Unfortunately, business rules often are a mystery in business. Most of time they are undocumented and worst they are a figment of someone’s imagination - no basis. However, mystery or not, we need them in eliciting stakeholder requirements in order to understand how the business obligations are kept, constraints are enforced and how decisions are made. And just like news reporters, we need to confirm the business rules with a second (hopefully authoritative and documented) source. Furthermore we need business rules to ensure a quality product and/or process through testing.
Challenge the obligations, the constraints
and decision rules associated with
requirements and processes.
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Quality = Testing = Business Rules
Business rules are the basis for confirming the quality of requirements and processes. Quality unfortunately is invisible, but testing makes quality visible. Testing is how we validate that the business rules, constraints, obligations, and decisions, are enforced. Without testing the quality of the product or process remains in question. For example, let’s say the business is a bank:
- Does the product/process enforce the constraints?
- All bank checking accounts must maintain a minimum balance of $500 to withdraw money unless the account is to be closed. Why is there a minimum balance and why is it set to $500?
- All bank account cash withdrawals from an ATM are limited to $300. Why $300?
- Does the product/process behave per obligations?
- All monthly loan payments must be made by the 7th day of the month to avoid an interest charge of 20%. Why the 7th day of the month and why 20%?
- Does the product/process use rules to make decisions?
- All deposits to bank checking accounts are to remain pending for 24 hours unless the deposit is in cash. Why 24 hours?
Maybe we just need to change or update a business rule to resolve a business problem rather than adding more software. For instance, let’s just say that the bank is losing customers because the competition is offering more lenient loan terms like interest charges less than 20%.
Challenging Business Rules
Business rules are like perishables, they need to be checked for freshness and validity. Few rules are eternal like, you don’t
- spit in the wind
- pull on Superman’s cape
- yank off the Lone Ranger’s mask [2]
Most rules need to be challenged because their basis may not be valid and the fact that ecosystem changes and therefore business rules may be outdated. Besides that, the changing of a business rule may allow you to gain an improvement without a process or a software change. Let’s amplify this point via another more detailed example.
Business Problem
Conference Inc . [3] is a company that hosts events for sponsors in various locations. Conference Inc. invoices the sponsor the actual cost of the conference including the speaker’s fee and expenses. This actual cost billing is a business rule. However, the invoices lately have become more complicated – multiple speakers. Now Conference Inc. must collect fees and expenses from several speakers.
Speaker fees are known ahead of time, but speaker expenses are unknown. Therefore all speakers need to forward their expenses to Conference Inc. so that invoicing can proceed. Unfortunately, not all the speaker expenses are forwarded in a timely manner; guideline is one week, but some are outstanding for weeks. As a result, Conference Inc. is experiencing a cash flow problem; the problem is trending to have an impact of running Conference Inc. itself.
Options
- Provide an easy way for speakers to submit their expenses – a website. Essentially add software to fix the problem; estimated cost $200K. Note, this option does not motivate the speakers to submit their expenses and there is no challenge to the actual cost business rule.
- Change the guideline of one week to a business rule of submitting within one week of the conference in order for the speaker to be paid. This option does motivate speakers to submit their expenses in a timely manner. Note there is still no challenge to the actual cost business rule.
- Change the business rule concerning actual cost. Place the speakers on a per-diem basis, rather than submitting their actual expenses. The rule of actual cost worked well when there was only one speaker. But now conferences consist of several speakers. The risk of missing an expense submission is much higher. The impact in using a per-diem rate for speaker expenses is that Conference Inc. can now issue invoices immediately after the conference or even before the conference eliminating the billing delay.
Cash Flow Resolution, Waste Elimination Improvement, but Potential Resistance
The third option seems the best. It not only resolves the delay in issuing invoices, but improves the billing cycle; eliminates wait time, one of the principles in lean. However, even if you think that this business rule change is the greatest thing since sliced bread, I would be remiss if I did not mention that changes in business rules need to be approved by management, in particular process owners. And their risk tolerance in changes to business rules may be much less than your allowance. For instance, one manager may say “I don’t like per-diem rates since there is possibility of paying a speaker more than their actual expenses. We are already paying the speakers high fees.”
Always propose a range of options
representing different levels of risk.
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Getting Back to Baseball
Johnny never made “the show” [4] , but he did learn all about baseball rules from me; fortunately there is an authoritative and documented baseball rule book unlike many businesses. Note that the game of baseball is also subject to rule changes just as all businesses, but the baseball rule book is always updated, again unlike many businesses. And I’d give odds that Johnny is challenging business rules wherever he works – asking why there is a rule and where is it documented. As we all should.
Author: Mark Monteleone, PMP, CBAP, CSM, CSPO
Mr. Monteleone holds a B.S. in physics and an M.S. in computing science from Texas A&M University. He is certified as a Project Management Professional (PMP®) by the Project Management Institute (PMI®), a Certified Business Analysis Professional (CBAP®) by the International Institute of Business Analysis (IIBA®), a Certified ScrumMaster (CSM) and Certified Scrum Product Owner (CSPO) by the Scrum Alliance. He holds an Advanced Master's Certificate in Project Management and a Business Analyst Certification (CBA®) from George Washington University School of Business. Mark is also a member of the Association for the Advancement of Cost Engineering (AACE) and the International Association of Facilitators (IAF).
Mark is the President of Monteleone Consulting, LLC and author of the book, The 20 Minute Business Analyst: a collection of short articles, humorous stories, and quick reference cards for the busy analyst. He can be contacted via -
www.baquickref.com.
References/Footnotes
1. https://content.mlb.com/documents/2/2/4/305750224/2019_Official_Baseball_Rules_FINAL_.pdf
- Rule 5.09(b) (1) and (2). In the vernacular, after a runner reaches first base and leaves the base path heading for his dugout or his fielding position, the umpire may declare the runner out......
- In Johnny’s case, when the top of the first inning ended, he left second base, went to his dugout, grabbed his glove and took his field position for the bottom of the first inning. By virtue of the fact he left second base, he is out (i.e., Johnny cannot return to second base as a runner at the top of the next inning).
2. Words extracted from the song, “You Don’t Mess Around with Jim” by Jim Croce
3. Fictitious company name
4. Jargon used for Major League Baseball