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

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Posts Tagged ‘basics of busines rules’

What is a Business Rule?

It’s become more and more apparent that software vendors are misleading people (badly) about the true meaning of ‘business rule’. Time to set the record straight. Here is an authoritative 3-part explanation. Take a moment and reacquaint yourself. As a business-oriented professional you’ll be glad you did!

   Reference Sources

[MWUD] Merriam-Webster Unabridged Dictionary (Version 2.5).  [2000].  Merriam-Webster Inc.
[SBVR] Semantics of Business Vocabulary and Business Rules (SBVR) (Version 1.0).  [January 2008].  Object Management Group.
  1. Rule When we say rule we always mean real-world rule. Here’s the dictionary meaning of “rule”. That’s what we mean.

[MWUD ‘rule’ 1a]:  guide for conduct or action; [MWUD ‘rule’ 1f]:  one of a set of usually official regulations by which an activity (as a sport) is governed [e.g.,] *the infield fly rule* *the rules of professional basketball* ; [MWUD ‘criteria’  2]:  a standard on which a decision or judgment may be based

A real-world rule always tends to remove some degree of freedom.  If it does not, it’s not a rule.  2. Under Business Jurisdiction    When we say business rule we mean only rules that the business can opt to change or to discard. A business rule is always under business jurisdiction of your organization.  The point with respect to external regulation and law is that your organization has a choice about how to interpret the regulations and laws for deployment into its day-to-day business activity – and even whether to follow them at all. So external regulations are not business rules per se. Business rules include only the rules that a business creates in response to external regulation. SBVR explains: 

“The laws of physics may be relevant to a company … ; legislation and regulations may be imposed on it; external standards and best practices may be adopted. 

These things are not business rules from the company’s perspective, since it does not have the authority to change them. 

The company will decide how to react to laws and regulations, and will create business rules to ensure compliance with them.  Similarly, it will create business rules to ensure that standards or best practices are implemented as intended.”

3. Business Rule

[SBVR]:  a rule that is under business jurisdiction

A business rule is a criterion used to:
    • guide day-to-day business activity
    • shape operational business judgments, or
    • make operational business decisions. 
A number of years ago, a colleague of ours, Mark Myers, came up with a highly pragmatic test to determine whether some statement represents a business rule or a system rule.  It almost always works.  Imagine you threw out all the systems running your business and did it all by hand (somehow).  If you still need the statement, it’s a business rule.  If you don’t, it’s not.  A colleague on the SBVR standardization team, Don Baisley, puts it another way:  “Business people don’t set variables and they don’t call functions.” Some people think of business rules as loosely formed, very general requirements.  Wrong.  Business rules have definite form, and are very specific.  Each should give well-formed, practicable guidance Here are a few simple examples expressed in RuleSpeak:  

A customer that has ordered a product must have an assigned agent. 

The sales tax for a purchase must be 6.25% if the purchase is made in Texas. 

A customer may be considered preferred only if the customer has placed more than $10,000 worth of orders during the most recent calendar year.

Business rules represent a form of business communication and must make sense (communicate) to business people.  If some statement doesn’t communicate, it’s not a business rule. 

Consider this example:  If ACT-BL LT 0 then set OD-Flag to ‘yes’.  Not a business rule. 

Consider another example:  An account must be considered overdrawn if the account balance is less than $0.  This statement communicates and therefore is a business rule. 

More observations about business rules:
    • In SBVR a business rule can be either a behavioral rule or a definitional rule.
    • Business rules can be technical, but only in terms of the company’s know-how or specialized product/service, not in terms of IT designs or platforms.
    • Expression of business rules should always be declarative, rather than procedural.
    • A business rule statement should use terms and wordings about operational business things that should be based on a structured business vocabulary (concept model).
    • Your company’s business rules need to be managed and single-sourced, so we strongly recommend rulebook management.
Business rules are not about mimicking intelligent behavior, they are about running a business Mimicking intelligent behavior in a generalized way is far harder (an order of magnitude or more) than capturing the business rules of an organization.  Unfortunately, expert systems have generally focused on the former problem, causing considerable confusion among business practitioners.  ~~~~~~~~~~~~~~~~~~~~  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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When is a Door Not a Door? … The Basic Ideas of Business Rules

One of the interesting things about consulting with different organizations on business rules and publishing a Journal on that subject (the Business Rules Journal on BRCommunity.com) is that a lot of really silly rules cross my desk. Sometimes it feels like a Dilbert parade! We’ve even started a LinkedIn group about them – Rules Say Must Not.  A colleague recently forwarded a rule that raises some interesting questions. He observes that in his apartment building the doors to the stairwells all have signs on them saying, Door must be kept closed at all times. His question was, “Is a door you must never open really a door?” If the rule is followed religiously, he observed, the door might as well be considered part of the wall. Well obviously not quite! Before addressing that tongue-in-cheek question, let’s do some analysis of this rule. I think we can safely assume that the rule as stated is actually a shorthand. A more complete and accurate version might be, You may use this door for entry, but it must be closed behind you. If we wanted to be very complete, we might explain the basic motivation for the rule by adding, Fire Door. Further analysis of this simple rule reveals the basic ideas of business rules: 
  • The rule was posted; that is, written down. Why? The answer lies in the motivation for the rule – its purpose is to protect the inhabitants against the dangers of fire. When a rule becomes important enough, it is always written down.
  • The rule was written in plain English. If the rule were difficult to understand, or encoded in such way that many of the inhabitants could not readily interpret it, it would not serve its purpose very well. A rule important enough to write down is worth writing down plainly.
  • A process or procedure for this situation is not really needed. We could write one, of course, but in this case, it would probably be trivial (approach door; grasp doorknob with hand; twist doorknob is clockwise direction; pull/push carefully …). Nonetheless, the rule is still crucial. Rules can exist independent of processes.
  • This rule – like all rules – serves to shape behavior. The posting of the rule reminds inhabitants, staff and others to close the door, and presumably they are therefore less likely to forget, or perhaps even block the door open. The purpose of a rule is always to guide or influence behavior in desired ways.
  • The rule serves a purpose – it is neither frivolous nor arbitrary. Fire is a deadly risk, and all reasonable measures must be taken to protect against it. Business rules never arise in a vacuum; there are always by identifiable and important business factors motivating them.
  • The rule was posted right where the action is – that is, where actual entry can occur. This proximity to the action helps ensure the rule is followed as events actually unfold. The best way to ensure rules are followed is to get them right in front of people at the exact point where the guidance is relevant.
  • The rule is undoubtedly part of a larger body of fire code rules for buildings. Even though the rule may be posted thousands of times for enforcement purposes, these postings arise from a single source. This ensures consistency. If rules are important enough to be enforced, they are important enough to be single-sourced.  
  • The body of fire-code regulations was undoubtedly produced by experts experienced in the field, and is backed by the political authority of the city or state. Changes must be reviewed, incorporated, and disseminated carefully. Because new dangers and liabilities can be discovered at any time, this process should be streamlined and efficient. In other words, the rules must be managed.
These commonsense observations represent the basic ideas of business rules. Your business has many hundreds or thousands of such rules guiding its operational business activity. Yet in practice, these basic business rule principles are seldom followed. Can you do anything about it? Yes! The business rules approach offers proven solutions. Now back to that question, “Is a door you must never open really a door?” The answer is obvious – yes, of course it is. A wall without a door will always just be a wall. If you need a door sometime in the future, you must remodel, and that means time and money (not to mention disruption for the inhabitants). If you have ever remodeled your home, you know exactly what I mean. The wall with a door acts like a wall until such time that the must-remain-closed rule is discontinued. Then, with relatively little delay, expense or disruption, it becomes a functional door. Think of business rules as a relatively inexpensive way to build potential doors for your business in all those many cases they might one day be needed. That way you can avoid walling yourself in. In a world of constant and accelerating change, business agility is the name of the game!

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