Tuesday, 30 January 2018 09:03

Business Rules - A Case Study

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What exactly is a business rule?

According to the International Institute of Business Analysis, “a business rule is a specific, practicable, testable directive that is under the control of the business and that serves as a criterion for guiding behavior, shaping judgments, or making decisions.”

Business rules have impact beyond the scope of any particular project and are applied across the organization. A specific rule may impact operational processes (as in a rule that describes the time period during which a request must be fulfilled), enterprise data (as in a rule that describes a calculation), roles (as in the requirement to establish a new audit function), and events (as in a rule that requires reporting to a government agency for transactions in excess of a certain dollar amount).

While business rules are defined as being under the control of the business, the need for a business rule is often triggered by an external entity, through laws and regulations, through the actions of competitors, and through the behavior of customers. In this regard, the urgency to implement a business rule may not be under the control of the business.

Mitigate risk by being proactive

We believe that the “business rule” risk (along with many other risks) is mitigated by infusing business analysis competency into the organization – a business analyst can help bring order to sometimes chaotic processes and can serve to help mitigate risk in enabling an organization to quickly assess and understand the impact of a proposed change.

One company’s story

One of our clients, a mid-size insurance company, realized the need to move from a plethora of policy administration systems to a single integrated system that would enable the company to move products to market in a more integrated and rapid fashion. Prior to even considering candidate solutions, the company embarked on an architecture modeling endeavor, using process analysis techniques to understand their current state, identify process gaps, and appreciate opportunities for process improvements. As part of this process, they captured and documented business rules inherent not only in their existing systems, but in processes and procedures across the organization.

This company found that the work that they had already completed began to pay immediate dividends, and was clearly enabling the company to mitigate a non-trivial portion of the risk associated with such a system migration.

  • Prior to and then in parallel with their vendor search, the company began to collect and document their business rules. Like most other companies, they found that business rules were hidden in policy documentation, subject matter experts’ heads, and in system code. The work to collect the business rules was painstaking, but the long-term benefits of this effort soon became apparent.
  • The company quickly eliminated several candidate vendors, as it was clear that the solutions would not meet with company’s needs or could not support each of the product types that the company offered. By mapping key business rules against these vendor solutions, it was evident to both the vendors and the company which solutions were not appropriate.
  • The response from the vendors whose products were candidate solutions was one of delight! Most vendor solutions today are highly configurable, and the ability to configure is based on a solid understanding of business process and associated business rules, so these vendors knew that their implementation pathway had been well paved with this analysis work.
  • Having developed a business rule capture and maintenance approach along with diagrammatic models that depict processes, data, events, and roles, the company will be able to quickly ascertain in the future what the impact of the development of a new product or the implementation of a rule change will mean, as the rules will be traceable to the products, processes, data, events, and roles that each impacts.

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What were the benefits of using modeling and process analysis techniques over how the company had previously attacked product development?

  • Thinking about their business in a systematic way – its rules, its events, its roles, its calculations – made the process more focused. The team used business analysis facilitators both to elicit the required information and then to document it. The business analysts were also responsible for building the diagram representing the business architecture. Everyone agreed that having the diagram made the business processes and rules visible and, therefore, easier to discuss and change. It also provided a means for communication and collaboration among the team members.
  • Each product – its architecture and the rules it would use – was documented in a repository. If additional riders, benefits or components need to be added in the future, there would now be a single source for that information.
  • Performing business process analysis on all of the in-scope operational processes built a base of process flow maps and associated rules. These could be saved in a repository and, for any new development effort (including the anticipated development of new and innovative products), could be analyzed to identify areas of change.

It would be impossible to overemphasize the value of having the organization’s analysis assets in a repository. The requirements, workflows, rules, and overall process models were documented in an on-going, living data and requirements repository, available for use for the next development effort. In a way, these requirements will become the reusable code of the business and product development process and, as such, the product and rules architecture models. The process models and the requirements are tangible company assets, ready to jump-start future process improvement undertakings. Such models lay the foundation for a library and formed a solid basis for continuous optimization through a solid understanding of rules, requirements, and business process models.

All agreed that without the full-time commitment of strong, professional business analysts, none of these benefits would have been realized. As a result, the organization is in the process of building its own internal business analysis and rules expertise. Their desire is to continue to reap the benefits of mitigating risk through a disciplined business rules and analysis approach.

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Sandra Sears

Sandy Sears, PMP, CBAP, PMI-PBA, SA, is the Director, Commercial Business Unit, for RG. She has been a speaker at industry conferences and for professional and education organizations. Her work was featured in the book, Breakthrough Business Analysis, by Kathleen Hass. She can be reached at sandra.sears@teamrg.com.

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