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
Business Rules Management System - What Is It????!!!!!!
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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
Why use Business Rules with BPM?
Validation
Validation Rules
Eligibility
Eligibility Rules
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
Pricing
Pricing Rules
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.
Combining BPM & BRMS
BPM Alone
BPM + BRMS
Decision 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
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•Business Decisions
•Task allocation
•Dynamic routing
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Traditional Approach for Managing Decision Change
Business rules are crucial to operational
systems, and they change over time. The
traditional (ad hoc) approach of dealing
with rule changes leads to…
Where Business Rules Typically Exist
 Reduced organizational agility
 Reduced employee productivity
 Increased load on IT
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
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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 Rule Management System
Where Business Rules Typically Exist
Rules are
Defined,
Analyzed and
Maintained
User Tools
Rules are
Stored and
Shared
Documents
Applications
Rule Repository
People
Rules are
Deployed,
Executed and
Monitored
Processes
Rule Server
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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
Graphical representations
Text-based (point-andclick + guided editing)
Rule Solutions for Office
IBM ILOG JRules BRMS Product Components
Business Environment
Technical Environment
Rule
Developer
Rule Studio
Deploy
Eclipse-based Rule IDE
rules
Rule Service design & development
Decision Validation Service
Testing & Simulation framework
Rule
Repository
Rule
Manager
Deploy
rules
Rule Team Server
Web-based Application for
Rule Maintenance
Production Environment
System
Administrator
Rule Execution Server
Single node or cluster
(J2SE & J2EE compliant)
Web-based console to monitor
& control rule execution
Benefits of a BRMS Approach
What does it enable?
• 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
What is the value?
BRMS
 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
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
• Claim
• Validation
• STP approval
• Exception routing
• Policy/Underwriting
• Eligibility
• Risk
• Pricing
• Annuity
• Recommendation
• Commissioning
• Payout calc.
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Banking
• Loan
• Eligibility
• Risk
• Pricing
• Account
• Cross-sell
• Fraud/Alerts
• Credit Card
• Mktg Offers
• Fraud
• Credit limit
Healthcare
Government
• 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
Energy/Util./Telco
• Land/Permits
• Conveyance
processing
• Contract
compliance
• Service Mgmt
• Service
prioritization
• SLA alerts
• Maintenance
alerts
• Order
configuration
ILOG BRMS customers in payments
Use case
Pricing
Customer
Description
• 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
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
ILOG BRMS customers in payments
Use case
Customer
• Increase straight-through processing (countryspecific validation rules)
• Integration with EPP-based payments hub
• Other use cases being analyzed: customer-specific
conditions for corporates
Validation of
account numbers
Anti-Money
Laundering
Card fraud
detection
Description
Top-10 US Bank
• Rule service performing country-specific AML
checks
• Integration with EPP-based payments hub
• Standard-based (ISO20022) service definition
• Fraud patterns captured as business rules to react
quickly to new fraudulent behaviors
ILOG BRMS customers in card and online payments
Use case
Customer
Description
• 150M transactions processed in a 8 hour time window
• Shorter time-to-market for new products
• Specific rules for various regions
Message validation,
calculation of
merchant fees &
internal routing
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
Merchant-level
fraud detection
• Merchant-level fraud detection provided as a valueadded service to banks
• Business rules as a way for TSYS to exploit value by
extracting knowledge from huge volume of card
transactions
Online fraud
detection
Global e-Auction
• Fraud patterns captured as business rules to react
quickly to new fraudulent behaviors
Case Study: European P&C Insurance Company
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 incurred
Increased of customer satisfaction through faster turnaround
Substantial 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
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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:
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
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
• Benefits:
– Manage 200 risk management profiles in 7 categories
– Allow business users to manage & understand the risk profiles
– Gain 1 hour/day/advisor
50,000 letters
per day
Société Générale – Risk Management
Situation
Goals
Solution
Benefits
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 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
 Improve risk detection and management
 Increase branch financial advisor efficiency managing risk profiles
 Automate action recommendations
 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)
 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)
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
Automating decisions along a payments flow
Validation
Product
configuration
• Validation & autorepair
• Validation of account
numbers (countryspecific rules)
• Determine product
and configure
payment attributes
based on
instructions and
customer profile
Approval
rules
SLA-based
exception mgt
• Customer-specific
and SLA-based
limits
• Determine what to
do next upon an
exception
• Automate SLA
conditions
03/02/09
Routing
• Least-cost routing
in CSM selection
• Customer
preferences
• CSM operational
constraints, e.g.
type of payments
supported, cutoff
times …
SEPA DD
• Mandate
management
Fee
calculation
• Real-time charge
calculation
• Monthly discount
calculation
• Payment bundles
• Agreement and
customer-specific
conditions
Accounting &
reconciliation
• Example: How to
reverse a cancelled
payment that is part of
a batch
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Customer Success – Simplifying the Process
Customer
Process
Pains
BPM - Decision
Service
Results
Loan
Origination
• Highly manual
process
• WebSphere ILOG
BRMS to handle a
variety of business
logic for a IBM BPMorchestrated process:
- Routing
- Compliance
- Scoring & rating
• Cost savings – $1.5M over 5
years
• IBM BPM to manage
the application
process end-to-end
• 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
• Delays arose as
applications were
routed through
approvals via
interoffice mail
• 15 days to 1 approval time
reduction
• Improved staff focus and
satisfaction
• Lengthy approval
turnaround time
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
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• ILOG JRules to
determine the
eligibility of applicants
to social benefits
IBM ILOG Customers.........................
e-Gov
Capital Markets
Insurance
Banking
T & T etc..
The Value of Simplification
Five Ways to Fast ROI With BRMS
Cost reduction
1. Reduced application
development
and maintenance
2. improve payments margins
3. Improved regulatory
compliance
Revenue generation
4. Provide value-added services
5. Faster time-to-market
Using the Right Tools for Different Types of Rules
Integration with other Components & Services
Rules Types
Rule Examples
Where are
Rules
Defined?
Business
Event Stream
Pattern-Match
Event pattern: person on the CIA
watch list, purchases chemicals ,
purchases a one-way plane ticket, uses
cash.
Eventstream
specific
Business Events
(CEP)
Assign loan review task to the
Process Flow / Task
Underwriter with the lowest number of
Assignment
tasks-in-queue.
Process
specific
BPM
Trigger notification / process when
Process Monitoring “Response Time” KPI for Final Approval
(SLAs)
task exceeds maximum threshold
value.
Process
specific
BPM-BAM
Decoupled
from
applications
BRMS
Variable, Complex
Business Decisions
and Policies
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Best Offer (pricing and promotions),
Eligibility Determination, Risk
Assessment and Mitigation, Straightthrough Processing Determination
Right Tool
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)
Business Processing & BRMS Combined Use Case - AML
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
BRMS for Legacy Applications
Business Rule Management System
Rules are
Defined,
Analyzed and
Maintained
• Increased agility for management of automated business
decisions in COBOL applications
• Improved visibility of decision logic
• Enables progressive application modernization strategy
User 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
Rules are
generated as
COBOL copybook
for execution in
IMS, CICS, batch
JRules and Lombardi Teamworks: Standards-based
Integration
Map to JRules Rule
Services via standard
Teamworks Integration
Services
Rule
Management
Teamworks
Process
User Tools
Communication Interface / ESB
DEPLOY
Rule Repository
Rule
Execution
Server
Windows/Unix/Linux Server
Business Initiative Presentation to Agricorp
Interface Flexibility:
 Web Services
 Messaging
 Java APIs
FileNet BPM/ECM & WebSphere ILOG BRMS
Business
Rule
Management
FileNet Business Process
Integration Flexibility
• Web Services
• Messaging
• Java/.NET APIs
Web Services / APIs
Messaging Queues
Rule Studio
FileNet Content Management
Communication Interface
Content
Repository
Rule Team Server
Rule
Repository
Deploy
Rule
Execution
Server
Multi Platform Support:
Windows/Unix/Linux Server or Mainframe
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• Java/J2EE
• z/OS
• .NET