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What Is a Business Rule?

Separating the "Know" from the "Flow"

In a way, everybody knows what business rules are—they are what guide your business in running its day-to-day operations. Without business rules, you would always have to make decisions on the fly, choosing between alternatives on a case-by-case, ad hoc basis. Doing things that way would be very slow. It would likely produce wildly inconsistent results. I doubt it would earn very much trust from your customers.

In today's world, you cannot really operate that way—not for very long, anyway. So every organized business process has business rules. But what are they? What exactly do you use to "guide your business in running its day-to-day operations"?

In a moment, we will examine several definitions of business rule.2 Before doing that, however, I should be clear about what business rules are not.

  • Business rules are not software. Let me be a little more precise. Business rules are often implemented in software, but that is a different matter. In fact, application software is only one of several choices in that regard. Alternative implementation approaches include supporting them in manual procedures (not very efficient but sometimes necessary) or implementing them as rules using business logic technology3 (a much better choice). The point is that business rules arise as an element of the business—as the name business rules suggests—not from any particular hardware/software platform that supports them.

  • Business rules are not process. Roger T. Burlton4 recently expressed the business rule message this way: "Separate the know from the flow." The implication is that the "know" part and the "flow" part are different.

Business rules represent the "know" part—the separate stuff that guides the "flow." Guidance means rules; hence the name business rules.

Separate the know from the flow.
—Roger T. Burlton

Take a look at the definitions of business rule listed in Table 13–3. All the definitions are valid; however, if you are interested in a historical view, the entries appear in chronological order and reflect some natural evolution over time. Several important observations are worth making about these definitions, as discussed in the related boxed item starting on page 184.

Table 13–3 Definitions of Business Rule

Source

Definition

"Business Rules: The Missing Link," by Daniel S. Appleton [1984]5

". . . [A]n explicit statement of a constraint that exists within a business's ontology."6 [p. 146]

Entity Modeling: Techniques and Application, by Ronald G. Ross [1987]

". . . [S]pecific rules (or business policies) that govern . . . behavior [of the enterprise] and distinguish it from others. . . . [T]hese rules govern changes in the status [state] of the enterprise. . . ." [p. 102]

The Business Rule Book (1st ed.), by Ronald G. Ross [1994]

". . . [A] discrete operational business policy or practice. A business rule may be considered a user requirement that is expressed in non-procedural and non-technical form (usually textual statements). . . . A business rule represents a statement about business behavior. . . ." [p. 496]

GUIDE Business Rules Project Report [1995]

". . . [A] statement that defines or constrains some aspect of the business . . . [which is] intended to assert business structure, or to control or influence the behavior of the business. [A business rule] cannot be broken down or decomposed further into more detailed business rules. . . . [I]f reduced any further, there would be loss of important information about the business." [pp. 4–5]

The Business Rule Book (2nd ed.), by Ronald G. Ross [1997]

"A term, fact (type) or rule, representing a predicate.. . . ." [p. 380]

Business Rules Group (formerly GUIDE Business Rules Project), 19987

"A directive that is intended to influence or guide business behavior. Such directives exist in support of business policy, which is formulated in response to risks, threats or opportunities."8

Capturing Business Rules, by Ronald G. Ross and Gladys S. W. Lam [2000b]

"An atomic piece of re-usable business logic, specified declaratively."9

Managing Reference Data in Enterprise Databases, by Malcolm Chisholm [2001]

"A single statement that takes data or information that an organization possesses and derives other data or information from it, or uses it to trigger an action." [p. 365]

Business Rules Applied: Building Better Systems Using the Business Rule Approach, by Barbara von Halle [2002]

". . . [C]onditions that govern a business event so that it occurs in such a way that is acceptable to the business."10 [p. 28]

Business Rules and Information Systems, by Tony Morgan [2002]

"Basically, a business rule is a compact statement about an aspect of the business. . . . It's a constraint, in the sense that a business rule lays down what must or must not be the case. At any particular point, it should be possible to determine that the condition implied by the constraint is true in a logical sense; if not, remedial action is needed. This interpretation, which might be described as Boolean from a software perspective, is the main reason that the term business logic is so commonly used."11 [pp. 5–6]


Observations about the Definitions of Business Rule

Business versus system perspective: Although all the definitions are consistent in theme, if you look closely, you will see tension between a purely business perspective (see the Business Rules Group definition from 1998) versus a system perspective (see the Ross and Lam definition from 2000). The bottom line is that both perspectives are correct—just different in their viewpoints.

Terms, facts, and rules: A general consensus emerged among experts in the 1990s that there are three basic categories of business rules—terms, facts, and rules. (This important breakthrough is credited to the GUIDE Business Rules Project and was originally reported in its 1995 paper.) Literally, in the business rule approach, the "know" part always comes in the form of a term (concept), a fact, or a rule. A business rule is never anything else. By the way, terms are the most basic of the three categories because facts must build on terms, and rules must build on facts. That principle produces a very powerful building-block approach for the "know" part.

Fact models: Note the term business structure in the 1995 GUIDE Business Rules Project definition. This term refers to basic structure for the "know" part—literally, how terms relate to one another in the form of facts. As discussed in Part II and later in this part, a fact model is the best way to express such structure.

Suggestors: The 1995 GUIDE Business Rules Project definition includes both the word control and the word influence in reference to business behavior. If you think of rules only as hard and fast constraints (asserting strict control), you miss at least half the scope of business rules. Operational-level suggestions, guidelines, heuristics, and so on (that is, suggestors) are also business rules!

Atomic form: The word atomic appears explicitly or implicitly in several of the definitions. This reflects an important goal for business rules—to achieve the most granular level of specification possible. Why is that so important? Because it allows for fine-grained change in business practices.

Reusability: Note the terms re-usable and declaratively in the Ross and Lam 2000 definition. Declarative specifications are what you get when you express business logic in the form of terms, facts, and rules. This approach has crucial advantages, not the least of which is that your business logic becomes reusable across both processes (the "flow") and hardware/software platforms. As such, it becomes both highly reengineerable and highly redeployable. Think of this as business rules in a suitcase—just the thing for a business always on the go.

Business rules really mean establishing the "know" part of your business processes as a resource in its own right. This new resource brings with it both benefit and responsibility. The benefit lies in being able to change elements of the "know" part directly, which in turn means being able to change them faster. (What business does not want to be able to change faster these days?)

But there is a price for that—this new resource must be managed. Therein lies the responsibility. You must now come to grips with management of that "know" part—that is, with rule management

A final point is this. In real life, some of the "know" part has always been separated from the "flow" part in the sense that workers carry the "know" part around in their heads. Does such tacit knowledge represent business rules? In the theoretical sense, yes, but in the sense that they can really be managed, no. If you need any proof of that, just think what happens when the workers retire—or go to work for the competition!

For practical purposes, business rules are that portion of the "know" part written down—that is, encoded—for ready reuse (or revision) as needed. Here then follows an additional way to describe business rules.

Business rules are literally the encoded knowledge of your business practices.

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