1. James Taylor VP Enterprise Decision Management Fair Isaac
Real-World Experience in Applying Business Intelligence to Business Processes
James Taylor VP Enterprise Decision Management Fair Isaac

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

3. Business Intelligence
Alluring…
Provides much more information access and insight
Increases knowledge worker productivity
Describes and synthesizes past performance
… and yet limited
Need action not insight Applying the insight to identify the ideal action is too hard
No operational improvement Need to use intelligence to improve operational processes
More hindsight than insight We need to predict and optimize future performance

4. Applying intelligence to business processes
Lots of approaches
Process Analytics
Operational BI
Business Activity Monitoring
None really satisfactory
The process is not the business These analytics don’t use customer information or the rules of your business to control the process
Systems cannot read reports No matter how real-time and how focused, reports and cubes don’t help “code” get smarter
People, people, people BAM is still aimed at getting people to do something. So much for straight through processing…

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 decisions PRECISION
In the same way, over and over again CONSISTENCY
While being able to adapt “on-the-fly” AGILITY

6. Operational decisions across the enterprise
Operational Systems and Process
CRM
SCM
ERP
Call Center
Website
POS
Etc.
Business Rules
Decision Service
Rules
Models
Analytic 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 ResultsX
Descriptive Analytics
How do I use data to learn about my customers?
Predictive Modeling
How are those customers likely to behave in the future? How will they react?
Decision Optimization
How do I leverage that knowledge to recommend the best action?
Knowledge - Description
Action - Prescription

9. The business case for EDM
Timeliness of Decisions
Days
Real-time / Point of Contact
Complexity of Decisions
Local / Simple
Corporate Objectives / Trade-Offs
Constraints on Decisions
Static / Simple
Dynamic / Complex
Changes to Decisions
Every 3-5 Years
Frequent Adjustments
Observation
Data Point
Better decisions drive better results
93% felt that operational decisions impacted profitability
61% significantly
Not leveraging data properly
70% of CIOs/CTOs did not get the most value from data.
47% because could not blend business rules with insight
Large number of unaddressed decisions
51% had automated about 25% or less
79% had automated about 50% or less

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

11. And many possibilities for competitive advantage
We measure operational improvements in decisioning in 5 areas
Precision, consistency, agility, speed and cost (build)
We identify the best practice on each dimension, map an organization against this and move to improve all dimensions
As discussed in Harvard Business Review, June 2005
Page 11

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
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
Government agencies world wide use Fair Isaac solutions 80

15. Enterprise Decision Management in Action: Managing Risk in Financial Services
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)
of the world’s top 100 banks work with Fair Isaac
2/3
card accounts worldwide are managed using Fair Isaac solutions
700 million

16. Enterprise Decision Management in Action: Marketing Sharper in Retail
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
IDC ranks Fair Isaac #4 in Worldwide Automation Applications Revenue #4
of the top 10 global pharmaceuticals companies have worked with Fair Isaac 8

17. Enterprise Decision Management in Action: Streamlining Operations in Insurance
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
of the top 50 U.S. P&C insurers use Fair Isaac technology
70%
insurers and healthcare payers worldwide use Fair Isaac technology
400+

18. Enterprise Decision Management in Action: Fighting Fraud in Telecommunications
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
transactions are reviewed every day by one provider using our network analytics
1.5 billion
of all roaming cellular call records in North America are processed with our technology
90%

19. Things you can do Go to Fair Isaac’s website:
Come to our booth - #305
Automate decisions with Fair Isaac Blaze Advisor
Read my blog
Send me questions or comments