Business Rules Case Study – Part II

In part one of this case study,  I  discussed questions like:

  1. Why are Business Rules necessary?
  2. What exactly is a Business Rule?
  3. What should happen if the data fails a Business Rule?

I would like to thank the following people for contributing to the discussion to date:

Jim Harris @ocdqblog shared his experience on data migration and data integration projects, and concluded “Sadly, the most common problem was that no business rules were defined at all and the data would be blindly migrated or integrated without even at least some superficial validation checks.” more here.

In Henrik Liliendahl Sørensen’s @hlsdk experience, Business rules divide into External and Internal Business Rules:

  • “External rules that are defined outside your organisation – mostly laws and other regulations you must follow when doing business in a given country (or group of countries like the EU).
  • Internal rules that are defined by and for your business alone – made to make your business competitive.” more here.

Marianne Colwell @emx5 shared recent wins on the project she is currently working on, in which they have captured business rules in a requirements management repository, more here.

Phil Allen would like to know what the most popular choices of software are for handling the recording of Business Rules and what experiences people have had more here.

In part two, I plan to explore:

I will continue to use a case study from an Anti Money Laundering (AML) programme.  However, in my experience, all data migration / data population projects face the same challenges.

What controls should you have in place to manage Business Rules?

In Sarbannes Oxley (SOX) terms: “If it’s not written down, it doesn’t exist”.  In my experience, you need the following controls to manage business rules:

  1. Business owner (Business responsibility)
    There must be a defined business owner (business area) with responsibility for the data item, and for the business rule(s) relating to it.  The definition must include details of who to contact (the title of a person) with queries regarding the data.
  2. Location of Business rule(s) (Business responsibility)
    The Business owner must identify where the Master business rules are formally documented, and subject to Change Management.  The business owner must also identify where copies of the business rules are held, since they must all be updated when the master copy is updated.
  3. Change Management process for the Master business rules, and copies. (Business responsibility).
    The Business owner must have a documented Change Management process for updates to the Master business rules, and for ensuring that all copies of the business rules are also updated.
  4. Location of source data (Business accountability – Technical responsibility)
    The Business owner must satisfy him/herself that the providers of IT services to the business have a control process in place that identifies where the actual data is held (i.e. the physical location).  If there are a number of physical locations, they should all be recorded, together with details of which is the Master source, which is a replica, and details of the replication process.

Where should you look for Business Rules (if your Enterprise has no Master Business Rules Repository)

Too often, I have worked on data migration/population projects for which there was no master business rules repository.  We had to research the business rules from first principles. If you have to research business rules from first principles, I suggest you consider the following locations.

  • Business Operations Manuals
    Most organisations have some form of operations manuals – in hard or softcopy.  Business rules are commonly embedded in this documentation.  Be careful, they are often out of date.
  • Computer System prompt screens / help screens
    The possible/permitted values for a given field are often provided on help screens.
  • Internet sites belonging to the Enterprise
    Internal and external websites are a rich source of business rules.  They can hold product details, fee rates, etc.
    Unfortunately, they are too often out of sync with the Master Business Rules (wherever they are).
  • Data Warehouse(s) within Enterprise
    If you are lucky enough to have a single “Enterprise Data Warehouse”, this is the logical place to find business rules.  In my experience, many enterprises have a number of data bases (often in the Marketing area), at least one of which is referred to as a ‘data warehouse’.
  • Data Protection Area
    In most countries, customers may request details of the data held about them by an Enterprise.  Many Enterprises have a “Data Protection Area” to coordinate gathering the details held about the customer.  Often, the details held contain internal codes, which the Data Protection Area must ‘translate’ into something meaningful for the customer.  In my experience, the “Data Protection Area” translation process is a rich source of Business Rules.
  • Business Rules are often coded into application systems such as:
    • Anti Money Laundering (AML)
    • BASEL II
    • CRM
    • Single view of customer database

The above are all potential sources of Business Rules…however, they share a common characteristic – they are all typically ‘copies’ or replicas of the master business rules.   My experience suggests the following (I look forward to reading your feedback on this ):

  • The ‘Master Copy’ should be the copy used by the production application system (e.g. to apply an interest rate, e.g. to calculate fees due).
    Rationale:
    – The production application system copy dictates the customer experience (e.g. interest rate charged or given).
    – Production ‘Master copies’ are already subject to ‘IT Change Management Processes’ that ensure all changes are authorised by the business, and tested prior to going live.
  • Unfortunately, many production ‘IT Change Management Processes’ do not attempt to identify ‘replica copies’ of the product information, and I believe this is a ‘Gap’ in the process.
  • I recommend that production ‘Change Management Processes’ should be extended as follows:
    • Replica copies of business rules must be identified, together with the business owners of the replica copies.
      (This can be a once-off process).
    • The Business area requesting and authorising a change must contact the business owner of each replica copy, and receive confirmation that the proposed change is understood and accepted.
    • The change to the production ‘Master Copy’ must be synchronised with the change to all ‘replica copies’. e.g. If the interest rate on a product is changed from 3% to 4% – The product information on a website must change at the same time that the rate is changed (probably within 24 hours).
    • Copy ‘owners’ should also perform a periodic control; every 6 or 12 months, to verify that changes made to the ‘production master’ have been reflected in their replica copies.
      (The copy owners require a means of displaying both the master and copy details).

What has all of the above got to do with an AML programme?

My most recent encounter with researching business rules from first principles was on an AML programme.  An AML programme is an “End of food-chain” programme, as are most Data Migration and Data Population programmes like Euro Changeover, Basel II, CRM and Single View of Customer programmes.

End of food-chain programmes share the following characteristics:

  • They depend on pre-existing data
  • They have no control over the quality of existing data they depend on
  • They have no control over the data entry processes by which the data they require is captured.
  • The data they require may have been captured many years previously.

    What has your experience been?  Have you identified other places to look for business rules? Please share your experience by posting a comment.   Thank you, Ken.

    One thought on “Business Rules Case Study – Part II

    1. I would like to suggest that the ultimate source of business rules is business policy. Business policy should hopefully be some form of manual derived directly from the business strategy, and is the closest that we can get in tangible terms to a definition of what the business is. The rules found here are the essence of business value.
      Some further discussion can be found on our website – the most accessible is this powerpoint http://tiny.cc/mkFjx, or this discussion paper has more detail http://tiny.cc/yLslV

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