Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

We systemize tacit knowledge into explicit knowledge

Blog Enabling Operational Excellence

Posts Tagged ‘legacy systems’

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.

Continue Reading

Your Approach to Business Analysis: The Big Picture

Let’s stand back and think for a moment about the future of your business and its approach to business analysis. What’s really important? My elevator pitch would comprise the following insights.

Insight 1. Order-of-magnitude improvements in business agility are possible … and proven.

Every year for the past 15 years at the Business Rules & Decisions Forum Conference[1], we’ve heard one case study after another about how companies have dramatically improved business agility. Time and time again they report having reduced the cycle time of deploying changes to business rules by an order of magnitude or more. Extensive applied experience exists in the field – such initiatives are not at the bleeding edge.

What’s actually required? Two things: Some new techniques and vision. Are we to be forever prisoners of legacy? Only if we let ourselves.

Insight 2. Doing more of the same, just faster, won’t get you there.

You’ll never get to agile business via agile programming and development. Not ever.

A requirements development and design methodology should result in high-quality systems that are inexpensive to maintain and cost-effective to enhance. How well is yours really doing that in that regard?

Insight 3. It’s not about working harder, just smarter.

Most of us are frankly already working about as hard as we can. That’s not the problem. Rather, it’s about working smarter – and producing more effective business solutions. For that you need (true) business architecture.[2] It includes business strategy, business processes and business rules, and business vocabulary (concept model).[3]

Insight 4. It’s about building business capability, not better business software (though that will happen).

Quick Quiz: Which of the following is/are directly about software?

  • Business rules.
  • Business architecture.
  • Business strategy.
  • Business processes.
  • Business vocabulary.
None of them! Of course you can use software to manage and implement any of them, but that’s a very different matter. If they’re not about software, then what? Architecting real solutions for real business challenges. Building business-oriented, business-based business capability. Any business software solution that doesn’t base itself today on these new fundamentals will be LOD – legacy on delivery. It’s time we move beyond instant legacy. ~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to http://www.businessrulesforum.com/. The Business Rules & Decisions Forum Conference is part of the Building Business Capability (BBC) Conference, the official conference of the IIBA: http://www.buildingbusinesscapability.com/
[2]Refer to Building Business Solutions: Business Analysis with Business Rules by Ronald G. Ross and Gladys S.W. Lam, 2nd edition (to be published mid-2015), an IIBA Sponsored Handbook, pp 8-9. http://www.brsolutions.com/b_building_business_solutions.php
 

Continue Reading

Scary Estimate about the Correctness of Business Rules in Legacy Systems … Are Yours Better or Worse? Do You Even Know?

A business analyst at a major insurance company recently said this: “When we looked hard at business rules currently implemented in existing systems, we found at least 30% were flatly wrong. That’s a very conservative estimate: the actual figure was probably much higher.” How does that estimate compare to yours? Have you ever done an assessment? I’d like to hear about it. The replies can be anonymous … like this one … DM me or use LinkedIn. By the way, the business analyst went on to say, “ 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.” Yes indeed they were. ~~~~~~~~~~~~~~~~~~~~~~~~~~ Text excerpted from our new book (Oct, 2011) Building Business Solutions: Business Analysis with Business Rules. See:  http://www.brsolutions.com/b_building_business_solutions.php  

Continue Reading 1 Comment