Today we are looking at business rules, the clear cut dos and don’ts within an organisation that slice through the grey spaces of behaviour and define what is mandated and what is not acceptable for its employees, members and other volunteers. They are directions – providing more than guidance – and they are about keeping business operations on the straight and narrow.
Ronald G. Ross, the ‘father of business rules’ defines a business rule as “a criterion used to guide day-to-day business activity, shape operational business judgments, or make operational business decisions” and I think this is a good summary of where business rules are useful.
Business rules, whether acknowledged and documented or not, exist in every organisation. The idea of working somewhere without tacit business rules sounds liberating but in reality would be CHAOS – imagine if everyone worked different hours, in unspecified roles, with different filing systems, different reporting frameworks, and a crazy variety of logos and company catchlines. No customer would be impressed with that and nothing would get done!
Working somewhere without documented business rules would only be one step better though. While people around the organisation would know bits and pieces about ‘how things are done’, any new starter would be kept busy tracking down this know-how, and even then it is likely that the ‘know how’ held by employees is inconsistent or absolutely contradictory.
Therefore documenting business rules helps to put more rigour, certainty and definition around how business constraints and business principles apply to an organisation’s operation. High level constraints and principles – although providing the necessary high-level guidance in the way that ‘north’, ‘south’, ‘east’ and ‘west’ do- cannot cover the detail required in complex operations in the way that business rules do.
So it is obvious that business rules do and must exist – and that without documenting them an organisation is at risk of losing the respect of its customers due to sloppy and inconsistent results (this goes for government departments as well as private companies) and key know-how (when knowledgeable staff members leave… or are hit by a bus). But what is less clear is how or even if documenting the vast numbers of business rules can improve the performance of organisations.
Now, in this first pass through the Superior Business Analysis Organisational Model I am trying to stay away from discussing in any detail the format and content of each model component. However, I feel like it is hard to pinpoint the benefits of documenting business rules without a detour into format-land. So here we go… here are the ways I see that business rules can be documented. As you go through the list, have a think about at what point you think the benefits of documenting business rules on a large scale start to hugely outweigh the effort of this documentation.
- In a manual list – easy right?! Well yes, easy if you have broken down a simple process into a very simple procedure and you therefore only have a small number of business rules. Unfortunately, most areas are complex and would have very loooooong lists and the human brain would struggle to process them.
- In an integrated document – case in point, legislation. The current version of the Corporations Act 2001 (Cth) has 1538 sections and I know that many of these sections will comprise of many business rules… see 1!
- In an electronic rulebook (based on the manual ones suggested as 1 and 2). This still is list based, but enables you to flick between references to other business rules.
- In a process-based system. This is where operations staff use a process-based system to complete their tasks and the business rules are embedded in the system as required (I think Ron Ross calls these ‘flashpoints’)– to determine what leg of a process is triggered next, what actions can be undertaken next, or what decision can be made.
- In a decision-support system. This is where operations staff use a system to guide complex decision-making based on the business know-how documented in business rule form. The system enables business rules to be changed based on new information and learnings… think adaptive management.
Now, obviously 4 and 5 are where business rules get really exciting! This is where an organisation can get better and better (more efficient and more successful) and really start driving toward meeting its business goals. 4 and 5 are about making a high performing organisation as opposed to one that just does the bare minimum.
But without documented business rules… chaos!
A business rule is: A direction given by an organisation about how its people must behave (usually in a specific circumstance).
The purpose of defining business rules: To capture corporate knowledge, drive consistent behaviour within an organisation (supporting the achievement of business goals) and enable the operationalisation of business principles and constraints.
What do you think?
Is this the right definition of a business rule? And can you think of any exciting ways in which business rules can be documented and used?