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

Quality and Tolerances in the Knowledge Economy

Quality must be viewed very differently in the white-collar world. The traditional view simply doesn’t fit. In Henry Ford’s day, for example, central to the concept of mass production was standardization of parts. That idea leads directly to the notion of manufacturing tolerances – i.e., upper and lower limits for parts in 3-dimensional space. The goal is to ensure physical interchangeability of physical parts. That idea is now standard practice, of course, across manufacturing and production sectors. But what are the ‘parts’ in white-collar work? White-collar processes simply don’t deal with physical things. How can you identify tolerances for them in 3-dimensional space? You can’t! In a very real sense, the ‘parts’ in white-collar work are literally just bits and bytes. If not tolerances as a basis for quality, then what’s the proper focus? My answer: consistency and reliability of results. For example, if I visit ten different branches of the same bank about getting a mortgage for my dream home, shouldn’t I get the same answer on my application from all 10 branches?! As you perhaps have experienced yourself, that’s not the way it works in many banks today. So one aspect of quality in white-collar work is the consistency and reliability of operational business decisions. Another aspect of quality concerns compliance. Every business is subject to ever growing numbers of (take a deep breath here) … acts, laws, statutes, regulations, contracts, MOUs, agreements, terms & conditions, deals, bids, deeds of sale, warranties, prospectuses, citations, certifications, receipts, legal notices … and the list goes on. Shouldn’t I expect consistency and reliability of results with respect to all those obligations and commitments? I believe we should. If it’s not about quality, then what?! My conclusion:When there isn’t any physical product from a business process, quality and defects must be measured by consistency and reliability of results, which are in turn always purely a matter of business rules. For background on this post, see: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com

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Measuring Quality and Defects in the Knowledge Economy

Everyone wants high quality from their business processes. But what exactly does quality mean these days? Let me tell you a quick story that recently got me thinking. I like to eat toasted raisin bread in the morning. I even have a favorite brand. Every morning when I’m at home I eat several pieces. Over the years I’ve become so experienced with the brand’s quality that I can spot defects. I know when they’ve laid on the cinnamon a little too heavily, or when the dough didn’t rise quite enough. Every morning I look forward to doing my little AM taste test. But one morning recently I suddenly realized the large majority of client processes we’ve worked with over the last decade are not ones I can perform any taste test for. There’s nothing physical from the process I can taste or hear or touch. There’s nothing whatsoever to directly assess quality by. That’s because some clients simply have no physical products at all – e.g., insurance, finance, taxation, etc. But a good number do – e.g., electrical equipment, trucking, railroads, and so on. For these latter clients the processes of immediate concern didn’t directly involve those physical things however – only just white-collar stuff. So the question becomes how do you assess quality from a business process when there’s no physical product? How do you identify defects when there isn’t any physical result? My conclusion: When there isn’t any physical product from a business process, quality and defects are purely a matter of business rules. If you’re not documenting and managing business rules as part of your BPM or quality management approach (or elsewhere) you’re missing a crucial part of the picture. ~~~~~~~~~~~~~~~ www.BRSolutions.com

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Are Processes and BPM Relevant in the Digital Economy?

I wouldn’t go so far as to say that process and BPM are meaningless across the board in the digital economy. If you’re manufacturing or producing a physical product, you still do need to think in terms of a modeled and managed business process. Other the other hand, if your products are non-physical – for example, money, time, skills, information, meta-data, etc. – you’d better have a major re-think. The old rules of the game simply don’t apply to white-collar work. Nor do they apply if your business model is about digitally leveraging other people’s idle assets – think Uber. You must still consistently satisfy contractual obligations and regulatory constraints in this new digital world of course. But that’s a business rules problem, not a process problem. A major characteristic of the new digital world is that activity is never static in any sense of the word. You simply get no points for hardwiring repetitive behaviors. You must:
  • Continuously make informed operational decisions in the blink of an eye (actually often faster than that).
  • Selectively respond to changing circumstances with subtle adjustments.
  • Be as dynamic as possible, yet still produce outcomes of predictable, consistent quality.
These too are business rule problems, not process problems. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com

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Pleased to Announce Release of Our New Book Edition!

Building Business Solutions: Business Analysis with Business Rules (2nd Edition) … Just Out! http://www.brsolutions.com/b_building_business_solutions.php Get it on Amazon: http://goo.gl/HXxN1f What It’s About: How to develop business solutions working directly with business leads, create blueprints of the solutions, and then use those blueprints for developing system requirements. Engineering business solutions, not just requirements.We have applied the techniques described in this book successfully in hundreds of companies worldwide. Kind Words from a Practitioner: “We have based our whole business rules analysis practice on the methodology and techniques developed by the Business Rules Solution team. This book is an integral part of our practice. It’s an easy to read, useful guide with real life examples – we use it daily and couldn’t do without it!” – Michelle Murray, Inland Revenue Department NZ New in this Edition: How Business Architecture corresponds with your projects and requirements work. Developing a Concept Model and how it will help you. How business rules align with the new terminology in the recently released IIBA® BABOK® Guide version 3. ~~~~~~~~~~~~~~~~~ www.BRSolutions.com

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Wholeness: Insight for Expressing Business Rules Well

The standard Semantics of Business Vocabulary and Business Rules (SBVR)[1] offers fundamental insights about how to express business rules well. These common-sense insights can and should directly inform all expression of business rules – and any language that purports to support them. The first of these insights is the notion of practicable, which I discussed in my previous post. See: http://www.brsolutions.com/2015/06/29/practicable-insight-for-expressing-business-rules-well/ The second of these insights is the principle of wholeness. The descriptive text below is taken directly from SBVR itself.[2]Wholeness essentially means each business rule statement can be taken as fully trustworthy even in isolation from all other rules. The principle precludes priority schemes and rules that disable other rules, both of which can act to make any given rule less than fully trustworthy. ~~~~~~~~~~~~~~~~~~~                          Principle: An element of guidance means only exactly what it says, so it must say everything it means. Explanation: Each element of guidance must be self-contained; that is, no need to appeal to any other element(s) of guidance should ever arise in understanding the full meaning of a given element of guidance. The full impact of an element of guidance for a body of shared guidance, of course, cannot be understood in isolation. For example, an element of guidance might be in conflict with another element of guidance, or act as an authorization in the body of shared guidance. The Wholeness Principle simply means that if a body of shared guidance is deemed free of conflicts, then with respect to guidance, the full meaning of each element of guidance does not require examination of any other element of guidance. In other words, each element of guidance can be taken at face value for whatever it says. ~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] For more information about SBVR see the SBVR Insider section on www.BRCommunity.com.

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Practicable: Insight for Expressing Business Rules Well

The standard Semantics of Business Vocabulary and Business Rules (SBVR)[1] offers fundamental insights about how to express business rules well. These common-sense insights can and should directly inform all expression of business rules – and any language that purports to support them. The first of these insights is the notion of practicable. The descriptive text below is taken directly from SBVR itself.[2]Practicable essentially means all ambiguity has been resolved. As a result, a practicable business rule can be given either to workers to apply ‘manually’, or to IT to implement under some platform, and the results will be exactly the same either way (barring human error or malfeasance). ~~~~~~~~~~~~~~~~~~~~~~~~~~ Definition: the element of guidance is sufficiently detailed and precise that a person who knows the element of guidance can apply it effectively and consistently in relevant circumstances to know what behavior is acceptable or not, or how something is understood Dictionary Basis: able to be done or put into practice successfully; able to be used, useful [Oxford Dictionary of English] Notes:
  • The sense intended is: “It’s actually something you can put to use or apply.”
  • The behavior, decision, or calculation can be that person’s own.
  • Whether or not some element of guidance is practicable is decided with respect to what a person with legitimate need can understand from it.
    • For a behavioral rule, this understanding is about the behavior of people and what form compliant behavior takes.
    • For a definitional rule, this understanding is about how evaluation of the criteria vested in the rule always produces some certain outcome(s) for a decision or calculation as opposed to others.
  • A practicable business rule is also always free of any indefinite reference to people (e.g., “you,” “me”), places (e.g., “here”), and time (e.g., “now”). By that means, if the person is displaced in place and/or time from the author(s) of the business rule, the person can read it and still fully understand it, without (a) assistance from any machine (e.g., to “tell” time), and (b) external clarification.
 ~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] For more information about SBVR see the SBVR Insider section on www.BRCommunity.com.

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The Conversation of Three Baseball Umpires and How it Relates to Modeling

OMG released version 1.3 of SBVR (Semantics of Business Vocabulary and Business Rules)[1] last month – comprehensively reorganized for approachability, but not changed.[2] Some thoughts … ~~~~~~~~~~~~~~~~~ Ever hear the conversation that three baseball umpires once had? If you don’t live in a baseball country, it’s an archetypical story, so you’ve probably heard some variant. By the way, in American English a ‘pitch’ is a throw of the ball for the batter to try to hit, not the field of play. Meanings matter!
    • The first umpire says, “Some pitches are balls and some are strikes. I call them as they are.”
    • The second umpire says, “Some pitches are balls and some are strikes. I call them as I see them.”
    • The third umpire says, “Some pitches are balls and some are strikes. But they aren’t nothing till I call them.”
Most modeling techniques primarily focus on modeling the real world as it ‘really is’. They essentially take a first-umpire point of view or maybe second-umpire. I come from that tradition too. My 1987 book Entity Modeling was about doing that … modeling the real world as it ‘really is’. Pretty much all professionals with some IT background come from that world. Working with business people and business rules for the last 25 years, however, has taught me that business is really more of a third-umpire world. Think of laws, regulations, statutes, contracts, agreements, terms & conditions, policies, deals, bids, deeds of sale, warranties, prospectuses, citations, complaints, receipts, notices … and business policies. Even businesses that deal with tangible stuff (e.g., railroads, electrical transmission, infectious diseases, etc.) live in a third-umpire world. And many of the most automated organizations around have no tangible product at all (e.g., finance, insurance, government, etc.). They really exist only in a world of words (between people). It’s humbling to realize that the way the business world ‘really is’ is more directly the product of words exchanged by the players in a conversation game than anything IT professionals can model directly. But why would it be otherwise? Do IT professionals really know better than business owners, business managers, lawyers, engineers, subject matter experts, etc.? Really?! SBVR, in contrast to almost all other standards, doesn’t try to model the way the real world ‘really is’. Instead, its focus is on modeling what is said about the way the world really is. It’s fundamentally a third-umpire standard. You simply have to understand what the words mean – and that’s a human-communication issue. Yes, the SBVR world view is a game changer. It also happens to align closer with some of the most exciting new work in computerization today including cognitive computing and machine learning. I stand accused by peers in the standardization community of wanting to go beyond the ‘capture, exchange and production of information’. Sure, I can live with that. ~~~~~~~~~~ www.BRSolutions.com


[1]For more information on SBVR refer to the SBVR Insider section on www.BRCommunity.com.

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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
 

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Basics for Business Architecture: #3 – Structured Business Vocabulary (Concept Model)

Professionals should always focus on business solutions first, then and only then on designing systems. Not just lip service, I mean applying the power techniques of true business architecture[1]. The first two of these techniques are:   The third technique is structured business vocabulary – a concept model. The value-add companies produce today is based on rich operational business knowledge. No business solution can prove truly effective if business people (and the tools they use) are unable to communicate about that knowledge clearly. Who profits from operating in a Tower of Babel? A concept model[2] is about identifying the correct choice of terms to use in business communications (including statements of business rules) especially where subtle distinctions need to be made. A concept model starts with a glossary of business terms and definitions. It puts a premium on high-quality, design-independent definitions, free of data or implementation biases. It also gives structure to business vocabulary. Essential for any true architecture is stability over time. Are the core concepts of an operational business stable over time? Yes.[3] Did you know that?! ~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to the second edition of Building Business Solutions: Business Analysis with Business Rules, an IIBA Sponsored Handbook, by Ronald G. Ross with Gladys S.W. Lam, (to be published mid 2015). http://www.brsolutions.com/b_building_business_solutions.php
[2] The standard for concept models is the OMG’s Semantics of Business Vocabulary and Business Rules (SBVR). Refer to the SBVR Insider section of www.BRCommunity.com.   
[3] 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

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Basics for Business Architecture: #2 – Business Processes & Business Rules

Professionals should always focus on business solutions first, then and only then on designing systems. Not just lip service, I mean applying the power techniques of true business architecture[1]. The first of these techniques is structured business strategy. See: http://www.brsolutions.com/2015/05/31/basics-for-business-architecture-1-structured-business-strategy/. The second technique is business processes and business rules. Effective business solutions require architecting both the following:
                  • What is done to create value-add (business processes).
                  • What ensures value-add is created correctly (business rules).
Many professionals are unclear about the respective roles of business processes vs. business rules. At the risk of stating the obvious, let me make the following points.
    1. Business processes and business rules are different. They serve very different purposes: A business process is about doing the right things; business rules are about doing things right.
    2. There is no conflict whatsoever between business rules and business processes. In fact, they are highly complementary. Each makes the other better. If they don’t fit hand-in-glove, somebody is simply doing something wrong.
    3. You need both. Neither can substitute for the other. Period.
~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to the second edition of Building Business Solutions: Business Analysis with Business Rules, an IIBA Sponsored Handbook, by Ronald G. Ross with Gladys S.W. Lam (to be published mid-2015). http://www.brsolutions.com/b_building_business_solutions.php

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