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Decisions

What Exactly is a Business Rules Engine?

The concept of a business rule is rather simple – it’s “if X, then Y.” The business rules engine is where they’re built, stored, managed, and enforced. A flexible business rules engine allows the creation of a variety of business rules with easy connectivity to any type of workflow, which triggers specific actions based on the answer to the business rule.

For example, someone has just filled out a loan application. A very simple, basic, statement-based business rule says if their income is greater than $5,000 a month, they are approved for a $100,000 loan. The “result” of the rule is connected to a workflow that then initiates the email approving them for the loan and sends them the relevant paperwork. If their income is less than $5,000 a month, they are not approved. Another workflow initiates a different email notification – rejection of the application.

Business rules can be used for process automation, automating interactions, creating interactive forms, strengthening security, and more. The business rules engine allows for the building of a variety of rule types, everything from the “if-then statements” to decision trees and from sequential rules to embedded rules.

With a comprehensive business rules engine, the ability to create all types of business rules is built in.

  • Statement rules
  • Truth tables
  • Matrix rules
  • Sequential rules
  • Business-oriented rules

Statement rules are built using plain language, with easy to understand and edit logic –the “if, then” described above.

Truth tables give more than one result as they combine a variety of variables within one location. For example, if we extend the loan example above from a statement rule to a truth table, it could take into account conditions as follows:

  • Income level: Between $2,500-$4,999 per month, and above $5,000 month
  • Interest rate: prime, prime + 1.5%

Anyone with income above $5,000 a month who requests $100,000 is automatically approved at prime. Anyone with income between $2,500-$4,999 a month who requests $100,000 will pay prime plus 1.5%. Anyone with income below $2,4999 who requests $100,000 will be rejected.

Matrix rules take two seemingly unrelated conditions and “decide” based on the intersection of those conditions. Again, using the loan example – in this case, we’ll note that while it’s an online financial institution, they are actually registered only within certain states, so they can only make loans to residents of Illinois, Indiana, Montana, and Ohio.

The decision trees meet on two axes, with the result being determined by the intersection.

If a person meets all the criteria to receive a $100,000 loan, but the person lives in Texas, the loan application will automatically be rejected. If a person lives in Illinois, but has an income less than $2,000, that person will also automatically be rejected. If the person lives in Montana and has an income of greater than $5,000, the loan will be approved.

A comprehensive business rules engine allows for the creation of sequential rules, where a series of rules depend on the results of the previous set of rules.

Let’s change our example slightly. The online financial institution has recently been allowed to offer loans in Missouri, but only if the loan amount requested is less than $50,000. Therefore, a sequential decision process may be as follows.

In this case, the first step in the process will be based on jurisdiction. If the person lives in Illinois, Indiana, Montana, or Ohio, they can proceed to the loan application rule as described above – $5,000 income, etc. If the person lives in Missouri, they will be directed into a separate workflow with a different set of business rules, where their income level and interest rate will be determined based on how much they have requested to borrow.

The more flexible the business rules engine, the more options it includes, including business-oriented rules. These are complex rules sets based on the way business is done. They can be built separately and then integrated into multiple types of workflows.

Business-oriented rules allow for the management of complex rules that are built individually but used in combination. A comprehensive business rules engine not only manages one-to-one decisions, but also manages large batch processing, accessing millions of records to “decide” billions of rules per hour. The ideal business rules engine allows for comprehensive testing of the individual business rules before sending the application “into the real world.”

In summary, a business rules engine makes it simple to implement business process automation, streamlining processes and procedures, eliminating manual work, and strengthens competitive advantage. For more information about how a business rules engine can smooth business processes to drive competitive advantage, please contact us