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:
-999999 1950 100
1951 1975 75
1976 1990 30
1991 999999 1

Amount of Delinquencies
-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
Delinquencies
1 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 Engine
Filter
Scoring Engine
Scoring Engine
Harness
Scoring
Component 1
Scoring
Component n
payment_schedule_1
payment_schedule_n
Scoring Object =
payment_schedule
Call
Engine
Calculate Calculate
Pass
payment_schedule_ID
Create
Delinquency or
Pre-Delinquency
Object
Score Range Configuration
Delinquency
Management
Concurrent
Program
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.

Delinquency
Buffers
Strategy
Management
Concurrent
Program
Check
Scores
Call
Engine
Check
Category
Check Rank
Check Filter
Strategy Engine
Filter
delinquency_id_1
Strategy
Selection Engine
Assign Strategy
Assign First
Work Item
Determine
Specific 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 Strategies
Create 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
Run
Concurrent
Programs
Sequentially
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
Run
Concurrent
Programs
Sequentially
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
Run
Concurrent
Programs
Sequentially
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
Run
Concurrent
Programs
Sequentially
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 and >=$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.

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<10000


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)
For the 31 to 60 Component:
SELECT Nvl(Count(1), 0) FROM IEX_ PRE_DELINQUENCY_VIEW
WHERE PAYMENT_SCHEDULE_ID = :PAYMENT_SCHEDULE_ID and
trunc(DUE_DATE) > trunc(sysdate+30) and trunc(DUE_DATE) <=
trunc(sysdate+60)

Next, the new Scoring Engine is created. Start at the Scoring tab and click on the Create Button.
Enter the necessary data. The Object to be scored is the Collections Invoices and remember to tie
the Delinquency Management Concurrent Program to the engine. You will have to set the Enable
flag later.

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
-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 used to determine the score component value.
Function indicates whether or not this is a functional call.
Object selections are: Collections Invoices, Collections Delinquencies, Collections Cases or Parties.
Work Item Planning Worksheet
Name Description Type Category Priority Workflow Fulfillment Pre
&
Post
Wait
Time
Optional
& Wait
Time
Escalation Same
Resource
Notify Skills

Rules:
Work Type can be: automatic, manual, email, fax or print.
Priority can be high, medium or low.
Wait Time UOM can be: minute, hour, day, week, month, quarter or year.
Planning for Strategy: _____________________________
Name Type Work Item Fulfillment
Template
Optional Order

Rules:
Order indicates the order in which the work items will be created and assigned. Use the Work Item
Planning Worksheet to select the work items for each strategy.
Appendix B: Checklist for Strategies and Scoring Engines

Step Item Complete?
1. Create Scoring Components
2. Create Scoring Engine
3. Add Scoring Components to
Scoring Engine and include
Weights

4. For each Component, enter the
Low/High Ranges with its
Values to the Scoring
Components

5. Enter the Scoring Range
Configuration to identify
Delinquency Status Range
(0 to 60 = Delinquent
61 to 90 = Pre-Delinquent
91 100 = Current)

6. Optionally create new Filters
(for Universe of Customers)

7. Optionally add a Filter
(Universe of Customers) to the
Scoring Engine

8. Enable the Scoring Engine
9. Create Work Items
10. Create Strategies
11. Assemble Work Items into
Strategies

12. Set Delinquency Status
Prioritization

13. Run Concurrent Programs
14. Work Delinquencies
Appendix C: Workflows

Strategy Fulfillment Workflow

Strategy Main Workflow

Strategy Sub Workflow

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