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

Wanted: A New Knowledge Paradigm

ParadigmShift[1]My inner geek gets as excited as the next professional about all the technological innovations adding up to what gurus are calling the digital platform or digital business – or simply digital. This new wave of technological capability features social, mobile, cloud, big data, and more. It promises a host of new capabilities to accelerate innovation including robotics, 3D printing, internet of things, cognitive, and augmented reality. WOW!!

But there’s a little voice inside me counseling caution. When have new platforms or channels ever fixed major business challenges?!

It’s all too easy to get caught up in ChannelMania, a state of virtual panic about introducing the next big thing, keeping up with the Joneses technologically. In the frenzy you can easily lose sight of the hidden business costs.

We should step back, take a deep breath, and ask ourselves some fundamental questions.

  • How well can we really manage yet more channels?
  • Do we deliver consistent business results to our customers?
  • Are we happy with our current lot in managing change?
  • Does the company have any real strategy to address ever-accelerating complexity?
  • With all the new agile methods, is the business actually becoming more agile?

It’s not too hard to envision what real operational excellence would look like.

  • Your customers would get consistent business results through any of many channels.
  • Rolling out business change would be faster and cheaper.
  • You could demonstrate compliance at every turn.
  • You could manage complexity at scale.
  • You’d provide stellar customer experience at inhuman speeds.

The question, of course, is how do we get there? I argue that we need a new knowledge paradigm. I call it Business Knowledge Engineering.

~~~~~~~~~~~

Read about the new knowledge paradigm: http://www.brcommunity.com/articles.php?id=b900

Continue Reading

Addressing Business Complexity

complexity complicated-flows1[1]A large consulting company recently conducted an assessment of the IT development approach followed by one of our clients that uses our approach for business analysis with business rules. The consulting company judged the approach highly effective because the approach is ‘componentized’ (their description). 

The consulting company meant that business rules are viewed as a component; business processes are viewed as a component; business vocabulary is viewed as a component; etc. ‘Componentized’ may or may not be the right description, but the consulting company hit upon an important point.

Most IT methodologies for requirements development today make no attempt to examine the fundamental questions what, how, where, who, when, and why individually and selectively.  That omission is odd to say the least.  Those six questions are ones all of us ask and answer every day in real life.  The six question words are very basic to our language.

Instead, most methodologies today are centric.  They are process-centric or data-centric or user-story-centric or sometimes even rule-centric or decision-centric.  A centric approach requires force-fitting some or all elements of a solution into a single mold that distorts and submerges other elements.  Worse, a centric approach does little to avoid elements being neglected or omitted altogether.

Business problems are inherently complex and multi-faceted, as are their solutions. So we make every effort to ensure our approach to business analysis is well-factored and balanced – that is, non-centric – right from the start.

A non-centric approach doesn’t make developing winning business solutions harder, just the opposite. By addressing business complexity head on – as naturally factored in the real world – top-quality business solutions are far easier to attain.  Experience proves it time and time again.

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

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: April 4-6, 2017 – 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. www.BRSolutions.com

Continue Reading

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!

Continue Reading 1 Comment

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!

Continue Reading 1 Comment

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.

~~~~~~~~~~

Continue Reading

‘Rules of Record’ … Why ‘System of Record’ Isn’t Enough

Business computing today is characterized by a tangled web of interfaces and data movement from system to system, from source to sink. Knowing the official ‘systems of record’ is basic for resolving discrepancies and demonstrating compliance. But that’s merely a start. What your business really needs today is to know the rules of record. A focus on business rules, rule management, and decision management makes that possible. This post explains. First a little background. If every piece of data in the organization had a single, clear home, identifying official versions would be easy. But in today’s world, operational data is extracted, merged, massaged, re-platformed, and reported many times over, often obscuring original sources. Identifying a ‘system of record’ establishes which source is official for each element (or chunk) of data. In other words, it gives you physical traceability back to source.[1] That’s a first and very basic step for compliance. What physical traceability doesn’t do is explain why that source may have a different value from the copy of the data you’re actually seeing. You might call that difference semantic drift (although that term probably dignifies what often is just plain sloppiness about the meaning and use of data). Since you can’t be sure what rules were applied to create the official version, you can’t easily do a delta on what you’re actually seeing. In other words, you have no semantic traceability back to source. From a compliance point of view, knowing the rules for source data is paramount. Of course, if those rules never changed, you might be able to reconstruct them at an acceptable price when and as needed for compliance. But today, change — at an ever faster pace — is the name of the game. Add massive personalization and customization to the mix and you quickly reach an impossible threshold of complexity and expense. The solution is simply never putting yourself in a position of having to reconstruct rules. Rather, you want to manage rules in such way to keep them ‘on the record’ — i.e., to maintain rules of record for each operational business decision your company makes. Impossible? Not at all. That’s exactly what business rules, rule management, and decision management is all about. There is proven technology to support it.[2] All you need to do is change how you look at the problem. References [1] For additional background on ‘system of record’ see: http://en.wikipedia.org/wiki/System_of_record http://www.yourwindow.to/information-security/gl_systemofrecord.htm [2] For example, Raden and Taylor write, “Logging rules as they execute to create a record of how a decision was made is a common requirement of decision services. They can be managed like a typical logging requirement, except that using business rules makes it easier. Using business rules also makes it possible to use the logged information in both customer-facing and regulatory conversations, because the rules are more user-friendly.” James Taylor and Neil Raden, Smart (Enough) Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions, Prentice-Hall (June 2007), ISBN: 0132347962, p. 358. ~~~~~~~~~~~~~~~~~~ The original version of this post appeared as: “‘Rules of Record’ ~ Why ‘System of Record’ Isn’t Enough,” Business Rules Journal, Vol. 9, No. 1 (Jan. 2008) http://www.BRCommunity.com/a2008/b385.html

Continue Reading

The Procedural Paradigm Won’t Scale: We Need Configuration Agility!

It’s been said that I claim the procedural paradigm won’t scale anymore. Guilty as charged! Let me explain. Procedural vs. Declarative In the big scheme of things, you have two basic choices for conceptualization, and ultimately implementation, of business capabilities: procedural vs. declarative. Let’s make sure we agree on what these terms mean. I’ll draw directly on Merriam-Webster Unabridged to make sure we’re on the same page. If the terms don’t mean what they’re supposed to mean, all bets are off. But I guess that goes without saying, doesn’t it?

procedure: 1a: a particular way of doing or of going about the accomplishment of something 1b (1): a particular course of action (2): a particular step adopted for doing or accomplishing something (3): a series of steps followed in a regular orderly definite way

You can spot the seeds of the scalability problem right away with repeated use of the word “particular” and with the phrase “regular orderly definite way” in the definition. Given the degree of product/service customization desired today, and the accelerating rate of change, how much business activity still occurs in a particular and regular orderly definite way? The answer, of course, is less and less all the time. ‘Exceptions’ have become the rule. The essential characteristic of procedures is that they flow. The flow comprises the steps by which a thing is intended to become a different thing (or the same thing in a different state). The essence of ‘procedure’ is therefore that something will be hopefully transformed. For sure, that’s a very basic, very important, very necessary part of any business capability. The problem arises taking procedure beyond that point. Something declarative, in contrast, doesn’t flow. It just states something that must (or should) be true.

declarative: 2: having the characteristics of or making a declaration : ASSERTIVE;  specifically : constituting a statement that can be either true or false

Business rules are that way; they simply give guidance. They don’t do anything. They don’t flow anywhere. They can’t be anything other than true or false. In short, business rules are fundamentally different than procedures. Big-P Process The traditional procedural paradigm (I’ll call it Big-P Process) embeds business rules in procedures (and in process models and in procedural code).What happens when you treat things that could be declarative in a procedural way? You get bloat. You lose business intent. You produce needless complexity. And you also get what I call configuration stagnation. As you scale, these problems grow exponentially. How many business rules are we talking about? Any given business capability easily has hundreds, sometimes thousands of business rules – especially when you begin to factor in the know-how needed to make smart operational business decisions. And don’t our businesses increasingly depend on ever more complex know-how? Is there any end to that trend in sight? At the scale of today’s business, the Big-P Process paradigm simply doesn’t work. It results in ungovernable business operations and unretainable know-how. Big-P solutions are like setting the business in concrete. It’s all so unnecessary and so counterproductive. It’s just not smart. Configuration Agility The key question for agile business capabilities is how the business is configured (and quickly reconfigured) for operation at any given point in time. In the Big-P paradigm, the building-blocks become thoroughly entangled with flow (procedure). The result is essentially a semantic dead zone. Because things that could be expressed declaratively aren’t, the opportunity is lost to use logic to automatically evaluate business rules (read ‘business practices’) for conflicts, anomalies and other logical defects. The future clearly does not lie in that direction. Instead, it lies with granular, declarative, semantically-rich specification of business configurations in building-block fashion. It lies with the paradigm that can produce the optimal configuration agility. In addition to procedures, smart configuration models will feature at least these other building blocks for business capabilities, all specified at the business level:
  • business rules 
  • operational business decisions 
  • structured business vocabularies (concept models, also known as fact models) 
  • business goals and risks 
  • business events
From an engineering perspective, the secret to agile configuration is ‘late binding’ – that is, bringing all the pieces together for execution (i.e., performance of procedures) as late as possible. That way, performance can be as up-to-date and as flexible as possible. Smart configuration models should be the new mantra for enterprise architecture. In a world of constant and accelerating change, I simply see no alternative. Doing more of the same is simply not going to work anymore (and already hasn’t been for a good, long while). [Warning, plug coming]: Smart configuration schemes also address business governance and compliance – essential in a world of constant change – and just-in-time (JIT) delivery of know-how for operational workers. In our new book, Building Business Capabilities (see http://www.brsolutions.com/b_building_business_solutions.php) we call systems built using smart configuration models business operation systems (as opposed to ‘information systems’).  

Continue Reading 2 Comments

Creating a Business Model: Walk the Walls!

In running facilitated sessions, we like to create each kind of business model on a different wall.  We find that the physical act of walking or shifting focus from one wall to another helps participants rapidly grasp and remember what each wall represents.  It also helps business leads and Business Analysts identify disconnects and gaps in the business solution more readily. We call this walking the walls. Our definition:  managing complexity in developing a business model by figuratively, and as much as possible literally, addressing each primitive as a separate concern (i.e., on a different wall)  In physically walking the walks, we usually put business process model(s) on the left wall and the structured business vocabulary (concept model) on the right wall.  On the front wall we put reminders about the strategy for the business solution (Policy Charter) and on the back wall we capture business rules.   Aside: Business rules go on the back wall to help resist the temptation of wordsmithing, which is better done offline.  In an ideal world, there would be one surface for each of the six primitives of the Zachman Architecture Framework.  (Alas the ceiling and floor are hard to use.)  Business rules, serving as integration relationships, would occupy the 3D space between the six surfaces (even harder to use!).  Our approach approximates the notions well enough in practice.

Continue Reading

Want to Make Your Business Process Models Less Complex and More Approachable? There’s a Proven Solution!

The best way to simplify business process models is to take the business rules out and address them separately. Example: For a large pharmaceutical client, we reduced a complex 28pp model to just under 4 pages by doing that – nearly an order-of-magnitude reduction in size (and probably even more in terms of complexity). Everyone loved the results. There was nothing unusual or atypical about the result – we’ve seen it happen many, many times. By the way: If you know of similar cases, I’d love to hear about them!

Continue Reading 2 Comments

Does Your Business Have a 1000 Business Processes? … Not!

A practitioner recently wrote: ” … businesses typically have over a thousand different business processes. There are often variations of business processes for different regions, products, exceptions and business areas as well as other reasons, that’s why there are so many …”. What kind of “process” could he possibly mean!? A business couldn’t possibly have over a thousand business processes. Such a business would be unmanageable. (Unfortunately, some businesses probably aren’t.) The practitioner’s view misses the crucial insight that for both operational and financial reasons, a business must have a small set of core business processes that are standard. Variations can be handled … within what is acceptable … by business rules. Such variation might have to do with geography, products, best practices, etc. Without business rules, the complexity is simply unmanageable.

Continue Reading 2 Comments

Our Clients

[cycloneslider id="our-clients"]