Business rule

Principles that define and constrain business activities

Template:Business term

A business rule is a statement that defines or constrains some aspect of the business. It is intended to assert business structure or to control or influence the behavior of the business. Business rules are derived from policies, procedures, and regulations, and they help ensure that the business operates in a consistent and efficient manner.

Types of Business Rules

Business rules can be categorized into several types, including:

• Constraint rules: These rules limit the actions that can be taken within the business. For example, a constraint rule might specify that a customer cannot place an order if their account is overdue.
• Derivation rules: These rules define how information is derived or calculated. For example, a derivation rule might specify how to calculate the total price of an order based on the prices of individual items and applicable discounts.
• Reaction rules: These rules specify the actions that should be taken in response to certain events. For example, a reaction rule might specify that an email should be sent to a customer when their order is shipped.
• Transformation rules: These rules define how data should be transformed or converted. For example, a transformation rule might specify how to convert a customer's address from one format to another.

Importance of Business Rules

Business rules are crucial for several reasons:

• Consistency: They ensure that business processes are carried out in a consistent manner, which helps maintain quality and reliability.
• Compliance: They help ensure that the business complies with relevant laws, regulations, and standards.
• Efficiency: They streamline business processes by providing clear guidelines and reducing the need for ad-hoc decision-making.
• Communication: They provide a clear and unambiguous way to communicate business policies and procedures to employees and stakeholders.

Implementation of Business Rules

Business rules can be implemented in various ways, including:

• Manual implementation: Business rules can be documented in manuals, policies, and procedures, and enforced through training and supervision.
• Automated implementation: Business rules can be embedded in software systems, such as business process management (BPM) systems, enterprise resource planning (ERP) systems, and customer relationship management (CRM) systems. This allows for automatic enforcement of rules and reduces the risk of human error.

Related Concepts

• Business process
• Business process modeling
• Business process reengineering
• Business process management
• Enterprise architecture
• Governance, risk management, and compliance
• Policy
• Procedure

See Also

• Business process management
• Enterprise resource planning
• Customer relationship management
• Governance, risk management, and compliance