1. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 1 The Future of Decision Modeling (The Decision Model, OMG’s DMN, The Event Model) Barbara von Halle bvonhalle@kpiusa.com Barbara (Meacham) Von Halle on linkedin bvonhalle@kpiusa.com

2. 2 Knowing the Rules Behind Decisions

3. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 3 Decision Modeling? Heard of ItDone Some with TDM Done Some with OMG/DMN Using DM ToolsInterested in DM Tools

4. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 4 Objectives Share new models and glance at a possible future. Which models will business analysts create? Your Objectives

5. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 5 Timeline of Models 201020112012*2013**prior2009 Enterprise-grade Software Application developed by Sapiens 2010 2014 First adoption of The Decision Model by a leading financial institution TDM and DECISION adopted by leading global financial institutions *Invited to join OMG DMN **Partner with IBM Research Haifa, Israel 1969 The Relational Model 1989 6 co-inventors

6. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 6 Agenda DMN Changing the Game: A New Standard Tackling the Next Dimension: Event Processing Innovating, Proving Value: Business Focused and Stable

7. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 7 Proven operational impact

8. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 8 Real World 82 rules IF … AND mixed with IF … OR Two rule types - decisions & procedural rules Decision – closure eligibility Procedural rules – for statements and soft reject messages Posting locks – accounts, cards Customer inhibits (Missing Address) E-products etc. in continuation … Long free text rule descriptions Rules with different focuses – fraud, lost/stolen cards, Federal State Arrestment orders, UN sanctions …

9. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 9 TDM Rule Family Card lock status type is Lost card Account closure lock status Is Active Account closure channel Is Back office ANDAND ANDAND ANDAND ANDAND Account closure Is Ineligible Multiple Logic Statements that Look Like This: Become Two Dimensional Tables called Rule Families Like This: Rule Families are Tables that Conform to Rigorous Principles AND OR

10. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 10 How the Decision Model Diagram corresponds to Rule Family Structures Excess Alert Status Excess Alert Balance Product Determine Excess Alert Status The Decision Model

11. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 11 ConditionsConclusionMessages Row IDRule Pattern Excess Alert Balance ProductExcess Alert Status 11Is in{xxx,yyy}IsNo Alert 22IsNot overdrawn Is in{xxx,zzz}IsNo Alert 32IsoverdrawnIs in{xxx,zzz}IsAlertBalance on account is overdrawn beyond overdraft limit – please work with client 42Is in{xxx,zzz}IsNot retrievedIsAlertBalance on account is not available and could be overdrawn beyond its overdraft limit – arrange funding for client if necessary The Decision Model 11 Excess Alert Status Excess Alert Balance Product Determine Excess Alert Status How the Decision Model Diagram corresponds to Rule Family Structures

12. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 12 Real World Decision model covering all closure eligibility rules with top-down clarity and normalized Overall decision LocksPending items Linked e-products / e-bonds Customer locks Account locks Card locks Orphaned e- bonds Orphaned e- products Sole account Sole accounts Joint accounts

13. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 13 Real World (Principles find all errors)

14. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 14 Real World Separating out decisions simplifies the process and separates changes

15. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 15 Let’s Create a TDM Rule Family

16. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 16 Probationary Driver License Compliance: Bottom Up Create a Rule Family table for the third compliance requirement. (http://www.state.nj.us/mvc/Licenses/EarlyBird.htm#a2) 1.Display a reflectorized decal on each license plate (front/back); decals available at motor vehicle agencies, $4 per pairreflectorized decal 2.No driving after 11:01 p.m. and before 5:00 a.m. 3.You must be accompanied in the front seat by an adult supervising driver who is at least 21 years of age and who possesses a valid New Jersey driver license and has a minimum of three years driving experience 4.You can't use cell phones, hand held video games or any other hands-free interactive, wireless communication device 5.Seat belts must be worn at all times

17. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 17 Rule Family Preliminary Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience

18. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 18 Rule Family Preliminary Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience

19. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 19 Rule Family Preliminary Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience

20. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 20 Rule Family Refined Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience Supporting Rule Family computes Front Seat Passenger Age

21. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 21 Rule Family Refined Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience Supporting Rule Family has logic for Front Seat Passenger Driver License Validity (state code, vehicle type, active vs suspended/expired, etc)

22. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 22 Rule Family Refined Column Headings You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience We don’t have access to this information

23. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 23 Rule Family Compliant Row You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience

24. © 2013 Knowledge Partners International LLC ●www.kpiusa.com 24 Rule Family “Otherwise” Rows You must be accompanied in the front seat by an adult supervising driver who is (1) at least 21 years of age and who (2) possesses a valid New Jersey driver license and has (3) a minimum of three years driving experience

25. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 25 Let’s Create a TDM Diagram

26. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 26 Let’s Create a TDM Diagram Conditions from Regulatory Requirements Vehicle Reflective Decal Compliance Driving Hours Front Seat Passenger Compliance Driver Device Compliance Driver Seat Belt Probationary Driver Compliance Vehicle Reflective Decal Compliance Driver Device Compliance Front Seat Passenger Compliance Driving Hours Driver Seat Belt Determine Probationary Driver Compliance

27. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 27 Probationary Driver Compliance Vehicle Reflective Decal Compliance Driver Device Compliance Front Seat Passenger Compliance Driving Hours Driver Seat Belt Determine Probationary Driver Compliance Driver Device Compliance Driver Cell Phone Driver Video Game Driver Other Hand-Held Device Vehicle Reflective Decal Compliance Vehicle Front Decal Present Vehicle Rear Decal Present Front Seat Passenger Compliance Front Seat Passenger Age Front Seat Passenger Driver License Validity Create Logic Branches

28. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 28 Determine Probationary Driver Compliance Front Seat Passenger Age (Front Seat Passenger Birthdate) Front Seat Passenger Driver License Validity FSP Driver License Vehicle Type FSP Driver License State Code FSP Driver License Status FSP Driver License Type Probationary Driver Compliance Vehicle Reflective Decal Compliance Driver Device Compliance Front Seat Passenger Compliance Driving Hours Driver Seat Belt Driver Device Compliance Driver Cell Phone Driver Video Game Driver Other Hand-Held Device Vehicle Reflective Decal Compliance Vehicle Front Decal Present Vehicle Rear Decal Present Front Seat Passenger Compliance Front Seat Passenger Age Front Seat Passenger Driver License Validity Until Done Then Populate Tables Row IDRule Pattern ConditionsConclusion

29. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 29 What the Decision Model has been Used For Compliance decisions (compliant, noncompliant) Eligibility decisions (multiple values) General business logic (claim payments, membership in healthcare plans, policy renewal) Underwriting logic Risk logic for defaulting assets Data quality and data acceptance logic

30. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 30 Agenda DMN Changing the Game: A New Standard Tackling the Next Dimension: Event Processing Innovating, Proving Value: Business Focused and Stable Goals of OMG DMN Flexible representation and expressions Related items (sources) Common metamodel New language called FEEL

31. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 31 Brief OMG DMN History 2008-9: KPI presents TDM to OMG 3/2011: DMN RFP Issued 5/2012: Two Submissions (combined into one) 7/2012: Barb, Larry invited to join the team 1/2014: Press Release

32. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 32 The DMN Submission and Authoring Team of Companies Escape Velocity Model Systems

33. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 33 January 17, 2014 OMG BOARD OF DIRECTORS VOTE TO ADOPT DECISION MODEL AND NOTATION SUBMISSION Needham, MA – The Object Management Group (OMG ® ) is pleased to announce that its Board of Directors has voted to publish the Decision Model and Notation (DMN) specification. It may be viewed by the public on the OMG homepage.  Aside: The BABOK update team at the IIBA accepted decision modeling as a technique to be included in the BABOK, thereby removing the use of process to describe decision-making logic.

34. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 34 DMN Decision Requirements Diagram

35. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 35 DMN Knowledge sources

36. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 36 Sample DMN Decision Table (There are 5 types) Inputs Outputs Hit policy Applicant Risk Rating

37. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 37 TDM to DMN Probationary Driver Compliance Vehicle Reflective Decal Compliance Driver Device Compliance Front Seat Passenger Compliance Driving Hours Driver Seat Belt Determine Probationary Driver Compliance Driver Device Compliance Driver Cell Phone Driver Video Game Driver Other Hand-Held Device Vehicle Reflective Decal Compliance Vehicle Front Decal Present Vehicle Rear Decal Present Front Seat Passenger Compliance Front Seat Passenger Age Front Seat Passenger Driver License Validity Front Seat Passenger Age (Front Seat Passenger Birthdate) Front Seat Passenger Driver License Validity FSP Driver License Vehicle Type FSP Driver License State Code FSP Driver License Status FSP Driver License Type Business Glossary Fact type name DefinitionData typeDomain Driver Device Compliance Indicates if driver is using prohibitive devices IndicatorCompliant Noncompliant Driving Hours Time of day in military hours of driver stop Integer0-2400 Driver seat belt Indicates if driver is wearing proper seat belts indicatorWorn Not worn

38. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 38 TDM to DMN: High Level Probationary Driver Passenger Driver License Front Seat Passenger Age DevicesFront Seat PassengerDecals No TDM octagon No TDM business glossary TDM Rule Families shown as DMN decision structures with free form text Arrows

39. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 39 TDM to DMN: Detailed Level TDM Rule Families shown as DMN decision structures with TDM format Probationary Driver Probationary Driver Compliance Vehicle Reflective Decal Compliance Driver Device compliance Front Seat Passenger Compliance Driving Hours Driver Seat Belt Decals Vehicle Reflective Decal Compliance Vehicle Front Decal Present Vehicle Rear Decal Present Front Seat Passenger Driver License Front Seat Passenger Driver License Validity FSP Driver License Vehicle Type FSP Driver License State Code FSP Driver License Status FSP Driver License Type Front Seat Passenger Front Seat Passenger Compliance Front Seat Passenger Age Front Seat Passenger Driver License Validity Passenger Age Front Seat Passenger Age (Front Seat Passenger Birthdate) Devices Driver Device Compliance Driver Cell Phone Driver Video Game Driver Other Hand-Held Device

40. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 40 Comparison 2009 TDM Formal model with 15 principles and normalized structures Widely used worldwide Driven by Business Glossary 2014 DMN Notation, metamodel, FEEL, not constrained to normalized structures Not widely used yet No business glossary *TDM is an ideal model for detailed business logic (highest quality, lowest cost of maintenance) and can maximize the value of DMN notation (validation and test case generation).

41. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 41 Agenda DMN Changing the Game: A New Standard Tackling the Next Dimension: Event Processing Innovating, Proving Value: Business Focused and Stable

42. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 42 The book “Event Processing in Action”, co-authored by Opher Etzion and Peter Niblett is published About Opher Etzion Opher Etzion works on application generations, active database systems and temporal database systems in the Israeli Air-force, Sapiens and the Technion; receives several prestigious awards and Within the next decade Amit is being used within several IBM products and service offering, as well as embedded technology for some ISVs. 20062010prior1998 Opher Etzion initiates the “event processing” discipline and community by organizing the first event processing symposium which results in the establishment of the Event Processing Technical Society 2010 2012 2011 Opher Etzion co-edits the book “Temporal Databases- Research and practice”. Opher Etzion joins IBM Research and establishes the work on “Amit – Active middleware Technology”, one of the pioneering projects on event processing. Opher Etzion receives the IBM Corporate Award, the highest IBM award for “groundbreaking research on event processing that lead to establishing IBM as leader in an emerging market” Opher Etzion is recognized by ACM as distinguished speaker Starting the work on “The Event Model” with KPI

43. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 43 What are events? I want to know about it immediately and react in the best possible way DetectDeriveDoDecide AwarenessReactionSituation TEM TDM/DMN Process

44. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 44 TEM Vocabulary Event: an occurrence of something that may happen, will happen, or has happened that is of business interest and is published Raw Event: output of a producer Example: “a” cash deposit Derived Event: output of Event Logic Example: “big” cash deposit Situation: derived event with at least one consumer or activator Example: “suspicious” account Event logic: specification of “context” and “conditions” to derive that a situation of interest has occurred, may have occurred, or is likely to occur

45. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 45 What Does Event Processing Look Like Today? Not all events fit within a well-defined internally controlled process Event logic is hidden inside the business process Difficult to define Cumbersome to change

46. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 46 What Does Event Processing Look Like Today? // Big cash deposit insert into BigCashDeposit select * from Transaction where amount > 100,000 and transaction_cash_deposit_indicator =’Y’ // Frequent (At least three) big cash deposits create context AccountID partition by accountId on Transaction; Context AccountID Insert into FrequentBigCashDeposits select count(*) from BigCashDeposit having count(*)>3; // Transfer abroad insert into TransferAbroad select * from Transaction where transferabroad_indicator =’Y’ // Frequent cash deposits followed by transfer abroad Context AccountID insert into SuspiciousAccount select * from pattern [ every f=FrequentCashDeposit -> t=TransferAbroad where timer.within(15 days)] Non-intuitive code to business users Business logic embedded in the code Difficult to define and maintain Cumbersome to introduce changes

47. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 47 Event processing with TEM Compliance officer Frequent largecash deposits Large cashdeposit Frequent cash deposits followed by transfers abroad Cash deposit followed bytransfer abroad Suspicious Account Frequent largecash deposits Frequent cash deposits followed by transfers abroad Lack of account activity Lack of account activity Cash deposit is absent Transfer abroad is absent Large cashdeposit customer threshold cash amount Bank transaction system Cash deposit followed by transfer abroad Cashdeposit Transfer abroad Simple diagram specifically defined only for events No program code Uses business-created glossary No technical terms or artifacts Independent of technology Set of integrity/validation principles Fully automatable due to principles

48. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 48 Step 1: Draw the situation of interest and its consumer Compliance officer Suspicious Account

49. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 49 Step 2: Add the situation’s structure Frequent large cash deposits Frequent cash deposits followed by transfers abroad Lack of account activity Derived events serving as input to the conclusion Conclusion Context Compliance officer Suspicious Account

50. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 50 Step 3: Go one step further Add structures for the three required derived events Connect event producers

51. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 51 Step 4: Complete the Diagram Compliance officer Frequent largecash deposits Large cashdeposit Frequent cash deposits followed by transfers abroad Cash deposit followed bytransfer abroad Suspicious Account Frequent largecash deposits Frequent cash deposits followed by transfers abroad Lack of account activity Lack of account activity Cash deposit is absent Transfer abroad is absent Large cashdeposit customer threshold cash amount Bank transaction system Cash deposit followed by transfer abroad Cashdeposit Transfer abroad

52. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 52 Step 5: Create the tables Large cash deposit Row #ContextConditions WhenPartition bySelection on eventPattern on eventsSelection on patterned events ExpressionStartEndCustomer IDcash amount 1always same>=customer threshold Compliance officer Frequent largecash deposits Large cashdeposit Frequent cash deposits followed by transfers abroad Cash deposit followed bytransfer abroad Suspicious Account Frequent largecash deposits Frequent cash deposits followed by transfers abroad Lack of account activity Lack of account activity Cash deposit is absent Transfer abroad is absent Large cashdeposit customer threshold cash amount Bank transaction system Cash deposit followed by transfer abroad Cashdeposit Transfer abroad

53. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 53 The Vision Governance through program code. TODAY CODE LEVEL

54. © 2013 Knowledge Partners International LLC ●www.kpiusa.com and IBM Corporation 54 The Vision Governance through program code. Governance through event models. TODAY TOMORROW CODE LEVEL

55. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 55 The Vision Governance through program code. Governance through event models. TODAY TOMORROW CODE LEVEL

56. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 56 Host onsite or online presentation on any of these three models Supply sample event logic (under NDA) to validate TEM’s ability to cover most common needs If interested, please contact me at bvonhalle@kpiusa.com or LinkedIN bvonhalle@kpiusa.com Follow Up/Interest

57. © 2014 Knowledge Partners International LLC ●www.kpiusa.com 57 How to Learn More Visit www.kpiusa.comwww.kpiusa.com FREE PRIMER Updated Events Download White Papers News For discussions, become a member of The Decision Model Group Read our articles and buy our books For announcements, training, webinars Go to Linkedin The Decision Model News Contact us information@kpiusa.com Phone +1 919 606-6711 Attend our monthly Decision Modeling Essential online training Next One: March 25-27 09:30 AM – 12:30 PM EDT