Ron kicked off Day 2 talking about the knowledge economy, noting that companies don’t act like they are part of the knowledge economy as they don’t think about knowledge, about how to find it or how to manage it. He identified a set of elements that contribute including business rules and operational decisions, business vocabulary and more.
Your business is smart, he says, when it
- acts on the basis of rules
- knows what its rules are
- can communicate the rules clearly.
Business rules are about business communication, communicating with people who people across rime and location. Communication, effective communication, is essential to smart companies in a knowledge economy. If you cannot communicate clearly then it’s going to be hard to be smart.
Words matter because words at the center of the knowledge that companies need. He used the IIBA Business Analysis Body of Knowledge as an example – that the words matter, that only those concepts that can be described and communicated can be leveraged.
Ron identified a major myth in this context, that the vocabulary of a knowledge-intensive area is not stable. In fact, he says, the core vocabulary of a business are remains very consistent over time.
He feels that no new platform for business computing will ever emerge for which you do not need to know your business rules and core business concepts.
Ron went on to divide rules into decision rules and behavioral rules. Decision rules drive the decisions that are part of the process. Behavioral rules are not part of the process but, he says, are enforced by a watcher. Of course I would argue that this “watcher” makes decisions using behavioral rules – the difference is between decisions made in a process and decisions made in response to events or state triggers. Someone or something in the process or outside the process is making a decision to apply these different rules.
What, he asks, is a smart process? One that is self-learning and can adapt while running. Regardless of how smart a process is, and how structured it is, how will you keep it honest? Business rules he says establish the boundaries for your business process. They define what actions are allowed or forbidden, what decisions are good or bad within the process and so on.
Ron moved on to decisions after this discussion of behavioral rules. His first example is a classic, the decision that amazon.com makes to suggest other titles based on what you did – event decision action. This kind of event-based, decision-centric approach is increasingly common.
Ron moved on to plug his proprietary technique to decision decomposition. Of course I prefer the standards based approach used in the new Decision Model and Notation standard. He also made the point that decision tables are a great tool for describing the elements of such a decision decomposition.
So what makes a business smart? A business is only as smart as its strategy. Though, of course, you have to ACT on this strategy too. Which means you have to know what decisions will make that strategy real and the rules that will drive good choices in decision-making. Ron likes the Business Motivation Model as a way to define and manage strategy (I like it too though I am looking forward to linking it to decisions not just rules and processes). He also adds that you need to know that your business strategy is failing before it fails completely. This leads to key performance indicators and associated measurement. Strategy should drive key performance indicators and use these indicators to track how well that strategy is being executed. And I would add you should know what decision-making you would have to change to move those indicators up or down. This is part of the DMN standard.
The increasing amount of automation means that customers increasingly can’t tell the difference between a smart business and a smart system, smart automation. If the systems make smart decisions then the company will look smart to a customer. But, he says, internally you can tell the difference between a long term investment in your body of knowledge as a smart company and more transitory systems that have smarts embedded in them. Soft skills, eliciting and managing knowledge, having a shared vocabulary are key to long term knowledge management.