Business Rules Defined

Business rules are statements that govern the business. From the point of view of an information system, business rules state what information is allowed, how to deduce information, and how the system should behave in certain situations. The business rules also define how the organization should work with the system, and how the system should help in this work. Together with the data model, the business rules constitute the core knowledge of the business.

Organizations are governed by business rules. Business rules are stated by the management and users as being the reflection of the processes in their day to day business. They will safeguard against information corruption, from non-approved business transactions on the information, and will support the user by providing automatic behavior.

It is sometimes hard to understand how a business process can be stated in terms of rules. The first thing to consider is that business processes have become less and less linear over the last years. Business is driven by external events that it has to reply to, for example, customers that want to order a product, changing the order again, and then canceling it. The business event approach shows how the business process relates to the real world.

For each business event, the company will have asked itself: Can I support this request; is it allowed? If not, we have our first restriction rule, for example, not to allow orders from customers who do not have a credit card. The next question is, "How should my employees respond to this external request", what instruction rules apply? You will probably also want the system to help the user to handle the event. When entering the order in the database, the system should automatically calculate the price and update the stock records. These are called deduction and behavior rules.