Principles of the Business Rule Approach by Ronald G. Ross

Intended to be the first book that anyone from an IT manager to a business manager will read to understand what Business Rules are and how they can be applied to their own situation. Well suited to be used in conjunction with Web services. Softcover. Editorial Reviews From the Back Cover The Business Rule Approach represents a major paradigm shift in business-system design and development. Employing a business-driven approach, the use of business rules has been proven to enhance the effectiveness, flexibility, and efficiency of business systems. The technology is appropriate for any kind of organization, and is especially well suited for development in the rapidly expanding Web services industry. Written by the world's leading expert in business rules theory and technology, Principles of the Business Rule Approach is appropriate for business and technical professionals, as well as academics. It serves as a concise introduction and tutorial, presenting understandable explanations and practical techniques. This book explores the rationale behind business rules, as well as the many opportunities presented by this innovative new approach. It explains key business-rule concepts and offers experience-based best practices for expressing business rules. In addition, the book looks at the role of business rules within the context of a wider trend towards model-based development and offers an accessible introduction to the underlying theory of business rules and notation. Topics covered include How the Business Rule Approach is changing the face of business and opening new areas of opportunity The direct impact of business rules on IT projects Organizing basic business knowledge Understanding business structure and processes Working successfully with BRS RuleSpeak,TM including rule categories and sentence patterns for rule statements Expressing business logic using decision tables An in-depth look at fact models Theoretical foundations, including formal constraints and predicates Numerous appendixes address specific topics in business rule technology, such as the Pattern-R approach and notation, evaluating the truth value of a rule, IF...THEN syntax, and more. Knowledge of the emerging Business Rule Approach is critical for all who are at the leading edge of business system development. Principles of the Business Rule Approach is the authoritative guide and an essential resource. 0201788934B01132003 About the Author Ronald G. Ross is cofounder and principal of Business Rule Solutions, LLC, a firm that provides workshops, consulting services, and publications centered on business analysis and rules. He codeveloped Proteus? methodology, including the popular RuleSpeak?. He also serves as executive editor of www.BRCommunity.com and is a regular columnist for the internationally acclaimed Business Rules Journal hosted there. 0201788934AB01132003 Excerpt. ? Reprinted by permission. All rights reserved. The driver for business systems should always be business need. Business workers should be involved in expressing this need in very direct, concrete ways. Applying these principles in practice means taking a fresh approach to business systems that will profoundly affect the roles of both business professionals and information technology (IT) professionals. This fresh approach can be called business analysis and its basic deliverable a business model. Unfortunately, these terms are often used very loosely. Many system developers think their deliverables qualify as business models, but they do not. Rather than try to explain here (it does require some background), I will leave that topic for Part I. For now, let's simply call the fresh approach business-driven and move on. A basic ingredient of the business-driven approach--a very exciting one--is business rules. Before continuing, let me clarify something. We could certainly talk about business rules without necessarily discussing everything else needed for a business-driven approach. In other words, we could discuss business rules separately. But why would we want to? If business need is the driving factor for business systems, then both the business-driven approach and business rules should be put on the table and served together. That way the business can achieve the very best business solutions to the challenges it faces in the 21st century. In a nutshell, that describes the basic mind-set of this book. That brings me to the audience, or more accurately the audiences, for this book. In general terms, there are three audiences: business professionals, IT professionals, and academics. In today's world, there are significant gaps between these three communities--and that in itself is part of the problem. To create the best business solutions possible, these three communities must come closer together in common purpose and approach. This book helps show the way. About Technology I will say a few words to each of these three communities in a moment, but first let me say a word about technology. Because I believe so strongly that business systems should be driven by business need, I have purposely avoided discussing technology (with some difficulty!) throughout the book. But the topic certainly does deserve comment, so let me talk about it briefly. We are on the verge of a huge new wave of technological innovation focused on the knowledge capabilities of the business. Think of business rules (which I collectively call business logic) as a first--and in many respects relatively modest--step in that direction. The plain truth is that such technology has never been a significant part of mainstream business IT. Expert systems made a minor foray into that realm in the 1980s but had very little impact. There were many reasons why, but perhaps the most important was technological. Computing architectures then (and since then until recently) were basically monolithic, and they provided no easy way to accommodate outside services. Without going into detail, that fundamental barrier is now being eliminated, and plug-in services are becoming easier and easier to incorporate. And what better service to incorporate than direct knowledge support? Knowledge support does sound a bit abstract. There are several terms in current usage for such a service, including rule engine and decision management platform. In Part V of this book, I suggest business logic server. By whatever name, I predict without hesitation that such services will be part of all major business software platforms within a mere matter of years. To many, this technology will seem like a tidal wave from nowhere. But that's not really true. In fact, the theoretical foundations of this new technology go back many, many years, again as discussed in Part V. Commercial offerings date to the mid-1980s; applied research goes back well before that. Business Logic Technology: Near-Term Directions In the near future, commercial technology servicing business logic is likely to be offered in several different ways, including the following. Supported as a stand-alone component: In this case, the business can acquire a best-fit or best-of-breed package and incorporate it into its computing architecture as appropriate. Coupled with a workflow engine: This powerful combination features automated process management with coordination and decision making provided by the business logic technology. The result permits not only more sophisticated workflow control but automation of selected decision-making tasks as well. Bundled into other packaged software: Many other kinds of software capabilities, including customer relationship management (CRM) and enterprise resource planning (ERP), provide natural niches for business logic technology, which will undoubtedly be exploited to the full extent their architectures permit. And the list goes on. A big question mark for the future concerns database management systems (DBMSs). In Part V, I argue that in the long run, database support should be integrated within a business logic server. Again, our focus in this book is not technology, but rather where do the business rules come from? That brings us to the business rule approach. About the Business Rule Approach Like the technology, the business rule approach did not suddenly appear from nowhere. In fact, the core concepts (as described in Part II) date to the early to mid-1990s, and many of the related techniques and methodologies (including those in Part III) have been thoroughly battle-tested by pioneering organizations during the late 1990s and early 2000s. (The same is true, incidentally, about business-driven approaches.) So what I talk about in this book is not unproven theory or academic conjecture but pragmatic, real-world stuff. The interesting and perhaps unique thing about the business rule approach is that it did not arise as a response to any emerging new class of software tools--knowledge-oriented or otherwise. (Again, the same is true for business-driven approaches.) Rather, the business rule approach is a real-world, grassroots movement whose driving force is business success, not technology. It arose from the vision of dedicated professionals with many years of experience in the trials and challenges of business software. Their goal: to offer companies the best possible approach to developing business solutions involving automated systems. To Business Professionals For that reason, it is appropriate that I address members of the business community first. To repeat, this is not a book about technology, but rather one about business opportunity. The key question should therefore be why knowing about business rules is important as a business proposition. So exactly what is the value proposition of business rules? Part I provides the answer, but let me give you a short version here, then invite you to read on. What Problems Does the Business Rule Approach Address? Ad hoc rules: Most businesses have no logical approach for defining their business rules. As a result, business workers often make up the rules as they go along. This leads to confusion, contradiction, and operational inefficiency. After-the-fact resolution of these problems wastes time and resources and causes frustration for customers and staff alike. The larger the organization, the bigger the problem. Also, since many business rules involve monetary transactions (for example, whether a customer should be given a discount, and if so, how much), this problem can also directly affect the bottom line. Business rule solution: A structured approach helps you think through rules before the fact. Miscommunication: Misunderstanding of key business concepts inevitably results in miscommunication. Does preferred customer discount mean the same across all departments? If not, what are the differences? What rules apply? Do these rules differ for different areas of the business? Are the rules consistent? Business rule solution: A clear set of concepts provides a foundation on which rules can be directly based. Inaccessible rules: Finding out what rules apply to a given business situation often involves an open-ended search through multiple sources. It is not uncommon in the end to resort to the application source code. Pursuing rules in this fashion is time-consuming, inefficient, inaccurate, and frustrating. Business rule solution: A way to manage business rules provides direct accessibility. Massive differentiation: Many businesses seek to support highly individualized relationships with growing numbers of customers and other partners for ever more complex products or services. How can businesses massively differentiate between business parties and, at the very same time, conduct each business transaction faster, more accurately, and at ever lower costs? Business rule solution: A rule-based approach featuring rapid development and deployment of rules supports differentiation. The need to keep up to speed: Rapid change, at an ever faster pace, is a fact of life. In the Internet age, people expect almost instantaneous implementation of changes. How can line workers consumed with day-to-day activities ever hope to keep up? Business rule solution: Real-time delivery of business logic to knowledge workers as errors actually occur creates a seamless, never-ending, self-training environment. Knowledge walking out the door: By and large, baby boomers created much of the operational business capacity and operational systems we see in place in larger organizations today. Much of the related knowledge still sits in their heads--and nowhere else. What will happen when they retire? On a smaller scale, people with vital operational knowledge walk out the door almost every day. Business rule solution: A systematic way of capturing, documenting, and retaining the business rules prevents the loss of knowledge when people leave. Part I also discusses what business-driven approaches are about. From a business perspective, the business rule approach fits hand-in-glove with them. Combined, they are potent indeed. I hope Part I will prove so compelling in this regard that you will read on. I have tried to use a readable, nontechnical style throughout the book, so there is much to be gained from going as deep into the book as you care to read. Part II explains the basic ideas of the business rule approach using a broad analogy to the human body. Continuing from there (or skipping ahead if you choose), Part III provides a comprehensive language, called BRS RuleSpeak, to capture and express your business rules. You will find that material informative and in places perhaps entertaining. Part IV is officially directed toward IT professionals, but it is actually a continuation of, or more accurately a different perspective on, the material in Part I. I believe it is very important for business professionals and IT professionals to speak with the same voice; this material should help your organization achieve it. By the way, the first chapter of Part IV is the only other place in the book where I talk about business-driven approaches directly. To IT Professionals Just a word about business-driven approaches first: I believe they are closely aligned with the architecture-based or model-based development strategies now emerging in the industry. In particular, a business-driven approach provides an excellent front end for these strategies in the form of the business model. A business model represents a top-down, multi-aspect blueprint of the business whose contents are driven by business professionals. That's a great starting point for system design and development of an application system (or deployment of an application package). These ideas are developed in Parts I and IV of the book. If your interest centers specifically on business rules, you can concentrate on Parts II and III. You will also not want to miss important portions of Part IV devoted to rule management, rule capture, and data design. The main objective for all this material is to help you gain a deep understanding of what business rules are about and to enable you to make them a comfortable part of your professional toolkit. I think you will be quite excited by the powerful ideas and techniques that await you. To Academics By academics, I do not mean only those readers who happen to be in universities or research labs. I mean any serious student of logical systems--systems here in the sense of theory, not applications. I also mean those who are just plain intellectually curious. Part V is aimed toward all such readers. Part V provides answers to some of the big questions of business rules, such as their basis in formal theory--the predicate logic. You should not let that intimidate you. Part V is written as a tutorial so that the ideas are as accessible as possible to everyone. At the same time, I anticipate that this material will provide the basis for continuing research, some of which has already commenced. The bottom line is this: You know you are on to something really powerful when good theory and successful practices converge. That convergence is exactly what has happened with business rules, and it is a very exciting time to be in the field! 0201788934P01212003 About Technology I will say a few words to each of these three communities in a moment, but first let me say a word about technology. Because I believe so strongly that business systems should be driven by business need, I have purposely avoided discussing technology (with some difficulty!) throughout the book. But the topic certainly does deserve comment, so let me talk about it briefly. We are on the verge of a huge new wave of technological innovation focused on the knowledge capabilities of the business. Think of business rules (which I collectively call business logic) as a first--and in many respects relatively modest--step in that direction. The plain truth is that such technology has never been a significant part of mainstream business IT. Expert systems made a minor foray into that realm in the 1980s but had very little impact. There were many reasons why, but perhaps the most important was technological. Computing architectures then (and since then until recently) were basically monolithic, and they provided no easy way to accommodate outside services. Without going into detail, that fundamental barrier is now being eliminated, and plug-in services are becoming easier and easier to incorporate. And what better service to incorporate than direct knowledge support? Knowledge support does sound a bit abstract. There are several terms in current usage for such a service, including rule engine and decision management platform. In Part V of this book, I suggest business logic server. By whatever name, I predict without hesitation that such services will be part of all major business software platforms within a mere matter of years. To many, this technology will seem like a tidal wave from nowhere. But that's not really true. In fact, the theoretical foundations of this new technology go back many, many years, again as discussed in Part V. Commercial offerings date to the mid-1980s; applied research goes back well before that. Business Logic Technology: Near-Term Directions In the near future, commercial technology servicing business logic is likely to be offered in several different ways, including the following. Supported as a stand-alone component: In this case, the business can acquire a best-fit or best-of-breed package and incorporate it into its computing architecture as appropriate. Coupled with a workflow engine: This powerful combination features automated process management with coordination and decision making provided by the business logic technology. The result permits not only more sophisticated workflow control but automation of selected decision-making tasks as well. Bundled into other packaged software: Many other kinds of software capabilities, including customer relationship management (CRM) and enterprise resource planning (ERP), provide natural niches for business logic technology, which will undoubtedly be exploited to the full extent their architectures permit. And the list goes on. A big question mark for the future concerns database management systems (DBMSs). In Part V, I argue that in the long run, database support should be integrated within a business logic server. Again, our focus in this book is not technology, but rather where do the business rules come from? That brings us to the business rule approach. About the Business Rule Approach Like the technology, the business rule approach did not suddenly appear from nowhere. In fact, the core concepts (as described in Part II) date to the early to mid-1990s, and many of the related techniques and methodologies (including those in Part III) have been thoroughly battle-tested by pioneering organizations during the late 1990s and early 2000s. (The same is true, incidentally, about business-driven approaches.) So what I talk about in this book is not unproven theory or academic conjecture but pragmatic, real-world stuff. The interesting and perhaps unique thing about the business rule approach is that it did not arise as a response to any emerging new class of software tools--knowledge-oriented or otherwise. (Again, the same is true for business-driven approaches.) Rather, the business rule approach is a real-world, grassroots movement whose driving force is business success, not technology. It arose from the vision of dedicated professionals with many years of experience in the trials and challenges of business software. Their goal: to offer companies the best possible approach to developing business solutions involving automated systems. To Business Professionals For that reason, it is appropriate that I address members of the business community first. To repeat, this is not a book about technology, but rather one about business opportunity. The key question should therefore be why knowing about business rules is important as a business proposition. So exactly what is the value proposition of business rules? Part I provides the answer, but let me give you a short version here, then invite you to read on. What Problems Does the Business Rule Approach Address? Ad hoc rules: Most businesses have no logical approach for defining their business rules. As a result, business workers often make up the rules as they go along. This leads to confusion, contradiction, and operational inefficiency. After-the-fact resolution of these problems wastes time and resources and causes frustration for customers and staff alike. The larger the organization, the bigger the problem. Also, since many business rules involve monetary transactions (for example, whether a customer should be given a discount, and if so, how much), this problem can also directly affect the bottom line. Business rule solution: A structured approach helps you think through rules before the fact. Miscommunication: Misunderstanding of key business concepts inevitably results in miscommunication. Does preferred customer discount mean the same across all departments? If not, what are the differences? What rules apply? Do these rules differ for different areas of the business? Are the rules consistent? Business rule solution: A clear set of concepts provides a foundation on which rules can be directly based. Inaccessible rules: Finding out what rules apply to a given business situation often involves an open-ended search through multiple sources. It is not uncommon in the end to resort to the application source code. Pursuing rules in this fashion is time-consuming, inefficient, inaccurate, and frustrating. Business rule solution: A way to manage business rules provides direct accessibility. Massive differentiation: Many businesses seek to support highly individualized relationships with growing numbers of customers and other partners for ever more complex products or services. How can businesses massively differentiate between business parties and, at the very same time, conduct each business transaction faster, more accurately, and at ever lower costs? Business rule solution: A rule-based approach featuring rapid development and deployment of rules supports differentiation. The need to keep up to speed: Rapid change, at an ever faster pace, is a fact of life. In the Internet age, people expect almost instantaneous implementation of changes. How can line workers consumed with day-to-day activities ever hope to keep up? Business rule solution: Real-time delivery of business logic to knowledge workers as errors actually occur creates a seamless, never-ending, self-training environment. Knowledge walking out the door: By and large, baby boomers created much of the operational business capacity and operational systems we see in place in larger organizations today. Much of the related knowledge still sits in their heads--and nowhere else. What will happen when they retire? On a smaller scale, people with vital operational knowledge walk out the door almost every day. Business rule solution: A systematic way of capturing, documenting, and retaining the business rules prevents the loss of knowledge when people leave. Part I also discusses what business-driven approaches are about. From a business perspective, the business rule approach fits hand-in-glove with them. Combined, they are potent indeed. I hope Part I will prove so compelling in this regard that you will read on. I have tried to use a readable, nontechnical style throughout the book, so there is much to be gained from going as deep into the book as you care to read. Part II explains the basic ideas of the business rule approach using a broad analogy to the human body. Continuing from there (or skipping ahead if you choose), Part III provides a comprehensive language, called BRS RuleSpeak, to capture and express your business rules. You will find that material informative and in places perhaps entertaining. Part IV is officially directed toward IT professionals, but it is actually a continuation of, or more accurately a different perspective on, the material in Part I. I believe it is very important for business professionals and IT professionals to speak with the same voice; this material should help your organization achieve it. By the way, the first chapter of Part IV is the only other place in the book where I talk about business-driven approaches directly. To IT Professionals Just a word about business-driven approaches first: I believe they are closely aligned with the architecture-based or model-based development strategies now emerging in the industry. In particular, a business-driven approach provides an excellent front end for these strategies in the form of the business model. A business model represents a top-down, multi-aspect blueprint of the business whose contents are driven by business professionals. That's a great starting point for system design and development of an application system (or deployment of an application package). These ideas are developed in Parts I and IV of the book. If your interest centers specifically on business rules, you can concentrate on Parts II and III. You will also not want to miss important portions of Part IV devoted to rule management, rule capture, and data design. The main objective for all this material is to help you gain a deep understanding of what business rules are about and to enable you to make them a comfortable part of your professional toolkit. I think you will be quite excited by the powerful ideas and techniques that await you. To Academics By academics, I do not mean only those readers who happen to be in universities or research labs. I mean any serious student of logical systems--systems here in the sense of theory, not applications. I also mean those who are just plain intellectually curious. Part V is aimed toward all such readers. Part V provides answers to some of the big questions of business rules, such as their basis in formal theory--the predicate logic. You should not let that intimidate you. Part V is written as a tutorial so that the ideas are as accessible as possible to everyone. At the same time, I anticipate that this material will provide the basis for continuing research, some of which has already commenced. The bottom line is this: You know you are on to something really powerful when good theory and successful practices converge. That convergence is exactly what has happened with business rules, and it is a very exciting time to be in the field! 0201788934P01212003 About the Business Rule Approach Like the technology, the business rule approach did not suddenly appear from nowhere. In fact, the core concepts (as described in Part II) date to the early to mid-1990s, and many of the related techniques and methodologies (including those in Part III) have been thoroughly battle-tested by pioneering organizations during the late 1990s and early 2000s. (The same is true, incidentally, about business-driven approaches.) So what I talk about in this book is not unproven theory or academic conjecture but pragmatic, real-world stuff. The interesting and perhaps unique thing about the business rule approach is that it did not arise as a response to any emerging new class of software tools--knowledge-oriented or otherwise. (Again, the same is true for business-driven approaches.) Rather, the business rule approach is a real-world, grassroots movement whose driving force is business success, not technology. It arose from the vision of dedicated professionals with many years of experience in the trials and challenges of business software. Their goal: to offer companies the best possible approach to developing business solutions involving automated systems. To Business Professionals For that reason, it is appropriate that I address members of the business community first. To repeat, this is not a book about technology, but rather one about business opportunity. The key question should therefore be why knowing about business rules is important as a business proposition. So exactly what is the value proposition of business rules? Part I provides the answer, but let me give you a short version here, then invite you to read on. What Problems Does the Business Rule Approach Address? Ad hoc rules: Most businesses have no logical approach for defining their business rules. As a result, business workers often make up the rules as they go along. This leads to confusion, contradiction, and operational inefficiency. After-the-fact resolution of these problems wastes time and resources and causes frustration for customers and staff alike. The larger the organization, the bigger the problem. Also, since many business rules involve monetary transactions (for example, whether a customer should be given a discount, and if so, how much), this problem can also directly affect the bottom line. Business rule solution: A structured approach helps you think through rules before the fact. Miscommunication: Misunderstanding of key business concepts inevitably results in miscommunication. Does preferred customer discount mean the same across all departments? If not, what are the differences? What rules apply? Do these rules differ for different areas of the business? Are the rules consistent? Business rule solution: A clear set of concepts provides a foundation on which rules can be directly based. Inaccessible rules: Finding out what rules apply to a given business situation often involves an open-ended search through multiple sources. It is not uncommon in the end to resort to the application source code. Pursuing rules in this fashion is time-consuming, inefficient, inaccurate, and frustrating. Business rule solution: A way to manage business rules provides direct accessibility. Massive differentiation: Many businesses seek to support highly individualized relationships with growing numbers of customers and other partners for ever more complex products or services. How can businesses massively differentiate between business parties and, at the very same time, conduct each business transaction faster, more accurately, and at ever lower costs? Business rule solution: A rule-based approach featuring rapid development and deployment of rules supports differentiation. The need to keep up to speed: Rapid change, at an ever faster pace, is a fact of life. In the Internet age, people expect almost instantaneous implementation of changes. How can line workers consumed with day-to-day activities ever hope to keep up? Business rule solution: Real-time delivery of business logic to knowledge workers as errors actually occur creates a seamless, never-ending, self-training environment. Knowledge walking out the door: By and large, baby boomers created much of the operational business capacity and operational systems we see in place in larger organizations today. Much of the related knowledge still sits in their heads--and nowhere else. What will happen when they retire? On a smaller scale, people with vital operational knowledge walk out the door almost every day. Business rule solution: A systematic way of capturing, documenting, and retaining the business rules prevents the loss of knowledge when people leave. Part I also discusses what business-driven approaches are about. From a business perspective, the business rule approach fits hand-in-glove with them. Combined, they are potent indeed.