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Real-World Experience in Applying Business Intelligence to Business Processes

Real-World Experience in Applying Business Intelligence to Business Processes. James Taylor VP Enterprise Decision Management Fair Isaac. Introductions. Agenda The problem of hindsight Challenges in analytic improvement of business process Enterprise Decision Management Some examples.

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Real-World Experience in Applying Business Intelligence to Business Processes

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  1. Real-World Experience in Applying Business Intelligence to Business Processes James TaylorVP Enterprise Decision ManagementFair Isaac

  2. Introductions • Agenda • The problem of hindsight • Challenges in analytic improvement of business process • Enterprise Decision Management • Some examples

  3. Business Intelligence

  4. Applying intelligence to business processes

  5. So What is Enterprise Decision Management? EDM is a systematic approach to automate and improve decisions across the enterprise. It allows businesses to: Make more profitable and targeted decisionsPRECISION In the same way, over and over againCONSISTENCY While being able to adapt “on-the-fly”AGILITY

  6. Operational decisions across the enterprise BusinessRules http://www AnalyticModels Decision Service Rules Models Enterprise Data External Data

  7. Components of Fair Isaac’s solution • Blaze Advisor™ business rule management system • SmartForms rules-driven data capture • Model Builder Software and Mentoring • Predictive Models – Risk, Opportunity • Evidence-based Rules • Professional Services

  8. Various Analytics Can Improve Results Descriptive Analytics Predictive Modeling Decision Optimization X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X How do I use data to learn about my customers? How are those customers likely to behave in the future? How will they react? How do I leverage that knowledge to recommend the best action? Action - Prescription Knowledge - Description

  9. The business case for EDM Timeliness of Decisions Real-time / Point of Contact Days Complexity of Decisions Corporate Objectives / Trade-Offs Local / Simple Constraints on Decisions Dynamic / Complex Static / Simple Changes to Decisions Frequent Adjustments Every 3-5 Years

  10. There are many dimensions to the benefits • Effectiveness • Granularity • Quantitative Metrics Precision Cost Consistency • Efficiency • Cost – Value Trade-off • Activity Based • Repeatability • Compliance • Expected Outcomes Speed Agility • Responsiveness • Service Levels • Opportunity Cost • Adapting to Change • Testing • Design & Deployment Costs

  11. And many possibilities for competitive advantage As discussed in Harvard Business Review, June 2005

  12. EDM provides tremendous benefits Precision • Higher revenue yield per customer interaction • Lower costs through improved risk management • Lower costs through less waste / fewer ‘off target’ messages Consistency • Lower costs of making decisions through automation • Lower costs of compliance, regulatory requirements • Better customer service across channels Agility • Improved strategic alignment • Capitalize on new product & market opportunities….fast • Lower IT / Development costs to change decisions

  13. Successful companies harness both approaches • Strategic decisions have broad business scope but occur less frequently • Tactical decisions determine how to manage processes and customers • Operational decisions deal with individual transactions

  14. Enterprise Decision Management in Action:Legacy Renewal for Motor Vehicle Agency 80 Government agencies world wide use Fair Isaac solutions • 2,000+ rules applied to 70,000 transactions a day generating $4B in revenue • 13,000 hours of maintenance saved in the first year • 90% reduction in problem resolution time • Reuse across batch, 170 offices, new web service

  15. Enterprise Decision Management in Action:Managing Risk in Financial Services 700 million 2/3 card accounts worldwide are managed using Fair Isaac solutions of the world’s top 100 banks work with Fair Isaac • Change time from 35 days to 2 • Manual referrals reduced 75% • Income increased by 1.5% • Provision for bad debt reduced by 1% • 0% downtime since it went live in February 2003 • ROI ~6 months with subsequent savings >£5M annually (>$9M annually)

  16. Enterprise Decision Management in Action:Marketing Sharper in Retail #4 8 IDC ranks Fair Isaac #4 in Worldwide Automation Applications Revenue of the top 10 global pharmaceuticals companies have worked with Fair Isaac • Advanced analytics deployed using business rules • Personalized recommendations in categories with no prior purchases • Deeper customer relationships • More customer visits and bigger baskets • 17% began buying in new product categories a 2,000% lift

  17. Enterprise Decision Management in Action:Streamlining Operations in Insurance 70% 400+ insurers and healthcare payers worldwide use Fair Isaac technology of the top 50 U.S. P&C insurers use Fair Isaac technology • Automated more than 3,000 underwriting rules • Update strategies, policies and rules easily, without programming • Processing 99% of new policy applications automatically • Held expenses down as applications grew by 35% and agents accessing the system tripled

  18. Enterprise Decision Management in Action:Fighting Fraud in Telecommunications 90% 1.5 billion of all roaming cellular call records in North America are processed with our technology transactions are reviewed every day by one provider using our network analytics • Cut fraud losses in half with fewer “false positives” • Prevented $14 million in early-life bad debt in one year • Return on investment of 100% in less than four months

  19. Things you can do • Go to Fair Isaac’s website: • http://www.fairisaac.com/edm • Come to our booth - #305 • Automate decisions with Fair Isaac Blaze Advisor • http://www.fairisaac.com/rules • Read my blog • http://www.edmblog.com • Send me questions or comments • jamestaylor@fairisaac.com

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