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Net Benefits of Business Rules Automation Tamas Kramer Applications Sales Executive, Policy Automation, Central & Eastern Europe April, 2011

POLICY AUTOMATION

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The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

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Why Policy Automation?

Robert Tartaglia, global COO of Allianz Global Corporate and Specialty based out of London, part of the German Allianz insurance group, explains that if an organization is not doing well in this area, “you are at best inefficient, you are likely ineffective, and you don’t know if the policy has brought value.” … “One of the biggest challenges is how to balance running the business with changing the business. Typically, companies don’t say ‘you must change policy but can make less money while doing so’.”

Robert Tartaglia Chief Operating Officer

Allianz Global Corporate & Specialty

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What is policy?

Policy can be interpreted as: • A company/public body’s interpretation of their legislative obligations • Rules created by the company/public body which are allowed under legislation and drive how the company/public body function

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What does Oracle Policy Automation do?

• An engine for making complex decisions and calculations based on a set of rules

• Users create their rules in their natural language using

� Microsoft Word � Microsoft Excel � Microsoft Visio

• The rules are kept separate from any application code - Easier to test and maintain - The rules look like the source documents

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Policy Automation: Mission & History

20 years as a proven EPA leader

Mission is to “Optimize Enterprise Policy Automation” (EPA)

� Customers include the world’s largest government agencies and global 1,000 financial services, insurance and commercial customers

� Consistently recognized as a leader by industry analysts

� Customers and revenue from across North America, EMEA, Asia-Pacific, and Australia

� Patented technology automates legislation and policy using natural language rather than programming language, with multiple languages already supported

� Designed for rapid creation of industry content that can be easily configured for an organization's unique requirements

� Standard, pre-built integrations with leading enterprise application vendors

� Government agencies use Haley to serve tens of millions of citizens

� Tier 1 commercial banks use Haley to serve millions of customers

� Global insurers use Haley to automate tens of thousands of daily claims transactions

� Dynamic self-service applications and high-volume enterprise automation based on complex policy and legislation

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Policy Automation Customers

Financial Services and Insurance

Government Other

• American Fidelity (US) • Countrywide (US) • Credit Suisse (Switzerland) • UBS (Switzerland) • BUPA (UK, Ireland) • NASD (US) • United Healthcare (US)

• HealthMarkets (US) • American International Assurance

(US)

• Farm Bureau Financial Services (US)

• British American Tobacco (UK) • Motosport (US) • Cisco (US) • Intel (US) • AT&T (US) • Toyota Motor Corp (US)

• Internal Revenue Service (US) • Govt of British Columbia

(Canada) • Montana DMV (US) • HM Revenue & Customs (UK) • Home Office (UK) • Ministry of Defence (UK) • Dept Trade and Industry (UK) • Dept of Social Security (Sweden) • Westchester County (US)

• ICF Road Home (US) • 50+ Local Councils (UK) • Small Business Service (UK) • Dept of Statistics (Netherlands) • Dept of Defence (Australia) • Dept of Veterans’ Affairs

(Australia) • Dept of Immigration (Australia) • NSW Government (Australia)

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•Business users create the content

•Unique tools check rules &

show implications

•Quick, high performance deployment

• Business people write rules in Natural Language and therefore no cost or risk associated with translation by IT

• Manage rules with business tools like Microsoft Word, Excel, Visio reduces training requirement and allows for agility with updates

• Policy Isomorphism providing confidence in and visibility of rules

• In-built simulation and scenario modelling gives capacity to analyse and test policy and rule outcomes

• Detailed determination reporting documents how conclusions were reached for audit purposes

• Automated and interactive rule testing to ensure that deployments give correct results

• Fully SOA-enabled out-of-the-box providing low cost flexibility

• Integrated with Siebel

• High performance inference engine with Temporal Reasoning architecture

Policy Automation Value Proposition

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• Dramatically improves time-to-market for changes to policies and rules

• Simplifies development and maintenance

• Ensures accuracy and consistency in complex decisions and determinations

• Reduces the burden on IT resources • Assesses the impact of changes in

policy on customers and citizens through “what if” scenarios

• Provides full audit-trail capability

The Resulting Key Benefits

Policy

Documents

Modelling

Enforcement

Deploym

ent Assessment

Opt

imiz

atio

n

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7 Unique Product Differentiators

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Key Enabler: Policy Isomorphism (Patented)

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The Source

Legislation or

Policy

Executable Document in Natural

Language that Business users can

understand and modify Copy, Paste, Markup

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Key Enabler: Dynamic interactive interviews

•12

Asks least number

of questions in

most logical order

to finalize a

determination

Questions

automatically

created from

source document

without need

for any

programming

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Key Enabler: Determination Reporting

•13

Positive and

Negative

statements

automatically

created to explain

determination

Can be used to

build the content

for a letter of

advice or audit

Natural language

engine provides

personalization

and pronoun

substitution

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Key enabler: Temporal Reasoning (Patent Pending)

• Efficiently handle changes in: • Eligibility, e.g. a change in minimum age, which takes affect on a certain date

• Rates, e.g. quarterly increase of a benefit rate • Customer circumstances, e.g. number of children, marital status

• Benefits of the Oracle Policy Modeling approach to temporal

reasoning: • Accurate calculation of payments even when notification is retrospective • Expressing time-based logic is simple and concise • Optimal performance, without forgoing transparency or decision audits

Annual rate

increase

Annual rate

increase

Annual rate

increase

Claimant is married

New child Pay rise New child

New eligibility

rules come into effect

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Key Enabler: Business User Regression Testing

Clearly define and communicate

expected behavior for complex

scenarios

Ensure that between policy

versions only expected

differences occur

Instantly run 100s or 1000s

of test cases, and drill into

report results

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Key Enabler: Policy Visualization

Quickly find

dependencies

across sections,

and claimant data

Clearly identify

base data needed

for decision making

purposes

Find orphaned

sections of

legislation, and

identify unused

data items

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Key Enabler: Outstanding Performance

• Patented high-speed Linear Inferencing algorithm • Faster than Rete which is widely used within BRE industry • Better exploits modern CPU architectures • More space efficient (stateless) • Well suited to batch/transactional processing scenarios

• Results of benchmarking: • Over 1 million premise evaluations/sec • Using dual CPU Sun Fire 280R

0

0.5

1

1.5

2

2.5

3

0 2000 4000 6000 8000 10000 12000

# concurrent users

Ave

rage

resp

onse

tim

e (s

ecs)

•Oracle Web Determinations on 8 CPU Sun server

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Key Enabler: Multi Lingual capability

Model rules in your native language in Word or Excel Model rules in your native language in Word or Excel

•Easily add new verbs as needed •Easily add new verbs as needed

Integrate natural language questions into any application Integrate natural language questions into any application

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Automatic Language Parsing

Available for English, French, German, Spanish, Dutch, Swedish, Danish, Italian, Turkish*

* Italian beta version

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Insurance-specific Business Rules

With Oracle Policy Automation and Modeling for Insurance, insurers can manage business rules for the following industry-specific processes:

• Eligibility determination • Rating and underwriting and enrolments • Product configuration • Automatic claim adjudication • Complex benefit calculations • Medical bill review • Fraud detection • Subrogation detection • Benefits explanation • Business process management • Regulatory compliance • Pre-authorization

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Why OPA for Finance? • Improves/Automates Credit check

• Accelerates product development • Support of sales/consultancy, precise and

coherent pre-calculation schemes

• Focus on the front-office

• Manage risk: fraud, subrogation detection

• Accelerates business processes • Regulatory compliance

• Automated deployment of multiple sales/customer care channels

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Example Outcomes with Oracle Policy Automation Improved Agility and Customer Service with Reduced IT Project Costs

Area Without OPA

With OPA

Net Benefit

% Benefit

Business Rule Capture 200 days 20 days 180 days 90%

Logic Updates 90 days 3 days 87 days 97%

Call Center Training 60 days 5 days 55 days 95%

Business Logic Implem. $1M* $200K* 800K* 80%

Processing days / case 30 3 27 95%

Call Center calls / case 4 1 3 75%

Error Rate / 1000 cases 50 24 26 52%

Appeal Rate / 100 cases 5 3 2 45%

Source: OPA customer interviews. 2000-2009. *Relative expenditure figures based on customer side-by-side study vs. other implementation techniques

Improved

Agility

Improved

Custom

er Service

Low

er IT

P

roje

ct C

osts

H

ighe

r Q

ualit

y

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Summary: The Policy Automation Difference

• Handling business logic that requires: • Modelling complex legislation, policy, regulation in a portable

Microsoft Office Document • Temporal logic or data changes • Frequent rule changes or updates • Business rules managed in English or other languages

• While delivering: • Explanations for how decisions were reached • Interactive decision guidance • Compatibility, integration and high performance • Incomparable rule authoring lifecycle productivity • Strong testing and maintainability

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Backups

POLICY AUTOMATION

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Oracle Policy Automation

DEMONSTRATION: Oracle Policy Modeling and Automatio n Previously branded as Haley Office Rules

Oracle Policy Modeling

Oracle Web Determinations

Oracle Determinations Engine

Oracle Determinations Server (SOA)

CRM, Portal

HR, ERP

Middleware / Native Web Services / Java / .NET

Other Database

Oracle Policy Automation Connector for Siebel

Oracle Policy Automation Connector for SAP JCo

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One of 5 leaders in Business Rules

Haley has leading solutions for business analysts across all verticals

• Source: Forrester, “The Forrester Wave™: Business Rules Platforms, Q2 2008,” April 8, 2008.

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But unique in Determinations

Haley’s eligibility determinations technology is recognized as unique as well as being a leader

• Source: Forrester, “The Forrester Wave™: Business Rules Platforms, Q2 2008,” April 8, 2008.

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Questions

Tamas Kramer | applications sales executive | email: tamas.kramer@oracle.com

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