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Posts Tagged ‘definition of business rule’

Is It Really a Business Rule?

communication1A number of years ago, a colleague of ours, Mark Myers, came up with a highly pragmatic test to determine whether some statement represents a business rule or a system rule. 

“Imagine you threw out all the systems running your business and did it all by hand (somehow).  If you still need the statement, it’s a business rule.  If you don’t, it’s not.” 

A colleague on the SBVR[1] standardization team, Don Baisley, puts it another way: 

“Business people don’t set variables and they don’t call functions.”

Business rules represent a form of business communication and must make sense (communicate) to business people.  If some statement doesn’t communicate, it’s not a business rule.  Consider this example: 

If ACT-BL LT 0 then set OD-Flag to ‘yes’. 

Not a business rule.  Consider another example: 

An account must be considered overdrawn if the account balance is less than $0. 

This statement communicates and therefore is a business rule.  Business rules can be technical, but only in terms of the company’s know-how or specialized product/service, not in terms of IT designs or platforms. 

~~~~~~~~~~~~~~~~~~~~

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/publications/building-business-solutions/ 

Get the Training: Instructor-led, online, interactive training: December 13-15, 2016 – Working with Business Rules: Capture, Specification, Analysis & Management. http://www.brsolutions.com/services/online/working-with-rules/ 

©Business Rule Solutions, LLC 2016. www.BRSolutions.com  

[1] Semantics of Business Vocabulary and Business Rules (SBVR).  First released in January 2008.  Object Management Group.

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When is a Business Architecture a Dumb One?

In a recent discussion on social media I was explaining what I thought would make a business architecture smart. Tom Graves replied that he wasn’t sure what made one smart, but that he did know what makes one dumb. His criteria …  
    • rigid rule-based boundaries.
    • over-reliance on rigid true/false rules.
    • attempts to implement most or all of that architecture through automated ‘business-rules engines’ that can only work with rigid true/false rules.
He went on to say that these criteria suggest that “a first requirement for a smart business-architecture is that it go beyond all these mistakes.” Tom’s emphasis on ‘true/false’ rules needs to be carefully qualified. After all, you do want the internal workings of a rule engine to be based on formal logic. I believe what he really means is an approach that allows no shades of gray with respect to nuanced enforcement of business rules. On that point I hardily agree. In addition, Tom got me to agree with him on two major points about the current state of the industry. In his words …

1. The quest for ‘certainty’ in an inherently-uncertain world is futile. Rules of all kinds exist to help human thinking and human judgment, not to act as a substitute for it.

2. The software vendors … are frankly not far short of committing fraud with many of the claims they make as to the efficacy and validity of their ‘business-rules engines’.

The term business rule unfortunately has been hijacked by software vendors to mean something very different from the original concept. For example, production rules[1] (the basis for the majority of current product offerings) are not business rules. Full stop. This distorted view of business rule needs to be rectified. Don’t let yourself be sucked into it! For real business rules there are three (optional) supplemental specifications for each business rule statement[2]:

(1) level of enforcement

(2) violation (breach) response

(3) violation (breach) message.

It is through these specifications that the richness of behavioral coordination can arise.


[1] Production rules (also called productions) can be used to implement business rules, but are not business rules per se.  Production rules typically provide support for action selection, which results in non-declarative statements. According to Wikipedia, a production rule system (essentially, an expert system) is …

a computer program typically used to provide some form of artificial intelligence, which consists primarily of a set of rules about behavior

Production rule systems are a class of platform whose rule format and operation are aimed toward developers.  According to Wikipedia:

“A production system provides the mechanism necessary to execute productions in order to achieve some goal for the system.  Productions consist of two parts:  a sensory precondition (or ‘IF’ statement) and an action (or ‘THEN’). If a production’s precondition matches the current state of the world, then the production is said to be triggered.  If a production’s action is executed, it is said to have fired.”

[2] Refer to “Breaking the Rules: Breach Questions” http://www.brsolutions.com/2012/06/03/breaking-the-rules-breach-questions/

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What is a Business Rule?

It’s become more and more apparent that software vendors are misleading people (badly) about the true meaning of ‘business rule’. Time to set the record straight. Here is an authoritative 3-part explanation. Take a moment and reacquaint yourself. As a business-oriented professional you’ll be glad you did!

   Reference Sources

[MWUD] Merriam-Webster Unabridged Dictionary (Version 2.5).  [2000].  Merriam-Webster Inc.
[SBVR] Semantics of Business Vocabulary and Business Rules (SBVR) (Version 1.0).  [January 2008].  Object Management Group.
  1. Rule When we say rule we always mean real-world rule. Here’s the dictionary meaning of “rule”. That’s what we mean.

[MWUD ‘rule’ 1a]:  guide for conduct or action; [MWUD ‘rule’ 1f]:  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 ‘criteria’  2]:  a standard on which a decision or judgment may be based

A real-world rule always tends to remove some degree of freedom.  If it does not, it’s not a rule.  2. Under Business Jurisdiction    When we say business rule we mean only rules that the business can opt to change or to discard. A business rule is always under business jurisdiction of your organization.  The 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: 

“The laws of physics may be relevant to a company … ; legislation and regulations may be imposed on it; 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. Business Rule

[SBVR]:  a rule that is under business jurisdiction

A business rule is a criterion used to:
    • guide day-to-day business activity
    • shape operational business judgments, or
    • make operational business decisions. 
A number of years ago, a colleague of ours, Mark Myers, came up with a highly pragmatic test to determine whether some statement represents a business rule or a system rule.  It almost always works.  Imagine you threw out all the systems running your business and did it all by hand (somehow).  If you still need the statement, it’s a business rule.  If you don’t, it’s not.  A colleague on the SBVR standardization team, Don Baisley, puts it another way:  “Business people don’t set variables and they don’t call functions.” Some people think of business rules as loosely formed, very general requirements.  Wrong.  Business rules have definite form, and are very specific.  Each should give well-formed, practicable guidance Here are a few simple examples expressed in RuleSpeak:  

A customer that has ordered a product must have an assigned agent. 

The sales tax for a purchase must be 6.25% if the purchase is made in Texas. 

A customer may be considered preferred only if the customer has placed more than $10,000 worth of orders during the most recent calendar year.

Business rules represent a form of business communication and must make sense (communicate) to business people.  If some statement doesn’t communicate, it’s not a business rule. 

Consider this example:  If ACT-BL LT 0 then set OD-Flag to ‘yes’.  Not a business rule. 

Consider another example:  An account must be considered overdrawn if the account balance is less than $0.  This statement communicates and therefore is a business rule. 

More observations about business rules:
    • In SBVR a business rule can be either a behavioral rule or a definitional rule.
    • Business rules can be technical, but only in terms of the company’s know-how or specialized product/service, not in terms of IT designs or platforms.
    • Expression of business rules should always be declarative, rather than procedural.
    • A business rule statement should use terms and wordings about operational business things that should be based on a structured business vocabulary (concept model).
    • Your company’s business rules need to be managed and single-sourced, so we strongly recommend rulebook management.
Business rules are not about mimicking intelligent behavior, they are about running a business Mimicking intelligent behavior in a generalized way is far harder (an order of magnitude or more) than capturing the business rules of an organization.  Unfortunately, expert systems have generally focused on the former problem, causing considerable confusion among business practitioners.  ~~~~~~~~~~~~~~~~~~~~  Excerpted from Building Business Solutions: Business Analysis with Business Rules, by Ronald G. Ross with Gladys S.W. Lam, An IIBA® Sponsored Handbook, Business Rule Solutions, LLC, 2011, 304 pp,http://www.brsolutions.com/bbs

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Do Business Rules Define the Operational Boundaries of an Organization?

Have you heard business rules described that way? You certainly have to stop and think about it for a minute. Without additional explanation the term “boundaries” could easily be misleading. For example the term could be interpreted incorrectly as suggesting business rules define scope – i.e., the operational edges of an organization or an initiative. They don’t. Let’s revisit the meaning of “business rule”. Business rules are guides or criteria used to:
    • shape conduct or actions
    • form judgments of behavior
    • make decisions
Respectively, yes, business rules therefore establish “boundaries” for distinguishing:
    • acceptable or desirable conduct or actions from what is unacceptable or undesirable.
    • proper behavior from what is improper behavior.
    • correct or optimal decisions from what are incorrect or suboptimal decisions.
But these “boundaries” (delimitations) are a result of applying business rules, not what business rules fundamentally are (i.e., guides or criteria). Furthermore, these boundaries (delimitations) are not as rigid as the term “boundary” suggests. Depending on enforcement level, many business rules can be overridden with proper authority or explanation, or even ignored (e.g., guidelines). Level of enforcement is an organizational decision. Note that the transgressing behavior in such cases is nonetheless still within the scope of organizational operations. My bottom line re “boundary”. Describing business rules can …
    • misleading.
    • wrongly suggest scope.
    • incorrectly assume all business rules are strictly enforced.
But otherwise sure, business rules do set up boundaries (delimitations) for how activity in the organization is undertaken. And that’s especially important when you start thinking about smart processes – as my recent posts suggest.

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A Quick Review of What “Rule”, “Business Rule” and “Business Policy” Mean (in the Real World!)

From Building Business Solutions: Business Analysis with Business Rules, by Ronald G. Ross with Gladys S.W. Lam, An IIBA® Sponsored Handbook, Business Rule Solutions, LLC, October, 2011, 304 pp, http://www.brsolutions.com/bbs You can find definitions and discussion of all terms in blue on Business Rule Community: http://www.brcommunity.com/BBSGlossary.pdf

   Reference Sources

[BMM] The Business Motivation Model (BMM) ~ Business Governance in a Volatile World.  [May 2010].  Originally published Nov. 2000.  Now an adopted standard of the Object Management Group (OMG). 
[MWUD] Merriam-Webster Unabridged Dictionary (Version 2.5).  [2000].  Merriam-Webster Inc.
[SBVR] Semantics of Business Vocabulary and Business Rules (SBVR) (Version 1.0).  [January 2008].  Object Management Group.
  rule:    [MWUD ‘rule’ 1a]:  guide for conduct or action;

    [MWUD ‘rule’ 1f]:  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 ‘criteria’  2]:  a standard on which a decision or judgment may be based

              Note:  When we say rule we always mean real-world rule. business rule:  [SBVR]:  a rule that is under business jurisdiction

Discussion:  A business rule is a criterion used to guide day-to-day business activity, shape operational business judgments, or make operational business decisions. 

Some people think of business rules as loosely formed, very general requirements.  Wrong.  Business rules have definite form, and are very specific.  Here are a few simple examples expressed in RuleSpeak

      • A customer that has ordered a product must have an assigned agent.
      • The sales tax for a purchase must be 6.25% if the purchase is made in Texas.
      •  A customer may be considered preferred only if the customer has placed more than $10,000 worth of orders during the most recent calendar year.

Each business rule gives well-formed, practicable guidance.  Each uses terms and wordings about operational business things that should based on a structured business vocabulary (concept model, also called fact model).  Each expression is declarative, rather than procedural.  Your company’s business rules need to be managed and single-sourced, so we strongly recommend rulebook management.

A number of years ago, a colleague of ours, Mark Myers, came up with a highly pragmatic test to determine whether some statement represents a business rule or a system rule.  Except for eCommerce, it almost always works.  Imagine you threw out all the systems running your business and did it all by hand (somehow).  If you still need the statement, it’s a business rule.  If you don’t, it’s not. 

A colleague on the SBVR standardization team, Don Baisley, puts it another way: 

“Business people don’t set variables and they don’t call functions.”

Business rules represent a form of business communication and must make sense (communicate) to business people.  If some statement doesn’t communicate, it’s not a business rule.  Consider this example:  If ACT-BL LT 0 then set OD-Flag to ‘yes’.  Not a business rule.  

Consider another example:  An account must be considered overdrawn if the account balance is less than $0.  This statement communicates and therefore is a business rule.  Business rules can be technical, but only in terms of the company’s know-how or specialized product/service, not in terms of IT designs or platforms. 

SBVR provides the semantics for business rules.  In SBVR a business rule can be either a behavioral rule or a definitional rule.  Incidentally, SBVR does not standardize notation.  We use RuleSpeak to express business rules (including ‘exceptions’) in structured natural language.  

In SBVR, a real-world rule always tends to remove some degree of freedom.  If it does not, it’s not a rule, but rather an advice.  A business rule is always under business jurisdiction of your organization.  The 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. 

Business rules are not about mimicking intelligent behavior, they are about running a business.  Mimicking intelligent behavior in a generalized way is far harder (an order of magnitude or more) than capturing the business rules of an organization.  Unfortunately, expert systems have generally focused on the former problem, causing considerable confusion among business practitioners.

business policy:  a means that limits or establishes a degree of freedom for day-to-day business activity

Discussion:  Business managers create business policiesto control, guide, and shape day-to-day business activity.  Business policies are an important element of business strategy (e.g., Policy Charters) and the source of core business rules.

A business policy is not a business rule per se.  To become some business rule(s) first the business policy must be interpreted into a practicable form.  The Business Motivation Model [BMM] contrasts business policies and business rules this way:

“Compared to a business rule, a business policy tends to be less structured, less discrete, less atomic, less compliant with standard business vocabulary, and less formally articulated.” 

In general, business policies can address any of the concerns in Table 1, often in combinations (e.g., how many people are needed to produce a desired yield in the desired cycle time).  Business policies can also address exceptions (rules).

 Table 1.  Concerns that Business Policies Can Address
Question Word General Focus of Concern More Selective Examples
  What what things should (or should not) be available required kinds, quantities, states, or configurations
  How how things should (or should not) be done required outputs or yields
  Where where things that should (or should not) be done required facilities, locations, or transfer rates
  Who who should (or should not) do things required responsibilities, interactions, or work products
  When when things should (or should not) be done required scheduling or cycle times
  Why why certain choices should (or should not) be made required priorities
           

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