business rules managment systems; maximizing value

Business Rules Management Systems

Maximizing Value with an Enterprise-Level Strategy

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Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy

Business Rules Management Systems (BRMS) are facilitating significant

changes in how corporations build and maintain their core business systems.

The traditional and costly process of translating business requirements to code

written by programmers is being replaced by structured business vocabulary,

business rules repositories, and business user-centric development tools. This

change is helping companies develop and modify business applications more

quickly, reducing cost, and enabling timely response to regulatory

requirements and changing market conditions. When implemented at the

enterprise level, business logic can be used across multiple business

applications, providing consistency and transparency across the corporation.

Enterprise decision services implemented via business rule management

systems offer a number of benefits to a company, while enabling effective and

efficient management and delivery of business policy through business

systems. At the same time, BRMS implementations can fail to achieve full

return on investment (ROI). The missed opportunity is often traced to a set of

common mistakes, including: narrow deployment considerations, limited

investment beyond initial deployment, over-customization, and inappropriate

program management and governance. The adoption of an enterprise-level

strategy and systematic follow-through during and post implementation will

maximize the value of decision services across the entire enterprise. A simple

three-step approach will help to avoid common pitfalls and help to achieve the

full potential of BRMS deployments.

Introduction:

Business Rules Management Systems enable quick and dynamic modifications

of business policies/procedures in a fast-paced operations environment.

Implementations of BRMS enable policy authorship and management by

business users, often fostering greater alignment between business and

technology organizations. A BRMS offers numerous features that enable an

organization to deploy policy consistently, and across multiple operational

platforms. Implementation of business rules engines in one or more business

units, particularly in areas of complexity or those requiring intense manual

calculations and review (such as eligibility, underwriting, pricing, etc.), is a

fairly mature strategy in large financial services organizations. The vendor

community is large and stable, and is supported by a wide variety of third-

party toolkit and professional services offerings that enable business and IT

organizations to successfully implement and leverage the technology for their



needs. Recent consolidation in the industry further supports this technology

by offering closer/native integration with several large-scale platform

solutions: e.g., ILOG (IBM), Haley (Oracle), Yasu (SAP).

Common BRMS Implementation Mistakes:

Despite the level of industry maturity and technological sophistication (yet lack

of deep penetration), many organizations do not maximize the value of their

BRMS implementations due to a set of fairly common conditions:

1. Evaluation of BRMS products is limited to a stand-alone application

view instead of an enterprise platform view: Software evaluations for

BRMS products typically focus on the feature sets as related to a specific IT

project and rarely involve rationalizing the product against other enterprise

IT assets (e.g., middleware, database integration, etc.). Additionally, due

to a variety of existing technical and organizational constructs, it is not

uncommon for the same policy to be implemented multiple times (and

sometimes multiple ways) in multiple decision services across the

enterprise. An enterprise-wide BRMS strategy and development of an

enterprise-level policy and rules repository is imperative to overcoming

limitations and maximizing the value of BRMS investments.

2. Initial operational capability is reached, while subsequent

investments required to achieve full enterprise value are withheld:

Organizations can lose momentum after an initial deployment, and not fully

follow-through on the implementation and maintenance of advanced

authoring and simulation tools. These tools truly cede policy administration

control to the business units and reduce the IT staff involvement in

syntactically manipulating business policy to fit software structure. Limiting

the deployment of these tools to their full potential often leaves the BRMS in

the hands of the IT staff, leading to lower overall transparency, and

resulting in longer turn-around times for changes.

3. BRMS products are “over-customized” to meet narrow or specialized

IT needs: Like the adoption of other commercial off-the-shelf products,

BRMS products must be integrated with existing testing tools or reporting

mechanisms (e.g., integration of BRMS into existing requirements

management and test automation tools). These integrations require

customization that limits the potential of the BRMS solution to be applied



broadly across the enterprise. This is due to the fact that different business

units tend to have different integration needs. Leveraging a common

enterprise architectural standard, like SOA, could alleviate this problem by

enabling the BRMS to operate in a state-less, autonomous service mode.

Further, leveraging native BRMS functionality to meet testing and reporting

needs reduces the need for customization.

4. IT and business governance procedures are inadequately modified to

leverage new platform capabilities: Enterprise software development

life-cycles (SDLC) must be modified or otherwise customized to enable the

hot-deploy features of BRMS solutions, therefore enabling the enterprise to

enjoy full value. The existence of governance processes that have rigid

and formal change approval mechanisms pose a threat to the dynamic

change execution features of BRMS systems. Systems implementation

governance procedures that require scope reviews, requirement

approvals, system design and development documentation, and test

certifications in a sequential manner with varying levels of executive

change board reviews often add cycle time to change management. In a

well designed BRMS, rules are closer to data than application programming

logic. The SDLC overhead of data updates (e.g., updating conventional

loan limits for residential mortgage underwriting or other simple

parameter-like or referential pieces of data) should be minimal, and

extended to other business rule changes as well.

5. New evaluation and assessments methods/metrics are required for

BRMS implementations: Evaluating the success of a BRMS project against

traditional project management metrics (schedule and cost) is likely to be

inadequate, as these traditional measures typically focus only on the IT

element of the implementation (the project). A program review of a BRMS

implementation manages all of the stakeholder needs (and requirements)

and associated activities, responsibilities, and project risks. One critical

component of assessments that can be missed is the ability to track and

enable the necessary workforce and business process transformation

elements. Failure to include broader assessment criteria may result in the

project meeting its initial schedule/cost goal, but not fully recognizing

potential post-deployment value.



A Three-Step Approach to Maximizing Value:

Enterprises can maximize the value of their BRMS implementations by viewing

the technology solution in a broad enterprise context, including elements of

organization, governance, and business process transformation. A simple

three step-approach can help enterprises identify the right scope for a BRMS

implementation and enable them to manage the deployment effectively, and in

line with long-term strategy, maximizing value.

1. Conduct an enterprise-wide pre-implementation strategy assessment:

The pre-implementation strategy assessment should consist of developing

value stream maps for the enterprise’s core and secondary business

functions. A business-function to IT asset map should then be built to align

current business processes with IT assets. Each business process and its

component IT assets should then be analyzed for policy automation and

consolidation opportunities. Such a top-down assessment greatly improves

the enterprise’s chances of maximizing the return on BRMS investments.

2. Fine-tune any BRMS implementation assessment to rise above the

tactical IT deployment challenges: A periodic assessment that fully

incorporates tracking organizational and business process changes post IT

deployment is a critical success factor for maximizing value. ROI based

metrics constructed from division level or business unit level estimates do

not account for the missed opportunities for efficiencies across the

enterprise. Effective assessment should include a review of: (a) the

possible consolidation of business processes from multiple organizations,

(b) the collaboration across teams to establish centralized business rules

management and ownership terms, as well as (c) the design and

implementation of new governance measures that leverage the streamlined

policy change features provided by the BRMS. This assessment will help to

ensure that the BRMS project is rationalized against the long-term value that

can be delivered, and not just managed to the tactical risks in schedule and

costs for the initial deployment.

3. Establish a clear model for post implementation assessment to ensure

continued expansion of value across the enterprise: The third step

organizations can put in place is a post implementation assessment process

that continues to look for additional opportunities to expand the absorption

of the BRMS concept. This assessment should answer a few fundamental

questions:



Are we able to manage business policy more consistently than with our

pre-BRMS solution (i.e., customers get consistent treatment of their

transaction (e.g., loan file underwriting, pricing, etc.) independent of

their channel)?

Are we able to deploy changes more efficiently/effectively (i.e.,

release cycles shorter or scope larger for releases)?

Have we improved productivity for the organization (i.e., eliminated

traditional development and deployment steps and moved policy

management and deployment closer to business users/knowledge)?

Conclusion:

Maximizing value from your BRMS implementation starts with establishing an

enterprise level strategy for evaluation and adoption of the BRMS paradigm,

devising broad program management metrics, and conducting periodic

project assessments to ensure overall project success. A thorough review of

your enterprise value chain will enable you to identify all the opportunities for

consolidating business policy and streamlining management using BRMS.

Additionally, devising a broader set of program management metrics that are

FORWARD looking in terms of maximizing post deployment value will serve as

an indispensible tool in managing BRMS projects. These include metrics that

reflect progress in workforce/skill set transformation, enterprise-wide

consolidation of business rules, and business process (operations) change

management. Once a strategic framework of enterprise-wide opportunity is

established and broad program management metrics are devised, periodic

assessments of your BRMS project against metrics that emphasize expansion of

BRMS usage after initial deployment will help you realize the full benefits of an

implementation.

About the author: Prabhakar Bhogaraju is Director and head of Decision Management for The Summit Point

Group, a strategic management and technology consulting firm. With over 10 years of experience in leading

large scale IT transformation and enterprise business rule management programs, he has established a track

record of leading and delivering complex, high impact IT systems. Prior to joining The Summit Point Group,

Prabhakar led design and development for Desktop Underwriter; Fannie Mae’s premier automated

underwriting service for the mortgage industry.

[email protected]

business rules managment systems; maximizing value

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