collections strat scor superior

Proprietary to Oracle Corporation 24 February 2003 1

ORACLE COLLECTIONS Technical White Paper: Using Collections Scoring and Strategies for Superior Collecting Best Practices for Oracle Collections 11.5.8

Created by: Oracle Collections Development

Creation Date: November 22, 2001

Last Updated: February 24, 2003

Version: 1.0

Copyright (C) 2002, Oracle Corporation All Rights Reserved


Table of Contents Table of Contents................................................................................................................ 2

Purpose of Technical Product Note ................................................................................ 3 1.1 Overview......................................................................................................... 3 1.2 Audience ......................................................................................................... 3 1.3 Technical Note Components........................................................................... 3 1.4 Users and Skills............................................................................................... 4

How Oracle Collections Drives Down DSO and Treats Different Customers Differently! ..................................................................................................................... 5 Getting a Head Start with Collections Seeded Elements ................................................ 8 Oracle Collections 11.5.8 Definitions........................................................................... 10

2.1 Scoring Engines and Scoring Components ............................................................... 10 2.2 Strategies............................................................................................................... 14 2.3 Work Items.......................................................................................................... 16 2.4 Universes, Views and Filters .............................................................................. 18 2.5 Checklists............................................................................................................ 21 2.6 Collector versus Specialist.................................................................................. 21 2.7 Concurrent Programs .......................................................................................... 22

Rules to Remember....................................................................................................... 24 High Level Administrative Flow .................................................................................. 25 Quick Start Chart .......................................................................................................... 26 Collections Business Scenarios..................................................................................... 28 Collections Administration Steps ................................................................................. 32

Business Scenario #1: Start with Collections Out of the Box on Day One........................ 32 Skill: Run the Collections Request Set ..................................................................... 32 Business Scenario #2: Change the Customer Collections Scoring Values and Results ...... 35 Skill: Create New Scoring Engine for Customer/Party and Adjust the Weights of Scoring Components................................................................................................. 35 Skill: Add New Scoring Components........................................................................... 42 Skill: Create a new Scoring Engine .............................................................................. 44 Skill: Define the Delinquency Status Range .................................................................. 48 Business Scenario #4: Creating Two Different Strategies .............................................. 51 Skill: Create New Work Item Template......................................................................... 51 Skill: Create New Strategy Template ............................................................................ 54 Skill: Creating Two Distinct Filters of Customers ......................................................... 56 Skill: Creating Scoring Engines to identify Pre-Delinquent Invoices ...................... 59

Appendix A: Work Sheets and Planning Tools ............................................................ 69 Appendix B: Checklist for Strategies and Scoring Engines ......................................... 74 Appendix C: Workflows ............................................................................................... 75


Purpose of Technical Product Note 1.1 Overview

Oracle Collections introduces best practices Collections Strategies functionality in Release 11.5.8 that empowers collecting organizations to treat different customers differently while also aggressively targeting delinquent customers, reducing receivables and overall improving cash flow. Collections Scoring Engine evolves in this release to not only score delinquent parties but also to score invoices (and cases for Lease Management implementations) in order to determine the best delinquent or pre-delinquent strategy.

This document provides insight into how collecting organizations can utilize these powerful tools to evolve their businesses into effective collections and revenue management organizations.

1.2 Audience

The audience for this note includes collections managers and administrators of Oracle Collections as well as implementation teams and technical support personnel. Readers of this note should also be familiar with Oracle Collections Implementation Guide and Oracle Collections Use and Administer Guide for a complete understanding and working knowledge of Oracle Collections.

1.3 Technical Note Components

The following topics are covered in this note:

Why Oracle Collections Scoring and Strategies provide Winning Collections Strategies

Seeded Elements: list and definitions of seeded Collections scoring components, strategies and concurrent programs

Definitions: descriptions of key Collections terms and their usages Administration Flows: flow detailing the Administrators process to

create strategies, work items and scoring engines

Rules of the Game: list of rules related to the set up and use of strategies and scoring engines

Quick Start Chart: summary chart of key business issues and solutions to manage scoring and strategies

Business Scenarios: several typical business issues that collecting organizations struggle with and some suggested use of strategies and scoring to address these problems

Step by Step Directions: detailed list of steps along with Administrator Screen Shots to walk the collecting organization through setting up scoring engines and strategies to address the business scenarios

Appendix: checklists, worksheets and additional information to help the administrator set up and configure scoring engines and strategies


1.4 Users and Skills

There are several users and administrators that will be using Oracle Collections. The following represents the users along with their expected skill sets.

Collections Manager: possesses knowledge of a collecting organizations collections goals and practices; will be able to articulate scoring needs and create collections strategies using the Collections Administration screens.

Collections Administrator: possesses programming skills required to create database views and filters; will also create new scoring components which requires knowledge of Oracle Schema (HZ, AR and IEX Tables), SQL and PLSQL.

Collections Specialist: is responsible for managing the later-stage delinquency items (bankruptcy, write off, litigation and repossession).

Collector: main user of Collections who handles day-to-day contact with delinquent and pre-delinquent customers.


How Oracle Collections Drives Down DSO and Treats Different Customers Differently!

Oracle Collections Release 11.5.8 revolutionizes the collections process by providing innovative features and functionality to address collecting organizations unique business needs and collections goals. Automation and configuration introduced in Release 11.5.6 have been enhanced to empower collecting organizations to create best-practices collections strategies that support their collections goals, improve collector productivity, reduce DSO and allow them to treat different customers differently.

Through the use of Collections Strategies and Scoring Engines, this release of Oracle Collections provides solutions to virtually any collections scenario that a company may address. Some of these typical business requirements have been:

We are too busy to contact customers with overdue invoices that are less than $5,000. If we tried, we would not be able to collect from customers who owe bigger balances. Some customers pay these invoices but consequently, we end up writing off many of these small balances. Probably customers have figured out that they can get away with buying in small quantities and then ignoring overdue notifications. How can we stop this bleeding?

We value our customers who have been with us for more than two years and would like to develop a more gentle collections strategy to recover bad debt. But customers who have been with us for less than two years should have a more aggressive collections strategy so that we control their bad debt, get our financial relationship off to a better start and ultimately retain and weed newer customers out based on their value. How can we easily execute dual strategies without confusing our collectors?

We are having cash flow issues and realize that a large contributing factor are not the customers who we talk to and bill each month. This monthly contact has actually improved our debt recovery numbers in this segment. Instead, weve determined that the customers who pay on a quarterly or semi-annual basis are often days or weeks late. Since these payments are less frequent, the amounts are often larger and greatly impact cash flow. But, these customers are not necessarily bad customers but are habitually late. How can we get these pre-delinquent customers to pay on time (or even early!) without offending them by a collections call?

We have one call center that handles Europe. There are unique collections requirements for each country that determine how and when we can contact delinquent customers. We are expending lots of training resources to keep collectors clear on these country-specific rules and regulations. Weve also determined that customers in each country often respond differently to the dunning and calling process. Weve determined what works best within each country while also adhering to their guidelines. How can we easily create country-specific collections best practices strategies?

Our collectors struggle with customers who continue to refuse to pay. They waste extra calls to these delinquent customers when they should really refer these customers to managers or collections specialists who can take more drastic collections measures to litigate, repossess and/or write off these debts. Also, customers sometimes claim bankruptcy which, whether this is true or not, needs to be addressed quickly to reduce additional bad debt exposure as well as adhere to strict bankruptcy laws. How can we


address these later stage delinquencies activities without bogging down our collections process?

Our company is definitely feeling the pinch of the bad economic times. More customers are paying late, paying partial or refusing to pay at all. My collectors are overwhelmed with their collections assignments. Each day, they are confused as to who to call first and when to stop calling. We need automation to ease their burden. How can we prioritize their work so that our recovery rate improves?

To address all of these collections scenarios, Oracle Collections created a configurable, automated, powerful set of features in 11.5.8 to help all collecting organizations address their most painful collections issues first while also empowering them to treat different customers differently. A hard-core, heads-down collections strategy may improve the bottom line initially, but may result in negative impact on relationships with key customers down the road. Too many collectibles may mean the collector does not focus on the most critical delinquent customers.

Oracle Collections solution components that help collecting organizations meet the above business needs are:

Collections Scoring Engine: allows collecting organizations to create one or more scoring engines composed of configurable, multiple, weighted components to identify delinquent or pre-delinquent transactions. Based on the score, a transaction can be flagged as delinquent, pre-delinquent or current and an appropriate strategy is assigned. Or, customers can be scored based on certain criteria and collectors can have visibility into how their customers are viewed by their company.

Scoring Components: collecting organizations can create or configure any number of scoring components that can measure number of delinquent transactions, amount of delinquent transactions, days late, number of broken promises, or virtually any data element in the database. These components have individual ranges for their score and when combined into a scoring engine, can be weighted against each other to prioritize one over another.

Collections Strategies: collecting organizations can create strategies that consist of combinations of dunning notifications/letters, collections calls or collections visits to improve the collectors chance of collecting overdue amounts. Letters can be friendly or aggressive, and calls can be scheduled for immediate execution or for several days after dunning notifications. Strategies are selected based on the score calculated by the Scoring Engine. Special strategies can be created for later-stage delinquency processing of bankruptcy, litigation, write off or repossession. And, workflows can be tied to the strategy to facilitate automatic execution or escalation as needed.

Strategy Work Items: consist of manual or automated assignments that send dunning or schedule telephone calls or site visits. These work items are assembled into Strategies for effective collections management. Manual work items can be assigned based on collector skills or most recent collector assigned. Work flow can facilitate escalations and follow through and each work item can have pre and post wait times to promote effective use of resources to complete assignments. Once delinquencies have been cured, strategies and their work items are automatically closed.

Customer Universe or Filters: database views are created to segment customers into groups based on any database criteria including geography, delinquency amount/range, payment schedule due dates, company size, sales revenue to collecting organization or virtually anything else. These filters are then applied to Strategies (optional) or Scoring Engines (required) in order to apply the most appropriate strategy and scoring engine to a


particular set of customers. Additionally, views are used by Scoring Components to facilitate the processing of the score calculation.

Scoring Range Configuration: allows collecting organizations to define in a scale of 1 to 100 what is considered Delinquent, Pre-Delinquent or Current. These ranges combined with the Scoring Engine and Strategies ensures that delinquent transactions are matched with Delinquent Strategies, pre-delinquent transactions are matched with Pre-Delinquent Strategies, and the very delinquent the transactions are matched with more aggressive Delinquent Strategies.

Universal Work Queue: the single place where a collector goes to find all of their work assignments. Three main nodes provide their work assignments: Strategy Work Item node where all of their assignments appear; Broken Promise Node which represents call backs for all customer promises that were not fulfilled; and Delinquency Node which displays all of the delinquent (and pre-delinquent) transactions that all of their customers have. Collectors easily navigate from these assignments into the main Collections application to make calls, process payments and promises, create disputes and record notes.

Concurrent Programs: a series of programs that manage the entire scoring and strategy process as well as promise reconciliation. These concurrent programs should be run together.

For more detailed definitions, see the Definitions section of this document.


Getting a Head Start with Collections Seeded Elements Oracle Collections is shipped with a number of seeded elements to help implementation teams install and test the product. If these elements support a customers business processes they can also be used out of the box. For more information about these seeded elements refer to Oracle Collections documentation.

Seeded elements include:

Five seeded scoring engines o Oracle Collections Delinquent Party Score Engine o Invoice Delinquency Management Engine o Case Delinquency Management Engine o Oracle Collections Delinquent Case Scoring Engine o Oracle Collections Delinquent Inv Scoring Engine

Seven seeded scoring components o Payment Schedule Delinquency Determination o Case Delinquency Determination o Case Scoring Component o Invoice Scoring Component o Number of Delinquencies o Customer Since o Amount of Delinquencies

Nine seeded collections strategy templates o Collections Strategy for Delinquencies o Collections Good Strategy for Delinquencies o Collections Low Rank strategy for Delinquencies o Collections Medium Rank strategy for Delinquencies o Collections High Rank strategy for Delinquencies o Collections Strategy for Bankruptcy o Collections Strategy for Repossession o Collections Strategy for Write Off o Collections Strategy for Litigation

Seven seeded work item templates o Collections Call o Collections Visit o Collections Send o Collections Visit Skill


o Collections WorkFlow o Collections Call Optional o Collections Call Skill

Work Flows (some are documented later in this text): o Collections Fulfillment o Collections Strategy Main o Collections Strategy Sub

Concurrent Programs o IEX: Promise Reconciliation o IEX: Age Delinquencies (being de-commissioned in 11.5.9) o IEX: Scoring Engine Harness which calls IEX Delinquency Management o IEX: Strategy Management Another group of concurrent programs are used when Collections is used with Oracle Lease Management. (Note that this technical paper does not discuss the use of Collections Scoring and Strategies for Lease Management (OKL) implementations. Although the concepts are the same, the OKL implementation uses some of the features differently in order to meet the requirements of the leasing industry.)

o IEX: Case Owner Load Balancing o IEX: Generate Cure Amount o IEX: Generate Cure Refund o IEX: Notify Customer o IEX: Process Pending o IEX: Recall Transfer o IEX: Report All Contracts o IEX: Send Cure Request

Views o IEX_F_DEL_AGING_V o IEX_F_DEL_CASES_V o IEX_F_DEL_PS_V o IEX_F_STRATEGY_V o IEX_CU_F_PARTIES_V o IEX_F_CASES_V o IEX_F_SCORE_INVOICES_V


Oracle Collections 11.5.8 Definitions 2.1 Scoring Engines and Scoring Components

Quick Definition: Scoring Engines are used to score either the Customer (Party), AR Invoice, OKL (Lease Management) Case or Collections Delinquency. When scoring AR Invoices or Cases, the score is used to create Delinquencies or Pre-Delinquencies and then used to select the appropriate Collections Strategy. When scoring Collections Delinquency, it is used to review the current state of the Delinquency (or Pre-Delinquency) and either close the Delinquency, change a Pre-Delinquency to a Delinquency, and change the assigned Strategy. When scoring the Customer, this does not impact the selection of the Strategy but the value is displayed in the Collections Header and is used as a visual (numeric) clue to the Collector as to how the collecting organization views this customer. [Note: in the next main release, collecting organizations will be able to use party or account scores to determine customer or account-level strategies.] What is a Scoring Engine? A Scoring Engine is an engine that consists of one or more Scoring Components. These Scoring Components are each assigned a weight where the sum total of all components equals one. In this way, one component may have a higher weight which means its score has a higher value and influences the overall score more than components of a lesser weight. Seeded Customer (Party) Scoring Engine: For example, the seeded Customer (Party) Scoring Engine evaluates three Scoring Components:

Customer Since: how long has this customer been a customer of the collecting organization

How many delinquent transactions has this customer had in the last year How much is overdue

Most collecting organizations will place more emphasis on how much is overdue and how many delinquent transactions (in the last twelve months) over how long a customer has been their customer. To do this they may assign the following weights:

Customer Since: 0.1 Number of Delinquent Transactions: 0.4 Overdue Amount: 0.5

So by this calculation, the numbers of delinquent transactions and the amounts overdue will be considered more critical than the length of time a customer has been a customer. The value associated to each Scoring Component is multiplied by the assigned weight. In this way, two long-term customers with different payment history and amounts overdue will not receive the same score.

What is a Scoring Component? A Scoring Component is a PLSQL call or a Function Call that evaluates some customer or transaction information and determines a value. Each component is configured with a series of ranges with corresponding values. The value is then multiplied by the weight assigned in the Scoring Engine. The ranges/values for the seeded Scoring Components are:


Number of Delinquencies: Range Low Range High Value 0 5 100 6 20 50 21 99999 1

Customer Since:

Range Low Range High Value -999999 1950 100 1951 1975 75 1976 1990 30 1991 999999 1

Amount of Delinquencies

Range Low Range High Value -999999 0 100 1 1000 90 1001 5000 80 5001 25000 70 25001 50000 60 50001 75000 50 75001 100000 40 100001 500000 30 500001 1000000 20 1000000 999999 1

Now compare the score of two customers: Customer Component Value Value*Weight Component

Score Total Customer Score

Customer A 5 Delinquencies

100 100*0.4 40

Customer since 1975

75 75*0.1 7.5round up to 8

Delinquent Amount = $4,500

80 80*0.5 40

Total 88 Customer B 30

Delinquencies1 1*0.4 .4round

down to 0

Customer Since 1975

75 75*0.1 7.5round up to 8

Delinquent Amount = $75,000

40 50*0.5 25

Total 33


Remember that Customer (Party) Score appears in the header as the Collections Score. A collector who has responsibility for these two customers would quickly surmise from their record that Customer A is a good customer where as Customer B has real issues and needs to be dealt with pretty aggressively. Customers can create virtually any kind of Scoring Component to score any of the seeded objects (Party, AR Invoice, Collections Case or Collections Delinquency). Here is another example of a Scoring Engine that will be used to score individual AR Invoices. Scoring Component Weight Value Range Score Days Past Due 0.4 0-30 100 31-90 50 >90 10 Amount Outstanding 0.5 0-10,000 100 10,001-50,000 80 50,001-250,000 40 >250,000 20 Last Collections Score

0.1 0-50 50

51-100 100 Now lets look at Customer A Invoice#123 and Customer B Invoice #456 to see how differently the scoring can be and what the effect will be: Customer Component Value Value*Weight Component

Score Total Invoice Score

Customer A Invoice #123

60 days late 50 50*0.4 20

$15,000 overdue

80 80*0.5 40

Last Collections Score = 80

100 100*0.1 10

Total 70 Customer B Invoice #456

91 days late 10 10*0.4 .4round down to 0

$55,000 overdue

40 40*0.5 20

Last Collections Score = 55

100 100*0.1 10

Total 30 Clearly Customer Bs invoice is much more delinquent and for a larger amount than Customer As invoice. The scores reflect the seriousness of Customer Bs delinquency over Customer A. Since we are scoring AR Invoices, these Scores are used in the creation of Delinquencies and assignment of Strategies (which will be covered in the following


sections). Based on the Scoring Range Configuration, the score of an AR Invoice determines if an object is delinquent, pre-delinquent, or current. This scoring value is matched to the Rank of a Strategy to select the best collections strategy. Concurrent programs drive these processes. What Objects are Scored? In 11.5.8, there are four objects that can be scored:

Customer or Party: this is the same object as was scored in 11.5.6. A collecting organization views their customers at the party level.

AR Invoice: this refers to the AR Transactions of Types: Invoice, Chargeback or Debit Memo; Collections reviews the payment schedules due dates as part of the scoring evaluation. The Invoice Object is scored and Delinquent Objects (or Pre-Delinquent Objects) are created and then assigned an appropriate strategy.

Collections Delinquency: this is the object created in the previous definition. With some processing, Collections looks at delinquencies as a subset of all transactions instead of looking at all transactions again. This saves on processing time.

Collections Case: this refers to a grouping of Leasing Contracts with similar contract attributes. The Case Object is only used with Lease Management (OKL) implementations. [Note: This document does not cover the seeded Scoring Engines for OKL Cases.]

Another Seeded Example: Seeded Invoice Delinquency Determination Scoring Engine:

Oracle Collections uses the Invoice Delinquency Management Engine to initially create delinquencies or pre-delinquencies. This engine uses a single scoring component called Payment Schedule Delinquency Determination. And this scoring component uses a View called IEX_DELINQUENCIES_NEW_V

The View is as follows. SELECT PS.PAYMENT_SCHEDULE_ID ,

PS.CUSTOMER_TRX_ID, CST.PARTY_ID,CST.CUST_ACCOUNT_ID ,PS.CLASS,PS.STATUS, PS.AMOUNT_DUE_ORIGINAL ,

PS.AMOUNT_DUE_REMAINING, PS.TRX_DATE ,PS.GL_DATE, DECODE(PS.CUSTOMER_ID , -1, ,-2,, -3,, PS.DUE_DATE) FROM HZ_CUST_ACCOUNTS CST ,AR_PAYMENT_SCHEDULES PS WHERE CST.CUST_ACCOUNT_ID(+) = PS.CUSTOMER_ID AND

PS.CLASS IN (DM,INV, CB) AND PS.AMOUNT_DUE_REMAINING > 0 AND PS.STATUS = OP AND PS.DISPUTE_DATE IS NULL AND PS.DUE_DATE < runk(SYSDATE) AND PS.SELECTED_FOR_RECEIPT_BATCH_ID IS NULL

So when Oracle Collections identifies a new delinquency it looks at the database for:

Payment Schedules that are Not Paid (past due)


Payment Schedule Class of Debit Memo, Chargeback, or Invoice Amounts Due more than 0 Payment Schedule not in Dispute

If a collections organization wanted to change the criteria used to identify their delinquent invoices, they would need to create a new View, then create a new Scoring Component, and then create a new Scoring Engine.

2.2 Strategies

Quick Definition: A Collections Strategy is a series of automated and/or manual assignments called Collections Work Items that a collecting organization creates to improve collectors effectiveness when collecting bad debt. These best practices Collections Strategies are assigned a numeric Rank. The Score of an AR Invoice (or OKL Case) that matches the Rank determines what Strategy is assigned to that delinquent transaction. What is a Strategy? The strategy module automates the collections process by the creation of collections strategies and strategy work items. Most collections activities center around dunning letters and telephone calls to contact the debtor, inform them of their debt and then to try to collect from them. Collecting organizations vary the types and timings of dunning letters that are sent, vary the time between letters and telephone calls, vary the number of telephone calls made and vary the tone of the collections contacts. And, sometimes a field collector may be sent on site to survey the situation first hand. Usually the approaches and tones of the letters and contacts are directly related to the amounts that are due and the age of the delinquency. An item that is only 30 days late may not even receive a telephone call but may be sent a friendly reminder. An item that is 90 days late is generally sent a strongly worded letter followed by an aggressive calling campaign. The customer who is habitually late may receive a strongly worded letter whereas the customer who is seldom late may never be sent a notification at all. To be effective, Collections Strategies must be configurable, provide a high degree of automation when appropriate, adaptable to a collecting organizations business practices, and provide direction and prioritization to collectors performing the collections activities. How are Strategies Created? Collections managers create strategy templates. These templates are series of one or more Collections Work Items that are assembled to improve the chances of recovering of delinquent items. Proven strategies become a collecting organizations best practices. Strategy templates are reusable and have several parameters that determine how they will be used. The Rank is a numeric value that matches a Score associated to an AR Invoice. The Category refers to a specific type of strategy. Category Types


include: Delinquent, Pre-Delinquent, Bankruptcy, Litigation, Write Off or Repossession. The Rank and Category provide important criteria for the system to automatically assign the most appropriate strategy. How are Strategies Assigned? When the concurrent program is run (IEX: Scoring Harness), the system scores AR Invoices, compares the score to the Delinquency Status/Scoring Range Configuration, and creates Delinquent or Pre-Delinquent Objects. Collecting organizations set their Scoring Range Configuration to match their business practices. A sample Scoring Range Configuration could be:

Low Range High Range Status 0 60 Delinquent 61 90 Pre-Delinquent 91 100 Current

The Delinquencies and Pre-Delinquencies are created and closed based on this configuration. Once the Scoring is done, the IEX: Strategy Management Concurrent Program enables the Strategy Engine to determine the most appropriate strategy for each delinquent or pre-delinquent object. The Strategy Selection follows these four steps:

1. Match the Category of the Object 2. Match the Rank of the Object 3. Determine if the Object is in the Filter 4. Determine the Skill Set Required for the first (or next) Strategy Work Item

Scenario #1: Selecting Collections Strategy on a Single Filter Universe: A sample series of Collections Strategies could be: Name Rank Category Pre-Delinquent Friendly Reminder

85 Pre-Delinquent

Friendly Delinquent Reminder

55 Delinquent

Mid-Level Delinquency Strategy

30 Delinquent

Aggressive Delinquency Strategy

15 Delinquent

Bankruptcy Strategy 0 Bankruptcy When the IEX: Strategy Management Concurrent Program is executed, the system determines if there is a need to assign a strategy and what is the most appropriate strategy to assign. The system checks the Category and Rank of the AR Transaction/Delinquency Object. If there is not an exact match on Rank, then the system looks for a Strategy with the closest but lower Rank.


Using Customer A and Customer B above, the following represents the Strategy assignments: Customer AR Invoice Score Category Selected Strategy Customer A Invoice #123

90 Pre-Delinquent Pre-Delinquent Friendly Reminder

Customer B Invoice #456

30 Delinquent Mid-Level Delinquency Strategy

It is clear that Customer B will be dealt with more aggressively due to the lower score which is directly related to their more delinquent state. Scenario #2: Selecting Collections Strategies from Multiple Filter Options: In this example, Delinquency #999 received a Score of 50, is greater than $11,000 and is for a US-based Customer. The system has several strategies with a Rank of 50 to choose from:

Strategy 10 Rank = 50 Filter = Italy Strategy 20 Rank = 50 Filter = US

>$50K Strategy 30 Rank = 50 Filter =

Canada Strategy 40 Rank = 50 Filter = >$10K

As the selection progresses, the Strategy Engine determines that Strategy 40 is the match because the Rank matches but also because its filter includes Delinquency #999. The View for this Strategy was created by the following select statement: VIEW SELECT DELINQUENCY_ID FROM IEX_DELINQUENCIES(A),AR_PAYMENT_SCHEDULES(B) WHERE A.PAYMENT_SCHEDULE_ID=B.PAYMENT_SCHEDULE_ID AND B.REMAINING_AMOUNT>10000 Note that there is further discussion on the use of filters in the subsequent section entitled Universes, Views and Filters.

2.3 Work Items

Quick Definition: A Collections Work Item is an assignment requiring execution either by a Collector or Specialist or execution by an automated process. Work Items are related to dunning notifications and can be printed, faxed or emailed. Or, Work Items that require manual execution can be a telephone call or a site visit. Work Items are assembled to create effective Collections Strategies and can be re-used across more than one Strategy.


What are the parameters of a Work Item? Work Items allow Administrators to create very specific collections assignments that will help drive delinquencies to resolution. There are numerous parameters that can be set to ensure that delinquent customers are contacted at appropriate times and with appropriate frequency and prioritize the work for the collector so that their time is used in the most effective manner. The parameters include:

Work Type: Manual for collector or specialist assignments or Automated for dunning notifications

Category: Telephone call, site visit, letter (print), fax or email Priority: High, medium or low help the collector further prioritize their

work Workflow: allows workflow to be linked to a Work Item; a workflow to

Fulfillment server to send the dunning is an example of a seeded workflow Fulfillment Template: indicates which Fulfillment template is used as the

basis for the dunning notification; Administrators create as many template variations to meet their business needs

Pre and Post Execution Wait: Administrators can allow time to elapse between one Work Item and the subsequent one; a collector should wait 3 days after a printed dunning letter is sent but maybe only 4 hours after a dunning email is sent.

Optional: some Work Items can be optional; maybe calls for 30 day delinquent items is optional: the collector can make one if time permits.

Escalations: uses workflow to notify the collectors manager and then their managers manager if work items are not completed in specified time.

Assignments: should manual Work Items be assigned to the same collector who last handled this delinquency or find a collector or specialist based on their skill as defined in the HR module.

How do the collectors take action on their assignments? The Strategy Work Items are presented to the collector in their Universal Work Queue (UWQ). UWQ has a new Work Item node that presents only the actionable assignments to the collector. Work Items are created in the order that they are listed in the Strategy and not created until it is time to for them to be executed. The collector simply clicks a Work Item in UWQ and the system navigates to the new Strategy Tab in Collections. The Strategy tab displays the open Work Item for that collector as well as all completed and future assignments so the collector gets a clear understanding of the strategy for this delinquency. After the work is completed, the collector simply clicks a Complete button and the Work Item is closed and removed from UWQ (after it is refreshed). If the collector has multiple Work Items in UWQ, they can sort on various fields including Priority to ensure they focus on the critical assignments. How are Strategies completed? As the Work Items for a Strategy are completed, the system verifies if the appropriate payments have been received. Once payments have posted and the delinquency is cured, the Strategy is closed and all


remaining Work Items are removed. As the Strategy progresses, Work Items continue to be assigned if the delinquency is not cured. If a Strategy is completed and the delinquency is not cured, the system re-scores the delinquency and a new Strategy is assigned which will presumably be a more severe strategy.

2.4 Universes, Views and Filters

Quick Definition: Oracle Collections allows collecting organizations to segment or filter their database into groups of customers based on many different criteria. These Filters are actually Views on the database. Oracle Collections uses filters for Scoring, Strategy Selection and as part of a Scoring Component.

Each View represents a Universe of Customers (or their delinquent objects) that meet the set of criteria. A Filter is required for Scoring Engines but is optional for Strategies. The Filter for Scoring Engines identifies which transactions will be scored by that Scoring Engine. The Filter for Strategies identifies which scored objects are eligible for that Strategy. Scoring Components use views in certain instances: if you want to use a select statement that uses the result from another select statement as input, then you need a View.

How do collecting organizations leverage these filters? Collecting organizations realize that one collections strategy does not fit all. They really want to Treat Different Customers Differently. Reasons for this range from different legal guidelines between various countries in EMEA to small versus large customers to new versus long term customers. By using Filters/Views to create different Universe of Customers, collecting organizations can use unique Scoring Engines and Strategies that are applicable to each Customer Universe. This enables the collecting organization to hone their strategies for specific customer groups which ultimately result in more effective collections rates and satisfied customers.

How does the Scoring Engine use a Filter? The Scoring Engine uses the filter to locate a subset of objects to score. An Object ID is passed to the Scoring Engine and then used in the Scoring Component(s) to calculate a score based on the score range and weight of each scoring component. The following diagram and subsequent explanation provide insight into how a typical Scoring Engine will calculate scores for AR Transactions.

Scoring EngineFilter

Scoring EngineScoring Engine

Harness

ScoringComponent 1

ScoringComponent n

payment_schedule_1

payment_schedule_n

Scoring Object =payment_schedule

CallEngine

Calculate Calculate

Passpayment_schedule_ID

CreateDelinquency or

Pre-DelinquencyObject

Score Range Configuration

DelinquencyManagementConcurrentProgram

The Diagram represents the following steps:

1. The Scoring Harness reads the Scoring Engine


2. The Scoring Harness checks the filter to identify all data for the engine (data for the component to be scored)

3. The Scoring Harness calls each component for each payment_schedule and collects the results

a. For the Number of Delinquencies per Customer Scoring Component: the SQL query counts the delinquencies by customer via the payment_schedule_ID to determine the customer

b. For the Amount Overdue Scoring Component: the component looks at the amount overdue for that payment_schedule

4. Once all of the components are done, the Scoring Harness calculates the final score

a. Determines the individual Scoring Component Value based on the Range and Weight

b. Totals the values for each Scoring Component

5. After each payment_schedule has a score, the Scoring Harness initiates the associated Delinquency Management Concurrent Program which:

a. Compares the Score to the Score Range Configuration to determine if the scored object is Delinquent, Pre-Delinquent or Current

b. Creates the Delinquency Object or Pre-Delinquency Object

6. The score is saved in:

a. Score_Histories

b. Delinquency_Buffers (to be used by Delinquency Management Concurrent Program

7. Next, the system is ready for the Strategy Selection process

What are the parameters to create a Filter for a Scoring Engine? When building a Filter to be used with Scoring Engines to create and close delinquencies and pre-delinquencies, the column identified must be PAYMENT_SCHEDULE_ID and included in the View. The following are the guidelines to be used when creating a Scoring Engine Filter:

1. The Entity Name must start with IEX_F%

2. The Owner is APPS

3. The select_column field only displays:

a. The data_type of the column_name = NUMBER

b. The column_name like %ID

How does the Strategy Engine use a Filter? The Strategy Selection Engine uses the filter as part of its selection criteria when matching the delinquency_id or pre-delinquency_id to available strategies. The Object_ID must be included in the associated Strategy Filter or the strategy cannot be assigned. The following diagram and subsequent explanation


provide insight into how a typical Strategy Selection Engine will assign a strategy to a delinquent (or pre-delinquent) object and utilize the Strategy Filter as part of this process.

DelinquencyBuffers

StrategyManagementConcurrentProgram

CheckScores

CallEngine

CheckCategory

Check Rank

Check FilterStrategy EngineFilter

delinquency_id_1

StrategySelection Engine Assign Strategy

Assign FirstWork Item

DetermineSpecific Skills

Required

The Diagram represents the following steps:

1. The Strategy Management Concurrent Program uses the results of the Scoring Harness and subsequent Delinquency Management Concurrent Program.

2. The Strategy Engine first checks the category of the delinquent or pre-delinquent object:

a. Is it Current

b. Is it Pre-Delinquent

c. Is it Delinquent

d. If Delinquent, is it also Bankruptcy, Write Off, Litigation or Repossession

3. Next, the Strategy Selection Engine tries to match the Objects Score to the Rank of the Strategies. If there is not an exact match, the system looks for a Strategy with the closest but lower rank.

4. Next, the Strategy Selection Engine looks for the Object_ID in the associated Strategy Engine Filter.

5. After assigning the Strategy, the system then creates the first Work Item.

a. If an automated Work Item, the Work Item is processed

b. If a manual Work Item, the system checks to see if there are certain Skills Required to complete this Work Item before assigning a Resource

Scenario #2 which was covered in Section 1.1 Strategies follows this process.

What are the parameters to create a Filter for a Strategy Engine? When building a filter to be used to assign strategies to delinquent and pre-delinquent objects, the column


identified is DELINQUENCY_ID and must be included in the View. The following are the guidelines to be used when creating a Strategy Filter:

1. The Entity Name must start with IEX_F%

2. The Owner is APPS

3. The View must contain DELINQUENCY_ID

How does the Scoring Component use a Filter? The Scoring Component will use a view as part of its select statement. This allows the component to focus only on certain objects instead of all objects on the database. For example, in Business Scenario #6 (covered later), the requirement is to identify invoices that are coming due in the next 1 to 60 days and then assign proactive strategies to them. A view is created identifying invoices, debit memos and chargebacks with payment schedules coming due in the next 60 days. The associated scoring components will use this view as part of its select statement to streamline the calculation.

Who can build filters? Generally, a programmer builds the views/filters. They would work with the collecting organizations business process team to identify how these would be used to enhance their collections goals and return rates on collector activity. Once they are created, the Collections Manager or Administrator simply assigns them to the appropriate Strategy and Scoring Engine.

2.5 Checklists

Quick Definition: A checklist provides a granular list of items that a collector should ensure are completed as they work their delinquencies. Checklists are not meant to duplicate a list of Work Items for a Strategy, but to provide additional information for the collector to review. For example, the collector or specialist who are calling a first-time delinquent customer may want to verify billing address, telephone number, business contact and dunning delivery. These items would all be accomplished on their initial telephone call so should not be a series of work items. The collector simply clicks on the Check List button on the Strategy Tab to see the checklist and to check off the completed items.

2.6 Collector versus Specialist

Quick Definition: Oracle Collections has several defined users. The collector is the agent, usually in a call center, who is on the front line for the collecting organization. Since the collector is generally on the telephone, they will be using the FORMS interface that has been streamlined for call center use.

The other main user is the specialist or manager. This is a user who is generally focused on a particular strategy for later-stage delinquencies such as bankruptcy or repossession. The specialist does not spend the majority of his/her time on the telephone. They generally receive their assignments only after the collector has recommended a particular strategy. This user interface is HTML.

How do the Collector and Specialist interact? The collector has the bulk of the delinquent accounts that generally fall into 30, 60, or 90 day aged buckets. As the collector attempts to cure bad debt, they often come to the conclusion that the delinquent customer is not going to pay for a variety of reasons. The collector flags customers or delinquencies as needing the attention of a manager or collections specialist and recommends that the


specialist process a customer or an item for litigation (the customer will never pay so well have to take them to court); write off (the customer is never going to pay this; we should write off the bad debt and perhaps assign to third party to take more drastic action); repossession (the customer is never going to pay so why dont we attempt to repossess their asset); or bankruptcy (the customer is claiming they have or are going to claim bankruptcy so we should investigate immediately and attempt to recover bad debt in an expedient and legal manner).

The collector makes this recommendation by using the Delinquency tab in Collections. Once the record is saved, a workflow is created to route this recommendation to the collectors manager. If the manager reviews and approves, then a new strategy is created and it is assigned to an appropriate specialist to work. The specialist logs into the HTML part of Collections and sees all of the bankruptcies, litigations, write offs or repossessions that are assigned to them and acts on specific Work Items.

2.7 Concurrent Programs

Quick Definition: Oracle Collections uses concurrent programs to run batch processes on a regular basis. Batch processes are usually run during off hours to reduce performance issues. The Collections administrator is responsible for setting up the parameters of each concurrent program. You can stop concurrent processes at any time.

Each concurrent program runs at the lowest responsibility level, and can be set to run at multiple responsibility or organization levels. For example, administrators can login by country (different responsibilities) and set different parameters to use when running the same concurrent program. The default is set to run at the site level.

A Concurrent Program Request Set is seeded with Collections. If administrators create new scoring engines, then the related concurrent programs will have to be individually submitted. They should be submitted in the same order and the administrator should confirm one program is completed before the next is submitted to ensure accurate processing. Running Concurrent Programs All Collections concurrent programs run through one node in the Concurrent Manager. Set up the frequency for running the following Collections sets of concurrent programs. They must be run in the order they are listed below (and as they appear on the Request Set screen).

IEX: Promise Reconciliation: Verifies that promises made were kept or broken. Was the payment made or not? It considers grace days.

IEX: Score Engine Harness: This concurrent program may be run twice- once to score invoices and once again to score delinquencies. You can pick from one to five scoring engines in the parameters. This should be run as many times as required to run all the necessary scoring engines.

IEX: Age Delinquencies: You can pick up to five aging buckets for the parameters. No grace time applies to promises to pay. Two profile options are used in this concurrent program:

IEX: Score Engine Harness (optionally run the second time): Scores delinquencies. You can pick from one to five scoring engines in the parameters.

IEX: Strategy Management: This concurrent program assigns the appropriate strategy to delinquencies and pre-delinquencies, and closes completed strategies and strategies for cured delinquencies.


For detailed Oracle instructions for running and maintaining concurrent programs, refer to the Oracle Applications Users Guide and the Oracle Applications System Administrators User Guide.


Rules to Remember There are some high level rules to remember when configuring the various elements of Oracle Collections.

1. Seeded elements can be used as is but no changes can be made to them. New scoring engines, strategies or work items should be created by the collecting organization to model these entities after their business practice.

2. Since new scoring components and Filter Views require SQL statements or functions, technical knowledge is required.

3. In order to create new scoring engines, work items and strategies, business knowledge is required.

4. Each scoring component can be used to score only one object (party, invoice, delinquency or OKL case).

5. Each strategy can be used to manage only one collections status (current, pre-delinquent, delinquent, bankruptcy, repossession, write-off, litigation).

6. There are guidelines to be followed when creating Filters for use by Strategy Engines, Scoring Engines or Scoring Components. See the previous section on Universes/Views/Filters.

7. Scoring Engines require filters.

8. Filters are optional for Strategies.


High Level Administrative Flow Oracle Collections consists of a combination of automated and manual processes that result in the assignment of strategies. This flow identifies the various automated processes that Oracle Collections drives, the Collections Managers manual tasks associated with strategies and scoring, and the Collections Agents role in performing their assigned Work Items.

Create and Execute Collections StrategiesCreate Scoring Engine

Collections Manager

Roles

Collections Agent

Automated Process

Create Scoring Components

Out of the box components Add any DB element/s Weight each component

Score what object? Start/Stop dates? Which scoring components?

Create Scoring Objects

Customer

Invoice

Case

Delinquency

Automate Collections Strategies

Collect Invoices from AR

Score Collections Objects

Execute Strategy Template

System Generate Work Items

Agent Receives Work

Agent Processes Work

System Monitors Progress Per Strategy Template

Parameters

Create Work Item Templates

System or manual Optional or required Required skills Notification Escalations

Work items Ranking Values Use for Checklist Valid dates

Call

Write

System

Visit

Create Strategy Templates

Pre-delinquency

Delinquency

Bankruptcy

Repo

Etc.

Create Work Items and Strategies


Quick Start Chart

If youre familiar with basic set up of Oracle Collections, use this chart to determine what needs to be done to accomplish specific administrative functions.

If you want to

You need to

Scoring Engine

Scoring Component

Filter Workflow Strategy Template

Work Item Template

Concurrent Programs

Use Collections out of the box

Use Collections Seeded Elements

No Changes No Changes No Changes

No Changes

No Changes

No Changes

Use Seeded Request Set

Change Customer Scoring Values (non-seeded engine)

Change scoring components values

Step 1: Create new Scoring Engine

Step 2: Select the components and change their values

Re-use seeded Party Scoring Filter and assign to Scoring Engine

No Changes

No Changes

No Changes

Run Concurrent Programs Sequentially

Add new Invoice Scoring Value

Create scoring components

Step 2: Create new scoring engines

Step 1: Create new Invoice scoring components for each invoice grouping

RE-use seeded Invoice Filters and assign to Scoring Engines

No Changes

Step 3: Create new strategy templates

No Changes


Score different invoices differently

Create new scoring components and scoring engines

Step 2: Create new scoring engine

Step 3: Define the Delinquency Status Range

Step 1: Create new Invoice scoring component

RE-use seeded Invoice Filters and assign to Scoring Engines

No Changes

No changes

No Changes


Manage different invoices differently

Create new work items and strategies

No Changes No Changes No Changes

No Changes

Step 2: Create new Strategy Template

Step 1: Create new Work Item template


Manage different customers differently

Use filters to create subsets of your customer database

No Changes No Changes Step1: Create new customer filter

No Changes

Step 2: Apply new filter to a strategy

No Changes


Manage Invoices

Create new scoring

Step 2: Create new

Step 1: create new

Re-use seeded

No Changes

Step 4: Create

Step 3: Create

Run Concurrent


that are pre-delinquent

engines and components

scoring engines

scoring components; will need view for query

invoice filter

Changes new Strategy Template

new Work Item template

Programs Sequentially


Collections Business Scenarios Business Scenario #1: Start with Collections Out of the Box on Day One

The Business Problem

Your company runs a vanilla collections organization based on standard collections processes and business rules. Youve seen Oracle Collections demonstrated during the sales cycle, read the product documentation, and been trained on the product. Based on this knowledge, you dont want to change Oracle Collections functionality. You just want to use the product as it was designed.

The Skills Required to Solve the Problem

Use the seeded elements provided with Oracle Collections. If you dont require any changes all you need to do is submit the Collections

Concurrent Programs

Business Scenario #2: Change the Customer Collections Scoring Values and Results


The values that appear in the Collections Score field on the Collections Header dont reflect your corporate customer value policy of being more flexible with older customers and less flexible with newer customers. You want to modify the seeded values for the Customer Since that appear in the scoring component screen. Since you cannot change seeded Scoring Engines, you will create a new Scoring Engine and enter values that are consistent with your collecting organization.

You also want to identify these customers as Current, Pre-delinquent and Delinquent.

Collections Scoring Component Details screen


You want the values in your Scoring Engine to be:

Customer Since from Customer Since to Value

1950 1965 1

1966 1980 25

1981 1995 50

1996 2002 100

You also see that the Component Weight of this scoring component is only .01 and you want to give it more weight.


You need to create a new Scoring Engine used in the Oracle Collections Party Score Engine.

You need to add the Party Object Scoring Components to your new engine, assign weights to each and then add the range values for each component.

Since you have created new Scoring Engines, you will have to request the Concurrent Programs in sequential order.

Business Scenario #3: Score Different Invoices Differently


Its been decided to be more aggressive with customers who owe more then $10,000. However the current Collections scoring components used to score Invoices doesnt take the Amount Due into consideration. In order to identify customers who owe more than $10,000 you need to add this to the Delinquency scoring values. You want to create two different Strategies; one for invoices less than $10,000 and one for invoices greater than or equal to $10,000 The Skills Required to Solve this Problem

You need to add new Scoring Components with values of less than and greater that $10,000. And since this process creates new delinquencies, you need to define the Delinquency Status Range.

Since you cant modify the seeded Scoring Engines, you also need to create a new Scoring Engine to use the new scoring components.

Finally you need to run the Concurrent Programs sequentially.


Business Scenario #4: More Aggressively Collect on Larger Invoices


Now that you can identify and score invoices based on overdue amounts, you want to keep your collections agents aggressively calling about invoices more than $10,000 overdue. To support this business practice a simple two-step strategy (send a dunning email and immediately call the customer) will work. At the same time, you want another two-step strategy (send dunning email and wait ten days before calling) for invoices less than $10,000.


You can use an existing Work Item Template called Collections Send to support your more aggressive strategy. Its a good idea to review an existing Work Item Template to ensure everything is set correctly.

You need to create a new Work Item Template that has different wait times for invoices less than $10,000.

Then you need to create a new Strategy Template for to collect on invoices greater than $10,00 and another for invoices less than $10,000.

Next, you will have to provide Filters for the Strategies by =$10,000. Finally you need to run the Concurrent Programs sequentially

Business Scenario #5: Manage Different Groups of Customers Differently


Payments from customers in the United States are coming later than payments from your customers in Canada. You want the same group of collectors to call both Canadian and US customers but you want more aggressive collections efforts for your US customers. The Strategy Template you created in Problem #4 will work for the US customers. The Canadian customers can use two other Strategies. But you need to apply them to different groups of customers. The Skills Required to Solve the Problem

You need to review your existing Strategy Templates to ensure theyre set up correctly. You need to create two different Customer Filters: one for US customers and one for

Canadian customers.

Then you need to apply these filters to the strategies you created previously


Business Scenario #6: Identifying (and Collecting) Invoices that are Pre-delinquent for Proactive Collections!


Some of your customers are billed and pay on a quarterly basis. Most of these payments involve substantial amounts of money, which if late, negatively affect your cash flow. It would be advantageous to identify these invoices before they are due and contact payers in advance of the payment due date. A pre-payment reminder will allow payment problems to be proactively managed and eliminate late payments. Youd like to identify and manage these customers as Pre-delinquencies.


Youll need to create a new Pre-delinquency invoice filter for the Scoring Engine. Youll need to create new Score Component for Pre-Delinquency. Create the Scoring Engine to process the Pre-Delinquent Objects. Configure the Delinquency Status for the New Engine. Ensure there are appropriate Pre-Delinquency Strategies to be used.


Collections Administration Steps Business Scenario #1: Start with Collections Out of the Box on Day One

Skill: Run the Collections Request Set

This function is done in the FORMS environment. Your responsibility is Collections Forms Administrator.

From the Navigator, click on Submit Request.

To run the Collections Request Set, select Request Set from the screen that asks you What type of request do you want to run?

To run individual concurrent programs, select Single Request from this screen.

Click OK


From the Submit Request Set screen, type in IEX% and click on the LOV selector (three dots in a row) to the right.

Another pop-up screen will appear. Select IEX: Oracle Collection Concurrent Request Set from the list of values presented. Then click OK.


The list of all concurrent programs in your selected request set will appear. Click on the Submit button to start processing.


Business Scenario #2: Change the Customer Collections Scoring Values and Results Skill: Create New Scoring Engine for Customer/Party and Adjust the Weights of Scoring Components

Start at the Scoring Tab. First, you will create a new scoring engine to score your customers. Click on the Create Scoring Engine button to begin.

Next, enter the necessary details for your Scoring Engine. You select the Object of Party which does not use concurrent programs. Also, the enable flag cannot be set until later in the process.


After creating the Scoring Engine, you will be ready to add the components. Click on the Add Component button to proceed.

Next, you will see all the components that are available to be used to score the Party. You will select each of these, one at a time.


Then you will have to add a weight for each component. The sum total must equal 1.0 or there will be an error. For this scenario, the Customer Since value is being increased to .5 as the collecting organization wants to recognize longer-term customers over delinquencies. Next, you will click on the Detail link of each Component to enter the range and values of each.

Enter the range and value for the Customer Since component.

Enter the range and value for the Amount of Delinquencies component.


Enter the range and value for the number of delinquencies component.

Next, you have to assign a filter for the Scoring Engine. From the Scoring Tab, you click the Create Filter button on the new Scoring Engine line. Since youre scoring the entire customer database, you can use the seeded party filter: IEX_CU_F_PARTIES_V.


You select the View from the available views on the system:

Then, you select the appropriate column for the view. Since your scoring the party, the selection is the customer_id.


After clicking the Create Filter button, you can click the test button to see how many rows are in this view.


And the last step is to set the Enable Flag to yes. Now youre ready to use this Party Scoring Engine that better maps to your collecting organizations values.


Business Scenario #3: Score Delinquencies Based on Amount Due

Skill: Add New Scoring Components

You need to treat different customers differently, but do not want to create new universes for each customer type. Instead, you can create new scoring components; a new scoring engine and use the weights and ranges to assign the appropriate strategy for each customer group. In this example, you will differentiate between delinquent invoices under $10,000 and equal to/over $10,000.

First, you will create a new scoring component to identify delinquent invoices that are greater than or equal to $10,000. Start at the Scoring Component menu item under Scoring Tab. Click on Create Type button to create your new component.

Next, enter the necessary information to create the new component. Be sure to select Collections Invoices as the object. Also, the picture only shows three lines in the Score Component Value field. The complete text is:

SELECT Nvl(Count(1),0)

FROM IEX_DELINQUENCIES_NEW_V

WHERE Payment_Schedule_id=:payment_schedule_id

AND AMOUNT_DUE_REMAINING>=10000


Now, you have to follow the same steps to create a scoring component for delinquent invoices less than $10,000. Enter the necessary information. The picture does not display the entire text of the component which is as follows:

SELECT Nvl(Count(1),0)

FROM IEX_DELINQUENCIES_NEW_V

WHERE Payment_Schedule_id=:payment_schedule_id AND AMOUNT_DUE_REMAINING


Skill: Create a new Scoring Engine

Start at the Scoring Engine menu item on the Scoring Tab. Click on the Create Scoring Engine button to begin. Fill in the necessary information. Be sure to select Collections Invoices as the JTF Object type and to select the IEX Delinquencies Management as the Concurrent Program. You will have to set the Enabled flag later.


Next, you will have to add the filter to the Scoring Engine. Click on the Create button in the Filter column of your new scoring engine.

Enter the necessary data to create the filter. Select the view that relates to Payment Schedules since we are creating delinquencies based on invoices and their installments (payment schedules) and select the column id related to this filter.

Next, you need to add the components to the scoring engine. Click on the engine name hyper-text link on the summary screen. Click on the Add Component button on the Score Details screen.


From the Score Component Name Search, select your new components one at a time.


Then, enter the weight for each component. They will be equally weighted at 0.5. Then, click on the Detail hyper-text link to enter the weight range for each component.

Enter ranges for the first component and then the second one. Remember to make sure the ranges to not overlap but are contiguous. After you have saved, click the Back button. Also remember that the goal is to score the invoices greater than $10K at 40 and those less than $10K at 10.


And the range for the other component:

Skill: Define the Delinquency Status Range

Next, you need to define the Delinquency Range so the system knows what is Delinquent, Pre-Delinquent or Current. From the Score Details screen, you will click on the Delinquency Status button. (This button and the associated screen will be changed to Delinquency Status Score Range in the next release) Note: the Delinquency Status button is only available when the scoring engine is creating delinquencies (or delinquent cases) and not for party scores. In this example, the range identifies Current and Delinquent statuses.


Finally, the Scoring Engine is ready to be used and its Enabled Flag is set to Yes.

Now that you have your new Scoring Engine, you have to run the concurrent programs to create delinquencies and assign strategies. The assumption in this


scenario is that the seeded or available strategies are sufficient for your collecting organizations needs.

You may, however, create two strategies. A more aggressive strategy may send a stern letter and call one day later for the delinquencies over $10,000. The rank should be 40 for these. And for the other delinquencies under $10,000, a more pleasant letter and a call 10 days later may suffice; these will be scored at 10. You can create these or other strategies, some of which are detailed in the next business scenario section.


Business Scenario #4: Creating Two Different Strategies

Collections goal is to have two strategies to address the delinquent customers based on delinquent amounts. For the delinquencies over $10,000, the strategy will be more aggressive: strongly worded email followed with a stern collections telephone call within 30 minutes. For the delinquencies less than $10,000, there will be a more friendly dunning email sent and a call ten days later if the delinquency is not cured.

Skill: Create New Work Item Template

First, the Administrator has to create new work item templates associated with the aggressive and friendly emails and telephone calls. Starting at the Work Item menu under the Strategy Tab, the Administrator clicks the Create button.

Next, the Administrator creates the aggressive email work item. Since this is an email, the Administrator has to select a workflow to call the Fulfillment server as well as identify the Fulfillment (Dunning Letter) template.


Next, the Administrator creates an aggressive telephone call work item. Note that the Administrator has defined a mere 30 minutes wait time before the collector will be assigned the aggressive telephone call.


The Administrator creates the friendly dunning email using a different (and more friendly) dunning letter template from Fulfillment.

And finally, the Administrator creates a friendly dunning call back that will not occur until 10 days after the email has been sent.


Skill: Create New Strategy Template

Once the Work Items have been created, the Administrator will create two new strategies for the aggressive and friendly collections approaches. Starting at the Strategy Tab, the Administrator reviews the existing strategies and clicks the Strategy Template button to create a new one.

First, the Administrator creates the friendly strategy. Note that the rank is set to 10 to map to the previous scenarios score of 10 for delinquencies less than $10,000. Note that the category is Delinquent. After saving the new strategy, the Administrator can click on the Work Item Details button to add work items.

Next, the Administrator selects the Work Items for this strategy. The work items appear in the order they were selected, but the Administrator can rearrange by simply changing the Order number.


Then, the Administrator creates the more aggressive strategy. The rank matches the score for the delinquencies greater than $10,000.

The Administrator selects the Work Items for the aggressive strategy.

Both of the strategies are now ready to be utilized. The Administrator has to run the concurrent programs to create the delinquencies and assign the appropriate strategies.


Business Scenario #5: Manage Different Groups of Customers Differently

Skill: Creating Two Distinct Filters of Customers

Sometimes treating different customers differently requires creating two distinct customer universes with their own scoring and strategies. In this example, there will be universe for customers based in the United States utilizing the scoring and strategies created in Business Scenario #4 and the seeded Collections Strategies for Delinquencies for Canadian customers. This scenario assumes that a programmer has created two views for the different universes:

IEX_F_STRATEGY_CANADIAN_V for customers in Canada IEX_F_STRATEGY_US_V for customers in the United States

First, the Administrator starts at the Strategy Template menu item on the Strategy Tab and finds the two strategies for the US customer base. The Administrator clicks on the No Filter hyper-text link to add the US filters.

Next, the Administrator fills in the Filter information for the strategy. The search pop up provides the list of available filters.


The Administrator repeats the steps for the Aggressive Strategy.


The Administrator returns to the Strategy Template menu and identifies the strategy for the Canadian universe and clicks on the No Filter hyper-text link.

The Administrator repeats the steps to identify the Canadian universe for this strategy.


After assigning the filters to your strategies, you are ready to run the concurrent programs to score delinquencies and assign the appropriate country-specific strategies.

Business Scenario #6: Targeting Pre-Delinquencies for Proactive Collections Success Skill: Creating Scoring Engines to identify Pre-Delinquent Invoices

Customers who pay less often than monthly may be more prone to forgetting their payments when their payments are due. And since these payments are less frequent, they may be substantial amounts. In this example, there will be new scoring components, scoring engines and strategies to address this pre-delinquent challenge.

Assumption: Your programming staff has created a new View to be used by the Pre-Delinquency Scoring Components. The View created is IEX_PRE_DELINQUENCY_VIEW:

SELECT PS.PAYMENT_SCHEDULE_ID, PS.CUSTOMER_TRX_ID, CST.PARTY_ID ,CST.CUST_ACCOUNT_ID ,PS.CLASS ,PS.STATUS ,PS.AMOUNT_DUE_ORIGINAL ,PS.AMOUNT_DUE_REMAINING ,PS.TRX_DATE ,PS.DUE_DATE

FROM HZ_CUST_ACCOUNTS CST ,AR_PAYMENT_SCHEDULES PS

WHERE CST.CUST_ACCOUNT_ID(+) = PS.CUSTOMER_ID AND PS.CLASS IN ('DM','INV', 'CB') AND PS.AMOUNT_DUE_REMAINING > 0 AND PS.STATUS = 'OP' AND PS.DISPUTE_DATE IS NULL AND PS.DUE_DATE > trunc(SYSDATE) AND PS.DUE_DATE

Once this is completed, the Collections Manager is ready to create a new Pre-Delinquency Scoring Engine. First, create your new scoring components. You will create two: one for payment schedules that will come due in 1 to30 days and one for payment schedules that will come due in 31to 60 days. At the Scoring Tab, begin by clicking on the Scoring Components menu item. Both


will be used to score Collections Invoices (Object Type). Remember to include the new View for Pre-Delinquencies. The select statements entered are:

For the 1 to 30 Component: SELECT Nvl(Count(1), 0) FROM IEX_PRE_DELINQUENCY_VIEW

WHERE PAYMENT_SCHEDULE_ID = :PAYMENT_SCHEDULE_ID and

trunc(DUE_DATE) > trunc(sysdate) and trunc(DUE_DATE) trunc(sysdate+30) and trunc(DUE_DATE)


Next, select the two new components for your Scoring Engine. You will set equal weights for the components.

Next, you will have to enter the ranges and values for each component. Ultimately, you are trying to create two strategies: one for 1 to 30 pre-delinquencies and another for 31 to 60 pre-delinquencies. So, each scoring component will have a different set of ranges and values. For the 1 to 30 Day Component, you will enter:


And for the 31 to 60 day component, you will enter:

Next, you will enter the Score Range Configuration that identifies Current, Delinquent and Pre-Delinquent ranges. To do this, click on the Delinquency Status button on the new Scoring Engine detail screen. For this scenario, since you are only interested in Pre-Delinquencies, you will only need to enter the range values for Pre-Delinquency.


Now, you are ready to assign a filter to the Scoring Engine. From the Scoring Tab, click on the Create Filter button on the line for your new scoring engine. Since youre looking at payment schedules, you can use the seeded view: IEX_F_SCORE_INVOICES_V. Remember to select the column for PAYMENT_SCHEDULE_ID. You enter a name on the Create Filter screen and the rest of the details. After saving the filter dont forget to enable the scoring engine.

Now, your new Scoring Engine is on the Scoring Engine summary screen.


Now, you are ready to create the Strategies. But first, lets take a look at how two transactions will be scored. Assuming the date today is 12/15/2002, you will have one transaction that falls within 1 to 30 days due and another 31 to 60 days due. The following chart reflects how each of these two transactions will be scored.

Transaction & Due Date

Scoring Component

Score Range Value

Calculation Total Combined Total

#1: 01/01/03 1-30 50 *.50 25

31-60 1 *.50

25.526

#2: 02/01/03 1-30 1 *.50

31-60 80 *.50 40 40.541


Now, based on the ranges, you see will create two strategies and assign the ranks to meet pre-delinquencies in each range. To plan these strategies, you can begin by plotting what each strategy will accomplish.

Strategy Category Rank Work Items

1 to 30 Pre-Delinquency

Pre-Delinquency 24 Send Letter identifying payment is due in < 30 Days

Call 3 Days after letter to follow up

31 to 60 Pre-Delinquency

Pre-Delinquency 39 Send Very Friendly Reminder Letter identifying that payment is due next month

Follow up call 10 days after letter is sent

Now youre ready to create strategies and work items. Assuming the letters have been created in the 1to1Fulfillment module, you will simply create two work items to leverage these letters. You can probably re-use existing Call work items. First, create the work item for the 1 to 30 letter. Note that you have a post-execution wait time of 3 days before the call.

Now create the work item to use the 31 to 60 letter. Note the post execute wait time is 10 days.


Once the work items are created, you can create the new strategies. Starting at the Strategy Tab, click on the Create button.

Create your 1 to 30 Pre-Delinquency strategy first.


After saving, you can add the Work Items. Click on the Work Items detail and then click on Add Work Items. Select the items and review the order. When youre finished, it should look like this:

Next, create the 31 to 60 Pre-Delinquency Strategy.


And, add the work items. When youre finished, it should look like this:

Now youre ready to run the concurrent programs to score the objects and create the pre-delinquencies. Since filters are optional with Strategies, you do not have to add them.


Appendix A: Work Sheets and Planning Tools

Score Range Configuration Planning Worksheet

Range Value Low Range Value High Status

Rules:

Ranges cannot overlap.

Valid range must be between 1 and 100.

Status values are: Delinquent, Unassigned, Pre-Delinquent or Current.

A Score Range Configuration is needed for all scoring engines that create and manage delinquencies but not for scoring delinquencies or parties.

Score Component Details Planning Worksheet

Range Low Range High Value

-999999999

999999999

Rules:

Ranges cannot overlap.

Valid range is between 1 and 100.


Strategy Summary Planning Work Sheet

Name Rank Category Checklist Checklist Fulfillment Template

Change Strategy (Y or N)

Rules:

Rank is used to match score (of invoice or case); must be between 0 and 100.

Category refers to Current, Delinquent, Pre-Delinquent, Bankruptcy, Litigation, Write Off or Repossession.

Checklist indicates this is a checklist and not a strategy.

Include the name of the Fulfillment Checklist if one is used.

Indicate if a collector can manually change the strategy (either yes or no).

Remember if there is not an exact match between the rank and the score, then the system looks for a lower rank for the match. Category, of course, must match too.


Create Component Type Planning Worksheet

Name Value Function Object

Rules:

Value represents the SQL call or function

collections strat scor superior

Documents

oracle corporation

collections business

collections request

technical note components

scoring engines

quick start chart

copyright c

high level administrative