What You Need to Know about Decisioning with Business Rules

Transcription

1 What You Need to Know about Decisioning with Business Rules Process Days Conference July 29, 2010 by Ronald G. Ross Co-Founder & Principal, Executive Editor, Business Rules Journal, Chair, Business Rules Forum Conference, Oct , Washington DC References: Business Rule Concepts (3 rd Ed), Ronald G. Ross, 2009, BRSolutions.com Principles of the Business Rule Approach Ronald G. Ross, Addison-Wesley, 2003 The Business Rule Technique Company 3 Copyright, BRS. All rights reserved.

2 About Ronald G. Ross Ronald G. Ross is Co-Founder and Principal of (BRSolutions.com). BRS provides workshops, consulting, publications, and methodology supporting business analysis, business rules, business vocabulary, decisioning, and rule management. His popular public seminars, the first on business rules (starting 1996) and the longest-running in the industry, are given through AttainingEdge in North America and IRM-UK in Europe. Mr. Ross co-develops Proteus R, BRS s landmark methodology, featuring numerous innovative techniques including the popular RuleSpeak R (free on RuleSpeak.com, now also in Spanish, German and Dutch). These are the latest offerings in a 35-year career that has consistently featured creative, businessdriven solutions. Mr. Ross is also Executive Editor and regular columnist of BRCommunity.com and its flagship on-line publication, Business Rules Journal. Sponsored by BRS, BRCommunity.com is a non-commercial vertical community for professionals working in the field. Mr. Ross was formerly Editor of the Data Base Newsletter from 1977 to Mr. Ross is recognized internationally as the father of business rules. He has served as Co-Chair of the annual Business Rules Forum Conference since He was a charter member of the Business Rules Group (BRG) in the 1980s, and an editor of the two landmark BRG papers, The Business Motivation Model: Business Governance in a Volatile World (2000, revised 2005, 2007) and the Business Rules Manifesto (2003). He is also active in OMG standards development for business rules and business models, including SBVR. Mr. Ross (RonRoss.info) is the author of eight professional books. His newest are: Business Rule Concepts (2009), a third edition of his popular, easy-to-read handbook, and Principles of the Business Rule Approach, Addison- Wesley (2003). An earlier work, The Business Rule Book (1994, 1997), was the seminal work in the field. Mr. Ross received his M.S. in information science from Illinois Institute of Technology, and his B.A. from Rice U. The Business Rule Technique Company 4 Copyright, BRS. All rights reserved.

3 What is Possible? One Organization s Achievement Financial Services Credit Card Fraud Detection Business Set-Up Suspicious transactions kicked out to fraud specialists for manual inspection. Fraud specialists are an expensive and largely non-scalable resource. Scenario The bad guys pick up and move shop from Idaho to Manhattan. Transactions deemed suspicious by zip code yield a 10x increase in volume. Additional selection criteria (e.g., location of store, type of store, frequency of use, size of transaction, etc.) introduced to keep the volume of kick-outs relatively constant. Achievement Before rules engine elapsed time: days. After rules engine elapsed time: 3-6 days. The Business Rule Technique Company 5 Copyright, BRS. All rights reserved.

4 What is Necessary! Separating the Business Rule vs. Software Release Life Cycles Software Release Cycle Business Workers Business Rule Life Cycle IT The Business Rule Technique Company 6 Copyright, BRS. All rights reserved.

5 What is Possible? One Organization s Achievement Home Mortgage Department Major U.S. Bank Automated Decisioning Department One of the most mature in the world. It's not an accident that the bank is in good standing in this financial crisis. Achievement Software released about twice a year by IT. Rules changed every 1-3 weeks by business analysts. The Business Rule Technique Company 7 Copyright, BRS. All rights reserved.

6 What is Necessary! Business Traceability = Requirements Traceability Managing the Business Governing Rules Operating the Business Practicable Rules Traceability! Accountability! Transparency! Running the Systems Automated Rules The Business Rule Technique Company 8 Copyright, BRS. All rights reserved.

7 What is Necessary! Rulebook Management: the skills, techniques and processes needed to express, analyze, trace, retain, and manage the decision logic used in day-to-day business operations Business Workers Reference: General Rulebook System (GRBS) Business Rule Concepts (3rd Ed.), Chapter 3 Focus: Manage decision logic as a business problem rather than a technical problem. Goals: Ensure that... Basic business know-how is always accessible to those duly authorized. Business policies, regulations, and contractual obligations are interpreted in a faithful, repeatable and transparent fashion. The Business Rule Technique Company 9 Copyright, BRS. All rights reserved.

8 What is Possible? Testing We do enough analysis of new business rules, that it is literally not worth the cost of going through traditional IT testing. Software Release Cycle Business Workers Business Rule Life Cycle IT The Business Rule Technique Company 10 Copyright, BRS. All rights reserved.

9 What is Necessary! Business Leads Business Model (CIM) $ When is the best time to find you have anomalies in your rules? Logic Architects Computable Model (PIM) $ Tech. Engineers Platform-Spec. Model (PSM) $ Technicians Code $ Workers Functioning Bus. Capacity The Business Rule Technique Company 11 Copyright, BRS. All rights reserved.

10 What is Possible? Rule Anomalies Linguistic Equivalences A permanent employee must receive a salary. An employee who is permanent must receive a salary. Modal Equivalences An order over $1,000 must not be accepted on credit without a credit check. An order over $1,000 may be accepted on credit only with a credit check. Logical Equivalences A high-risk customer must not place a rush order. A rush order must not be placed by a high-risk customer. Subsumations A rush order must have a destination. An order must have a destination. Conflicts A shipment must include more than 1 order. An out-of-state shipment may include only 1 order. The Business Rule Technique Company 12 Copyright, BRS. All rights reserved.

11 What is Necessary! A best practice for expressing rules Business rules must be understandable out of context. Meaning Say fully what you mean and mean fully what you say. Expression Example Discourse-Dependent Rule: Please mute your phone. Discourse-Independent Rule: A webinar attendee must mute their phone while not speaking. The Business Rule Technique Company 13 Copyright, BRS. All rights reserved.

12 What is Possible? RuleSpeak for business-friendly business rules in structured natural language in English (2.0), Dutch, Spanish & German released April, 2009 free on Origin: Developed by (BRS) starting in Applied in hundreds of projects since that time. Standardization: One of three reference notations used in the creation of SBVR. Fully consistent with that standard. The Business Rule Technique Company 14 Copyright, BRS. All rights reserved.

13 What is Necessary! Business Rules Criteria for making minute-to-minute business decisions Classifications and Computations criteria for shaping concepts. Business rule: A customer is always considered a gold customer if the customer places more than 12 orders during a calendar year. Is this a gold customer or not? Yes! Human Behavior criteria for conduct or action. Business rule: A gold customer must be allowed access to the warehouse. Let this customer in or not? Yes! The Business Rule Technique Company 15 Copyright, BRS. All rights reserved.

14 What is Necessary! Design Decisions = Business Decisions Software Vendor: Depends on your definition of business rule... If I change a definitional rule like customers only have 1 address to customers can have multiple addresses then that can have deep consequences on [automated] systems. The Business Rule Technique Company 16 Copyright, BRS. All rights reserved.

15 What is Necessary! Claimant makes claim Take Claim Information if valid claim if claim accepted How many ifs?!? Adjudicate Claim Verify Basic Claim Information if fraud suspected if claim denied yes if policy number missing no How many rules?!? if policy number invalid no if policy expired no If claimant name invalid no If no location given no yes yes yes yes Never embed diamonds (or series of diamonds!) in your business process models. These diamonds always represent business rules which are best defined independently. Embedding diamonds will hopelessly complicate your model. If Anytime you stick your business rules in your process, you re dead. The Business Rule Technique Company 17 Roger T. Burlton Copyright, BRS. All rights reserved.

16 What is Possible? A best practice for business process models Verify Basic Claim Information Business Rules Govern the interpretation of a conditional. Provide criteria for branch points in the business process model. if valid claim Adjudicate Claim Rule: A claim can be considered valid only if it has all the following: An active policy. A claimant. An incident. Decision-making may involve a very large number of business rules! The Business Rule Technique Company 18 Copyright, BRS. All rights reserved.

17 What is Possible? Incremental Development! Claims Clerk Adjudicator Claimant makes claim Take Claim Information if valid claim if claim approved Adjudicate Claim Verify Basic Claim Information if insufficient information if fraud suspected if claim denied if invalid claim if response Upon suspicion of fraud Notify Claimant Request Additional Information Notify Claimant if no response Claimant Claimant the tasks required for an enterprise to satisfy a planned response to a business event from beginning to end... with a focus on the roles of actors, rather than the actors day-to-day job Claims Payment System if no fraud detected Make Payment Claimant Janey Conkey Frazier Process Claims The Business Rule Technique Company 19 Copyright, BRS. All rights reserved.

18 What is Necessary! The staff at GE observed that flowcharts, formulas, and narratives were inadequate when working with complex logic. Reported in Communications of the ACM, Vol 4, No 11 (November, 1961), pp The design and implementation practices of software engineering have a weak point: the design of the internal logic of the module or segment. Such designs should be disciplined, easily understood, and checkable. Decision Tables in Software Engineering, by Richard B. Hurley, Van Nostrand Reinhold Company, New York, 1983, p 1. The Business Rule Technique Company 20 Copyright, BRS. All rights reserved.

19 What is Possible? Analyze Deploy Capture Price Offering Execute Making information more readily available is important, but making better decisions based on information is what pays the bills. Smart (Enough) Systems by James Taylor & Neil Raden Prentice-Hall, 2007, p. 337 The Business Rule Technique Company 21 Copyright, BRS. All rights reserved.

20 What is Necessary! Analyze Deploy Capture Price Offering Execute The Business Rule Technique Company 22 Copyright, BRS. All rights reserved.

21 What is Possible? Analyze Solutions! Faster deployment Decision Cycle Time Rule engines Business Rules Deploy Capture General Rulebook System (GRBS) Price Offering Execute The Business Rule Technique Company 23 Copyright, BRS. All rights reserved.

22 What is Possible? Service Oriented Architecture (SOA) pricing Decision Service Business Rules Repository The business rules are now... Traceable Re-usable Improvable... Auditable... The Business Rule Technique Company 24 Copyright, BRS. All rights reserved.

23 What is Necessary! Service Oriented Architecture (SOA)?? pricing Decision Service Business Rules Repository Business events are a more natural way for business people to express requirements than 'services SOA is a flawed paradigm. The focus should be on 'what event is happening', rather than 'what service do I need'. Mike Gualtieri Forrester The Business Rule Technique Company 25 Copyright, BRS. All rights reserved.

24 What is Possible? About Decision Tables Rule: The applicable sales tax rate must be the percent in County-by-Year Sales Tax Table for a given year and county. County-by-Year Sales Tax Table County Year Harkin Lopes Qwan Quail The Business Rule Technique Company 26 Copyright, BRS. All rights reserved.

25 What is Necessary! About Decision Tables Classifications and Computations criteria for shaping concepts. Business rule: A customer is always considered a gold customer if the customer places more than 12 orders during a calendar year. Is this a gold customer or not? Yes! Human Behavior criteria for conduct or action. Business rule: A gold customer must be allowed access to the warehouse. Let this customer in or not? Yes! The Business Rule Technique Company 27 Copyright, BRS. All rights reserved.

26 What is Necessary! Observation: This is the natural format for decision tables in the real world. Three Multi-Value Criteria One Table The Business Rule Technique Company 28 Copyright, BRS. All rights reserved.

27 What is Possible? Library Fact Model is used to check-out library card is authorized for library Business Rules encompass... works for Terms typically 100s holds borrower is charged against librarian makes owns is owned by Facts typically 10X Terms Rules borrower type typically 10X Facts person organization assessment is made for book fee amount Rule: A library card may be used to check-out a book only if the book is owned by a library for which the card is authorized. Legend = Term (+ Definition) = Fact = Category The Business Rule Technique Company 29 Copyright, BRS. All rights reserved.

28 What is Possible? Defining Terms: The Concepts Catalog (Glossary) An ASSESSMENT is a specific monetary charge against a Library Card for abuse of books or borrowing privileges. A BOOK is any document, publication or work in any media that is held by or available through a Library. A BORROWER is a Person or Organization of interest to a Library that can potentially borrow Books. A BORROWER TYPE is the category of a Borrower -- i.e., Person or Organization. A FEE AMOUNT is the total amount of an Assessment. A LIBRARIAN is a certified professional who can work in a Library in an official capacity. A LIBRARY is a repository of Books and/or a lender of Books to Borrowers. A LIBRARY CARD is an agreement between a Borrower and a Library indicating that the parties agree to abide by the Library s book-lending rules. An ORGANIZATION is legal entity that can act independently of particular persons. A PERSON is an individual who acts in his own behalf. The Business Rule Technique Company 30 Copyright, BRS. All rights reserved.

29 What is Necessary! Case from the Electrical Transmission Industry Load Business Meaning 1. A network component that uses energy 2. The operating level of a network component that uses energy 3. A party that owns a network component that uses energy 4. A state of a network component 5. A part of the output of a generating resource 6. Constancy ( firmness ) of energy usage 7. Demand for energy Context of Business Usage Physical facilities that use energy Amounts of energy that physical facilities use Organizations participating in the energy marketplace Resources that can sometimes use energy ( net ) Measurements of energy production Projections of energy production and usage Aggregate network estimates Our people think they are talking to each other using the same language but they often aren t! One Executive s Lament The Business Rule Technique Company 31 Copyright, BRS. All rights reserved.

30 What is Necessary! Business Rules Manifesto The Principles of Rule Independence by Business Rules Group, Article 3. Deliberate Knowledge, Not A By-Product Business logic is built in building-block fashion. Business rules express basic business knowledge Rules build on facts, and facts build on concepts as expressed by terms. Reference: Business Rule Concepts, (3 rd Ed.), Chapter 1 and Part II. The Business Rule Technique Company 32 Copyright, BRS. All rights reserved.

31 About Co-Founders More Ways to Find Out More Ronald G. Ross Gladys S.W. Lam Oct , 2010 Washington, DC Public Seminars Ottawa Sept Over 14 Years Exclusively in Business Rules Public Seminar London Nov The Business Rule Technique Company 33 Copyright, BRS. All rights reserved.

32 Decisioning with Business Rules: Summary Thank You! ~~ The Business Rule Technique Company 34 Copyright, BRS. All rights reserved.