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Making sense of business rules management

Making sense of business rules management

IT chiefs from various industries gathered at a CIO roundtable event in Sydney recently to discuss how they are using business rules management tools inside their organisations.

Your organisation might answer thousands of questions every day. These may range from how much you need to charge a customer for a product or service or whether to approve or deny a claim. Making decisions at the right time with insight and control is a key.

But often, managing the business rules that drive these policies and processes can be a very time-consuming task. This can reduce an organisation’s ability to respond to changing market conditions and even potentially harm its competitive advantage in a world where customers are demanding that services be delivered almost instantaneously.

IT chiefs from various industries – including insurance, financial services, media, manufacturing and retail – gathered at a CIO roundtable event in Sydney recently to discuss how they are using business rules management tools inside their organisations.

These tools automate the rules that direct data flows based on answers to questions to deliver a rapid decision. The roundtable was sponsored by Progress.

Pictorial highlights from the recent roundtable entitled <i>Mastering business agility: Driving efficiency</i>, sponsored by Progress, are now online.

Business rules management systems (BRMS) are entirely complementary to business process management (BPM) systems as they enable business logic to be separated from the process, says Craig Law, managing director and regional VP, Progress, Australia and New Zealand.

Virtually all organisations have a BPM of sorts but the coding of rules into the BPM turns it into an ‘application’ along with all the usual limitations, he says.

“That is, changes have to go through a development and test cycle and upgrades are difficult and costly due to the level of product modification. It’s by extracting the business rules from a BPM and maintaining them in a BRMS by which business agility is delivered.

“New rules can be created, tested and deployed in minutes and decisions, when called by the BPM, are consistent, fast and easy to change,” he says.

Bill Swale, senior account executive at Progress, says organisations need to ask themselves three key questions when implementing business rules.

These include:

  • How can we respond to immediate market pressures and quickly adapt our products accordingly?
  • Where can we be more agile in our product offering and flexible in our pricing model to deliver the right product at the right time?
  • How can we refine our compliance and regulatory processes and be able to then focus more revenue growth opportunities?

Colin Cunningham, CIO, at High Standards Technology, says although the specialist IT consultancy doesn’t actively maintain regular business rule change, it is a key concern for its customers.

Cunningham says he has implemented business rules across governments, global enterprises and SMEs in several areas. These include ensuring the latest regulations are adhered to in sectors such as banking, and altering rules when organisations are implementing new strategies or policies.

“In one example, the rules around document dissemination and discussion across teams were built into an application. The required distribution was derived from strategy documents outlining resource allocation, expert knowledge and reporting to enhance cooperation across the business,” he says.

Rules have helped a client optimise its response to market changes, for example, qualifying sales leads based on the latest market data. They have also provided guidelines to staff making decisions impacted by customer feedback.

“For example, during the implementation of telecommunications services, the sequence of events was changed based on call centre feedback from previous implementations,” he says.

Hani Arab, CIO at facilities management firm, Assetlink Group, says there isn’t this level of business rules automation across his organisation.

“We have workflow automation around HR & IT processes but recognise the enormous benefit available once business processes are mature and well-defined,” he says.

Striking a balance

Arab agrees that it’s important to strike a balance between the need to automate business rules and still allow individuals to have the flexibility to implement business change.

“This is key and the business will need to define its propensity to risk as this will be a key factor in forming a balanced approach,” he says.

High Standards Technology’s Cunningham said a good example of ‘striking this balance’ is if a council is laying new footpaths and planning parameters for the time concrete takes to set are unlikely to change within the planning horizon.

“But the decision on how to handle a tree in the path direction will change constantly. A business rule in the process might state that all exotic trees can be simply ignored and removed or it might say the decision on bypass or removal might be sent to the council arborist group,” he says.

Cunningham says this needs to be handled very early in the process so a business rule will exist to state who needs to be contacted at the beginning of planning.

“Decisions take time and cost money. If they can be predetermined, they save time. If it takes a lot of time to correct a decision that was inappropriate, or worse, the risk of getting it wrong may be fatal in the few instances that the time taken to make a decision needs to be faster than a human can think. In these situations, it has to be automated or not done,” he says.

“If the same decision is being made across millions of situations, the cost factor is huge for intervention. The decision on the balance between automation and invention is mandatory before implementation and cannot be predetermined due to risk and cost.”

More flexibility required

All attendees agreed that organisations need to be more flexible and agile in the way they manage change inside their business as industries become more regulated.

Ken Smyth, sales engineer at Progress, says business is increasingly subject to oversight and complying with changes to regulations such as Basel III, is critical to remaining licensed to operate.

“Therefore, being able to quickly comply with new regulations and not have to undertake IT projects which consume budget and resources, which would otherwise be used to enhance business applications, is crucial to the competitiveness of any business,” he says.

One CIO from the financial sector says that being more agile in managing change is critically important regardless of whether industries are becoming more regulated.

“It has become more of an agent to be more commercially competitive,” he says.

High Standards Technology’s Cunningham adds that better change has always been vital regardless of regulation amendments.

The regulation, implementation and planning of any new product or service has become more automated – including change control – and there are areas along this chain where resources are released. This enables more products and services to be unveiled faster, he says.

“Relatively, change is therefore more visible in any activity and there are a greater number of activities, many of which involve regulation. So change has always involved flexibility and agility, it just needs to be managed to deliver efficiencies as with any part of the process. That change in volume needs to be addressed across the sum of all the activities as with any other function,” he says.

Tools for repetition and change

Most attendees intended to use business rules management tools in their businesses in the future, particularly in areas where there are many repetitive processes and a large amount of change.

Assetlink Group’s Arab says his organisation will use these tools where there’s repetition with a certain level of risk.

“Using business rules management makes a lot of sense when there’s a huge return on investment,” he says.

These tools can better manage change by separating areas of ‘high change’ from areas of little change, allowing simpler and cheaper intervention in areas where many alterations to business processes need to be made, says Cunningham.

“They act as an efficiency tool in any activity and are therefore, compulsory for survival,” he says.

Progress’ Law adds that a BRMS enables any organisation to automate repetitive business processes.

“This frees up staff from the routine to manage the complex cases and at the same time, gives the business the ability to easily update the routine in response to changing regulations and market pressure.”

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