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Business rules or business rulesets describe the operations, definitions and
constraints that apply to an organization in achieving its goals. For example a
business rule might state that no credit check is to be performed on return
customers. Others could define a tenant in terms of solvency or list preferred
suppliers and supply schedules. These rules are then used to help the
organization to better achieve goals, communicate among principals and agents,
communicate between the organization and interested third parties, demonstrate
fulfillment of legal obligations, operate more efficiently, automate operations,
perform analysis on current practices, etc.
Introduction
Strategic management is distinct from business rules. Business rules are a means
by which strategies are implemented. The rules tell an organization what it can
do in detailed tactics, while the strategy tells it how to focus the business at
a macro level to optimize results. Put differently, a strategy provides
high-level direction about what an organization should do. Business rules can
provide the tactical detail about exactly how a strategy will translate to
actions.
Example business rule domains include:
marketing strategies
pricing policies
customer relationship management practices
human resources activities
regulatory forces, either to ensure compliance with regulations, or to make
decisions under regulations (e.g. determining someone's tax bill or whether they
are eligible for a government benefit)
product and service offerings or operation workflows.
How business rules are gathered
Business rules exist for an organization whether or not they are ever written
down, talked about or even part of the organization’s consciousness. However it
is a fairly common practice for organizations to gather business rules in at
least a very informal manner.
Organizations may choose to proactively describe their business practices in a
database of rules. For example, they might hire a consultant to come through the
organization to document and consolidate the various standards and methods
currently in practice.
More commonly, business rules are discovered as part of a formal requirement
gathering process during the initial stages of a project. In this case the
collecting of the business rules are coincidental. Projects, such as the
launching of a new product, might lead to a new body of business rules for an
organization, i.e. this new product would require the employees to conceptualize
about what the purpose of the organization is in a new way. This practice of
coincidental business rule gathering is vulnerable to the creation of
inconsistent or even conflicting business rules within different organizational
units, or within the same organizational unit over time.
Business Rules Methodology is the process of capturing business rules in
English, in real-time while empowering users to manage rules with a few simple
steps.
Real world applications and obstacles
Despite many software vendors, consultants and research institutions offering
business rules solutions, business rules are usually only gathered when dictated
by law, as the first step in the automation process or as an ephemeral aid to
engineers. This is mostly due to the overhead and effort required to maintain
this database of rules. This becomes most severe the more dynamic and fluid the
business rules for an organization are, for example in start-up companies.
Another factor mitigating usage is the lack of incentive for employees to part
with their most valuable asset to the organization; their knowledge of the
business rules. A third factor is access to viable technology for maintaining
business rules. A classic solution is the business rules engine. Rules engine
products have been gaining traction in the market place.
Software packages automate business rules using business logic. The term
business rule is sometimes used interchangeably with business logic; however the
latter connotes an engineering practice and the former an intrinsic business
practice. There is value in outlining an organization's business rules
regardless of whether this information is used to automate its operations.
Best practices
Declarative: A business rule is a statement of truth about an organization. It
is an attempt to describe the operations of an organization, not an attempt to
prescribe how an organization should operate. This is why business rules are
said to be discovered or observed and not created.
Atomic: A rule is either completely true or completely false; there are no
shades of gray. For example a rule for an airline that states passengers may
upgrade to first class round-trip tickets if seats are available and they pay
the fare increase does not imply that this deal is available for just one leg of
the journey.
Distinct, independent constructs: Separate the things that define your business
(the rules) from the processes (i.e. strategies and tactics). Don't build
complex and cyclical dependencies - simplify and flatten the constructs.
Expressed in natural language: In order to appeal to the broadest audience, it
is almost always best to express business rules in a natural language without
the use of a lot of technical jargon.
Business, not technology, oriented: For example, a company's business rules
should not be foreign to a knowledgeable customer.
Business, not technology, owned: Business rules come from business decisions.
These are independent from implementation decisions.
Formal specification
If the situation merits this, business rules can be expressed in a very formal
language. Highly technical enterprises such as the building of a bridge would be
a potential case in point. Another might be if the goal is to automate the
business rules gathering process. Example languages include Unified Modeling
Language, Z notation, Business Process Execution Language, Web Services Policy
Framework, and Business Process Modeling Notation.
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