Achieving Organization Agility Using Decision Management

In today’s marketplace it is imperative that companies are creative about how they manage and evolve their business processes. Achieving agility is a critical organization driver for organizations eager to reduce time to market, foster innovation, and tackle complexity. Business rules help automate the decisions essential to the organization’s business processes - reducing manual steps, delays, and opportunities for errors. Decision management is the business discipline that best leverages business rules and puts analytics and optimization to work in every transaction. Leaner business processes and an ability to adjust or alter decision making using business rules directly improve an organization’s agility.

Organizations need to manage complexity
Organizations today are facing a host of challenges. They must reduce the amount of time taken across the board – activities that used to take days now need to be happen in real-time for customers waiting online or on the phone. Organization objectives that used to be straightforward now involve trade-offs between risk, resource constraints and opportunity costs. Decision making has become multi-dimensional, encompassing corporate and organization unit objectives as well as market characteristics. And as firms start to grow their organization beyond local borders there is increased regulation – not just more regulation but more complex regulations involving additional stakeholders, factors, and approval/governance processes. With new business opportunities and market conditions changing rapidly there is also increased uncertainty. Organizational strategies need to be managed and evolved on a continuous basis – gone are the days of setting three to five year strategic objectives – based on the realities of the marketplace.

A direct outcome of these drivers has been an increase in complexity of decision making with a rise in volume of operational processes, check points, and human reviews. Organizations are quickly realizing that unless they find a way to manage this complexity both the operational as well as opportunity costs and organization risks will continue upward.

BPM helps tackle these challenges
Business Process Management (BPM) helps a organization address these challenges using a variety of tools. Process modeling tools help identify the steps in a complex business process, recognize inherent uncertainty, and simulate impact to a process based on what-if criteria. BPM also helps ensure processes are compliant with local, regional, and global regulations and laws. It helps organizations cut costs by eliminating the need for complex programming to integrate multiple applications. Additionally, BPM helps model and execute business processes that require human steps such as reviews and approvals within the context of an end to end business process. By sharing process artifacts as well as entire processes across the enterprise, BPM can help manage the cost and complexity associated with automating enterprise processes. Finally, by providing visual tools to change business process behavior and adapters to plug into existing systems in the enterprise, BPM provides organizational agility.

A business process is fundamentally about a series of steps – manual and automated - where tasks are allocated and performed, and decisions are made. In order to increase the effectiveness of business processes we must examine the decisions that are involved in them. By learning about and understanding decisions we can make processes smarter and increase automation. So what exactly are decisions and how do we manage them?

Decisions and Decision Management
Decisions involve a choice, a selection of a course of action and are arrived at after some consideration. They end uncertainty or dispute in a business process and typically choose a particular option from a set of alternatives. Decisions result in an action being taken, not just knowledge being added to what’s known. The decisions that matter to business processes are operational decisions. There are different types of operational decisions such as those that ascertain eligibility, manage risk, perform calculations or recognize opportunities. Most of these decisions require a combination of predefined business rules, consistently applied, and change depending on organization needs and priorities.

Decision management consists of three steps – decision discovery, decision services, and decision analysis. Decision discovery involves finding and prioritizing decisions, finding the link between decisions and organization objectives and measures, and managing decisions for reuse and consistency. As applications have evolved from monolithic code to a collection of services, decision services have become established as the next step in decision management. A decision service is a self-contained, callable service with a view of all the conditions and actions that need to be considered to make an operational organization decision. Decision services define business rules for compliance, provide the ability for organization owners to alter rules to stay agile, and analytically enhance business rules for increased accuracy. Finally decision analysis helps measure and improve decisions, and the decision making process.

Decision management helps enhance processes so they can better handle uncertainty, support organization objectives, are flexible and organization-led, are compliant and easy to change, and are data-driven and constantly improve. The five keys of decision management are a focus on operational decisions; the use of business rules, predictive analytics and optimization; and ongoing decision analysis, adaptive control and simulation. BPM provides foundational capabilities and decision management aims to complement those capabilities

Achieving Organizational Objectives with Decision Management
Decision management complements BPM in several areas in order to achieve organizational objectives. For instance, decision management helps demonstrate compliance in every step of critical organization decisions and drives consistent decision-making across systems and channels. It helps organizations manage uncertainty and enhances organizational agility by engaging business users. It places business users at the forefront of defining, evolving, and managing rules and decision points in business processes. Business users get control with stable processes and the ability to respond rapidly to opportunities and threats by changing decision-making within those processes. Increasing customer retention by improving retention offers, increasing the rate of customer acquisition through personalization, and identifying fraudulent transactions are just a few examples. Shortened development time and business user engagement translates to fewer missed opportunities in the marketplace. Decision management helps lower maintenance costs and reduces the need for manual reviews enabling people to focus on higher value tasks.

Conclusion
Business Process Management or BPM has much to offer organizations in terms of improved control, efficiency and agility. Combining BPM with decision management allows you to develop simpler, smarter and more agile business process. With decision management you can put business users in control of their processes and decisions, put analytics to work and better manage uncertainty and change.

James Taylor (james[at]decisionmanagementsolutions.com) is CEO of Decision Management Solutions, a leading provider of decisioning consulting and implementation services for business rules, business analytics and optimization. James has over 20 years experience in enterprise software solutions and is an expert on applying decision management and decisioning technologies such as business rules, business analytics and optimization. James was previously a Vice President at Fair Isaac Corporation and was lead author of Smart (Enough) Systems, How to Deliver Competitive Advantage by Automating Hidden Decisions (Prentice Hall, 2007). He writes a blog on everything decision management at http://jtonedm.com.

Vijay Narayanan is a Technical Lead at a major financial services firm. He is leading a project dedicated to software development for building reusable data services and business process automation components. Prior to this project, Vijay worked on several software initiatives ranging from single-user systems to large, distributed, multi-user service platforms with services. Most recently, Vijay has been involved in research dedicated to combining agile practices with service-orientation. Vijay contributed content to the book Next Generation SOA as part of a chapter on modern SOA methodologies and maintains a blog dedicated to software reuse at http://softwarereuse.wordpress.com/.

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