Business Rules Managment Systems; Maximizing Value


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This paper looks at maximizing the value of BRMS implementations.

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Business Rules Managment Systems; Maximizing Value

  1. 1. Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy
  2. 2. 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 | Page 2
  3. 3. Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy 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 | Page 3
  4. 4. Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy 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. | Page 4
  5. 5. Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy 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: | Page 5
  6. 6. Business Rules Management Systems Maximizing Value with an Enterprise-Level Strategy  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. | Page 6