Pega Products - Pricing
Hi all,
I've been trying to get a high-level understanding of some of the Frameworks sold by Pegasystems and am currently trying to find a Framework which supports Product & Pricing. The closest two Frameworks I can find are the Product Builder and Configure Price Quote for Communication. I can see that the old Product Configuration Framework had a level of "pricing" capability but PBI does not have the same, judging by the lack of content in the Implementation Guide.
I really have a couple of questions:
1. Did Product Builder supersede Product Configuration Framework, and if so, was any functionality deprecated?
2. If pricing functionality was deprecated, was that functionality moved to another Framework?
I understand Pega Marketing is an area of focus, so is another possibility that Pricing could now be driven through an implementation of this Framework and PBI is only used for the "Product" definitions?
Thanks,
Ben
***Edited by Moderator Marissa to update platform capability tags**
Accepted Solution
Updated: 4 Jan 2023 14:29 EST
Pegasystems Inc.
IN
Product Configuration Framework (PCF) is a vertical agnostic application used for building products.
PBI is used as a replacement for PCF in Insurance applications,to meet insurance vertical needs.
Product builder for insurance(PBI) is developed from scratch and its intent is not to match
PCF functionality feature to feature.
Yes,PBI is only used for the "Product" definitions. Pricing is intentionally not included as part of PBI,as usually Insurance rating engines handle pricing outside product definitions.
Pega Marketing will not generally be used for Insurance rating.
Homeserve
GB
Hi if Pega marketing is not doing rating then what dose marketing do since most modelling done in it is based on propensity to buy (propensity models) that are largely affected by the price to pay by the customer. Doesn’t this therefore devalue Pega Marketing and its use as most people buy based on price which should be personalised, and calculated runtime based on customer circumstances.
Hi if Pega marketing is not doing rating then what dose marketing do since most modelling done in it is based on propensity to buy (propensity models) that are largely affected by the price to pay by the customer. Doesn’t this therefore devalue Pega Marketing and its use as most people buy based on price which should be personalised, and calculated runtime based on customer circumstances.
I'm not sure how all of the frameworks are working together for the insurance space. I see PUI is for on boarding and transacting the sale, Product builder for product definition, base price and costs (underwriting for example) with marketing providing the proposition and sales funnel but also rating, though I do not see any extension points for rating (these sat with the old product configuration framework). marketing has the sales advisor in CS which gives the products to sell based on next best action, but the model has no concept of rating. If I move rating out of the model, then the model isn’t complete and therefore makes marketing redundant. If the model has to take pricing (discounts and surcharges) into consideration, then it would need to be able to model price (including discounts and surcharges) against propensity to buy and therefore have functionality to account for this and then take action and suggest the right offer.
My question is, how does all of this hang together as it feels like product configurator has given way to marketing (there were clear extension points for a more complicated rating system if the basic rating system didn’t do what you needed) yet marketing hasn’t got all the functionality it needs to define personalised 'priced' offers to the customer based on propensity to buy with no clear extension points. It feels like Marketing has been bodged in to the frameworks (after the Chordiant purchase) without a clear view on it's real place in the end to end process and the framework stack.
What are the boundaries of responsibilities? it’s not clear where Marketing ends and PUI and product builder picks up especially when the customer has confirmed the sale in the sale funnel and the transaction needs to convert the sales order in to a policy which needs to be accounted for in some double entry accounting system.
It would be really good if some one could give some real clarity around the frame works and their basic roles and responsibility in the End to end stack. I’m guessing that the frameworks were born out of a insurance application that was built for some large insurance provider and had clearly defined roles in that application. Then marketing come along and some one said make it fit in the process. This integration was never completed fully, and parts of the framework were made redundant due to marketing functionality overlap. None of the documentation available defines the current standing of the frameworks and what functionality if depreciated.
Updated: 17 Jul 2018 14:14 EDT
Pegasystems Inc.
US
Pega Marketing is about what is offered to specific customers, when and how. It is about make the next best offer predicting what the customer needs. It does not include any products or premium rating calculations. More detailed info can be found here: https://www1.pega.com/products/crm-applications/marketing.
Product Builder was created as a replacement for Product Configurator. It is designed to allow an insurance product designer to easily create insurance products leveraging pre-defined components for different lines of business and market segments. Product Designers will adjust coverage, endorsement and form components for each product appropriately, along with setting up the jurisdictions to which the product applies, as well as customer eligibility. It does not include any premium rating calculation to be done by the PD. Almost all of our customers interface with one or many rating engines that they already have in place for complex insurance rating. Other customers will create simpler premium rating within PUI, or their own Pega application that often reflects what they may currently be doing in spreadsheets. We do have customers that have built complex rating engines in Pega.
For most customers, premium rating is done via PUI with integration to external rating engines, or created within PUI.
HCL Technologies
NL
Adding on to the response above from monap and to answer the question of an end to end stack revolving around Pega insurance applications and their roles and responsibilities : Pega Marketing would run campaigns to generate leads. These leads are converted to opportunities using the Sales Automation for Insurance application. The Opportunities initiate submissions within PUI. PUI integrates with PBI to fetch products based on eligibility, performs rating by integrating with an external rating engine (or using rules within PUI) and eventually issues a policy which will be written into a Policy Admin system. Once a lead is converted to a customer, any customer service requests will be handled by the Customer Service for Insurance application. Any claims will be handled by the Pega Claims for Insurance application.
Adding on to the response above from monap and to answer the question of an end to end stack revolving around Pega insurance applications and their roles and responsibilities : Pega Marketing would run campaigns to generate leads. These leads are converted to opportunities using the Sales Automation for Insurance application. The Opportunities initiate submissions within PUI. PUI integrates with PBI to fetch products based on eligibility, performs rating by integrating with an external rating engine (or using rules within PUI) and eventually issues a policy which will be written into a Policy Admin system. Once a lead is converted to a customer, any customer service requests will be handled by the Customer Service for Insurance application. Any claims will be handled by the Pega Claims for Insurance application.
In addition to running campaigns, Pega Marketing can also be used as a customer decision hub (CDH) that generates Next Best Actions/Offers for any of the other applications mentioned above. Regarding pricing, Pega marketing allows to set a base price for any offer/product configured. There is a strategy that gets executed before an offer is sent out to a customer as a campaign email or a banner ad on a website etc. This strategy can be customised to import customer specific data accessible to the organization (personal information, risk details, customer value, retention risk etc) and calculate discounts/surhcarges etc. The eventual price can be calculated using these discounts/surcharges at runtime and the calculated price can be sent out to the customer in the campaign (or displayed on the banner ad, based on whether it is inbound or outbound marketing). This is the recommended extension pattern to perform price level calculations.
Having said that, rating and pricing of Insurance products are complex and risk dependant and performed using rating engines, so the price calculated using these strategies and sent out via campaigns (if at all it will be done) will only be indicative and the eventual pricing would depend on the final rating done by the underwriter using PUI/integration with rating engine etc. This is probably the reason why we usually never see an ad or marketing collateral from an insurance company giving an exact price; since the risk details need to be analyzed for each individual.
SiXworks Limited
GB
Thank you Sowmya, that's a very useful answer.
Does Pega provide an Insurance Rating Framework? I found a Case Study which refers to developing a Rating Engine, but not sure if PUI would actually be useful.