Business decisions are made according to business rules. Automating the business logic behind decisions for both manual and legacy system processes can dramatically lower operational costs, increase customer satisfaction and generate higher profits. Thus, the ease with which you can capture, change and optimize business rules either promotes or inhibits the agility of your organization.
It sounds so easy, but here’s the problem: while organizations have been automating business rules for 10 years, 20 years or even longer, the traditional approach has been programming based. The business-policy makers define the rules and decisions and then hand them off to IT to program them into an application. With programming it’s possible to automate rules, but even simple rules can be hard to code, while complex rules can be impossible.
More importantly, once you’ve built the application, any single change can “spaghetti-code” down to where it’s impacting dozens or hundreds of different rules and processes.
A Business Rules Management System, or BRMS, helps you understand and proactively manage decisions – as part of a business process, within an application, or via a central repository that can be shared across the enterprise. A BRMS may be one of the most-well-kept secrets of leading organizations worldwide, enabling them to develop or modify new applications faster than their competitors. This article discusses how best-of-breed Business Rules Management Systems work, their benefits, and the essential elements to seek in a BRMS.
Challenges of programming business logic
Change in business policies, rules and decisions is inevitable due to various influences (see diagram below). The net is that, when the business side of the house says “we need to make a change,” the answer from IT is likely to be “we can do it but it’s going to take months or years and cost millions of dollars.” In our market studies at Corticon, we hear this time and time again.
In addition to agility, the ease with which you can change business rules also impacts the consistency, quality and speed of your decisions – which goes straight to your bottom line. Programmed legacy applications have become the de facto repositories of business knowledge for many organizations – their “corporate memory.” Beyond the challenges of programming business logic in applications, once coded the business logic is no longer visible or easily understood (most code is not documented at the time it’s written) and becomes prohibitively difficult and expensive to maintain. Programmed legacy applications limit a firm’s ability to effectively compete today and in the future.
Organizations want to make better, faster decisions and be agile enough to change on a dime. While many decisions can be automated by programming, even if with lengthy development times and at high costs, other operational decisions are still made manually by trained employees following policies and best practices. Neither of these approaches addresses some of the greatest challenges in today’s business climate, such as “how to ensure consistency and accuracy across thousands of transactions” or “how to keep up with change – changing regulations, changing market demands, changing business strategy.”
How a business rules management systems works
But there is a better way. The thousands of decisions an enterprise makes each day collectively represent the execution of its business policy, such as the management of human resources, products, or customer databases. The quality, effectiveness and efficiency of decision making directly impact corporate performance. A Business Rules Management System, or BRMS, is specifically designed to help manage decisions – treating them as true enterprise assets and providing a disciplined approach to their automation and integration within enterprise systems. A BRMS helps you understand and proactively manage decisions – as part of a business process, within an application, or via a central repository that can be shared across the enterprise.
Business Rules Management Systems today drive decision automation for many of the world’s largest banks, insurance carriers, media companies, telecommunication providers, retailers, manufacturers and government organizations. For example, a financial services firm needs to decide whether to extend credit to a customer. One of the rules underlying that decision might be “do not extend credit to delinquent accounts.”
Or an international shipping company may need to determine what type of vessel to use for delivery of hazardous materials. One of the rules governing that decision might be “hazardous materials must be shipped in double hull tankers.” A BRMS captures and executes the rules to drive various decisions within business processes. Externalizing the modeling and execution of rules (i.e., making the business rules visible to decision makers and not just programmers) enables the automation of decisions in any business process.
How do best-of-breed BRMS systems work? Ideally, a BRMS provides an out-of-the-box, Excel-like modeling environment in which to create, analyze, test and verify rules. This environment enables business analysts and policy makers – those who best understand the dynamics forcing change within the organization – to easily model and deploy business rules without the need for traditional programming. The output of this modeling environment is called a “decision service” – a set of automated rules that govern a decision or set of decisions.
External modeling for rules development also ensures a more flexible process. While a business process may change infrequently, the rules that drive the process can change regularly, and rapidly. Consider the rate at which product offers or loan rates change. With a BRMS, those in control of the business logic have the ability to change rules independently of the process or application itself – saving time and reducing errors.
Once the rules and decisions are automated, the BRMS utilizes a rules engine to process the decision services. The performance of the rules engine is critical for efficient automation, and all rules engines use a pattern-matching algorithm. The traditional algorithm, called Rete, was implemented with all of the early rules engines. While Rete scales well no matter how many rules there are, it runs into problems based on the complexity of the rules when executing large numbers of them. When this happens the rules engine hits the “Rete Wall,” a well-known limitation in the industry. Vendors have been working to improve performance, and while newer products have expanded the “Rete Wall” boundaries, the limitation still exists for high-performance environments. Another approach uses the DeTI (Design Time) algorithm, whose performance scales linearly regardless of the number of rules and the complexity of the data.
Essential elements of a BRMS
A BRMS addresses the challenges of the dynamic enterprise: tight application-development times, frequent change cycles and complex integrations with existing development environments. A BRMS includes these essential elements:
- Performance and scalability. The rules engine must deliver millisecond response times and easily scale to support millions of transactions per day. Performance needs to scale linearly regardless of the number of rules and complexity of data.
- Accuracy and integrity. Accurate results from the rules engine are required, with rule integrity features to ensure that the right decisions are made at the right time.
- Agility for change. Dynamic business environments require constant adjustment to business rules, and it must be simple to implement changes with both speed and accuracy.
- Ease of use. Business analysts and policy makers – those closest to the dynamics forcing change within the organization – must be able to easily model and deploy business rules without the need for traditional programming. Reuse capabilities are valuable as a means of ensuring that rules can be written once and then applied across multiple applications and decision services.
- Integration. Application programming interfaces (APIs) and integration with open-source development environments are essential, so that customers and vendors can incorporate the rules engine into their applications and preferred software development infrastructure.
A BRMS solution transforms manual processes and outdated legacy systems by harvesting, validating and redeploying business knowledge and logic for use in new cutting-edge applications.
The benefits of implementing a BRMS are dramatic. Organizations can make better, faster decisions and significantly reduce costs. By collapsing the traditional development/programming steps into a single modeling phase, a BRMS reduces development and change cycles by up to 90 percent (see diagram below). Instead of business-policy makers specifying the requirements, handing them off to the development team for design and programming, and then entering the test phase and discovering problems (either with the specifications or bugs in the actual code), a BRMS lets business and IT collaborate up-front in the modeling phase, where all the issues can be worked out. The result is not only reduced development cycles but also higher quality, higher performance and increased agility for change.
A BRMS such as Corticon can enable organizations to make better, faster decisions by automating business rules. Automated decision management empowers organizations to improve productivity and customer service, and adapt quickly to changing market conditions.
Today’s enterprise is driving harder than ever for increased effectiveness and agility in business operations. To achieve operational agility, organizations need to be able to quickly modify the business rules that affect decisions, and IT systems need to be just as nimble. By streamlining the management of complex decision logic, a BRMS is critical to achieving these goals, significantly reducing development cycles and ensuring consistent execution of business policies.
Bob Schoettle is Chief Marketing Officer at Corticon. He has more than 25 years of high-technology marketing leadership experience and a strong track record of successfully bringing new products and applications to market as well as of rapidly driving revenue growth in emerging companies including iPass, Intraspect, Panasas, and Innopath.