Copyiight, 2u11. Business Rule Solutions, LLC. 1 Copyiight, 2u11. Business Rule Solutions, LLC.

CHAPTER 1

Introduction
Busi ness Anal ysi s
wi th Busi ness Rul es
!"#$%#&"&' )*+#,- is a cential fact of life foi
business these uays. The techniques you use
foi business analysis must be baseu on the
assumption that business iules .%// change, often
quite iapiuly. The best business solution is one
that cateis to such change, always uoing so in the
mannei fiienuliest to business people anu
Business Analysts.
What othei issues shoulu techniques foi
business analysis auuiess in this seconu uecaue
of the 21
st
centuiy. In auuition to continuous
change:

Exceipteu with peimission fiom !"#$%#&'
!")#&*)) +,$"-#,&). !"#$%&## (%)*+#$# ,$-.
!"#$%&## /"*&#, by Ronalu u. Ross with ulauys
S.W. Lam, /& 00!/
1
+2,&),3*% 45&%6,,7,
Business Rule Solutions, LLC, 0ctobei, 2u11,
Su4 pp, .http:www.bisolutions.combbs

Copyiight, 2u11. Business Rule Solutions, LLC. 2

!
Captuiing, managing, anu ietaining business 7&,89:,8.
!
Enabling moie effective 6")#&*)) ',;*3&5&<*.
!
Naking compliance 0.%$* 1&'%#-'' 2&/-' 3 .*+$ -/'-456 moie
effoitless.
None of these challenges is well seiveu by the kinus of infoimation
systems we've built in the past. This book pioviues the basis to
engineei a new kinu 6")#&*)) ,2*35-#,& )=)-*>).
Let us wain you, this is not a book about fixing softwaie engineeiing
piactices. It's about )*+#,%#, them funuamentally. We think it's way
past time they weie. Cuiient piactices piobably miss as much as 9u%
of eveiything impoitant in iunning the business(!).
What a Business Rule Is
A business rule is a criterion used to guide operational business behavior,
shape operational business judgments, or make operational business
decisions. Business rules are only indirectly about system design or behavior.
Your business would need its business rules even if it had no software.
Alignment
Eveiyone asks: 7". 8" 9"& )/"'- $*- ,+: 1-$.--# $*- 1&'%#-'' +#8
;<4 We think that's the wiong question. You want to uo that, suie.
But the question as poseu moie oi less implies the solution will be
oiganizational, whethei by new styles of inteiaction, bettei pioject
management, iestiuctuiing, oi othei means.
Insteau, we think the key to an effective solution is aichitectuie. 0se
the iight aichitectuial appioach anu the oiganizational issues will
take caie of themselves (one way oi anothei). So we ask: 7". 8"
9"& +/%,# 1&'%#-'' ":-2+$%"#' .%$* 1&'%#-'' '$2+$-,94
To be fiank, most Business Analysts lack the stanuing in theii
oiganizations to pull off enteipiise-level solutions. We hope that
situation changes (anu ovei time, we believe it will). Expeiience
suggests taking smallei steps is wise. (We uiun't say '=+// steps,
just '=+//-2). So we iight-size the question to the moie achievable,
smallei-scale equivalent: 7". 8" 9"& +/%,# 1&'%#-'' )+:+1%/%$%-'
.%$* '$2+$-,%-' >"2 '"/?%#, 1&'%#-'' :2"1/-='4
You will finu success at that level of alignment fiuitful (anu
challenging) enough. Reau moie about it in the next Chaptei.

Copyiight, 2u11. Business Rule Solutions, LLC. 3
What a Business Capability Is
A business capability is not an application system, database, set of
use cases, enterprise architecture, or any other IT artifact. Its design
and implementation might depend on some or all of those things, but
thats a different matter.
Instead, a business capability is created as a business solution to an
operational business problem. That solution and the problem it addresses
have a scope (definite boundaries) that can be identified in terms of what
business items make it up. The business solution is initially developed and
expressed as a business strategy (Policy Charter).
The business model you create in business analysis is the business
architecture for the business capability, a blueprint enabling business people
and Business Analysts to engage in a business discussion about what needs
to be created, managed, operated, changed, and discontinued. Developing a
business solution using a business model does not necessarily imply software
development, but if software development does ensue (and it usually does),
the business model provides a solid grounding.
Our definition of business capability comes down to this: What the business
must know and be able to do to execute business strategy.
You'll notice we keep repeating business as a modifier
(business solution, business problem, business capability,
business model, business strategy, business rules, and so on).
We do so throughout the book. And we do it in practice too.
Its a reminder that our focus is always on business things, not system or
IT things. When we say business, we mean business.

Basic Principles for Business Analysis
You can see alieauy we'ie veiy caieful about how (anu when) to ask
questions. You'll finu that's tiue thioughout the book. You'll see it in
ueveloping a stiategy foi the business solution (?,$#<= @:53-*3),
25--*3& A"*)-#,&) foi haivesting business iules fiom vaiious kinus
of business mouels, %*<#)#,& 5&5$=)#), anu othei techniques in
?3,-*"). 7". you ask questions makes all the uiffeience in the woilu.
@&-'$%"# $*- A&-'$%"#'5
!5)#< ?3#&<#2$* B,3 !")#&*)) /&5$=)#). Always seek to ask
the iight question in the iight way of the iight people at the
iight time.
In cieating a business mouel we also take gieat caie nevei to use
;<':-+B in talking with business people. IT teiminology pioviues an
easy anu unueistanuable ieason foi business people to uiop out of

Copyiight, 2u11. Business Rule Solutions, LLC. 4
business uiscussions. A business mouel is always about 2-+/C."2/8
$*%#,', iepiesenteu using teims that business people woulu natuially
use.
!5)#< ?3#&<#2$* B,3 !")#&*)) /&5$=)#). 0se no teim in
talking with business people about the business they
woulun't use natuially.
Avoiuing all ;<':-+B is haiu. Nany familiai teims +''&=-
uevelopment of softwaie systems. Two examples: &'- )+'- anu 8+$+
="8-/D Both teims oiiginateu fiom IT anu imply a system. In
ueveloping business mouels you uon't neeu those teims(!).
Beie's a ielateu point. '0seis' exist only if you'ie thinking about
builuing an IT system. We avoiu the teim. In the business context,
business people aie not 'useis', they aie the cential actois in the uay-
to-uay uiama of business activity. Anyway, eveiybouy is a 'usei' of
'"=- system these uays, so 'usei' uoesn't much uisciiminate anything.
!5)#< ?3#&<#2$* B,3 !")#&*)) /&5$=)#). E-?-2 '+9 F&'-2G.
Now we confess that last one is haiu. It takes piactice. We still slip up
once in a while ouiselves. Watch closely to see if you catch any
misuse in this book.
Change Deployment Hell
A business managei at a veiy laige health caie oiganization iecently
confiueu to us that making a change to business iules of even
moueiate complexity took theii oiganization 4uu peison-uays ovei a
4-month peiiou. That's staggeiing. Bow coulu it be sustainable.
Theii oiganization, like many touay, is living in )*+#,- 8-:/"9=-#$
*-//.
The managei went on to obseive that a subtle stagnation hau ciept
into the staff's veiy way of thinking about the business. Be noteu that
they often uon't even consiuei business innovations they know fiom
expeiience to be uifficult foi the existing systems to hanule. Be
wonueieu out louu whethei they coulu even think thiough any ieal
business innovation effectively any moie. The bottom line: They
neeueu a new appioach, #"$ moie of the same.
By the way, the people at this oiganization weie haiu-woiking anu
veiy engageu in theii activities they uiu want to uelivei goou

Copyiight, 2u11. Business Rule Solutions, LLC. 5
quality. That wasn't the pioblem. Inueeu, we finu most people in oui
fielu to be veiy piofessional anu to have the best of motivations.
We can uo bettei than that, smaitei than that we can anu we
shoulu. Ask youiself this funuamental question: Bo you ieally want
to continue embeuuing the business iules you neeu to iun the
business in application piogiams.!
This book assumes you uon't. It explains piagmatic, pioven
appioaches foi iuentifying anu exteinalizing business iules fiom all
othei aitifacts piouuceu in business oi system analysis. In shoit, we
tieat business iules as a >%2'$C)/+'' )%$%H-#. We think eveiybouy
shoulu.
Can you ieally engineei business iules sepaiately fiom iequiiements
foi application softwaie. I1'"/&$-/9D It's a pioven fact.
Business Rules vs. Requirements
Let's be veiy cleai that business iules anu iequiiements aie not the
same thing. When you set out to cieate a softwaie system, business
iules can %=:/9 iequiiements but that's a uiffeient mattei.
Beie's a majoi uiffeience: Requiiements evolve 1->"2- ueployment of
a system; business iules evolve +>$-2 ueployment of a system. That
affects -?-29$*%#,.
To biing the uistinction into peispective, consiuei 8+$+ foi a moment.
Woulu you consiuei actual business uata not the uata uefinitions
but the actual uata itself to be pait of iequiiements. E"5
The life cycle of uata anu the life cycle of iequiiements aie simply not
the same. The life cycle of iequiiements, no mattei what methouology
you use, moie oi less enus with official softwaie ielease. Foi uata, in
contiast, that's just the 1-,%##%#, of life. The uata peisists. Noie
impoitantly it changes ovei time. That's the veiy essence of uoing
business. It's so obvious we take it foi gianteu.
Real Life Begins at Deployment
The veiy same is tiue foi business iules. 0fficial softwaie ielease is
just the beginning of theii life. They peisist. Noie impoitantly they
change, sometimes iapiuly, because a business constantly neeus to
aujust its business paiameteis.

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!5)#< ?3#&<#2$* B,3 !")#&*)) /&5$=)#). I/.+9' 2-=-=1-2
$*- 1&'%#-'' 2&/-' /%?- "#D
The uistinction between the softwaie uevelopment life cycle anu the
life cycle of business iules is sometimes haiu foi those in IT to giasp.
Inueeu, if you'ie looking thiough the lens of softwaie uevelopment
methous, you'ie almost ceitain to be confuseu. When you look at
business iules fiom the 1&'%#-'' point of view, howevei, seeing the
uistinction is fai easiei.
Eventually all companies will appieciate the uistinction. Then the
neeu foi managing iulebooks as a sepaiate iesouice (just like
uatabases) will be obvious. We call that activity 3"$*6,,7
>5&5'*>*&-. Leauing companies aie alieauy uoing it.
Order-of-Magnitude Improvement in
Business Agility
Touay's infoimation systems aien't agile even when agile softwaie
methous aie useu to uevelop them. Companies neeu 6")#&*)) 5'#$#-=
anu in most cases, IT simply isn't ueliveiing it.
We believe you shoulu aim foi nothing less than "28-2C">C=+,#%$&8-
impiovement in business agility. Is that possible. I1'"/&$-/95 Beie's
a biief case stuuy.
Order-of-Magnitude Improvement: Case Study
A medium-sized financial services company we visited specializes in detection
of credit card fraud. Suspicious transactions are kicked out to fraud specialists
for manual inspection. These fraud specialists are an expensive and largely
non-scalable resource.
Suppose the bad guys pick up and move shop from Idaho to Manhattan.
Transactions deemed suspicious only by zip code suddenly yield a 10x increase
in volume. To keep the volume of kick-outs relatively constant, additional
selection criteria (e.g., location of store, type of store, frequency of use, size
of transaction, etc.) must be introduced.
Before using business rules, the elapsed time to deploy revised selection
criteria was 30-60 days. By then smart bad guys are already operating
somewhere else. Using business rules, the company decreased the elapsed
time to 3-6 days. Would you say their business had become more agile?
You bet! Thats an order-of-magnitude improvement.

Copyiight, 2u11. Business Rule Solutions, LLC. 7
Summary
0ui woilu is fast-changing, highly-iegulateu, anu knowleuge-
intensive. Business opeiations aie highly complex anu becoming
moie so by the uay. Business Analysts uiun't invent the complexity
they aie simply the ones who must come to giips with it.
Success iequiies special thinking tools to stiuctuie the analysis of
business complexity. Business Analysts must be able to biing those
tools to the table. This book shows you what the tools aie anu how to
apply them with business people.
!5)#< ?3#&<#2$* B,3 !")#&*)) /&5$=)#). J- $*- =+'$-2 ">
$*%#B%#, $""/' $" +882-'' 1&'%#-'' )"=:/-K%$9D
Is theie any othei way. We uon't see any. 0ne thing foi suie uoing
moie of the same, just fastei, is #"$ going to woik. Existing IT
techniques have simply maxeu out. As Kathleen Baiiet, CE0 of the
IIBA says, .- #--8 $" $+B- %$ $" $*- #-K$ /-?-/.
We conceue the pioblem is big one. It's all aiounu us eveiywheie we
look. It's like what an ant ciawling up an elephant's leg can't see. The
elephant is just too big. We 8"#G$ conceue, howevei, theie's no
solution. We've pioven theie is. But fiist you must )** -:* *$*2:5&-!







Copyiight, 2u11. Business Rule Solutions, LLC. 8

(01"- -.& ("-.12# 3

C,&5$% DE C,)) is iecognizeu inteinationally as
the 'fathei of business iules.' Be is Co-founuei anu
Piincipal of Business Rule Solutions, LLC, wheie he
is active in consulting seivices, publications, the
L2"$-&' methouology, anu M&/-N:-+B. Ni. Ross
seives as Executive Euitoi of BRCommunity.com anu
as Chaii of the Business Rules Foium Confeience.
Be is the authoi of eight piofessional books, most iecently J&'%#-'' M&/-
!"#)-:$' (2uu9). Ni. Ross speaks anu gives populai public seminais
acioss the globe. Bis blog: http:www.ionioss.infoblog


D$5%=) +EFE G5> is a woilu-ienowneu authoiity
on business analysis anu applieu business iule
techniques. She is Co-founuei anu Piincipal of
Business Rule Solutions, LLC, the most iecognizeu
company woilu-wiue foi business iule methouology,
consulting seivices, anu tiaining. Ns. Lam seives as
Publishei of BRCommunity.com anu as Executive
Biiectoi of the Builuing Business Capabilities Confeience. She is a
iecognizeu expeit on pioject management anu is highly active in
consulting, mentoiing, anu tiaining.