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April 15, 2012

Three Simple Rules for Titanic Fans

In 1492 Columbus sailed the ocean blue.  Every little child knows that three ships set sail to discover the New World. But did you know that only two ships survived the return trip?

The Santa Maria ran aground off the coast of Haiti on Dec. 25, 1492 and was destroyed. Columbus learned his lesson and the Sailing Rulebook was born.

420 years later Titanic sailed into an iceberg and the rulebook grew. 

100 years later Costa Concordia and Captain Schettino forgot Rules 1 and 2.

Titanic Rulebook

http://10simplerules.com

 

 

 

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October 05, 2010

The Knowledge Supply Chain

It was quite an honor giving a joint presentation yesterday with John Zachman & Leon Kappelman at SIMposium 2010 in Atlanta, GA.

I presented a case study on "Building Mobil's Knowledge Base and Knowledge Supply Chain." We talked about how Enterprise Architecture and Knowledge Engineering helped preserve, share, and automate The Knowledge of the corporation.

This was the right time to introduce new ideas we've been working on with customers for a while.

  • The Knowledge Wars™
  • The Knowledge Supply Chain™
  • BIZRULES® RuleMart™
  • BIZRULES® RuleMall™
  • BIZRULES® KARMA (sm)
  • Ruling The Cloud (sm)

You'll hear more about this at RulesFest next week

You can hear more about these ideas, plus get the technical version of this case study, next week at RulesFest 2010 in San Jose, CA. 

SLIDES:  http://www.bizrules.com/library/KnowledgeSupplyChain_forSIM2010_byRolandoHernandez.pdf
SLIDES SHORT LINK:  http://bit.ly/93t7kq
TWITTER:  @BizRulesInc  #BIZRULES | #simposium2010 | #rulesfest  www.Rulesfest.org

May 07, 2010

Terrorists are Coming To Town

Terrorists are coming to town.

 

We better watch out
We all might die
Stay home don't go out
I'm telling you why

Terrorists are coming to town.

 

TSA's making a list,
Airlines aren't checking it twice;
We'll never find out Who's naughty or nice.
Terrorists are coming to town.

 

Wall Street's closed when you're sleeping
Drops 1,000 points when you're awake;
Some rule fool trades 16 billion shares
instead of 16 million.
So be good for Goldman's Sake!

 

Rule Fools are running Wall Street.
Rule Fools are running this town.

 

No more need to worry
Cause Rules are coming to town.
Cause Principles are coming to town.

 

O! We better watch out!

BP is gonna try,
To stop the 5,000 feet underwater oil spout

By giving a containment dome a try.

 

I know their Experts have
The Knowledge to fix it.
One day we'll know

Why the Blowout Preventer blew it.

 

Rule Fools are running Wall Street.
Rule Fools are running this town.

Terrorists are coming to town.

Terrorists are coming to town.

 

BP Oil Containment Dome   Blowout Preventer (US OSHA)

 


© Rolando Hernandez 

Please use Twitter hashtag #RULEFOOL for this post
Follow me on Twitter username @BizRulesInc

 

Check out Ten Rules for Restoring Trust in Wall Street, BP, TSA, Airlines... and anyone else who wants to do business in this town!

 

September 17, 2009

Business rules drag Orbitz down to Earth

Orbitz just lost its cool.

I just booked a roundtrip flight from Dallas to Atlanta. The outbound flight is at 5:30AM CDT. The return flight is at 4:05PM EDT. Each flight is about two and a half hours long.

But according the Orbitz' email confirmation:

  1. This is an overnight flight.
  2. This flight arrives two days later.
  3. This flight arrives on the previous day.
  4. This flight arrives two days prior.
  5. This flight departs from a different airport.
  6. This trip starts and ends at different airports.  (see the rest of the email text below)

WOW! There is just way too much information here to absorb. I need to take this one step at a time so it can really soak in.

First, "this is an overnight flight." Do you know if you have to pay for pillows and blankets nowadays?

Second, "this flight arrives two days later." Apollo 11 took four days to get to the moon. (July 16-19, 1969)

Third, "this flight arrives on the previous day." Now that I can believe! Believe it or not, that would be the second time this ever happened to me. Once I flew out of Tokyo at night on my birthday. I arrived in Hawaii in the morning, on my birthday. The International Date Line is cool that way. (see http://bizrules.com/resumes/rh_mobil_story.htm

Fourth, "this flight arrives two days prior." Back to the Future. Sounds like a good time to buy some stocks before takeoff.

Next, "this flight departs from a different airport." I hope they have a fast shuttle bus.

Finally, this trip starts and ends at different airports. I guess that message is OK. The main reason I booked this trip is to get from one city to another. So this message is technically correct. I've never seen this message before in Orbitz email confirmations, so this could be a new system enhancement to improve customer service: it's good to let customers know that they will land in a different place than where they took off from. That's all good. So that's not really a bug. It's more like a feature.

This automated email has 5 or 6 mistakes, depending on whether you think #6 is a bug or a feature. Actually 10 or 12 mistakes, because the messages were listed for each flight. That's not good.

Orbitz has a business rule problem. Somewhere in the system, rules are missing or they are just plane wrong. Orbitz needs to improve their business rules management system. Orbitz needs to figure out what their business rules are and what they should be. They need rules that are correct, complete, compliant, consistent, clear, and concise.

That's what Orbitz needs. And what Orbitz customers deserve.

Rolando Hernandez, CEO, www.BizRules.com


NOTE: Below is an excerpt of the Orbitz email

=================================================
Your Travel Document

Hello ROLANDO,

Thanks for traveling with Orbitz. This e-mail confirms the ticket number(s) issued for the "Atlanta <DepartureDate>" trip.

<DepartureDate>
Delta Air Lines # 1912
 
Dallas/Fort Worth International (DFW) to Atlanta Hartsfield-Jackson ATL (ATL)
Departure (DFW): <DepartureDate>, 5:30 AM CDT (morning)
Arrival (ATL): <DepartureDate>, 8:48 AM EDT (morning)

 This is an overnight flight.

 This flight arrives two days later.

 This flight arrives on the previous day.

 This flight arrives two days prior.

 This flight departs from a different airport.

 This trip starts and ends at different airports.

<ReturnDate>
Delta Air Lines # 67
 
Atlanta Hartsfield-Jackson ATL (ATL) to Dallas/Fort Worth International (DFW)
Departure (ATL): <ReturnDate>, 4:05 PM EDT (afternoon)
Arrival (DFW): <ReturnDate>, 5:34 PM CDT (evening)

 This is an overnight flight.

 This flight arrives two days later.

 This flight arrives on the previous day.

 This flight arrives two days prior.

 This flight departs from a different airport.

 This trip starts and ends at different airports.
=================================================

Update 1: An Orbitz customer service rep said this was due to Delta merging with Northwest. The inventory data from Delta is messed up she said. I wonder how many people received these warnings and error messages.

Update 2: A good place to go for more information on business rules management and rulebase techology is www.rulesfest.org

 

September 25, 2008

Ten Rules for Wall Street

Ten Rules for Wall Street

What are the rules? Did people break the rules, bend the rules, or ignore the rules?

Confidence in Wall Street went down the drain last week. The credit crisis gave business a bad name, and it gave government a bad name for not doing anything about it. Trust disappeared. 

It's time to rebuild trust in business and government.

Here are ten rules for restoring trust in business and government. These rules apply to everything from the global financial system, to Wall Street; from federal governments to local jurisdictions; from global corporations, to organizations and small businesses.

Companies that learn to define transparent rules that are sensible, consistent, easy to understand, and easy to follow will be easy trust. On the other hand, companies that rely on opaque rules that are complicated, confusing, illogical, inconsistent, or deceptive will be hard to trust. They will go out of business.

Rule 10 - Have guiding principles. Act on principles, independent of influence by greed or friends.

Rule 9 - Follow policies and guidelines about what is permissible and what will not be tolerated.

Rule 8 - Establish rules of behavior concerning what is right and wrong. Success in business depends on understanding the rules. The rules of the business are the way the business really operates. Design transparent rules that are logical, sensible, easy to understand, and easy to follow.

Rule 7 - Leverage knowledge and judgment. Know what you know, and know what you don't know. Document and retain what your experts know and how they think so their knowledge can be shared with those who need to know. Use wise judgment. Know when to follow the rules, when to bend them, and when to forget them.

Rule 6 - Make smart decisions informed by facts, rules, knowledge, principles, and judgment. Decide using clear, logical, and unbiased rules that explain each decision clearly. Use sound reasoning to make rules-based, principles-based, and knowledge-based decisions.

Rule 5 - Create enterprise architecture to deal with change and complexity. Use architecture to simplify complexity, and to understand how the whole business and the whole system works; Understand who, what, when, where, why, and how. Design the architecture to ensure that all the parts fit (interoperability), connect (integration), work (quality), work as intended (alignment), last (reliability), and can be shared (reusability). Design the architecture so the business can handle increases in complexity and increases in the rate of change (flexibility). Design the architecture to reduce time-to-market and reduce operating costs. Design the architecture to support rules-based and principles-based compliance.

Rule 4 - Do the engineering, to design systems that work, change, and last. Apply architecture and engineering design principles to ensure alignment, flexibility, quality, interoperability, integration, reusability, reliability, compliance, reduced time-to-market, and reduced costs. Build in risk management safety factors so the business and the systems can handle extreme stresses and excessive loads.

Rule 3 - Have a clear vision. Stand for brand.

Rule 2 - Instill confidence. Improve the quality, consistency, and accuracy of decisions and actions.

Rule 1 - Build trust. Align actions, decisions, and transactions with management's intentions. Align execution to goals, strategy, and mission. Align systems to business. Align implementation to intention.

Sept. 25, 2008   Rolando Hernandez   BIZRULES

Principles are Coming

Principles are Coming

More judgment and knowledge needed

While the finance industry is moving toward more rules and exceptions, and rules-based regulation, financial accounting and reporting is moving in the opposite direction, towards fewer rules and exceptions. Accounting and tax is moving towards more principles-based regulation.

The US is moving away from GAAP (Generally Accepted Accounting Principles) and towards IFRS (International Financial Reporting Standards). IFRS is the reporting framework used by most of the world today, and it has growing support in the US. IFRS relies on professional judgment rather than detailed rules. Under this principle-based approach, management will have a mandate and obligation to exercise its own best judgment when making decisions.

Companies will need to implement systems that use knowledge and judgment to make principle-based decisions.

It is time to adopt knowledgebase technology and knowledge management. It's time to build knowledge bases and embed knowledgebased technology into operations and existing systems.

Knowledgebased systems that are engineered and architected properly can

  • follow principles and guidelines
  • automate management's best judgment
  • ensure compliance
  • and deliver trust. These expert systems can be trusted because they use expert judgment to make the same decisions top experts would make, thus improving the quality, accuracy, and consistency of decision-making.

I don't believe there is any other practical or proven way of automating human judgment, other than building intelligent, knowledge-based systems.

Knowledgebased systems are the solution for principle-based compliance.

Rules are Coming

Rules are Coming 

More rules and regulations are coming

To restore trust in the financial system, the government is moving towards more rules and exceptions, and more rules-based regulation. The trend towards de-regulation is over. Regulatory reform is coming back. That means more rules and regulations than ever before.
 
Management will have an obligation to follow the rules and laws when making decisions. These decisions better be consistent, correct, complete, and compliant if you really want to stay in business. 

Companies will need to implement systems that follow the rules and make rule-based decisions.

It's time to adopt the business rules approach and business rules management. It's time to build rulebases and embed rulebase technology into operations and existing systems.

Rulebased systems that are engineered and architected properly:

  • follow the rules
  • automate management's decisions
  • ensure compliance
  • and deliver trust. Rule engines can be trusted because they implement the decisions management intended.

Rulebased systems and business rules management are the solution for rule-based-compliance.

Sept. 2008 credit crisis

On Sept. 10, the world's largest particle collider and atom smasher was turned on for the first time. Skeptics warned that the Large Hadron Collider, a 17-mile circular tunnel under the Swiss-French border designed to smash protons so they shatter and recreate the Big Bang, would create a black hole inside the Earth. 

In a world where homes could go down the drain and disappear into a black hole, the mortgage mess and global credit crisis seemed trivial in comparison.

Four days later, on Monday Sept. 15, the credit collider smashed Lehman Brothers to bits. Lehman filed for bankruptcy and instantly disappeared into the credit black hole. 

By Thursday Sept. 18, the black hole threatened to collide and smash U.S. financial markets and the entire global financial system. Then the federal government stepped in and turned off the collider with a $700 billion proposal for the largest bailout plan in U.S. history. 

One week later, on Thursday Sept. 25, the plan is still up in the air. Congress is debating the plan. President Bush just met with Sen. McCain and Sen. Obama. The world is rapidly losing trust in the U.S. German Finance Minister Peer Steinbrueck said "The United States will lose its superpower status in the world financial system. The world financial system will become more multipolar," he said.

Thursday night, Washington Mutual disappeared into the black hole, becoming the biggest bank failure in U.S. history. The government seized WaMu, took it over, and sold Wamu's $307 billion of assets to J.P. Morgan Chase for $1.9 billion.

"A crisis of confidence without precedent is shaking the global economy," French President Nicolas Sarkozy said in a speech in Toulon, France.

Toulon is close to the Large Hedron Collider, where this whole thing started. Could someone forward this message to President Sarkozy: Please shut down the collider!

 

Here are some photos inside the LHC tunnel, and in the control room on LHC First Beam Day:

LHC mission control  LHC atom smasher

LHC operators  LHC monitors

Images by Maximilien Brice    copyright CERN

 

March 27, 2008

Breaking the Rules: Suspicious bank transaction rules led to Spitzer resignation

Business rules triggered by Eliot Spitzer's suspicious money transfers led to his resignation as Governor of New York..

Spitzer broke these rules

The Justice Department says Spitzer is likely to be charged with a relativley obscure statute or rule called "structuring". Even people who know the rules break the rules. It all started a few months ago when a bank in New York followed the rules for filing a Suspicious Activity Report. It ended with his resignation last week.

To help understand the rules that "fired" Spitzer, we created an interactive business rule model of SAR rules. The rules are on www.RuleMap.com. This is a new website we created for demonstrating our interactive BIZRULES® RuleMap™ rulebooks and business rule models.

A picture is worth a thousand words. We beleive this RuleMap makes it easy to understand the rules that Spitzer broke.

March 16, 2007

Best Buy, Bogus Prices: Confusion about pricing rules reveals need for business rules management

If employees don’t know, don’t understand, or don’t care what the rules are, you have a business rules problem.

If customers get different answers depending on who they talk to, you have a business rules problem.

If salespeople can decide whether to charge the right price or a bogus price, you have a business rules problem.

Best Buy, the nation's largest electronics retailer, has a business rules problem.

It's also dealing with a public relations nightmare, and an investigation by the Connecticut Attorney General's Office.

Pricing rules used by salespeople in Best Buy stores are inconsistent and contrary to Best Buy pricing policies established in the boardroom. “What we've learned very quickly is we have not been clear enough in communicating to our employees the policy, and how to execute it in our stores,” said Dawn Bryant, spokeswoman for Best Buy.

Success in the world of business depends on understanding the rules,” I said recently during a panel discussion on Sarbanes-Oxley compliance.

“You need to know the internal rules and policies of your business. You have to comply with the external rules and regulations that govern your business, industry, and function. Your company must ensure that rules are followed. Your company must enforce the rules. Your company must give staff tools to help them follow the rules, make legal decisions, and prevent them from making illegal decisions. Business rule management systems (BRMS) and business rule engines (BRE) help companies comply with rules and regulations like SOX.

If you don’t have a rule engine that automatically prevents employees from breaking the rules and instantly detects and prevents fraud, you’re out of the game. You’ll end up watching your stock go from $30 to $3 during lunch. You lose. You’re out of business.

Smart companies are using business rules to ensure compliance with rules, to enforce rules, to increase agility so they can change faster, to prevent business mistakes, and to reduce IT system development costs by changing rules in days not months.

Business rules technology helps business comply with rules and regulations, helps employees follow the rules, and prevents employees from breaking the rules (either accidentally or on purpose).”

Business rules management is the prescription for business rules problems. Business rules management entails everything from the business rules approach to business rules technology. 

The business rules approach helps companies transform complex policies into easy to understand business rules. What better way is there to clearly describe and communicate policies and business rules to employees?

Business rules technology helps companies execute the right business rules at the right time every time. What better technology is there to automate business rules?

What happened at Best Buy is a great example of what can go wrong when business rules are not designed and engineered properly.

Business rules are like the glue that holds together all the parts of the corporation. Business rules integrate and align all the moving parts of the corporation. With business rules management, Best Buy can ensure that rules and processes used in the stores are aligned with Best Buy pricing policies defined in the boardroom.

Without business rules management to connect the elements of the corporation, the only way to ensure the corporation works as intended is to "hope and pray," as John Zachman likes to say. With weak or wrong business rules, the corporation falls down like a house of cards.

This is why business rules management is vital to the corporation.

Business rules management is not just about documenting business rules, defining who the owners are, and deciding who is authorized to change them. It’s not just about using rule-based languages to speed up system development instead of hard-wiring rules in legacy code. It’s not just about selecting a business rules engine. It’s not just about understanding the company’s strategies, policies and business practices, and then transforming those objectives into rulebooks, descriptive business rule models, IT specifications, and finally into automated systems.

Business rules management is also concerned with architecting and engineering the business rules so they are integrated with the rest of the business. This helps ensure that the implemented business rules that are in actual use, whether automated or manual, align with the governing rules and strategies of the business.

What happened at Best Buy?

At first, I thought the Best Buy pricing problem was complicated and hard to explain. Then I wondered how can business rules help solve this problem? What would BIZRULES do if Best Buy came to us for help?

That’s easy. I like to draw pictures to simplify complex ideas. By removing the complexity, pictures help me make even the most complex concepts easy to understand:

BIZRULES Analysis of Best Buy Pricing Rules 

(Click to see medium or large slide)

This is an example of three business rules that were apparently in operation at Best Buy when this story broke. Of course, we really don't know the rules were, so this is just a good guess based on published news accounts of what really happened.

Along with a picture of the rules, this slide shows how the rules affect the rest of the company. It also shows how the rules satisfy business rules management objectives, and business rule engineering design objectives:

Rule #1 is a conceptual explanation of the pricing policy to honor the lowest price.

  • This rule tells us what management means and what their intentions are.

Rule #2 is a logical description of the corporate policy to honor the lowest price:

  • This business rule clearly shows alignment to corporate strategy.

  • This is the high quality rule prescribed by the pricing strategy.

  • This rule shows integration between online and retail stores.

  • This rule offers reusability – the same rule can be implemented online and in the store.

  • This rule shows transparency.

  • This rule reduces operations costs because it’s easy to follow.

  • This rule demonstrates regulatory compliance.

  • This picture is worth a thousand words.

  • This rule builds Customer Trust Management.

  • This is a “Best Buy” type of rule.

  • This rule is easy to approve, assess, test, and certify.

  • This rule improves governance and controllership.

Rule #3 is used (i.e. prescribed) by some salesman to mislead customers into paying higher prices:

  • This business rule is clearly not aligned to corporate strategy.

  • This poor quality rule is operational and being used in stores.

  • This rule shows discontinuity and inconsistency between online and retail stores.

  • This store rule cannot be reused online because it lacks transparency.

  • This rule increases operations costs because it’s hard to explain and justify.

  • This rule raises questions about regulatory compliance.

  • You need a thousand words to explain this picture.

  • This rule destroys customer confidence and trust.

  • This rule is public relations nightmare.

  • This rule may be illegal.

  • This is a “bait & switch” type of rule.

  • This rule should never have been approved.

  • This rule raises questions about whether proper rules, processes, and controls are in place.


Now that I understand what the current pricing situation at Best Buy is, it seems pretty straightforward:

  • Management intention is Rule #1. This is Best Buy’s pricing policy.
  • Marketing description is Rule #2. This is what marketing thinks is happening.
  • Sales prescription is Rule #3. This is what salespeople are actually doing.
  • IT specification is not applicable in this example because these rules have not been automated. If these rules were automated, an executable specification of the rule (i.e. pseudo code) may need to be developed for the programmer.


These four views of the business rules fit nicely into an Enterprise Rules Architecture.

The next step is to fit these rules into an enterprise architecture framework. I used John Zachman’s influential and compelling Framework for Enterprise Architecture as an example:

The Zachman Framework for Enterprise Architecture

(Click to see medium or large slide)

Next, I overlaid Best Buy Rules #1-3 on top of Zachman’s Enterprise Architecture Framework to add more clarity to the Best Buy pricing situation:

BIZRULES Analysis of Best Buy Pricing Rules (part 2)

 (Click to see medium or large slide)

The pricing problem at Best Buy is that the business rule used by salespeople in the stores contradicts the company’s pricing policy. Clearly Rule #3 is not aligned with Rule #1 or Rule #2.
Business rules confusion is what caused the problem.

Business rules management is the solution.

To get out of this sticky mess, Best Buy needs to:
  • establish or improve their business rules management.
  • prevent salespeople from using Rule #3 immediately
  • mandate use of Rule #2 immediately.
  • automate Rule #2 as soon as possible. Why let salespeople decide pricing at all? Let the computer figure out what the lowest price is.
  • use a business rule engine to automate this rule as quickly as possible. This rule change needs to happen overnight. But changing hard-wired rules in code takes take days or weeks. Often, companies that don’t use rule engines take months to change business rules as simple as these. This is one reason why companies buy rule engines: Changing rules in a rule engine takes minutes.
  • educate salespeople on the pricing rules. Of course, if Best Buy automated the rules using a rule engine, they wouldn’t need to train as much.
  • ensure compliance with these rules from now on.
What about the secret website?

Business rules can also help Best Buy get rid of the secret and duplicate website. It's hard enough to maintain and manage prices for thousands of products on one website, let alone two. There are costs associated with maintaining a duplicate site containing 250,000 pages; surely management and shareholders want to reduce redundant costs like these. One way is to use a business rule engine to eliminate the duplicate site and duplicate effort. Why not write a few rules to show different prices (if that really is management’s objective) depending on whether the salesman pulls up the web pages on the Internet or the "secret website" on the Intranet?

How else can business rules management and business rules technology help Best Buy? Please comment and let me know.

Rolando Hernandez

CEO & Chief Rules Architect, BIZRULES

 

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Best Buy + Secret Website = State Investigation of Best Buy Sales Rules

Best Buy uses a “secret website” in their stores to mislead customers and deny them discounts advertised on BestBuy.com  

On February 9, 2007 George Gombossy, Staff Writer/Consumer Watchdog reporter for The Hartford Courant, wrote this article on how Best Buy salesmen in the West Hartford, CT, and  Newington, CT, stores refused to honor $150 discounts offered on a Toshiba laptop advertised on Best Buy's public website - bestbuy.com.

The salesmen justified their refusal by showing the customer a secret website that appeared to be BestBuy.com. This secret website that they accessed in the store did not have the sales price.

Best Buy spokesman Justin Barber called the reporter back and said Best Buy's policy is to always honor the lowest advertised price, whether from its Internet site or from a competitor.  Barber insisted that "nothing improper was going on and that there was no secret website that virtually duplicates the public site so salesmen can dupe customers."

On February 10, 2007 the Connecticut Attorney General's office started an investigation into whether Best Buy maintains a secret intranet site that may have been used by some salesmen to deny customers discounts that appear on the company's public Internet site. The AG's office office informed Best Buy that he wants answers about its Internet policies and to disclose whether it has an intranet site that could be used to mislead customers. His office will also look into whether other chain stores may be using similar sales practices.

"The key question is whether consumers were advertised one price, and then denied that price when they got to the store," Connecticut Attorney General Richard Blumenthal said last week.  Under pressure from state investigators, Best Buy later confirmed that its stores indeed do have a "secret intranet site that has been used to block some consumers from getting cheaper prices advertised on BestBuy.com."

What happened at Best Buy is a great example of what can go wrong when business rules and processes are not managed properly. At a minimum, this is clearly an example of poor business rules management practices and poor process management practices. At a maximum, executives, employees and the company could be liable for damages.

This situation shows why business rules management is vital to the corporation.

See: Best Buy, Bogus Prices: Confusion about pricing rules reveals need for business rules management

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March 14, 2007

New Power for Management: Business Rules

Understanding and managing business rules is vital to the corporation. It is just as important as managing people, processes, and information.

Nevertheless, business rules are often misunderstood and poorly managed.

Many rules remain unwritten – they are known only to and retained by subject matter experts who sooner or later leave the corporation, causing brain drain. When business rules are written, they are seldom shared and reused throughout the corporation, which increases operating costs. When business rules are automated, they may not be aligned to the business strategies and policies, leading to quality problems.

In order to program business rules, programmers often rely on unclear business rule specifications that are incomplete or incorrect. Then they usually hard-wire the business rules in computer languages that only programmers can understand and change.

Because programmers are not directly involved in the day-to-day operation of the business, they often make assumptions about what the rules are and what management intended. That leads to mistakes or bugs in the programs, which requires further programming and re-programming.

There is a solution.

Some corporations use advanced business rules technology and business rule management methods to take business rules out of IT and bring them back into the business. Now management can finally manage and change their business rules.

Business rules management techniques help management clearly describe and communicate business rules to employees, partners, and customers. Business rule management software helps automate the rules that should be rule-based.

Business rules improve the condition of the corporation. They prevent business mistakes and minimize risk. They solve many critical problems facing business and IT.

Business rules are like the glue that holds together all the parts of the corporation, ensuring that the automated rules align with goals and strategies.

Business rules integrate and align all the moving parts of the corporation into a cohesive enterprise architecture and operating system that works, changes, and lasts.

Business rules give new power to management.

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October 17, 2006

$6 Billion Business Mistake at Airbus caused by Poor Process Mgmt

I like to tell executives that business rule engines help prevent business mistakes. As a matter of fact, I am extremely confident that preventing business mistakes provides enough ROI on its own to justify the investment in business rules management and technology.

So one of my favorite sections in the Business Rules Knowledge Base is where I tell you about real life examples of business mistakes caused by poor rules management, poor process management, and poor knowledge management.
I've just added an entry on a business process mistake that led to a $6 billion profit hit at Airbus. Very interesting reading, at least to me...

Wayward Airbus - Cross-border clashes have led to costly production errors. Job One for a new CEO will be to unify the jetmaker. "Airbus' A380 double-decker jet is two years behind schedule, sending billions of dollars in potential profits down the drain. But the reason sounds too simple to be true: Airbus factories in Germany and France were using incompatible design software, so the wiring produced in Hamburg didn't fit properly into the plane on the assembly line in Toulouse. It's one of the costliest blunders in the history of commercial aviation, and it has plunged Airbus into crisis. Chief Executive Christian Streiff quit on Oct. 9 after only three months on the job...

The delays in the A380 mean EADS will take a $6 billion profit hit over the next four years...

When bundles of the cabin wiring started arriving in Toulouse early this year, assembly slowed to a crawl. Workers tried to make them fit into the fuselage by pulling them apart and rethreading the wires, but that proved to be impractical, and the effort was abandoned. Airbus says it has introduced new software to correct the wiring design, but it will take months for engineers to get up to speed on the new system. That's why Airbus now predicts it won't deliver the first A380 orders until late 2007... BusinessWeek, Oct. 23, 2006

Source: http://www.businessweek.com/magazine/content/06_43/b4006075.htm b4006075.htm
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