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

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

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BPM and the Knowledge Economy: White-Collar Work

Make no mistake, the future lies with automation of white-collar work. Fewer and fewer business problems these days focus on manufacturing and production processes, i.e., the nothing-but-widgets category. For all the non-widget-centric business activity in the world – which includes just about all every conceivable form of white-collar work – the following needs become paramount.
  1. Ensuring the quality of meta-data.
  2. Demonstrating compliance based actual rules, rather than the artifacts and effects that IT systems produce.
  3. Retaining, teaching and repurposing intellectual capital.
What would I do to correct the shortcomings of BPM for non-widget-centric business activity? Our answer is to become more why-centric, as opposed to narrowly how-centric.[1] You should focus on business capabilities, not just business processes. That shift has several essential features:
  • Understanding business strategy as something distinct from business processes (and BPM). Business goals and business risks should be drivers of business process design – not the other way around. You need to be strategy-driven, not simply process-driven.
  • Designing core metrics around business goals and business risks – the things that concern C-suite executives the most.
  • Realizing that for white-collar work the 3-D world of widgets has vanished, and that tolerances and quality can be expressed only in terms of business rules.
  • Treating business rules as a first-class citizen, externalized from process models.[2]
  • Identifying operational business decisions (based on encoded business rules) as a crucial focal point in re-engineering business processes.
  • Including a Why Button as part of every business solution. Pressing the Why Button leads immediately to the business rules that produced the results you see from any process.
~~~~~~~ Read more about the future for processes: BPM and the Knowledge Economy: Nothing But Widgets? http://www.brsolutions.com/2015/11/16/bpm-and-the-knowledge-economy-nothing-but-widgets/ What is the Future for Processes? http://www.brsolutions.com/2015/11/09/what-is-the-future-for-processes/ Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to: Ronald G. Ross, “The Why Engineer™,” Business Rules Journal, Vol. 14, No. 11 (Nov. 2013), URL:  http://www.BRCommunity.com/a2013/b727.html
[2] Refer to the Business Rules Manifesto, now in almost 20 languages: http://www.businessrulesgroup.org/brmanifesto.htm

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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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Basics for Business Architecture: #1 – Structured Business Strategy

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. True business solutions of any size or description hinge on strategy. Not project or IT strategy – not business case or project objectives – but real business strategy. Are you sure you really know the difference? Time and time again I find that many business analysts don’t. Here are two quick tests. Test 1. Are you aware of the standard The Business Motivation Model (BMM)[2]. Have you actually read it? If not, I’d say the issue is in doubt. Real strategy is about ends and means, not about change or how you plan, design or engineer such change. Change is inevitably involved of course – but that’s what projects and project plans are about. Test 2. Which of the following is closest to your thinking about alignment?
    • IT needs to be aligned with the business.
    • Business capabilities need to be aligned with business strategy.
If you instinctively went with the former, again I’d say the issue is in doubt. ~~~~~~~~~~~~~~~~~~~~~~~~~ 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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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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Final Word (For Now) on the Black Swans and Strategy Discussion: Do Business Rules Derive from a Business’s Goals and Objectives?

Question: Do business rules derive from strategy? Answer: In our experience only about 2-3% of a company’s business rules derive directly from strategy (goals and objectives). Needless to say, those are a critical 2-3%. The rest of a company’s business rules concerning behavior derive from regulations, contracts, agreements, business policies, warranties, deals, certifications, etc. Let’s call all those obligations. Every business has a choice of whether to comply with its obligations. Generally speaking, the risks of not doing so will be high in a good many (though not all) cases. So there’s certainly something to be said for being a good corporate citizen in a free enterprise system. The key is to make sure all business rules align with strategy, even if most don’t derive directly from it.

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Black Swans: Two Issues of Consequence that Taleb Doesn’t or Cannot Answer

Guest Post by Kenneth Watman Deputy Director, Systems Analysis Office of Director of National Intelligence Washington D.C. ~~~~~~~~~~~~~~~~~ Like so many people, I was fascinated and exasperated by Taleb’s book. But, when the book is summed up, I do not believe Taleb has defined “Black Swan” as anything special or remarkable. Near as I can tell, a “Black Swan” is an especially rare event, perhaps completely unanticipated with very large consequences. Well, had we discussed this question before 9/11 and the financial crash, I think we would have said, “Of, course.” If there are 100-year hurricanes, there probably are 500-year hurricanes. A relatively small asteroid has a 1-in-250 chance of hitting earth over some time period with unprecedented effects. So, if you want to label those “Black Swans,” why not? There are two issues of consequence that Taleb doesn’t or cannot answer.

1. First, is there a systematic reason to believe we are underestimating risk and or consequences? That’s a matter of data and analytical methods, and there are lots of people trying to find out. We know that when disaster models are misused, like the financial models, they will tell us garbage with results that may shock us. Again, where’s the news in that. Don’t misuse the models and put into place precautions against doing so.

2. Second, even if the data suggest we need fatter tails (long-standing procedures exist to do that), there’s a policy/greed question. Will finance and insurance companies put enough in their reserves to reflect the risks they face? Or, as a matter of policy, lack of regulation, competitive market pressures, and self-deception, will they simply close their eyes, cross their fingers, and discount cognitively what low risk means, e.g. non-zero risk?

Reminding us of rare, high consequence events is fine. Calling them “Black Swans” doesn’t add anything substantively, although it’s an effective metaphor. But the greatest contribution is in answering the latter two questions I’ve posed. ~~~~~~~~~~~~~~~ Have a look at my recent posts on Black Swans, strategy, and business rules … Search on “Black Swans”  

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Black Swans, Business Rules, and Strategy – Re-Clarified

Let me re-clarify what I am, and am not, saying about business rules and black swans. There’s been some confusion. I did not say that preparing for or responding to black swans is all about business rules. (I’m not that naive!) I did say, however, that business rules “… build robustness to negative [black swans] that occur and being able to exploit positive ones” [Taleb’s words]. My main point is this: If you don’t have ready access to your current business rules (i.e., know what they are in depth), then when a black swan occurs you can’t immediately undertake to respond to negative ones, and exploit positive ones. (See: http://goo.gl/Ny2Cn) A colleague wrote: “For example, Taleb cites 9/11 as an example of a black swan. What business rules would prevent or allow successful response to that?” I make no suggestions about prevention. Hindsight is 20-20. But successful response? You need to quickly review what your current business practices (business rules) are …
  • Permissible carry-ons. Box-cutter knives? Immediately banned. Any other sharp items including silverware for meals, banned.
  • Access to the cockpit. Special barriers (food cart, steward(ess)) put in a blocking position when a pilot exits the cockpit to use the lavatory. Doors locks reinforced.
We learn as we go. Amounts of liquid over a certain threshold, banned. Shoes must be removed at security. Souvenir ‘blizzard’ globes, banned. You want to roll out these new business rules fast(!). If you don’t know what business rules you already have in place, you simply can’t respond as fast you need to. Make no mistake, most businesses today sadly don’t really know what their current business rules are. That’s what I’m saying!

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Black Swans, Business Rules, and Strategy – Continued

I’ve gotten a lot of excellent response to yesterday’s post on black swans. Let me summarize yesterday’s points and continue the line of thought.

a. Business rules cannot be used to help protect against unforeseeable events that have not already happened. b. Business analysts can assess unforeseeable events (black swans) and develop business rules to cater for their potential recurrence.

c. If you don’t have ready access to your current business rules (i.e., know what they are in depth), then when a black swan occurs you can’t immediately undertake point b.

Point c is actually where my emphasis lies. The result is that the organization remains vulnerable for recurrence (and copycat malicious attacks) for a much longer period than necessary (or desirable). How long extra? At least days, more likely weeks, sometimes months. What most organizations don’t realize today is that they don’t actually know what their business rules are. Before they can even begin to rethink business practices in-depth they have to send out ‘scouts’ (business analysts and IT professionals) to discover their current business rules (from people’s heads, source code, procedure manuals, documentation, etc., etc.). When the scouts do find the current business practices (business rules), they have to sort through redundancy, inconsistency, gaps and conflicts. That’s simply no way to run a business! There’s no single-sourcing of business rules, no official, authoritative ‘rulebook’, no structured corporate memory. The result is huge loss of time and energy. The problem is so big it’s hard to see. We simply have to face up to the fact that current methodologies produce a crippled business governance process. And yes, the situation *is* that bad! ~~~~~~~~~~~~~~~~~ P.S. To single-source business rules and retain corporate memory about them, we recommend a ‘general rulebook system’. See http://www.brcommunity.com/BBSGlossary.pdf (page 30) for quick explanation.

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Black Swans, Business Rules, and Strategy: What Every Business Analyst Needs to Know

We preach (and practice) strategy as a key element of business analysis. A key element of strategy is identifying significant business risks. We address such risks in the deliverable we call a Policy Charter. See http://www.brcommunity.com/BBSGlossary.pdf (page 39). Appropriate business policies are developed to protect the company. Sometimes we hear the argument that it’s impossible to determine the risk of some future unknown event. And what’s a rational definition of risk anyway? By “risk” we simply mean what the dictionary (Merriam-Webster Unabridged) means: 1: the possibility of loss, injury, disadvantage, or destruction : CONTINGENCY, DANGER, PERIL, THREAT Yes, the following statement is correct: “It is impossible to determine the risk of some future unknown event.” The operative word in that is unknown. How could anyone argue with that? The implicit reference is to black swans … unpredictable outliers. The only thing business analysts can do to help protect the business against black swans is “… build robustness to negative ones that occur and being able to exploit positive ones.” (Wikipedia on Taleb’s book The Black Swan: The Impact of the Highly Improbable). I maintain that business solutions based on business rules do exactly that. To respond successfully to unforeseen circumstances you must know what your business practices (business rules) are in the first place(!). On the other hand, business people generally do have a good understanding of known business risks. We think it’s crucial to factor that understanding into business analysis. Now who could argue with that?!

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Business Policies vs. Business Rules: What’s the Big Difference Anyway?

The relevant standard on the question is OMG’s Business Motivation Model (BMM). I prefer the English (not UML) version: http://www.businessrulesgroup.org/second_paper/BRG-BMM.pdf. Business policies and business rules are both ‘elements of guidance’. The difference is that business policies are not practicable, whereas business rules always are.  A business rule must be ready to deploy to the business, whether to workers or to IT (i.e., as a ‘requirement’). So business policies must be interpreted and refined to turn them into business rules. An example I often use:

Business Policy: Safety is our first concern.

Business Rule: A hard hat must be worn in a construction site.

It’s very important to retain information about these interpretations for the sake of traceability. That’s at the heart of business rule management. Business policies are an integral part of strategy. In general, we find only 2-3% of business rules trace directly back to strategy. But those *core* business rules are very, very important (to enforce and monitor). One last point: Business rules must be expressed in a form that is understandable to business workers (who are authorized and capable). What IT usually specifies or implements as ‘business rules’ aren’t. They might be rules, but not business rules. And what do I mean by “rule”? Exactly what it means in the real world – ‘guide for conduct or action’ (Merriam-Webster Unabridged).

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