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An Introduction to
Decision
Management
JamesTaylor
CEO
©2014 Decision Management Solutions
Your Presenters
JamesTaylor
I’m a passionate believer in
the power of Decision
Management to deliver
simpler, smarter and more
agile processes. I write,
speak, consult and work on
Decision Management and
Decision Modeling.
Juergen Pitschke
I‘m a coach, consultant,
speaker, writer, …
Engineer
dealing with Enterprise
Architecture and all kinds of
enterprise models
Agenda
Decision Management
Decision Models
Decision Modeling
Decision Models and BPM
Decision Models and EA
©2014 Decision Management Solutions
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
Question 1:
What is Decision Management?
What is in scope? What is out of
scope?
Page 3
©2014 Decision Management Solutions
Decision Management
A business discipline and a technology stack
That builds on existing IT infrastructure
Enhancing business processes
Leveraging analytics to manage uncertainty
Increasing transparency and business control
It is a proven framework
for implementing business
rules management systems
and analytics
©2014 Decision Management Solutions
3 steps to decision management
Identify and model
the decisions that
are most important
to your operational
processes
Design and build
independent
decision services
using business rules
and advanced
analytics
Create a “closed
loop” between
operations and
analytics to
measure results and
drive improvement
Business
Rules
Predictive
Analytics
External Data
Big Data
©2014 Decision Management Solutions
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
Question 2:
How can we describe Decisions?
What is in the Decision Model and
Notation standard?
How are Decision Models related to
other artefacts?
Page 7
©2014 Decision Management Solutions
Repeatable
Automatable
Non trivial
Measurable
Decision
Input Data
Dependent
Decisions
Authority
©2014 Decision Management Solutions
Decision Tables or Rulesheets
Most common rule format
A set of rules in a tabular layout
Look up tables, comparing attribute values
Various formats
Applicant Risk
U
Applicant Age
Medical
History Applicant Risk Rating
1
> 60
good Medium
2 bad High
3 [25..60] - Medium
4
< 25
good Low
5 bad Medium
Special Discount
Type of Order Web -
Customer Location US -
Type of Customer Wholesaler Retailer -
Special Discount % 10 5 0
F 1 2 3
Credit Limit Assignment
Credit Limit
Income
< $40,000 >= $40,000
Card Type
Standard $1,000 $2,000
Gold $1,500 $2,500
©2014 Decision Management Solutions
Decision Modeling and Notation (DMN)
“… provide a common notation that is readily
understandable by all business users... DMN creates a
standardized bridge for the gap between the business
decision design and decision implementation.”
Use Cases
Modeling Human Decision-making
Modeling Requirements for automated Decision-making
Implementing automated Decision-making
OMG Beta Specification
Released Standard expected mid-2014
Decision Management Solutions, IBM, Oracle,TIBCO, FICO, Escape
Velocity, KUL, Model Systems, KPI,Visumpoint
©2014 Decision Management Solutions
DMN In context
Integrates with
process models at
decision points
Maps to
implementation
details
©2014 Decision Management Solutions
Defines
decision-making
explicitly
Documented
sources
Coherent
rule groups
Ownership,
volatility
Manage Business Rules
©2014 Decision Management Solutions
Define Automation
©2014 Decision Management Solutions
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
Question 3:
Notation is notation. What does a
method for Decision Modeling look
like?
Page 15
©2014 Decision Management Solutions
Use Cases For Modeling Decisions
Simplify
processes
Effectively
deploy
business
rules
Flexibly
define
automation
boundaries
Effectively
deploy
predictive
analytics
Describe Decisions
Define Decisions with
A question
Possible answers
Q: Which marketing offer should be
presented to this customer during this
interaction?
A: Any current, available marketing offer in
the database
©2014 Decision Management Solutions
Specify Decision Context
Processes
Activities require decisions
Events
Trigger decisions
Systems
Implement decisions
Organizational Units
Make decisions
Own decisions
Are impacted by decisions
Know which business
processes will be improved
by your rules or analytics
Know when your analytics
might be calculated
Know how you will have to
deploy your rules
Know who will have to
believe your analytics and
own your rules
©2014 Decision Management Solutions
Specify Decision Impact
Objectives impacted
Customer
Churn
Customer
Profitability
Multiple
Products
…
What is the best up sell/cross-
sell for this customer?
* *
What is the price of this
service?
* *
Can this customer buy this
service?
*
What retention offer should
we make this customer?
*
…
©2014 Decision Management Solutions
Decisions Require Information
“Determine Parts Availability”
requires BOM and Inventory information
“ValidateTax Return”
requires Return and Citizen information
“Refer claim for fraud”
requires Claim and Provider information
©2014 Decision Management Solutions
Knowledge and Decisions
Decision
©2014 Decision Management Solutions
Decisions require Knowledge
“Reorder parts”
requires supplier capabilities, shortage risks
“ValidateTax Return”
requiresTax Regulations
“Refer claim for fraud”
requires likelihood of fraud
©2014 Decision Management Solutions
You can Decompose Decisions
What is required to make this decision?
Knowledge
Guidelines, policy
Expertise
Regulations
Predictive Analytic Models
Data Mining Results
Information
Reference Data
Transaction Data
The results of other decisions
©2014 Decision Management Solutions
Decisions can require Decisions
These decisions must be made first
Is this a good time to make an offer?
Which product should the offer be for?
How valuable an offer?
©2014 Decision Management Solutions
Question 4:
How do Decision Models
impact process models?
© BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu
A real word example from BCS
Seite 26
• Business Process for handling an application
• Total of 48 such models, cause there are 48
application forms for different services
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
A real world example
Page 27
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
A real world example
Page 28
© BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu
The new process model
Seite 29
• One process model for all application types
© BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu
Decision Logic for the process
Seite 30
Question 5:
How do Decision Models
integrate into Enterprise
Architecture?
© BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu
Decision Management and EA
„If you can‘t describe it, you can‘t build it.“
John Zachman
• Connect the dots: How are Decision Models related to
Business Process, Events, Strategy, Requirements, …
Page 32
UI
Service
Security
Service
Appl.
Service
Data
Service
BI
Service
…
WF
Engine
BR
Engine
EP
Service
UI
Model
?
Appl.
Model
Data
Model
? …
Process
Model
Decision
Model
?
Business Architecture System Architecture
Performance
Management
Business
Intelligence
Data
Infrastructure
Application Context
Business Process
Management
Event Processing
Enterprise
Application
Today these pieces are semi-detached
1. Operational systems are built in a variety of ways
2. Data is extracted for analysis
3. Reports and queries are
intended to improve decision
making
4. Dashboards are used
to monitor performance
©2014 Decision Management Solutions
Performance
Management
Business
Intelligence
Data
Infrastructure
Predictive
Analytics
Optimization
Application Context
Business Process
Management
Event Processing
Enterprise
Application
Business Rules
Powerful technologies are underutilized
1. Business rules are forced into business processes
2. Predictive analytics are
forced into reports or left
stand-alone
3. Optimization has
limited, localized effect
4. The effectiveness of
decision-making is not
tracked or improved
Decision
Analysis
©2014 Decision Management Solutions
©2014 Decision Management Solutions
Decision Management maximizes ROI
Performance
Management
Business
Intelligence
Data
Infrastructure
Application Context
Decision Management
Decision
AnalysisBusiness Rules
Predictive
Analytics
Optimization
Business Process
Management
Event Processing
Enterprise
Application
Decision Management links these
technologies to the application context
Decision Management allows
decision performance to be tracked,
analyzed and ultimately improved
Decision Management ties
heterogeneous technologies into a
coherent approach for better results
Decision Management ties
how decisions are being made
and what can be done to
improve them directly to
business performance
©2014 Decision Management Solutions
© ModernAnalyst.com http://ow.ly/ldRrm
CRISP-DM
Wrap-up
Getting Started
Model Decisions with DMN
DecisionTechnology Blueprint
Focus Business Rules on Decisions
Proof of Concept Project
©2014 Decision Management Solutions
©2014 Decision Management Solutions
Learn More about Decision Modeling
OnlineTraining
Live, online training
May 6,7,8 and 13,14,15
More information at
decisionmanagementsolutions.com
/services/decision-modeling
james@decisionmanagementsolutions.com
European Training
Decision Modeling for
Business Analysts: DMN
May 15/16, Dresden
The BPM Trilogy: BPMN,
CMMN, DMN in context
July 14-16, Dresden
jpitschke@enterprise-design.eu

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An Introduction to Decision Management

  • 2. ©2014 Decision Management Solutions Your Presenters JamesTaylor I’m a passionate believer in the power of Decision Management to deliver simpler, smarter and more agile processes. I write, speak, consult and work on Decision Management and Decision Modeling. Juergen Pitschke I‘m a coach, consultant, speaker, writer, … Engineer dealing with Enterprise Architecture and all kinds of enterprise models
  • 3. Agenda Decision Management Decision Models Decision Modeling Decision Models and BPM Decision Models and EA ©2014 Decision Management Solutions
  • 4. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu Question 1: What is Decision Management? What is in scope? What is out of scope? Page 3
  • 5. ©2014 Decision Management Solutions Decision Management A business discipline and a technology stack That builds on existing IT infrastructure Enhancing business processes Leveraging analytics to manage uncertainty Increasing transparency and business control It is a proven framework for implementing business rules management systems and analytics
  • 6. ©2014 Decision Management Solutions 3 steps to decision management Identify and model the decisions that are most important to your operational processes Design and build independent decision services using business rules and advanced analytics Create a “closed loop” between operations and analytics to measure results and drive improvement
  • 8. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu Question 2: How can we describe Decisions? What is in the Decision Model and Notation standard? How are Decision Models related to other artefacts? Page 7
  • 9. ©2014 Decision Management Solutions Repeatable Automatable Non trivial Measurable
  • 11. Decision Tables or Rulesheets Most common rule format A set of rules in a tabular layout Look up tables, comparing attribute values Various formats Applicant Risk U Applicant Age Medical History Applicant Risk Rating 1 > 60 good Medium 2 bad High 3 [25..60] - Medium 4 < 25 good Low 5 bad Medium Special Discount Type of Order Web - Customer Location US - Type of Customer Wholesaler Retailer - Special Discount % 10 5 0 F 1 2 3 Credit Limit Assignment Credit Limit Income < $40,000 >= $40,000 Card Type Standard $1,000 $2,000 Gold $1,500 $2,500 ©2014 Decision Management Solutions
  • 12. Decision Modeling and Notation (DMN) “… provide a common notation that is readily understandable by all business users... DMN creates a standardized bridge for the gap between the business decision design and decision implementation.” Use Cases Modeling Human Decision-making Modeling Requirements for automated Decision-making Implementing automated Decision-making OMG Beta Specification Released Standard expected mid-2014 Decision Management Solutions, IBM, Oracle,TIBCO, FICO, Escape Velocity, KUL, Model Systems, KPI,Visumpoint ©2014 Decision Management Solutions
  • 13. DMN In context Integrates with process models at decision points Maps to implementation details ©2014 Decision Management Solutions Defines decision-making explicitly
  • 15. Define Automation ©2014 Decision Management Solutions
  • 16. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu Question 3: Notation is notation. What does a method for Decision Modeling look like? Page 15
  • 17. ©2014 Decision Management Solutions Use Cases For Modeling Decisions Simplify processes Effectively deploy business rules Flexibly define automation boundaries Effectively deploy predictive analytics
  • 18. Describe Decisions Define Decisions with A question Possible answers Q: Which marketing offer should be presented to this customer during this interaction? A: Any current, available marketing offer in the database ©2014 Decision Management Solutions
  • 19. Specify Decision Context Processes Activities require decisions Events Trigger decisions Systems Implement decisions Organizational Units Make decisions Own decisions Are impacted by decisions Know which business processes will be improved by your rules or analytics Know when your analytics might be calculated Know how you will have to deploy your rules Know who will have to believe your analytics and own your rules ©2014 Decision Management Solutions
  • 20. Specify Decision Impact Objectives impacted Customer Churn Customer Profitability Multiple Products … What is the best up sell/cross- sell for this customer? * * What is the price of this service? * * Can this customer buy this service? * What retention offer should we make this customer? * … ©2014 Decision Management Solutions
  • 21. Decisions Require Information “Determine Parts Availability” requires BOM and Inventory information “ValidateTax Return” requires Return and Citizen information “Refer claim for fraud” requires Claim and Provider information ©2014 Decision Management Solutions
  • 22. Knowledge and Decisions Decision ©2014 Decision Management Solutions
  • 23. Decisions require Knowledge “Reorder parts” requires supplier capabilities, shortage risks “ValidateTax Return” requiresTax Regulations “Refer claim for fraud” requires likelihood of fraud ©2014 Decision Management Solutions
  • 24. You can Decompose Decisions What is required to make this decision? Knowledge Guidelines, policy Expertise Regulations Predictive Analytic Models Data Mining Results Information Reference Data Transaction Data The results of other decisions ©2014 Decision Management Solutions
  • 25. Decisions can require Decisions These decisions must be made first Is this a good time to make an offer? Which product should the offer be for? How valuable an offer? ©2014 Decision Management Solutions
  • 26. Question 4: How do Decision Models impact process models?
  • 27. © BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu A real word example from BCS Seite 26 • Business Process for handling an application • Total of 48 such models, cause there are 48 application forms for different services
  • 28. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu A real world example Page 27
  • 29. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu A real world example Page 28
  • 30. © BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu The new process model Seite 29 • One process model for all application types
  • 31. © BCS – Dr. Juergen Pitschke 2003-2014, www.enterprise-design.eu Decision Logic for the process Seite 30
  • 32. Question 5: How do Decision Models integrate into Enterprise Architecture?
  • 33. © BCS – Dr. Juergen Pitschke 2003-2013, www.enterprise-design.eu Decision Management and EA „If you can‘t describe it, you can‘t build it.“ John Zachman • Connect the dots: How are Decision Models related to Business Process, Events, Strategy, Requirements, … Page 32 UI Service Security Service Appl. Service Data Service BI Service … WF Engine BR Engine EP Service UI Model ? Appl. Model Data Model ? … Process Model Decision Model ? Business Architecture System Architecture
  • 34. Performance Management Business Intelligence Data Infrastructure Application Context Business Process Management Event Processing Enterprise Application Today these pieces are semi-detached 1. Operational systems are built in a variety of ways 2. Data is extracted for analysis 3. Reports and queries are intended to improve decision making 4. Dashboards are used to monitor performance ©2014 Decision Management Solutions
  • 35. Performance Management Business Intelligence Data Infrastructure Predictive Analytics Optimization Application Context Business Process Management Event Processing Enterprise Application Business Rules Powerful technologies are underutilized 1. Business rules are forced into business processes 2. Predictive analytics are forced into reports or left stand-alone 3. Optimization has limited, localized effect 4. The effectiveness of decision-making is not tracked or improved Decision Analysis ©2014 Decision Management Solutions
  • 36. ©2014 Decision Management Solutions Decision Management maximizes ROI Performance Management Business Intelligence Data Infrastructure Application Context Decision Management Decision AnalysisBusiness Rules Predictive Analytics Optimization Business Process Management Event Processing Enterprise Application Decision Management links these technologies to the application context Decision Management allows decision performance to be tracked, analyzed and ultimately improved Decision Management ties heterogeneous technologies into a coherent approach for better results Decision Management ties how decisions are being made and what can be done to improve them directly to business performance
  • 37. ©2014 Decision Management Solutions © ModernAnalyst.com http://ow.ly/ldRrm CRISP-DM
  • 39. Getting Started Model Decisions with DMN DecisionTechnology Blueprint Focus Business Rules on Decisions Proof of Concept Project ©2014 Decision Management Solutions
  • 40. ©2014 Decision Management Solutions Learn More about Decision Modeling OnlineTraining Live, online training May 6,7,8 and 13,14,15 More information at decisionmanagementsolutions.com /services/decision-modeling james@decisionmanagementsolutions.com European Training Decision Modeling for Business Analysts: DMN May 15/16, Dresden The BPM Trilogy: BPMN, CMMN, DMN in context July 14-16, Dresden jpitschke@enterprise-design.eu