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Decisions in the cloud #ficoworld


Last session for me at FICO World is SulAmerica (part of ING) talking about their work with FICO moving decision management applications to the cloud. Cloud is clearly a growth area for businesses, with much of companies’ IT  investment being pushed to the cloud. This move to the cloud turns applications to SaaS, middleware into PaaS and hardware to IaaS – a new cloud stack. This new stack changes the dynamics of solution development: Usage-based models lower barriers to end, no install and no hardware means faster time to value and rapid scaling – all without needing IT and with less complexity.  Adoption of this new stack is rapid and accelerating. So what does this mean for decision making? Well decision management is ideally suited to the cloud – once we decide to manage decisions separately and we focus on delivering decisions to multiple systems then delivering decisions as a service is both powerful and clearly valuable (see my research on Predictive Analytics in the Cloud, for instance).

SulAmerica is the largest independent insurance group in Brazil with over 30,000 independent agents, $5B in revenue and nearly 7M clients. Insurance in Brazil is sold through independent agents or brokers and customers only contact the insurance company directly when making a claim or otherwise needing help. In 2005 SulAmerica licensed Blaze Advisor and developed an auto quote solution to replace 7 existing systems written in 3 different languages that had to be updated every month. By 2008 they had expanded from auto (one of their smaller lines of business) and had developed a centralized decisioning engine for multiple lines. More consistent decisions, increased agility and reduce maintenance costs.

SulAmerica is looking at cloud in three scenarios:

  • When  a service needs to be turned on and off periodically
  • When there is a need to add new capacity over time
  • When there are occaisional sudden peaks in demand for additional capacity
  • When there are predictable peaks and troughs in the demand for a service

All of these show clear value propositions from the scalability and flexibility of cloud provisioning. SulAmerica moved to SaaS in 2011,Paas in 2012 and IaaS in 2013. They deployed their health and dental quoting application to the Google App Engine (PaaS) and used Azure (IaaS) to provide a web downloadable auto quoting engine (internet connectivity is such that being able to download something locally can be important).

The health and dental insurance underwriting application was written using Blaze Advisor, targeted at small and medium businesses and delivered on the Google App Engine. The decision service replaced an Excel-based approach that was horribly hard to maintain and change as regulations and policies changed. The new application as able to match the on-premise performance and be delivered with the elasticity and scalability you would expect from a cloud solution. From a user interface perspective the business users continue to use Excel for maintaining the business rules. These spreadsheets are uploaded to update the business rules, minimizing the process change within SulAmerica. The brokers come to a web portal or a mobile application to get quotes.

The new system allowed for more rapid updates and helped the business grow 30% while reducing $2M in IT costs. The cloud-based performance and availability was actually better than for the on-premise version, critical because the agents are asking for several quotes and the faster, more reliable a response the better for the insurance company.

That’s a wrap.


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