If your organisation is serious about digital transformation and streamlining its operations, it should seriously consider business rule automation.
Most organisations have several departments working together to ensure seamless business operations. However, as the business grows it can become increasingly difficult to establish a fair amount of operational understanding between the departments. Needless to say, lacking a well-defined structure, hierarchy or operational rules in a business can result in poor communication, employee errors, low business efficiency, low employee morale and unhappy customers. These issues can be avoided by implementing well-defined and well-understood business rules.
In this article, we share with you why business rules are crucial for an organisation’s day-to-day operations and also highlight the importance of business rule automation for organisations that are aiming for growth and digital transformation. But before we dive in, let’s understand what business rules are and learn about the different types of business rules, along with some common examples.
A set of instructions, regulations, policies and guidelines that helps business leaders and professionals in the decision-making process are known as business rules. The aim of business rules is to support business compliance, maintain consistency and standards, conduct business in a fair manner, prevent errors, streamline operations and help in achieving the set business goals.
Think of business rules as certain conditions or criteria which you can use to assess different pieces of information or make decisions. They are essential for defining how certain processes or operations should ideally be implemented, simplifying business decision-making and ensuring consistent outcomes. Such predetermined choices help increase the efficiency of business processes and improve the productivity of the employees, as they don’t have to waste time making routine decisions.
More often than not, business rules are defined through conditional statements. Once a certain condition is met, it results in a specific set of consequences. Generally speaking, there are two main types of business rules.
Constraint rules check for specific conditions in order to allow, limit, or restrict certain actions. They are further categorised into the following three subgroups
Stimulus and response rules are designed to execute specific tasks or actions only when the specified condition is true. For example: informing a sales manager only when a big ticket product valued at £X gets sold.
Operation constraints are used to control the operations that are supposed to be executed before or after a specific condition is met. For example: adding a salary benefit of £X to any employee who completes 5 years working with the company.
Structure constraints are typically concerned with access control and applying limitations on data access and decision-making, based on the organisational policies. For example: giving access to employee data only to the managerial staff.
Derivation rules are defined to draw an inference based on the available data facts or information. Such business rules are divided into two subtypes: inference rules and computational rules. Organisations implement inference rules to come to a specific conclusion after testing a pre-defined set of conditions. For example: marking a lead as “cold”, if they fail to respond within the first 30 days of contact.
Here are some of the most common examples of business rule implementation:
Invoice processing
Business rules can be set up to determine invoices of which category and size/amount get sent to which managerial staff for necessary approval and/or processing.
Running customer discount/loyalty programs
Business rules are often employed to determine discounts that customers are eligible to receive, based on the sales amount. Similarly, customer loyalty programs rely on business rules to determine the kind of rewards each customer segment gets, depending on their purchase history.
Processing of purchase orders and returns
The retail industry utilises business rules when processing purchase orders and returns. For example, a business can simply reject the return claim of a customer if it’s not submitted within the 30-day window.
Approval of loan applications
Institutions that operate in the real estate and banking markets process applications for rental properties or housing loans on the basis of well-defined business rules. For example, they can reject an application if the credit score of the applicant is below the minimum requirement.
Leave request approvals
In order to approve a leave request, the HR team first verifies the balance of your leaves, out of the total number of leaves you are allowed on an annual basis. Then, the manager needs to ensure your leave request doesn’t overlap with that of others in your team with the same designation, or it could impact team productivity. These types of rules are generally automated to save the time and effort of those involved in leave approvals.
Recommending employees for promotions
To get nominated for promotion inside a company, an employee typically needs to meet specific conditions and qualify on the basis of their level of seniority, years of experience in the current role, skillsets gained, business goals accomplished etc. Such conditions can be implemented as business rules that can help team leaders identify which employees are ready for promotions.
Allotment of employee performance bonuses
Many organisations hand out commissions and conditional bonuses to their employees, based on their performance in the workplace. Implementing constraint rules is a good choice for such a scenario.
Personalisation of user interface
Webmasters, application developers and digital marketers often create different user interfaces for each user segment, in order to leverage gamification and navigate their user experiences differently. This is easily done by automating the business rule implementation, on the basis of attributes associated with each user segment.
Activation and deactivation of subscription services
One of the most common examples of business rule implementation is the activation and deactivation of subscription services on the basis of the payment status of each customer account. If a customer’s payment is overdue by a certain number of days, their subscription can be cancelled.
Now that we have a better idea of what business rules are, let’s learn about business rule automation and how it can enable business transformation.
The implementation of business rule management systems in the organisational workflow, in an effort to automate day-to-day business decisions, is known as business rule automation. Once business rule automation has been implemented, the business rules can be changed centrally and get reflected in the associated business processes as soon as they are updated.
To set up business rules management systems, you need to create detailed visual representations of workflows and processes conducted in your day-to-day business activities. When you do this, it becomes easier to identify the critical processes and tasks that support your business operations and then pinpoint inefficiencies wherever they exist. As a result, you can accelerate critical tasks, make business processes more efficient and improve the overall productivity of your organisation. Apart from this, it’s relatively straightforward to update the existing business rules and make changes to any company standards or regulations in the business rule engines, instead of manually updating the various pieces of documentation individually and informing all the staff members to take note of the changes.
Automated business rules are a great tool for assisting business professionals in making better decisions. When you let the business rule engines and the automated systems analyse the various crucial pieces of complex information on your behalf, it becomes easier for you to make difficult decisions without putting in the additional time and effort required for research and fact-checking.
Automated business rules can be used to maintain certain standards for quality assurance and employee performance, among other things. Since automation will ensure that business rules are executed in a consistent manner every time, setting a business rule automation can help your organisation maintain compliance with certain regulations and achieve the expected outcomes.
Sometimes, business rules overlap and the pre-requisites for decision-making can be seemingly complex. In such situations, it can become difficult to ensure all the business rules have been taken into account before arriving at a decision, manually, especially if several teams are involved in the same process at the same time. When you automate business rules and specify the conditional statements in the business rule engines, you significantly reduce the need for human intervention in the decision-making process, thereby also greatly reducing the level of complexity of the problems.
The higher the need for human intervention in the decision-making process, the greater the degree of error expected in a process. When you implement business rule automation, the business rule engines check the conditional statements and derive inferences on your team’s behalf, which results in far greater accuracy in terms of decision-making and a near-zero degree of error.
Given the critical role business rule automation plays in assisting teams in improving decision-making and reducing inefficiencies, it should be one of the core initiatives in an organisation’s digital transformation strategies. It enables businesses to become more agile and isolate their established business logic from their flexible process logic. With that being said, organisations need to refrain from hard-coding their business rules and correctly establish, document, and automate their business rules, in order to take advantage of the complex business rule modelling capabilities that are offered by business rule management systems.
If your organisation is serious about streamlining its operations, documentation, business processes, and other critical organisational activities, our automation and digital transformation solutions are just what it needs. To learn more about our best-in-class, enterprise-grade automation solutions and other managed IT service offerings, contact us today!
