Business Rules Analysis

In an environment devoid of clear rules or guidance on what business actions are allowed or not allowed, employees would make decisions on the fly. Decisions would be made without consulting company policies/guidelines, leading to complete chaos. Business rules are the conditions or constraints that define how the business operates and should be analysed alongside business requirements.

What are Business Rules?

According to IIBA,

A business rule is a specific, actionable, testable directive under the control of an organization, which supports a business policy. Business rules are derivable from business policies. A business policy on the other hand, is a non-actionable directive that supports a business goal.

Business rules come from different components: Terms, facts and rules. Terms represent definition; facts build on terms while rules build on facts.

Business rules are a combination of guidelines and inferences that direct how we do business. They are often referred to as “first class” citizens of the requirements world though they are different from, and documented separately from requirements. Business rules are often referenced in requirements documents; managing them in a separate document prevents the need to modify separate portions of the requirements document if changes are made to the business rules. Though business rules are not requirements, they can imply requirements and do constrain the proposed solution.

What Forms do Business Rules Take?

Business Rules are stated explicitly for the understanding of all parties to a process or business. Complex business rules are usually documented using decision tables. Business rules may also be implemented in a rules engine or expert system. Though they are mostly implemented through technology, they are not the result of the hardware or software that supports them.

Business rules can relate to:

1) Access Control Issue: Only the Marketing Director can approve sales forecasts

2) Policy: Eliminate any product with < 5% contribution to the business after its first 5 years

3) Calculation: Minimum buffer stock is calculated as 10% of monthly sales forecast

Qualities Every Business Rule Should Have:

  1. Business rules should be atomic. They should be expressed in a format as granular and declarative as possible. A business rule should be framed as an atomic statement that defines a term, fact, constraint or derivation.
  2. Business rules guide the flow of the process or how the system works. A business rule should be separated from the process that implements it. Roger Burlton recommends that BAs should "separate the flow from the know”, meaning the process should be separated from the business rules. This ensures that changes to a business rule can be made without changing the associated process. Rules are not process or procedure and should not be contained in them.
  3. Business rules only become active or legit when stated explicitly. They should not reside in a person’s head but be clearly stated using an understandable format.
  4. Business rules should be actively managed. They are vital business assets and should be ready for re-use when needed.
  5. Business rules should be documented independently of the who, when, where and how of their enforcement.
  6. Business rules should be numbered for easy identification and traceability.
  7. Business rules should be documented with attributes such as: Name/description, example, source, related rules, revision history and version number, where available.
  8. Each business rule should be about only one thing – that is, it must be cohesive.

Example of a Business Rule

Who is a Business Rules Analyst?

Business analysts may be required to elicit and analyze business rules. There is however, a specialist business analyst role dedicated to business rules management and analysis: Business Rules Analyst.

A Business Rules Analyst may be required to:

  1. Analyze, design & implement business rules that drive an organization and its operations
  2. Understand how business rules are determined, enforced, documented and managed
  3. Map business rules to the processes guided by them
  4. Update business rules to reflect organizational changes
  5. Verify which rules will be affected by certain organizational changes
  6. Manage risks that may interfere with the implementation of business rules

Business rules are easier to analyze when documented and managed separately from the processes that enforce them. On the downside, business rules can be contradictory and may produce unexpected consequences when combined together. Business rules should however, be constantly maintained to ensure they remain relevant to the business.