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How to Define Business Terms in Plain English

plain-english-3There’s a high premium on knowing how to craft great definitions. Every business analyst should know how. We’ve just published a new Primer on creating business definitions (see below – free download).

There are various schools of thought about how to define terms, some arising from professional terminologists and academia. But those approaches are often relatively arcane and not well-suited to everyday business practice.

So you should stick with common dictionary practices. They are perfectly adequate for your needs. By ‘dictionary’ I mean natural language dictionaries of course, not any kind of dictionary arising from IT (e.g., data dictionaries).

If you want to talk about how data is retained or exchanged, do a data model. A good data model has definitions too of course, but they subtly relate to fields and data types, not directly to things in the real world. That bias throws them off-center for business communication. This implicit mindset is often hard for those with a data or IT background to unlearn. But not impossible! If you fall into this category, our Primer will teach you how.

Our new Primer is organized as a set of guidelines, each with one or more examples. Each guideline can be understood on its own, but the overall set is mutually supportive and comprehensively interlocking. Master this set of guidelines and your definitions are guaranteed world-class.


Extracted from: How to Define Business Terms in Plain English, by Ronald G. Ross – free download, 26pp, pdf, http://www.brsolutions.com/publications/crafting-definitions-a-primer/

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‘Business Rule’ Means These 3 Things

Software vendors and others mislead people (badly) about the true meaning of business rule. Let’s set the record straight. The OMG standard SBVR (Semantics of Business Vocabulary and Business Rules, 1.4) defines business rule as a rule that is practicable and is under business jurisdiction. The definition has these three parts: (1) rule, (2) practicable, and (3) under business jurisdiction. Let’s look at each part in turn. 1. Rule Rule in business rule means real-world rule – in other words exactly what the dictionary says rule means. Here are the relevant meanings of rule from Merriam-Webster Unabridged Dictionary [MWUD].

guide for conduct or action [MWUD ‘rule’ 1a]

one of a set of usually official regulations by which an activity (as a sport) is governed [e.g.,] *the infield fly rule* *the rules of professional basketball* [MWUD ‘rule’ 1f]

A real-world rule always tends to remove a degree of freedom.  If it does not, it’s not a rule. Also, a real-world rule is declarative. It never does anything. It merely shapes behavior or decisions. If you’re using an approach where rules can actually do things (e.g., execute an action, set a flag or variable, call a function, etc.), they’re not business rules. You’re in TechnologyLand, and a procedural one at that. 2. Under Business Jurisdiction    Business rule includes only rules that the business can opt to change or to discard. A business rule is always under business jurisdiction of your organization. The important point with respect to external regulation and law is that your organization has a choice about how to interpret the regulations and laws for deployment into its day-to-day business activity – and even whether to follow them at all. So external regulations are not business rules per se. Business rules include only the rules that a business creates in response to external regulation. SBVR explains:

“… legislation and regulations may be imposed on [the company]; external standards and best practices may be adopted. 

These things are not business rules from the company’s perspective, since it does not have the authority to change them. 

The company will decide how to react to laws and regulations, and will create business rules to ensure compliance with them.  Similarly, it will create business rules to ensure that standards or best practices are implemented as intended.”

3. Practicable Practicable means a rule is sufficiently detailed and precise that a person who knows about it can apply it effectively and consistently in relevant circumstances. In other words, the person will know what behavior is acceptable or not, or how some concept is to be understood. A practicable business rule is one ready to become a deployed business rule – i.e., applied in day-to-day business activity. Whether the guidance is to be deployed to staff or ultimately to machines is immaterial. You should get the same results either way. Business policies are generally not practicable in this sense. Business rules always are. ~~~~~~~~~~~~~~~~~~~~ Excerpted from: Building Business Solutions: Business Analysis with Business Rules, 2nd edition, by Ronald G. Ross & Gladys S.W. Lam, 2015 Get the book:http://www.brsolutions.com/b_building_business_solutions.php Get the training: Instructor-led, online, interactive training: October 4-6, 2016 – Business Analysis with Business Rules: From Strategy to Requirements. http://www.attainingedge.com/online-training-business-analysis-with-business-rules.php ©Business Rule Solutions, LLC 2016. wwwBRSolutions.com 

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Who (or What!) Makes Your Day-to-Day Business Decisions?

Operational business decisions happen every minute of every day in your organization. You’d like to think that business managers can truly manage them. You’d also like to think that the results of those decisions are comprehensively correct, consistent, traceable, and repeatable (high quality). But are they? Based on real-life evidence I strongly suspect they often are not. Let’s be clear what kind of decision I mean. Say “decision” and many business people immediately think strategic decision (e.g., whether to enter some new market), or tactical decision (e.g., which supplier to use for a year-long special project). Those are not the kinds of decision I’m not talking about. I’m not talking about project decisions either. When IT professionals talk about “decisions” they often mean branch points within the deep systemic logic executed by machines – classic decision points in data processing. I don’t mean that either. Instead, I mean decisions in the day-to-day, minute-to-minute bread-and-butter operations of the business. Some examples of such operational business decisions:
  • Whether to give a mortgage to a given applicant.
  • What discounts a premium customer will receive on a purchase.
  • Which customer gets preference if some product or resource is in short supply.
Your business makes these kinds of decisions hundreds or thousands of times a day – or hour, or minute. These are the kinds of decisions that regulators, auditors, and compliance officers care about. The kind your business partners deem important because they are directly impacted.   Are the decisions high quality? At a major insurance company a thoroughly competent, highly experienced business system analyst recently told us: “When we looked hard at business rules currently implemented in existing systems, we found at least 30% were flatly wrong.” After a moment’s reflection he added, “That’s a very conservative estimate; the actual figure was probably much higher.” The organization was just beginning to recognize the magnitude of the problem. And whose problem is it? The analyst said, “IT told us they couldn’t solve the problem because it was a business issue not a software issue. And they were absolutely right about that.” We might have thought this case an outlier if we hadn’t heard similar estimates from credible sources in many other companies. And we’ve found the same ourselves. Not long ago we were asked to conduct an audit of implemented business rules in one area of business for a major North American bank. The results frankly astounded us. We double- and triple-checked. No error. To conduct the audit first we harvested 518 business rules from the relevant Policies and Procedures Manual, the printed (and on-line) reference source for loan officers, and expressed them in RuleSpeak. How many business rules were implemented correctly in their automated system? We found zero – zero! – fully aligned. Some 447 were actually not implemented at all; the remainder just partially aligned. You wouldn’t think it possible but it gets even worse. We found 261 business rules implemented in their system that did not appear anywhere in the Manual. What sort of way of doing business is that?! Who (or what!) is making the decisions?! To put things in proper context it helps to appreciate the costs associated with maintaining legacy systems not built on business rules. In a recent visit to a very large health care organization, a high-level manager cited the following statistics. They’re staggering. He reported it takes their organization:
  • 24 person-years per year to maintain a 30-year old monolithic COBOL legacy system.
  • 400 person-days over a 4-month period to make changes to business rules of ‘moderate’ complexity.
The manager admitted sadly, “Truth be told, we work for our legacy systems, not the business.” Beyond these frightening costs the manager also described how a subtle stagnation had crept into the staff’s very way of thinking about their business. “Our business leads are so familiar with the limitations of our legacy systems, they don’t even consider business innovations they know from experience to be difficult for the system to handle. Sometimes I wonder if they can even think through innovation effectively anymore.” With variations it’s a story we hear time and time again. The need for innovation is ever more immediate, but the reality of achieving it ever so distant. Who (or what) is making the decisions is in your organization?! At BRS, we have dedicated ourselves to pioneering innovative techniques for achieving order-of-magnitude improvements in how businesses literally operate themselves. We offer no silver bullets. It’s heavy lifting to put an organization onto a different track with respect to their core knowledge practices. Is it worth it? Absolutely. When we see control over decisions coming back where they belong – into the hands of business managers – the results are always extremely rewarding.

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The Story of Al’s Spreadsheet and Absent Brains

I want to share with you the most intelligent thing I’ve ever heard a manager say on the fly. I’ll give some background first. In one way or another, the situation that evoked what she said may seem quite familiar to you. A few years ago Gladys and I were invited to conduct a one-week facilitated session for a national taxation authority. The objective was to reverse-engineer business rules from a very complex spreadsheet. The manager told us everyone was deathly afraid to touch it because no one understood how it worked. You could never tell what impact making a change would have. Used by many of their systems and embedded in various websites, the spreadsheet was mission-critical. She was finally biting the bullet and assembling some of her best staff to re-engineer it. Everyone knew the spreadsheet by its nickname, Al’s Spreadsheet. It dated to the 1970s when it was implemented under the first generation of automated spreadsheets. Notorious in the organization for more than a generation, it was devilishly convoluted. One of these days I might hold a contest for the world’s most complex spreadsheet. I’ve actually told this story many times around the world, and the audiences’ reaction is inevitably the same – perhaps the same as yours reading this. “No, Al’s Spreadsheet couldn’t possibly be the world’s most complex spreadsheet because my company has the world’s worst!” Around the globe there is extensive core operational business knowledge running businesses day-to-day that is highly inaccessible. Just putting your fingers on it, much less revising it, consumes vast amounts of vital resources. We live in a service provider’s dreamscape. It makes you wonder how brittle (read not agile) many companies’ operations really are today. To return to the story, by mid-week we’d achieved only limited success in deciphering the spreadsheet. Progress was painfully slow. Lapsing momentarily into frustration, an idea popped into my head.  I blurted out, “Hey, why don’t we just go ask Al what this thing really does?!” I assure you my intention was not to provide comic relief. To my chagrin that’s exactly what happened. The whole room erupted into laughter. When the hysteria finally subsided, someone patiently explained to me (barely keeping a straight face) that nobody actually knew who Al was – or indeed, whether Al had actually ever even existed. If so he had long since parted ways with the organization, fading away as all workers sooner or later do into the mists of time. That’s when the manager said the thing that I found so memorable. Looking at no one in particular and staring vaguely into the far distance she said, “No organization should ever depend on absent brains.”. Exactly! To ensure the continuity of operational business knowledge, no organization should ever depend on absent brains – or even on brains that could (and eventually always will) become absent in the future. To say it differently, your operational business knowledge should be encoded explicitly in a form that workers you have never even met yet can understand. Operational business knowledge can be either tacit or explicit (read ‘accessible’). The classic test for when knowledge is tacit is ‘lose the person, lose the knowledge’. You make operational business knowledge explicit by expressing it as business rules. So make sure when you lose your Al, he doesn’t walk out the door with the day-to-day knowledge you need to run your business. Encode it as business rules!

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Governance, Compliance and Business Rules (Through Young Eyes)

When my older son graduated from college, he worked as an intern for a professional sports team.  At the end of his very first day of work he called me, puzzled.  “I asked them what my responsibilities were,” he related, “and they said, ‘We need you to know what we are supposed to be doing’.”  After a long pause he went on, “I wanted to ask them why they didn’t already know what they were supposed to be doing, but I didn’t think that would be such a great idea my very first day there.” Let’s see whether at some level that situation sounds familiar to you.  It turns out his area of responsibility had to do with ensuring operational compliance with corporate sponsorship agreements.  The sponsorships are quite expensive.  You might think these agreements would be relatively simple, but of course, there’s no such thing as a truly simple business.  A sponsorship contract:
  • Outlines a complex configuration of promotional and other benefits, some automatable and some not, all usually tailored specifically for the individual sponsor.
  • Is loaded with obligations, decision criteria, and computation formula (read ‘business rules’) to govern the sponsorship relationship.
  • Is amended frequently, both formally and informally (via hand-shake), owing to the dynamic nature of the sponsors’ marketing needs.
To continue the story of my son’s first day, they gave him a stack of contracts and amendments, operational schedules, and invoices and told him to see if they all matched.  Of course they didn’t.  Not by a mile. By the end of the first week, my son had become fairly fluent in the organization’s governance problems.  (Ah, young minds!)  The contracts and schedules were all produced by different people at different times.  Some of the schedules were hand-done and some automated.  But even the ones that were automated often didn’t match the contracts.  The invoices were automated, but in many cases they too bore little resemblance to the contracts.  The IT people were not much help either.  “They seem to speak a different language,” my son reported naively.  Bottom line:  A number of the sponsors were becoming quite annoyed — not a good thing for a mediocre team in a mid-sized market. But there was still more.  The sales reps were, shall we say, quite creative in what they offered the sponsors.  Their terminology, which often found its way into the contracts, was highly idiosyncratic.  Yet they were talking about the same shared resources (e.g., banner boards in the stadium) that had to be coordinated real-time across many sponsors.  They seemed oblivious to some of the company’s rules — even though some, quite literally, were dictated by physics (e.g., a banner board can only say one thing at a time; there is only so much time during a game, etc.). By the way, my son went to one of the team’s games his first week at work.  The team lost.  Attendance was poor.  Sponsors were unhappy.  “I think it’s going to be a season,” he said. After a moment of reflection he added, “You know what really worries me is that I am going to figure all this out, then walk right out the door with all that knowledge.  They’ll be right back where they started.  Doesn’t seem to me like a very good way to run a business.” Welcome, my son, to the reality of business rule mismanagement in the 21st century!

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Six Succinct Reasons for Business Rules

What business problems do business rules address?  My take: 1. Ad hoc rules: Most businesses have no organized approach for specifying their business rules. As a result, business workers often make up the rules as they go along. This leads to confusion, contradiction, and operational inefficiency. After-the-fact resolution of these problems wastes time and resources and causes frustration for customers and staff alike.

Business rule solution: Business rules ensure consistency in customer experience and provably on-target results for demonstrating compliance.

2. Miscommunication: Misunderstanding of key business concepts inevitably results in miscommunication. Does preferred customer discount mean the same across all departments? If not, what are the differences? What rules apply? Do these rules differ for different areas of the business? Are the rules consistent?

Business rule solution: A structured business vocabulary provides a foundation on which rules can be directly based.

3. Inaccessible rules: Finding out what rules apply to a given business situation often involves an open-ended search through multiple sources. It is not uncommon in the end to resort to the application source code. Pursuing rules in this fashion is time-consuming, inefficient, and inaccurate.

Business rule solution: An organized approach for managing business rules yields order-of-magnitude improvements in productivity and business agility.

4. Massive differentiation: Many businesses seek to support highly individualized relationships with growing numbers of customers and other partners across multiple jurisdictions for ever more complex products or services. How can businesses massively differentiate and, at the very same time, conduct each business transaction faster, more accurately, and at ever lower costs?

Business rule solution: Business rules support highly scalable customization and personalization and provide a structural solution for managing complexity.

5. The need to keep up to speed: Rapid change, at an ever faster pace, is a fact of life. In the digital age, people expect almost instantaneous implementation of changes. How can line workers consumed with day-to-day activities ever hope to keep up?

Business rule solution: Real-time delivery of business rules to knowledge workers creates a seamless, never-ending, self-training environment.

6. Knowledge walking out the door: By and large, baby boomers created much of the basic operational business capacity and operational systems we see in place in larger organizations today. Much of the related knowledge still sits in their heads – and nowhere else. Now they are retiring. On a smaller scale, people with vital operational knowledge walk out the door almost every day.

Business rule solution: A systematic way of capturing, documenting and managing business rules enables pragmatic knowledge retention.


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Integration Without Business Rules. Really?!

Consolidation is not the same thing as integration.  What does it really take to integrate business practices?  Let me illustrate with a thought experiment. Imagine that the U.S., Canada, Cuba, Jamaica, and Japan were completely closed societies.  However, to invigorate their sports, each allows one visitor for one day each century to bring a new game idea. For the 1800s, baseball is chosen.  Abner Doubleday arrives in each country, and talks about bases, runs, strikes, balls, innings, and all the other things of baseball.  At the end of the day he leaves.  Nobody knows what happens until the next visit, a hundred years later. As it turns out, each country has embraced the game enthusiastically, and each now has a century of competitive results. So taken are the countries with the game, they express a desire to merge their results, and to begin an international league.  A commission is chartered for that purpose and hires business architects. The initial results are promising.  Each country uses the same nouns (i.e., bases, runs, strikes, batters, etc.), and many of the same verbs (e.g., “run is scored in inning”).  A data model emerges that meets general approval. Then the trouble begins.  Not surprisingly, substantial differences have arisen over a hundred years in how each country plays the game.
  • In Japan, a batter loses so much face after one strike (not a foul ball) he is immediately retired.
  • In Canada (being a tolerant country), an unlimited number of strikes per at-bat is permitted but, to compensate, only two outs per inning.
  • In Cuba (being a socialist country), strikes are charged to the pitcher, rather than to the batter.
  • In Jamaica (suffering from earlier British influence), only two bases are used, the ball is bowled, ‘pitch’ refers to the playing field, and games may continue for two days.
Can the results be merged?  Yes and no.  Because they are based on the same words, they can be consolidated (lumped together).  However, because each country plays the game differently, they cannot be integrated (compiled meaningfully). What does it take to achieve true integration of business practices?  Without common standards for how the game is played, integration is impossible. To play ball you need business rules and a shared rulebook.

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Activity vs Business Rule: Can You Always Tell the Difference?

A Practitioner Wrote:The distinction between activities and business rules becomes very fuzzy when models grow very granular/detailed. Suppose I have a process called “Handle customer inquiries”, and an activity called “Close inquiry”, which has several small sub-steps, one of which is a “Send customer confirmation of solution by email”.  Is that sub-step a rule or an activity? My Answer: No fuzziness whatsoever. Processes – including activities to any level of granularity – always involve a transform. True business rules never do. So ‘Send customer confirmation of solution by email’ is a process (activity step). I can tell because its name starts with the verb ‘send’ in the command form. Suppose the following  had been written instead: “A customer must be sent a confirmation by email when a solution is found.” That’s a business rule. It would apply to any process (activity) anywhere, anytime, even if such process(es) are not modeled. The business rule could be violated, of course, but it would not do (transform) anything. It would exist to ensure consistency (of behavior) everywhere – and not incidentally, a good customer experience. Note I said true business rule. Rule technologies confuse the matter because sometimes their rules do do (i.e., do transform) things. That’s simply a highly unproductive mis-positioning of business rules.

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Concept Model vs. Data Model

John Zachman says you can (and probably should) develop each of the following three kinds of artifacts to “excruciating level of detail”. 1. For the business management’s perspective (row 2), a conceptual model (roughly CIM in OMG terms). 2. For the architect’s perspective (row 3), a business logic design (roughly PIM in OMG terms). 3. For the engineer’s perspective (row 4), a class-of-platform design (roughly PSM in OMG terms). Because each is a different kind of model, there is a transform from one to the next. One implication is that it is possible to make a clear distinction between analysis (CIM) and design (PIM).   Another implication is that concept models and logical data models are clearly distinct. Unfortunately, many people blur the line between them. That’s wrong.
  • A concept model is about the meaning of the words you use, and the business statements you make assuming those meanings. It’s about communication.
  • A logical data model is about how you organize what you think you know about the world so it can be recorded and logically manipulated in a systematic way.
I started my career in data. It took me as much as 15 years of intense work on business rule statements (1990-2005) to fully appreciate the difference. But now I am very clear that concept models do need to be developed to excruciating level of detail in order to disambiguate the intended business communication. Most businesses don’t do that today. They jump in at data design (conceptual, logical or even physical). And they unknowingly pay a big price for it. By the way, a good concept model can be readily transformed into a first-cut logical data model – just as Zachman says. ~~~~~~~~~~~~~~~ www.BRSolutions.com

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Business Rules and the Design of Business Processes

Sample behavioral business rule: A customer that has placed an order must have an assigned agent. A practitioner wrote: In process design this means that an activity ‘Assign agent’ must happen before an activity ‘Take order’. My analysis: Here’s how behavioral business rules like this one should work according to standards[1]:
  • If the business rule is violated in performance of the process ‘Take order’, then the process (activity) ‘Assign agent’ should be (optionally) invoked automatically so the violation can be corrected immediately (by the appropriate actor).
  • In performance of the process ‘Retire agent’ (which hasn’t been mentioned!), if the business rule is violated – i.e., the retiring agent is assigned to some customer who would thereby be left agent-less – the process (activity) ‘Assign agent’ should be (optionally) invoked automatically so the violation can be corrected immediately (by the appropriate actor).
There’s one business rule, but two kinds of events (in separate processes) where the rule can be violated. I’ve literally looked at 10,000s of business rules. Probably 95% or more are multi-event like this, and therefore often multi-process. You can see from this example how easy it is for business analysts to completely miss the second event. My contention is that’s one big reason why systems today often give such inconsistent results – the other event(s) are overlooked or in another process altogether. Conclusions
  • It’s highly misleading to say ‘business rules are part of processes’. No, not really. (I run into that statement all the time.)
  • We’re not designing processes today in a very intelligent way. Designers shouldn’t have to think, ‘O.K., which process (activity) has to come first because of the business rules?’. That approach forces us into sequences where no natural sequence is meaningful. In any case there are far too many behavioral business rules for it to be practical.
P.S. If you think ‘decisions’ will fix this fundamental problem, sorry, but I’m afraid you’re in for a rude awakening! ~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com

[1]Semantics of Business Vocabulary and Business Rules (SBVR).

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