Business Rules

Business rules can apply to many aspects of an organization and can be expressed in a variety of ways. In general, business rules define specific instructions or constraints on how certain day-to-day actions should be performed.

For example, business rules can include:

• A decision-making approval structure for invoice processing where only certain managers can sign off on invoices totaling a specific amount
• Calculations in which a formula may be used to calculate revenue or expenses
• Policies where an organization requires its employees to work with a preferred list of vendors

When business rules are designed separately from process implementations, they provide a powerful and flexible approach to help organizations move more quickly in meeting their goals and better respond to changing business needs.  

How Business Rules Support Process Automation

In practice, business rules may not always be formally documented, but as many organizations undergo digital transformation, defining and automating business rules can help organizations more effectively reach their goals.

Traditional automation methods often involve hard-coding business rules directly within process workflows. However, these rigid process designs may restrict an organization’s ability to quickly make updates. Given that business logic is likely to change over time, it can be disruptive to find all the affected implementations and make time-sensitive updates to custom code or process designs, especially if multiple processes call on the same rules. There is also the potential risk of the same rule being implemented slightly differently, leading to inconsistent outcomes. Furthermore, how quickly design changes can be made often depends on the availability of technical staff or the IT department.

To help organizations remain responsive and agile, some process automation software offers the capability to model business rules independently from automated processes. This allows organizations to separate their business logic from their process logic. In other words, staff do not need to go one-by-one through each process and change each implementation of the rule manually.

Furthermore, business rules are made available in an easy-to-read format for the domain experts who manage the company’s business policies and likely do not having programming skills. This allows them to make updates to processes without involving developers or impacting the core infrastructure in place. With this approach, organizations are effectively able to maintain flexibility while saving valuable staff time spent updating organizational policies.

Common Types of Business Rules

To account for different types of policies and decisions, business rules can be modeled in multiple ways. Two common types of business rules are formula rules and decision table rules.

A formula rule allows employees to maintain calculations in a no-code format, similar to creating formulas in Microsoft Excel. Once a formula is defined, it can be reused as appropriate in multiple process designs. If the formula needs to be updated, only the formula itself needs to be changed without requiring an end user to manipulate code or individually adjust each applicable process. Many standard formulas are already built into the software, such as determining an average, sum, date, and maximum, among many others.

A decision table rule is a powerful feature that lets non-developers represent related conditional decisions or “if-then” logic in a concise manner as a spreadsheet style-table. Decision tables use columns as the conditions, while rows specify the appropriate outcomes. Approvals, application acceptance criteria, and loan eligibility checks are all general examples where decision tables can be applied and owned by the domain experts themselves.

In traditional approaches, these decisions can be hard-coded directly as part of process designs, leading to complex implementations that require developers to make manual updates as they arise. When complex logic is modeled as a table, it provides a much more relatable and visual format that is easier to maintain for both business and IT.