Business rules play a crucial role in efficiently managing organizations of varying sizes — they represent business aims, best practices, laws, and regulations while automating complex and time-consuming processes. Think of business rules are conditional statements, such as “If-Then” and “If-Else”. Popular examples include assigning an account manager to a new client, onboarding employees, making relevant product recommendations for website visitors, and preventing fraudulent transactions.
Why Are Business Rules Important
Business rules are the instructions that guide business processes by creating criteria that must be met.
They help organizations manage complicated and time-consuming processes, thereby reducing the likelihood of error.
Examples of Business Rules
Manual tasks are often inefficient, error-prone, and expensive, which frequently results in delayed production. Let’s take a quick look at business rules examples across industries.
Automated Underwriting in Insurance
Underwriting is the important process of gathering a potential customer’s data to establish the scope and price of the loan or the insurance plan. In order to do so, the underwriter looks at information such as assets owned, salary, family health history, and lifestyle choices.
The problem that insurers are faced with is that underwriters are frequently overwhelmed by the volume of applications that need to be processed.
Business rules can simplify this process by conducting precise risk assessments in a fraction of the time it would normally take. If an applicant meets all the requirements, then the application is automatically sent for review by a human underwriter.
Straightforward applications are processed in minutes, which helps underwriters to focus their attention on difficult and nuanced cases.
Surge Pricing
Dynamically pricing products is a tactic employed by companies that continually adjust prices based on changing market conditions. The aim is to offer the same product at different times and at different prices.
For example, airlines have popularized this strategy and made it a cornerstone of their business operations. The airline industry uses business rules to adjust ticket prices using various factors including the number of available seats, days left before the flight, and seasonality.
Protection Against Fraud
Financial institutions use business rules-powered software solutions to spot potentially fraudulent transactions and set off authentication procedures.
Validating Documents
Data entry errors are common. A staff member makes a mistake when filling out a form, which means that the document will have to be returned for corrections after review.
To avoid these types of avoidable mistakes and delays, organizations can use business rules in their document controls to validate the input information.
Highly-Relevant Recommendations
Online retailers use business rules to show personalized product recommendations to website visitors.
Therefore, e-commerce stores can create customized shopping experiences by displaying relevant items at various stages of the buying journey.
For example, business rules can show display items purchased by other customers who are interested in similar products.
Business Rules Benefits
Business rules that can enhance business processes and drastically cut costs. However, in order to reap the benefits of business rules, companies need to use tools that automate business rules.
Business Rules Engines
A business rules engine is a robust software tool that helps companies automate business rules.
Traditionally, automation meant hard-coding rules directly into business processes, which made instant updates in response to changing market conditions impossible; programmers had to find time to make even the slightest adjustments to digital products.
Rules engine cut the deployment time of sophisticated products down to minutes by enabling non-technical business users to make changes to the business logic without having to wait for help from the IT department.
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