In the complex world of business, the decisions you make are critical to the success and sustainability of your organization. While some of these decisions are strategic, there are plenty of everyday decisions knowledge workers and managers make. These business decisions include authorizing a loan, based on established rules and policies — i.e., “manual” operational decision management. Luckily, these types of decisions are perfect for automating with the aptly named IBM Operational Decision Manager (ODM).
ODM is IBM’s business rules engine and software platform. It provides organizations with a way to configure and codify their business decisions so that the software can make decisions automatically. Automated decision-making naturally speeds up your processes, but it also has several business benefits in other areas.
Given the rules-driven nature of the insurance industry, it’s no surprise that it’s a perfect fit for IBM ODM.
It’s crucial for insurance organizations to comply with industry regulations and plan membership requirements. Not only do businesses avoid steep fines by complying, they also keep their customers happy. For example, companies must process claims within required time periods. Consistency and auditability are two major factors in ensuring this compliance.
One practical instance in which ODM can be useful is in its decision table capability. This feature groups predetermined rules that have similar conditions and actions for quicker response time. For example, a loan company may need to determine an insurance rate based on the loan amount, customer credit rating and/or a variety of other factors. The ODM will look up these factors in its decision table and return a corresponding insurance rate.
Other possibly automated business decisions specific to insurance and finance include: deciding whether to accept or reject a claim, determining insurance rates, approving internal promotions and detecting cross-selling opportunities. Codifying industry rules into a configurable solution like ODM improves decision-making accuracy, reduces staffing requirements and eases the burden of training new employees.
Like insurance, finance also centers largely around rules. Consider loan origination in automotive services, where rules play a major part in how the dealer interacts with a finance company.
When a dealer applies for financing for the customer, such as with a purchase loan or lease, the finance company decides whether to finance the deal based on defined rules. These rules relate to the data provided on the application— credit report, income, debt-to-income ratio, etc. If the data doesn’t meet certain requirements, the dealer may reject the application.
Assuming acceptance, the dealer then walks through the contract with the borrower, which then goes back to the finance company for validation. The finance company must decide whether the received contract matches the original offer sent to the dealer. They also determine whether all the required information is available for acceptance.
Rules are an intrinsic part of the loan origination process, making it a good fit for automated operational decision management. IBM ODM handles many process elements, which provides an unbiased, consistent and accelerated review (seconds instead of hours) of inputted data.
IBM ODM has the power to make simple business decision processes expedient and accurate, giving insurance and finance organizations a compelling reason to explore the platform.
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