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

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

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Fundamental Challenges Facing Your Business: #1 – Business Agility

Charles Darwin is reported to have said, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Becoming more responsive to change is simply not optional these days. Consider the current state of affairs in IT today. The statistics are depressing. Reliable sources indicate that over 75% of all IT resources go toward system ‘maintenance’. That’s not agile! In the second of edition of Building Business Solutions: Business Analysis with Business Rules, Gladys Lam and I describe this world as like living in change deployment hell[1]. You might say that legacy systems are poorly engineered, but I believe that misses the mark. Rather, perhaps they are be over-engineered. What happens when you over-engineer something? The solution you produce is too stiff or too rigid or too cumbersome for the real-world problem. Think ‘tree that doesn’t bend with the wind’. The speed of business is accelerating, yet the architecture of traditionally-built systems is rigid and static. The fundamental problem in this regard is embedding business rules within the systems themselves. If you hard-code business rules into application logic, they will be hard to find, hard to understand, and even harder to change. Do we really want to keep building systems that way?! Make no mistake about it – many business rules will change. So if you continue hard-coding business rules into systems, you will be revisiting the code … a lot! That might be a good thing for service providers, but it’s not a good thing for the business. The obvious solution is to engineer business rules separately from functional requirements. Can you do that cleanly and effectively? Absolutely. It’s been proven many, many times. ~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1]Building Business Solutions: Business Analysis with Business Rules by Ronald G. Ross and Gladys S.W. Lam, 2nd edition (to be published in mid-2015), an IIBA Sponsored Handbook, pp 8-9. http://www.brsolutions.com/b_building_business_solutions.php

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Circular Definitions: Quiz

Question: Can you spot the circularity among these three definitions?

Need: a problem, opportunity, or constraint with potential value to a stakeholder

Solution: a specific way of satisfying one or more needs in a context

Stakeholder: a group or individual with a relationship to a change or a solution

  Answer 1: The definition of “need” references “stakeholder”, whose definition references “solution”, whose definition references “need”. The definitions don’t need to be circular. It’s simply bad definition/glossary practice. How can the circularity be removed? “Need” should simply be defined as “problem, opportunity, or constraint”. That’s the essence of the concept. Whether it has “value to a stakeholder” is an assessment. Just because one person says something (a need) has value and another person says it (the need) does not (which happens all the time by the way) doesn’t mean the thing is not a need to either: (a) the person who has it, or (b) the person who says it has no value. The latter person would say “that need has no value”. He/She just called it a “need”, so how can it not be a ‘need’? Answer 2: There is actually a second circularity in the definitions: need –> value –> stakeholder –> solution –> need. Changing the definition of “need” as I propose above will fix that second circularity too. “Need” is a very basic concept. If there were no need, there would be no reason to assess what value it has to what stakeholder (including the one who proposed it). If there were no need, there would be no solution, context or change (in the BA’s world). It’s a seed concept. Principle: In developing a vocabulary it’s best to start from terms whose definitions use no other terms … i.e., from seed concepts. Otherwise, circularities will make Swiss cheese of your brain. www.BRSolutions.com

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What is a Concept Model?

A concept model organizes the business vocabulary needed to communicate consistently and thoroughly about the know-how of a problem domain. A concept model starts with a glossary of business terms and definitions. It puts a very high premium on high-quality, design-independent definitions, free of data or implementation biases. It also emphasizes rich vocabulary. A concept model is always about identifying the correct choice of terms to use in communications, including statements of business rules and requirements, especially where high precision and subtle distinctions need to be made. The core concepts of a business problem domain are typically quite stable over time.[1] Concept models are can be especially effective where:
    • The organization seeks to organize, retain, build on, manage, and communicate core knowledge or know-how.
    • The project or initiative needs to capture 100s or 1,000s of business rules.
    • There significant push-back from business stakeholders about the perceived technical nature of data models, class diagrams, or data element nomenclature and definition.
    • Outside-the-box solutions are sought when reengineering business processes or other aspects of business capability.
    • The organization faces regulatory or compliance challenges.
Definition of Concept Model

a model that develops the meaning of core concepts for a problem domain, defines their collective structure, and specifies the appropriate vocabulary needed to communicate about it consistently

The standard for concept models is the OMG standard Semantics of Business Vocabulary and Business Rules (SBVR).[2] Concept Model vs. Data Model A concept model differs from a data model in important ways. The goal of a concept model is to support the expression of natural-language statements, and supply their semantics – not unify, codify (and sometimes simplify) data. Therefore the vocabulary included in a concept model is far richer, as suits knowledge-intensive problem domains. In short, concept models are concept-centric; data models are thing-entity-or-class-centric. Data models can usually be rather easily derived from concept models; the reverse is much harder (or impossible). Like data models, concept models are often rendered graphically, but free of such distractions to business stakeholders as cardinalities. The Components of Concept Models[3] Noun Concepts. The most basic concepts in a concept model are the noun concepts of the problem domain, which are simply ‘givens’ for the problem space.
    • For BACCM these basic noun concepts are: need, stakeholder, value, change, context, and solution.
    • In finance, basic noun concepts might include financial institution, real-estate property, party, mortgage application, lien, asset, loan, etc.
Verb Concepts. Verb concepts provide basic structural connections between noun concepts. These verb concepts are given standard wordings, so they can be referenced unambiguously.
    • In BACCM some basic wordings for verb concepts include: Value is measured relative to Context, Change is made to implement Solution, Stakeholder has Need.
    • In a financial business, some basic wordings for verb concepts include: Lien is held against Real Estate Property, Party requests Loan, Asset is included in Mortgage Application.
Note that these wordings are not sentences per se; they are the building blocks of sentences (such as business rule statements). Sometimes verb concepts are derived, inferred or computed by definitional rules. This is how new knowledge or information is built up from more basic facts. Other Connections. Since concept models must support rich meaning (semantics), other types of standard connections are used besides verb concepts. These include but are not limited to:
    • Categorizations – e.g., Person and Organization are two categories of Party.
    • Classifications – e.g., ‘Toronto Dominion Bank’ is an instance of Financial Institution.
    • Partitive (Whole-Part) Connections – e.g., Dwelling and Land are two Parts of a Real Estate Property.
    • Roles – e.g., Applicant is the role that Party plays in the verb concept Party requests Loan.
Strengths A concept model:
    • Provides a business-friendly way to communicate with stakeholders about precise meanings and subtle distinctions.
    • Is independent of data design biases and the often limited business vocabulary coverage of data models.
    • Proves highly useful for white-collar, knowledge-rich, decision-laden business processes.
    • Helps ensure that large numbers of business rules and complex decision tables are free of ambiguity and fit together cohesively.
Limitations A concept model:
    • May set expectations too high about how much integration based on business semantics can be achieved on relatively short notice.
    • Requires a specialized skill set based on the ability to think abstractly and non-procedurally about know-how and knowledge.
    • Involves a knowledge-and-rule focus that may be foreign to stakeholders.
    • Requires tooling to actively support real-time use of standard business terminology in writing business rules, requirements, and other forms on business communication.
For more information about Concept Models, refer to Business Rule Concepts 4th ed, by Ronald G. Ross, 2013, Part 2. www.BRSolutions.com


[1] Ronald G. Ross, “How Long Will Your Fact Model Last? — The Power of Structured Business Vocabularies,” Business Rules Journal, Vol. 12, No. 5 (May 2011), URL:  http://www.BRCommunity.com/a2011/b594.html
[2] This discussion is consistent with that standard, but explains concept models from a business point of view. See the SBVR Insider section of www.BRCommunity.com for more information about SBVR.
[3] The first set of examples in each of the following two subsections is from the Business Analysis Core Concepts Model (BACCM), a part of the IIBA’s Business Analysis Body of Knowledge (BABOK), version 3.

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A Follow-Up Note to Business Analysts about ‘Decision’

In a recent blog post I called attention to the fact that there’s a major collision of terminology with respect to the term decision as used by different communities. See: http://www.brsolutions.com/2014/07/06/a-note-to-business-analysts-about-%e2%80%98decision%e2%80%99/ My basic observation was that both communities are correct in their own context – but since the contexts intersect the result is a significant potential for confusion.
  • Business Analyst Community. Decision is often used in talking about business analysts’ own work – i.e., what methods to use, go/no-go on change, tool selection, choice of elicitation approach, etc. Its usage also seems to cover the sense of “management decision” – e.g., what course should project work take.
  • General Business Community. Decision always refers to a determination in business activity – e.g., should this applicant be given a mortgage, what should be charged for shipping an order, etc. This is the focus of decision in the business rules / decision engineering community.
Let me make some additional observations. A first question one should ask to clarify decision is what is the time horizon? Is it strategic or operational? A second question one should ask is what does decision actually refer to when used by each community for a given time horizon? Table. What Decision Refers to Based on Community and Time Horizon
Time Horizon of Decision

General Business Community

Business Analysis Community

strategic

strategic business decision strategic project decision or change initiative decision or option analysis

operational

operational business decision  —
  In contrast to operational decisions, strategic decisions are always longer in time horizon, and generally made only once (which isn’t to say they can’t be revisited sometimes). This point is true for both communities. The distinguishing characteristics of an operational business decision is that it:
  • Is highly repetitive (100s, 1000s, or more per day, hour, etc.).
  • Can be encoded as practicable business rules.
Note: My analysis doesn’t address operational decisions for the Business Analysis Community (the cell show with dashes). That’s not because decision isn’t applicable in that context, but rather simply because it’s outside the scope of the present discussion. I recently saw the following draft definition of decision, which illustrates the problem of mixed meanings quite clearly.

An activity to answer a question or select an option from a known or knowable set of possible options. Typically defined in terms of business rules and made in response to events or at defined points in a business process.

  • The first part of the definition is reasonable for decision in any usage. It applies to both communities and to any time horizon.
  • The second part of the definition pertains only to the meaning of operational business decision. Strategic decisions, whether for the General Business Community or for the Business Analysis Community, are generally not based on specific business rules and are not made in response to events or at defined points in a business process. Strategic decisions are simply different in kind from operational business decisions.
The focus of a strategic decision is also quite different for each of the two communities.
  • General Business Community: The focus is on conducting future business in a certain way.
  • Business Analysis Community. The focus is on conducting a proposed initiative in a certain way to change the business itself.
Bottom Line: For clarity, I would always qualify decision to indicate which kind is meant. We certainly don’t need any more confusion in business engineering than already exists! www.BRSolutions.com

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A Note to Business Analysts about ‘Decision’

Perhaps the following point about the term decision is already clear to all, but at the risk of stating the obvious, I’ll make it anyway. There’s a major collision of terminology with respect to decision as used by different communities.    
    • In the business analyst community, decision is often used in talking about business analysts’ own work – i.e., what methods to use, go/no-go on change, tool selection, choice of elicitation approach, etc. Its usage also seems to cover the sense of “management decision” – e.g., what course should project work take.
    • In the larger business community, decision always refers to a determination in business activity – e.g., should this applicant be given a mortgage, what should be charged for shipping an order, etc. This is the focus of decision in the business rules / decision engineering community.
In the context of their own communities both usages are correct. Unfortunately, the collision often results in confusion about the appropriate focus – and about which methods to use – for both audiences. In situations such as this, the best practice is to define the concept in question for each community. Terms considered to be obvious usually aren’t. It’s not clear to me that this has been done explicitly in the business analyst community. Another best practice is to qualify the term every time it’s used. So we always say operational business decision when talking about the business context, not just decision. That also distinguishes the concept we mean from other potential sources of confusion – e.g., strategic business decisions and system-level decisions or IT decisions. I believe what the business analyst community means by decision is strategic project decision or strategic change decision. But I can’t really be sure since as I say the term doesn’t seem to have been defined. www.BRSolutions.com

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Ten Rules for Validating Business Rules with Business People

Here are some practical do’s and don’ts we’ve learned on the years for validating business rules with business people in facilitated sessions. I should warn you, some of these points are counterintuitive.  
  1. Determine whether there is already a trusted source or implementation for a rule. Always re-use, don’t rewrite.
  2. Of course there are exceptions. There are always exceptions. Document them and move on.
  3. Limit discussion about organizational responsibilities for applying the rules. That’s a different discussion.
  4. A rule only addresses exactly what it says explicitly.  For example, “high credit usage” doesn’t necessarily mean “high risk”.
  5. How strictly a rule is to be enforced is a separate issue from just what it says. Focus on practicality and precision, not on whether a rule is strictly enforced or just a guideline.
  6. Don’t jump into whether or not current data elements support some aspect of the rule. That’s system design.
  7. Take it as a given that analytics might be used to sharpen some rules. That’s homework.
  8. The goal is consistency and precision for people too, not just for automation.
  9. Avoid brain churn. Eliminate all matters from further discussion except what remains uncertain. If a rule in isolation is not that important, just move on.
  10. Rules are living, breathing things. Don’t be afraid to put a stake in the ground, e.g., a specific number for a threshold, because with well-managed rules, it can be changed at any time.
www.BRSolutions.com

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Do you see these things as business rules? Now I confess.

I put that question and the following list on several LinkedIn groups. It was a lot of fun. I feel a little guilty – and dismayed – so many people struggled so hard with it.

1. Assigning values to variables. 2. Asserting mandatory GUI fields. 3. Specifying which data can be viewed by which users. 4. Expressing which documents are to be routed to which queues. 5. Orchestrating tasks assignments in an execution environment.

So now I should confess it was a trick question. I don’t see any of those things as business rules. They only represent how business rules might be applied or implemented. True business rules:
  • Are about human communication. So they must be expressed in a manner that business people can understand (if they know the business vocabulary) – e.g., via RuleSpeak.
  • Would be needed even if you did the business ‘by hand’. So they must be about business issues, not system design or system orchestration issues.
We’ve got a long way to go to become true business engineers – what we call Why Engineers. What’s a ‘Why Engineer’? Have a quick read of http://www.brcommunity.com/b727.php www.BRSolutions.com

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Working with Business Rules: Capture, Specification, Analysis & Management

Location: Online Seminar Overview Do your business processes always produce correct and consistent results? If not the problem probably lies with your business rules and decision logic. Business Analysts need the right techniques to fix these problems – process models, use cases, data models and other requirement techniques just aren’t right for the job. This hands-on series will equip you with proven techniques for success. More info: http://www.attainingedge.com/online-training-business-rule-analysis-masterclass.php Register for full series!

Session 1. The why, what and who of business rules

Next Session: October 1, 2013 @ 10:30am – 12:00noon (ET)

  • Why business rules
  • What benefits you can achieve
  • What business rules are, and are not
  • Business rules vs. business processes
  • Kinds of business rules: definitional vs. behavioral
  • How the business should react to violations
  • Business rules and decisions
  • What skills you need to capture business rules effectively
  • What you need to know
Register Session!

Session 2. Eight steps to find and capture business rules

Next Session:October 1, 2013 @ 3:30pm – 5:00pm (ET)

  • Capturing business rules from people’s heads
  • Capturing business rules from great big documents
  • Using facilitated sessions
  • Step-by-step approach
  • What about reverse-engineering business rules from code
  • Do’s and don’ts
Register Session!

Session 3. Eight steps to express clear business rules

Next Session: October 2, 2013 @ 10:30am – 12:00noon (ET)

  • Business policies vs. practicable guidance vs. automated rules
  • The role of business vocabulary
  • Step-by-step approach
  • Clarity and completeness
  • Eliminating ambiguity
  • Addressing exceptions
  • Guidelines
  • What to avoid and why
Register Session!

Session 4. How to analyze and communicate business rules

Next Session: October 2, 2013 @ 3:30pm – 5:00pm (ET)

  • Basic principles for rule analysis
  • Rule quality
  • Handling conflicts
  • Developing business reactions to violations
  • Simplification – When, why and for whom
  • How to validate business rules with business people and SMEs
  • Verification – Examples
Register Session!

Session 5. Eight steps to set-up decision tables

Next Session: October 3, 2013 @ 10:30am – 12:00noon (ET)

  • When to use decision tables
  • How to set up decision tables
  • Decision tables and business process models
  • What your decision tables should not do
  • Decision tables and business vocabulary
  • Best practices
  • Alternative formats
  • Completeness, subsumption and conflicts
Register Session!

Session 6. Ten steps to start or refine your business rules projects

Next Session: October 3, 2013 @ 3:30pm – 5:00pm (ET)

  • Business rules and requirements
  • Properties of business rules
  • Traceability of business rules
  • Retaining corporate memory
  • Managing the life cycle of business rules
  • Business rule management – examples
  • Business rules and rule engines – implementation examples
  • How to get started
Register Session!

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What is Business Alignment Really All About?

Business alignment is like motherhood and apple pie, no one will argue much against it.  But for all the hand waving, questions remain.  What are you aligning?  How do you align?  Answers generally center on aligning IT with the business.  But shouldn’t that be a given?!  Methodologies recommend a great many touch points with individual users and good interpersonal relationships.  But do those things ensure good business practices – or just good GUIs?  And why just IT?  Aren’t there other kinds of projects in the business too? True business alignment results from engineering real business solutions for real business problems based on deliberate strategy (in a deliverable we call a Policy Charter).  The approach should be exactly the same whether the business solution involves comprehensive automation, just partial automation – or none at all.  True business alignment is also something you can demonstrate quantitatively
  • How fully are business goals being achieved? 
  • What is the failure rate of business policies
  • How quickly can emerging risks and opportunities be spotted? 
Only metrics (key performance indicators) based on the strategy for the business solution (a Policy Charter) can reliably answer make-or-break business questions like these. ~~~~~~~~~~~~~~~ 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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Business Rule Analysis: Practitioner MasterClass Series

Location: Online Seminar Overview Do your business processes always produce correct and consistent results? If not the problem probably lies with your business rules and decision logic. Business Analysts need the right techniques to fix these problems – process models, use cases, data models and other requirement techniques just aren’t right for the job. This hands-on series will equip you with proven techniques for success. More info: http://www.attainingedge.com/online-training-business-rule-analysis-masterclass.php Register for full series!

Session 1. The why, what and who of business rules

Next Session: October 1, 2013 @ 10:30am – 12:00noon (ET)

  • Why business rules
  • What benefits you can achieve
  • What business rules are, and are not
  • Business rules vs. business processes
  • Kinds of business rules: definitional vs. behavioral
  • How the business should react to violations
  • Business rules and decisions
  • What skills you need to capture business rules effectively
  • What you need to know
Register Session!

Session 2. Eight steps to find and capture business rules

Next Session:October 1, 2013 @ 3:30pm – 5:00pm (ET)

  • Capturing business rules from people’s heads
  • Capturing business rules from great big documents
  • Using facilitated sessions
  • Step-by-step approach
  • What about reverse-engineering business rules from code
  • Do’s and don’ts
Register Session!

Session 3. Eight steps to express clear business rules

Next Session: October 2, 2013 @ 10:30am – 12:00noon (ET)

  • Business policies vs. practicable guidance vs. automated rules
  • The role of business vocabulary
  • Step-by-step approach
  • Clarity and completeness
  • Eliminating ambiguity
  • Addressing exceptions
  • Guidelines
  • What to avoid and why
Register Session!

Session 4. How to analyze and communicate business rules

Next Session: October 2, 2013 @ 3:30pm – 5:00pm (ET)

  • Basic principles for rule analysis
  • Rule quality
  • Handling conflicts
  • Developing business reactions to violations
  • Simplification – When, why and for whom
  • How to validate business rules with business people and SMEs
  • Verification – Examples
Register Session!

Session 5. Eight steps to set-up decision tables

Next Session: October 3, 2013 @ 10:30am – 12:00noon (ET)

  • When to use decision tables
  • How to set up decision tables
  • Decision tables and business process models
  • What your decision tables should not do
  • Decision tables and business vocabulary
  • Best practices
  • Alternative formats
  • Completeness, subsumption and conflicts
Register Session!

Session 6. Ten steps to start or refine your business rules projects

Next Session: October 3, 2013 @ 3:30pm – 5:00pm (ET)

  • Business rules and requirements
  • Properties of business rules
  • Traceability of business rules
  • Retaining corporate memory
  • Managing the life cycle of business rules
  • Business rule management – examples
  • Business rules and rule engines – implementation examples
  • How to get started
Register Session!

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