Cross-posted at ebizQ
My old buddy Jim Sinur is presenting on one of his favorite topics – why rules are important business rules in BPM. Rules are moving, he says, inside-out in process. As processes become less structured and more fluid, the rules go beyond the “happy path” and start to guide the process dynamically. Business rules are a growing market, though the number of rules vendor is decreasing, as platform and BPM vendors acquire rules vendors. Moving increasingly also to rules management, with rules for different scenarios, for instance.
The value of business rules and decision management in Jim’s mind includes:
- Prevent unacceptable kinds and levels of risk by monitoring warning signs and addressing root causes
- Accept the necessary consequences of doing business by monitoring thresholds and impacts, minimizing likelihood of risk
- Seize opportunities by identifying events and implementing a rapid response
Rules and decision management allow more innovation and let companies do more for less. But business rules are everywhere – in applications, BAM, BPM, CEP and more. The leading vendors are taking more control of these rules. Furthermore they are looking forward, using leading indicators not lagging ones, and merging predictive analytics and simulation with business rules (decision management). They will also adopt what Gartner call pattern-based strategies: Seek out changes that might need a new pattern, model these patterns and then adapt these new performance-driven patterns based on the combination of rules and analytics.
New adaptive software, he says, will leverage explicit rules as well as goal-seeking capabilities. Near real-time improvements in processes require constant analysis and change of business rules that manage the critical decisions within a process. Today this is people-centric (people make the changes to the rules) but this is becoming more automated such as with analytics. In addition, decisions add value to the process and rules are an effective tool for defining decisions. Decisions can help processes skip steps, simplify sequences and provide additional agility.
Gartner sees rules as the primary driver for business control in processes. The business rules that handle things like tax and accounting, regulatory compliance or underwriting – decision-making rules – have the best fit for business rules management (as against system rules, presentation rules, event correlation rules etc). These are true business rules, they drive business decisions, and should be managed by the business directly. These tend to be more volatiles but may represent only 35-50% of the rules in a business.
Jim showed a continuum – from a few companies that embed all their rules in systems through a semi-structured sweet spot with a mix of rules and processes to a few that are completely rules-based and dynamic. Today the market is moving up the curve but is still mostly stuck at explicit navigation rules with a little more complex navigation. Once the market matures, some will need to move past rules-guided process behavior to rules-driven composites and rules-based dynamic processes.
Legacy modernization is another area where he sees opportunity, with companies identifying hot spots that require rules-based approaches. These hot spots are where agility is required, where there is lots of change, and represent ideal opportunities for rules-based modernization. The business rules market has traditionally focused around application development, packages and application integration (I would say risk management too) but is moving into CEP (Complex Event Process), BPM, governance and what Jim calls Intelligent Decision Management. This movement is driven by improvements in both the technology and the methodologies/understanding of its use. Some best practices/planning suggestions:
- Centralizing business rules management of the critical rules with effective management of local variations gives a combination of executive control and agility that will become critical in the future. This, of course, is not as easy as all that and requires thoughtful implementation relative to your company’s approach. Stewardship and governance must be thought through and managed.
- Part of what is driving the further use of business rules has been a big improvement in different kinds of rule representation (Decision Tables, Decision Tees, common vocabularies) as these make it possible for the business and IT to collaborate.
- A Business Rules Management System or BRMS is what you need and it contains a rule execution engine, a rule design environment, rule repository, modeling and simulation/impact analysis, business user rule management, industry templates, monitoring and analysis tools (my definition is on my site). This is where the market is going.
- As rules are used to drive processes you must manage the overlapping roles and skills. Line of business managers must determine which rules are volatile and author/manage these rules. System Architects must manage more complex rules and administer the whole environment. Business process analysts must monitor the health of both rules and processes, author new rules and identify opportunities for decision making in processes/simulate new scenarios.
- Develop a business rules champion and arm them with business benefits, whether these benefits are decreased reaction time, improved risk management or customer satisfaction, reduced cost for governance or compliance, improved transparency or product design and pricing flexibility.
Finally a list of best practices:
- Do some volatility analysis and focus rules on high volatility rules
- Let business people manage at least some of the rules
- Establish roles and change management processes
- Get business and IT to share ownership, collaborate
- Express rules clearly so both business and IT can understand them
- Get a BRMS that works for you
- Pick suitable rule representation(s)
Don’t go to BPM or SOA and ignore rules – the future involves rules, BPM and SOA. Business rules help business grow by giving you agility with compliance, consistency. They help you differentiate and expose the knobs and levers you need to drive your business.
Comments on this entry are closed.
Gartner is on to it. We also think that this will be the year that the decision automation wave arrives. Thanks for a really clear post that sums the whole subject up so neatly James.
In your model does every enterprise have one-off definitions and process maps? Or do they choose a vendor and then drink the kool-aide?
Seamus
Not sure I follow the question 100% but in general I find enterprises have a mix – they have some custom, one-off process designs and some that are variations on industry “frameworks” and some that are pretty darned vanilla. Similarly some of the rules they need in their decisions are common to everyone (regulatory rules, for instance) while others are their secret sauce/internal policies. One of the interesting observations I would make is that an effective decisioning strategy can dramatically reduce the need for custom processes, allowing organizations to inject custom decision making into standard processes.
You know, anyone can answer my question. Even if your a vendor, G-D forbid.
Is it IT’s social media guidelines that prevents them from joining in on the discussion? Aren’t they the ones creating the mess anyway?
No comment 😉
Thank you, your observation was very helpful. I believe standard processes should be the rule and the rule book the exception. I am not saying rules are not important, but leadership by rule is prone to resistance. I can imagine management up in the the “war-room” reviewing patterns while the transactions are happening out in the field. To transform, get out in the field, control business process not patterns, speak the language, and measure.