BizRules Blog

Documenting business rules is a good first step on the path towards the business rules approach.

But sometimes that's not enough.  Taking the next step and getting to the next level requires simulating business rules so they are easy to review and verify.

Over the past few months BIZRULES has been working on a new product that lets us do both. It's a visual tool that lets us not only draw diagrams of business rule models, it also lets us simulate the rule logic. This tool helps us speed up the rules harvesting process and improves the quality of our rulebooks.

BIZRULES® RuleMap™ is an interactive rulebook that models business rules and simulates business logic.  This logical model lets you see how your business rules really work. It lets you visualize the Reasoning Chain™ that leads to smart conclusions and right decisions.

We use this tool to document your business rules independent of any BRE - yet it can be implemented using any BRE. Again, this is a logical model of your business rules.  It can be used as the rulebook or specs for authoring the rules in any BRE.

Take a look at a sample RuleMap. And let us know what you think. Contact us for pricing or a web demo.

 

 

Posted by Ask Rolo at 02:03 PM Filed under Analyst, Architecture, BIZRULES, BPM (Process Mgmt), BR 101, BRE / BRMS, BRE / BRMS Vendors, BRM (Rule Mgmt), Best Practice, Business Domain / Industry, Decisioning, FIC, Haley, IBM, ILOG, InRule, Lessons Learned, MSFT, PEGA, Press Release, Rule Examples, RuleMap | | Permalink | Comments (0) | TrackBacks (0)

Say hello to Enterprise Decision Management, or EDM for short. EDM is the new buzzword that business rules folks are buzzing about lately.

It sounds like it was dreamed up by marketers to put a new spin on something that great companies have been doing all along, albeit probably manually. In fact, it’s a great acronym invented by James Taylor, Vice President of Enterprise Decision Management at Fair Isaac, to describe what their customers were essentially doing with Fair Isaac’s Blaze Advisor rule engine: Building smart rule-based systems to manage and automate decisions.

It turns out that all sorts of companies are using business rule engines to build EDM applications. James just figured this out first and gave it a great name. By now many of the leading BRE vendors are probably updating their marketing materials with the EDM buzzword.

(shameless plug – I just added EDM to the BIZRULES website in the decisioning solutions page.)

James just published a new book, along with co-author Neil Raden, about EDM and their ideas for building smarter systems. I had an opportunity to chat with James recently and interview him about his new book called, appropriately enough, Smart (enough) Systems. (see http://www.smartenoughsystems.com/wp/main) 

BIZRULES: Tell us about your new book, Smart (enough) Systems 

Taylor: The book is being published by Prentice Hall Professional, and it describes how companies can use the computer-based systems they have in place rather than purchasing new ones to build smarter systems - and how these systems can help companies thrive through Enterprise Decision Management.  

Continue reading "Interview with Fair Isaac VP James Taylor on EDM and Smart (enough) Systems" »

Posted by Ask Rolo at 02:43 PM Filed under A.I., BRM (Rule Mgmt), Decisioning, FIC, Quotes | | Permalink | Comments (0) | TrackBacks (0)

James Taylor over at Fair Isaac has a really good list of "Why business rules?" I agree with most of the points, except the stuff about expert systems.

Maybe the question should be "why not expert systems?"

The dirty little secret is that a lot of the rule engines out there were originally called "expert systems" or "inference engines", then they were called "business rule engines", and today they are known as "business rule management systems. (See the business rules hype cycle)

Of course, everything is better today. And faster. And connected. When expert systems first came out, the Web wasn't even born yet, and PCs were running at 10 mHz. 

The biggest problem we had at Mobil Oil between 1988-1994 when we were building the Global Expert System Strategy and Lube Knowledgebase Strategy was making and mailing floppy disks to all our affiliates.

I remember one day we were showing the customer (an executive in Mobil Marine division) a demo of the expert system, his comments were:

1. This is like an intelligent checklist, it never asks un-needed or dumb questions!
2. I like that I can click on an underlined word (a hyperlink) and popup a definition, photo, go to the next page, or whatever!
3. This is not like our other DOS or mainframe apps. Our users will not like the fact that this works on a "one page at a time" metaphor,
4. because we're forcing users to fill out information or answer questions on the page (screen), then they have to press enter to go to the next page (screen).

That one page at a time metaphor he described was basically how the World Wide Web works. We were doing this in a business rule engine (BRE), aka an expert system (ES) in 1988. Before WWW. Before Windows.

(Want proof, go here and click on the photo on the right. There's a picture from back then, in my younger days... the program on the PC behind me is 1DirPlus or something like that.... Definately B.W. Before Windows). And so back then we built expert systems that did reasoning, chaining, hypertext / linking, and of course inferencing. Basically they would fire rules exactly the same way a modern rule engine would today. And give the same answer the expert would give,

Even after the experts retired long ago!

We did that in AION. We could have used Neuron Data (which evolved into Fair Isaac Blaze Advisor), or we could have done it in ILOG. Or any number of other ES tools at the time. Some of them are still around today. (See BRE Family Tree)

Distribution of expert systems, and access, is one of the reasons they "never took off". People used to say expert systems were a solution looking for a problem. Deploying expert systems on the web solves those problems.

I think the Web is "the problem" that expert systems were looking for. The Semantic Web is reigniting a lot of the good stuff from the AI/ES days. Adding intelligence and reasoning to applications is what expert systems have been doing all along.

And by the way, not everyone agrees that expert systems never took off. I certainly don't.

As Richard Barfus, CEO of MindBox, (an ES/BRE/BRMS firm) likes to say, "Expert systems didn't really go away. They went undercover."

 

Posted by Ask Rolo at 08:04 PM Filed under A.I., BR 101, BRE / BRMS Vendors, Benefits / ROI, Brain Drain, Decisioning, Energy, Oil & Gas, Expert System, FAQ, FIC, ILOG, Inference Engine, KM (Knowledge Mgmt), Quotes | | Permalink | Comments (2) | TrackBacks (0)

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:

 

(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:

(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:

 (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

 

Continue reading "Best Buy, Bogus Prices: Confusion about pricing rules reveals need for business rules management" »

Posted by Ask Rolo at 03:34 PM Filed under Architecture, BR 101, BRE / BRMS, BRM (Rule Mgmt), Benefits / ROI, Best Practice, Business Mistakes, CEO, CIO, Challenges, Compliance (SOX, etc.), Decisioning, E-Commerce Rules, Lessons Learned, Pricing & Discount Rules, Retail Rules, Revenue Recognition, Rule Examples | | Permalink | Comments (0) | TrackBacks (0)

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

Continue reading "Best Buy + Secret Website = State Investigation of Best Buy Sales Rules" »

Posted by Ask Rolo at 11:46 AM Filed under BRM (Rule Mgmt), Business Mistakes, CEO, Compliance (SOX, etc.), Decisioning, E-Commerce Rules, Lessons Learned, Pricing & Discount Rules, Quotes, Retail Rules, Rule Examples | | Permalink | Comments (0) | TrackBacks (0)

Macro decisions are strategic or tactical decisions. I like to call them million dollar decisions. Examples of macro decisions that can be automated using business rules:

• What is the best product that we should recommend for this customer?
• What is the best solution for this situation?
• What is our underwiting strategy and policy?
• What is our refund policy?
• What is our pricing strategy for next year?
• What is our discount policy this year?
• What promotions should we run?
• What should we do to improve improve yields and revenue?
• Where should we locate the new store?
• Where should we build the plant?
• Where should we build the product?
• Where should we hire the employees?

• What Legal Entity structure should we use for this company?
• What Legal Entity should we use for this contract?
• Should we create a new legal entity for this deal?
• What is the best way to structure this deal?

• How do we design this plant so as to prevent and contain fires? How do we clean up this oil spill?
• How do we minimize tax and maximize revenue for this contract?
• How should we record these types of accounting transactions?
• How do we calculate this quarter's tax provision?
• How do we solve this customer's mission critical problem right now?
• How do we troubleshoot this problem?

Thanks to James Taylor at the EDM blog for the idea for this list. If you have any others you'd like to add to the list, please add your comment below.

See also:

• Who makes macro decisions
• Micro decisions (a million little decisions)
• Think Micro not Macro - decisions, that is (EDM blog)

Posted by Ask Rolo at 08:40 AM Filed under Decisioning, Glossary | | Permalink | Comments (1) | TrackBacks (0)

Micro decisions are operational decisions. I like to call them a million little decisions. Examples of micro decisions that can be automated using business rules:

• Is the customer eligible for the product?
• Is the customer eligible for the promotion?
• What discounts is the customer entitled to?
• What should I up-sell right now?
• What should I cross-sell right now?
• What is the highest available commission (HAC)?
• What is the lowest available fare (LAF)?
• What credit card does the customer prefer to use?
• Do I have all the information I need to save this record in the system?
• How do I work-around the bug or limitation in the system?
• Who should we assign as the company contact person for this sale?

Thanks to James Taylor at the EDM blog for the idea for this list. If you have any others you'd like to add to the list, please add your comment below. See also:

• Who makes micro decisions
• Macro decisions (million dollar decisions)
• Think Micro not Macro - decisions, that is (EDM blog)

Posted by Ask Rolo at 08:09 AM Filed under Decisioning, Glossary | | Permalink | Comments (1) | TrackBacks (0)

Every company has Subject Matter Experts (SMEs). But great companies also have what I call Super Experts.

Everyone knows who the Super Experts are: They are the people that even the Subject Matter Experts call when they need help making a decision. They are the people that lead executives to seriously wonder, "what do we do if Peter gets hit by a truck?". Super Experts are the "brains" behind key, complex, and high-value decisions.

Subject Matter Experts

Subject Matter Experts are the people who make a lot of decisions in a little bit of time. These are microdecisions. SMEs seem to know a lot about a few topics.

SMEs could easily make hundreds or thousands of microdecisions in a day. Yet each decision is a crucial step in a larger process, such as building a product, making a sale, or taking a reservation. And each microdecision is crucial: A mistake at any point in the process will make the entire entire product, service or process defective.

Microdecisions are things like:

• Is this customer eligible for this particular product?
• What discounts is this customer entitled to for this particular transaction?
• What is the commission for this booking?
• What should I up-sell to this customer?
• What should I cross-sell to this customer?
• Do I have all the information I need to save this record in the system?
• How do I work-around the bug or limitation in the system?
• Who should we assign as the company contact person for this sale?
• Does the customer want window or aisle?
• Does the customer want a double bed or king bed?
• What credit card does the customer want to use?

Super Experts

Super Experts are the rare individuals who solve the toughest problems in the company. They routinely make complex decisions, and they make it look easy. Their phone is constantly ringing. A Super Expert is the only one in the company who has the knowledge, experience, and expertise to make the right decision every time. Instead of making a hundred microdecisions a day, the Super Expert worries about making one big decision. Super Experts seem to know everything about lots of topics.

Super Experts may only make one decision a day. They may take a few days, or even weeks, to make an final decision. But each decision can save the company millions of dollars. Each decision can determine how thousands of transactions will be handled, and how millions or dollars will recorded in the books.

I'm talking about bottom line decisions... million dollar decisions like:

• How do we solve this customer's mission critical problem right now?
• What is our underwiting strategy and policy?
• How do we design this plant so as to prevent and contain fires?
• How do we clean up this oil spill?
• Where should we build the plant?
• Where should we build the product?
• Where should we hire the employees?
• What will our price program structure look like next year?
• What will our discount policy be next year?
• What promotions should we run?
• What do we do to improve improve yields and revenue?
• Should we create a new legal entity for this deal?
• What Legal Entity structure should we use for this company?
• What is the best way to structure this deal?
• How do we minimize tax and maximize revenue for this contract?
• What Legal Entity should we use for this contract?
• How should we record these types of accounting transactions?
• How do we calculate this quarter's tax provision?
• What is the best product or right product that we should recommend for this customer situation?
• How do we troubleshoot this problem?

Who are the Subject Matter Experts and Super Experts in your company?

If you are going to work on a business rules management project, one of the first things you need to do is identify who the true Subject Matter Experts and Super Experts are. You need to work with and elicit knowledge from both types of experts in order to succeed.

Posted by Ask Rolo at 02:39 AM Filed under Decisioning, FAQ, SME | | Permalink | Comments (0) | TrackBacks (0)