burning points
 Reward clients based on their value: €  points
 Reward clients based on their loyalty: years  points
 Promote new usage types
– Burn of points for trials of new services
– Burn of points for terminal renewal
 Segment high value customers and push specific loyalty events and campaigns
– GCR Status segmentation
– Statutory advantages
– Targeted marketing and communication campaigns
 Need for a robust and lasting solution
– 8 million accounts with a target of 20
– Up to 15.000 terminal renewals per day
– Multi-channel (Self-care, Customer Service, Distributors)
 New usage
– New populations (prepaid, corporate)
– Aggregation at multiple levels (group, client, line)
– New point accrual means
BRMS Success at SFR – Loyalty Management
Solution

« Garantie Carré Rouge » loyalty program implemented

BRMS solution based on 80 rules developed Cap Gemini & ILOG

ILOG consulting for requirements gathering, modeling, architecture & performance audits
 Vs. packaged solution
–  Turnkey, in use with other clients, matter expertise as editor and integrator…
–  Imposed roadmap, proprietary data model, no source code/black box, cost and delay
 9 month till delivery, about 1 year till production use
– Software editor present at all phases of the project
– Use of third party for integration
 Attention points
– Performance tests and tuning
– Change management for the authoring/maintenance of the rule base and associated parameters
Point Engine
GUI Module
Purging Module
Reporting Module
Rule Engine
Ginger
GCCP
ORIAN
GCR
Batch Module
SAP
DWH
CRM
TIMOR
Cegedim
Business Services Module
V&S
Mail Order
WAP/WEB
BRMS Success at SFR – Loyalty Management
Benefits

Flexibility of BRMS approach

Solution 30% cheaper than package

Development and deployment time (- 2/5 months) quicker than package
Si
Il y a un événement de facturation sur la ligne
Alors
Créditer la ligne de 10 points par euro de type Standard de durée 36 mois
Definitions
set ‘billing event’ to a billing event in the events of the line
When
the type of ‘billing event’ is in { « voice », « SMS », « MMS » }
Then
Credit the line with ( 10 * the price of ‘billing event’ ) points of type Standard
and duration 36 months
Retail Banking
RISK MANAGEMENT
Success in Risk Management – Major Retail Bank
• One of the 5 Retail Banks in Europe
– Deployed for 13,000 users
– 9 million customer accounts
• Private individuals
• Small businesses
• Behavioural Risk Management project
– Improve customer advisor productivity
– Better risk detection and management
– Automate action recommendations
Success in Risk Management – Major Retail Bank
• “High risk customer profile” process:
Advisor’s working day
Night
Get explanations
And actions plan
Get list of letters
For a customer
4,000,000 events on
9,000,000 accounts
• Benefits:
400,000 High Risk profiles
about 5% of customers
Get High Risk Profiles
When logging in
Update actions plan
13,000 advisors
2,500 branches
50,000 letters
per day
– Manage 200 risk management profiles in 7 categories
– Allow business users to manage & understand the risk profiles
– Gain 1 hour/day/advisor
Application Architecture
Data
flows
Backend
Rule Execution
Server
Rule Team
Server
Rule Scenario
Manager
Rule Repository
RuleApps
Scenario
Repository
Counterpart
consolidation
Risk Situation Handling Batch
Situation Handling
Rule Service
Event generation
Rule Service
Follow-up Servlet
Interactive follow-up
Rule Service
Data Access
Data Access
Rule Execution Server
Rule Execution Server
Risk Database
Counterpart
indicators
Events
Risk situations
Advisor
Workplace
Technical, SOA Architecture
• 7 Rule Services sharing 400 business rules
– 3 Batch programs (6,700 events/sec)
– 4 TPs (1 Transaction < 10 ms)
• Deployed on WebSphere 6.1 on z/OS USS
– Online using Web Contained and CICS Transaction
Gateway
– Batch written in Java with JDBC Binding
Copyright© 2008 - ILOG, Inc., All Rights Reserved
Overall phasing
Client Program
Program Kick-off Design & Specs
Other phases
Integration
BRMS Sub-project
I
E Design and C
Implementation
Kick-off
Specs
Assembly and T Assistance
sub-validation to Integration
App. 5 months
App. 9 months
Validation/UAT
Insurance
COMMISSIONING
Business Rules for Commissioning
• Commission networks in growth and competitive markets
• Steer the network
– Commissioning, over-commissioning, bonuses
– Sales campaigns: product launch, promotions,…
• Manage general and specific contractual provisions
– Attach rules to contracts, products or networks
– Commission throughout the life-cycle of a contract (different events)
• Create a link between commissions and their calculation
components
– Conformity and SOX
– Amount verification, validation and explanation
• Reduce errors in commissioned amounts and enhance brand image
with distributors
Where Rules Apply in the Process
Events to be
commissionned
Preparation
• Data enrichment
• Eligibility
• Grouping
Calculation
Validation
• Formulas, rates,
scopes
• Global Validation
• Conditions and
priorities
• Identifying
singularities and
notification
• Overcommissionning
• Payment Orders
generation
Business Rules Capabilities for commissioning
• Make rules understandable by business staff
– Express rules in a business language and in dedicated design
environments
• Centralize the management of rules in a repository
– Defines hierarchies and priorities
– Group rules
– Control the execution flow
• Change swiftly rules in production
• Audit and analyze the impact of rules and their
interaction
• Simulate rules and perform « what if » scenarios
Illustration: rules for business people
Illustration: Audit for more control
Check
Business
Partner
Compute
Savings
Commission
Compute
Pension
Commission
Compute Life
Commission
VAT
Computation
General
Ledger
Assignment
Success at Generali – Commissioning
Situation Goals




Generali France: 14.2 B€ vs Generali Group 64 B€
Classic organisation by Business Line ( life, non-life, health,..)
Deployment of a new software architecture
17 different commissioning applications/modules




Standardize on one commissioning Decision Service for all Business Lines
Improve Time to market – service initiative
Commissioning : capital asset
Improve Tracability and auditability
Solution




BRMS part of the new software architecture
JRules for Commissioning Services with 1st Pilot in Dec 07
Dvpt incremental com services, on a 3 years plan
Set-up BRMS task force in parallel (Underwriting, Claims, ...)
Benefits




Better Commissioning change management
Improve process time  better services  External network retention customer retention
less failures  improved service quality
Extended process automation
CONCLUSION
Conclusion
• Applicability of technology to all decisioning logic
• Fastest time to business value and lowest total cost of
ownership
• Empowerment for business teams and IT teams
• Synchronised full life-cycle management of all business rules
and decision logic
• Next steps
– Check IBM’s website for more material :
http://www.ibm.com/software/websphere/products/business-rule-management/
– Discuss your business case one on one, illustrate with appropriate
references
– Build a solution outline together through a Discovery Workshop
Emmanuel Schweitzer
schweitz@fr.ibm.com