Build business components to facilitate

1. Agility Deliver World Class Business Systems Components to customers’ in support of their need for speed, agility and power, in a dynamic business environment, constantly pressured by change and Power innovation Speed Build business components to facilitate • Agile business processes • Speedy business processes • Power in the marketplace • Compressed Systems Development Timelines with fewer resources

2. EXACTING MARKET EXPECTATIONS Quality of products and services Response time compression Ease of doing business ACCELLERATING COMPETITION Technology drivers Risk Drivers NEED INNOVATION New opportunities, threats Technology, e/m-commerce drivers Global & new markets Evolving regulations & guidelines ADAPT TO MOVING TARGETS Reduce time to market Scalable, Nimble business processes TARGETTED PRODUCTS Niche/granular market segments Customized products & services RESOURCE CRISIS Staff availability Staff retention Staff Learning/leverage CUST. LOYALTY/RETENTION STAFFING COST INFORMATION GLUT SYSTEMS OBSTACLE TO CHANGE Lost time = missed opportunity Defects and operational failure = lost custom MANAGE DIVERSITY Customer risk/ change aversion Legacy & New products, platforms, services Plethora of product, service platform configurations No/limited control of operating environments Dictated by Market forces & customers’ legacy, cost & business drivers Proliferating interfaces between ever increasing numbers of stakeholders, business partners and processes • CHAOS & COMPLEXITY YIKES! “The basic economic resource is no longer capital, nor natural resources, nor labor. It is, and will be Knowledge. Value is now created by ‘productivity’ and ‘innovation’, both applications of knowledge to work” - Peter Drucker in Post Capitalist Society Business Components will encapsulate knowledge of the corporation’s business rules 31.1% of projects get cancelled before they ever get completed, 52.7% projects overrun their initial estimates by an average of 189% - Survey of 8380 firms in Application Development Trends, Jan 1995 Only 18% of I/T spending produced value in 1998 - Howard Rubin in CIO Enterprise Nov 15 1998

3. THE PROBLEM • CHANGE FACILITATION • BUSINESS THRIVES ON CHANGE • INTENSE COMPETITION • INCREASING REGULATION • NEW OPPORTUNITIES, THREATS • SYSTEMS • OBSTACLE TO CHANGE • MULTIPLICITY OF IMPACT • COST • LOST TIME & MISSED OPPORTUNITY • THE SOLUTION • REFLECT FACTS ABOUT THE REAL WORLD IN SYSTEMS AS THEY ARE REPRESENTED IN THE REAL-WORLD • BUSINESS MODEL

4. Our Scope Business Rules Encapsulate and normalize common business patterns in Knowledge artifacts BUSINESS RULES BUSINESS RULES Policy/Strategy Policy/Strategy Exceptions Exceptions Process Process Events Events Vision Vision Value Value Business Rules INFORMATION LOGISTICS BUSINESS Business Opportunity or Environmental Change BUSINESS PROCESS AUTOMATION Usually specific to an organization INTERFACE RULES (HUMAN & AUTOMATION) Well entrenched industry standards available, to which organizations often add custom rules TECHNOLOGY RULES Optimize Technology Platform Performance - Opportunities for improving platform performance, platform reliability and technology standards Well entrenched industry & vendor specific standards Business Opportunity or Environmental Change Our Approach Component BUSINESSPATTERNS Capture common business patterns in components of real-world knowledge and meaning - Reusable business configurations to facilitate business (re)engineering and innovation INFORMATION LOGISTICS Component ACTIVE PROTOTYPING COMPONENTS DATA MOVEMENT Usually Customized for each organization -Potential automated data mapping facility -Potential for re-engineering flow, and availability of information ACTIVE PRODUCTION INTERFACE RULES (HUMAN & AUTOMATION) COMPONENTS Business Process Automation Process automation Opportunities - Automated instruments and sensors - Screens& Reports - Potential for re-engineering presentation, format, accuracy and timing of information Performance optimized component for select platforms GUIs & FORMATTING COMPONENTS TECHNOLOGY RULES PERFORMANCE OPTIMIZATION COMPONENTS Technology Layer

5. What is a Business Rule? What is a Business Knowledge? ORGANIZATION/PEOPLE PHYSICAL INFRASTRUCTURE INFORMATION TECHNOLOGY “Consider that an enterprise is a thinking entity…many of these thoughts exist as business rules”- Barbara von Halle in the20th Century "Verily, knowledge is of these three: the firm sign, the just duty, and the established practice. - Prophet Mohammed in the7th Century BUSINESS STRATEGY PRODUCT / SERVICE OFFERING POLICIES, LEGISLATION,REGULATION PROCESS AND WORKFLOW

6. Business Rules Business Process Automation Rules Process Definition “PURE” ABSTRACT BUSINESS RULES ABSTRACT BUSINESS RULES IMPLEMENTATION MECHANISMS Business (re) definition INFORMATION LOGISTICS RESOURCES & WORK PRODUCTS RESOURCE FEED & WORK PRODUCT UNLOADING MECHANISMS INTERFACE RULES (HUMAN & AUTOMATION) BUSINESS PROCESS AUTOMATION MECHANISMS THAT DO NOT DIRECTLY INVOLVE INFORMATION PROCESSING Any rule that connects business meanings to technology AND Is visible to EITHER applications programmers or users FUNCTIONAL FEATURE Any rule that connects business meanings to technology AND Is visible to BOTH applications programmers and users

7. BUSINESS RULES • “New employees must be oriented.” • “New employees must be oriented within one month of joining the firm.” • “New employees will be allowed two working days to get oriented.” • “A physical object must be located in a single geographical place at any given moment in time.” • “All products will be considered untested when they are first acquired” (a rule about an initial condition of a business object. We will revisit initial conditions again in section 2 of this chapter.) • “Each product will be considered saleable only after it has been tested.” • “Send shipment” • “Take customer order” • “Send shipment on a truck.” • The truck, a mechanism for implementing “Send Shipment,” does not directly involve information. • Shipment is a real world business concept and Truck, a real world object, hence “Send shipment on a truck” is a business, not business process automation, rule. • “Bake Cookie in Oven.” • The oven, a mechanism for implementing the real world abstract process “Bake Cookie,” does not directly involve information. • Cookie, Oven and “Bake Cookie” are all real world objects, hence “Bake Cookie in Oven” is a business rule. NOT BUSINESS RULES • “YYY Database management systems will assign a default zero value to all numeric fields” is a rule about an initial condition, but not a business rule because it is a rule imposed by a technology platform (the database management system) and not the real world of business. • “Accumulate telephone call records in the message file” is not a business rule because it involves information movement from the telephone switch to a file. • “Key customer order into the order entry screen” is a business process automation, not business, rule because it is an assertion about the information capturing mechanism for implementing a business rule.

8. FACTS ABOUT BUSINESS INFORMATION FLOW & AVAILABILITY (visible to users or applications programmers) INFORMATION LOGISTICS • Source of information: Files, records, data elements • Destination of information: Files, records, data elements • Records & Data elements transported, stored or staged • Retention periods, storage media, volumes, growth, and security of information stored or staged • Initial condition of any or all of these items (Initial conditions apply to objects in all layers of the Architecture of Knowledge) • Relationships between any of the following: data flows, data stores, initial conditions of these items, retention periods, storage media, volumes, growth, and security of information stored or staged. EXAMPLES • “Store orders in order file,” and “Store unmatched customers’ telephone usage in exception file” are rules about where to store information. • “Match customer on order entry screen with customer in customer file” and “Obtain customer credit rating from S&P” are rules about data flow/sourcing. • “Store customer telephone call records file on disk” and “Store customer telephone call records four 10 ten years old in tape files” are a rules about storage media that belongs to this layer. • “Preserve customer telephone call for 10 years” is a rule about availability of data that belongs to this layer. • “YYY Database management systems will assign a default zero value to all numeric fields.” is a rule about an initial condition of stored business information that maps to quantitative domains imposed by choice of a technology platform (the database management system), not the real world. It relates real world business information to the technology platform. Hence it is a rule of Business Process Automation. It belongs to the information logistics layer because it is a rule about the initial condition of business data. • “An employee’s security clearance in the personnel file must match that in the departmental security clearance file” is a relationship between data stores.

9. EXAMPLES OF RULES THAT ARE NOT INFORMATION LOGISTICS RULES • “If memory overflows, dump its contents to disk.” • Both computer memory and disk are parts of the technology platform. • The rule does not refer to any business information. Refers to flow of information among technology objects internal to the platform that executes software. • Therefore it is not a rule of Business Process Automation. • “Store the last three orders in the screen buffer area.” • Although orders are business information, the Screen Buffer Area is internal to the technology platform. • Movement to and from, and storage of information in, buffer areas is transparent to application programmers • Therefore this is a technology rule • (if this is not transparent to application programmers, it will belong to the Business Process Automation layer, but not be a functional feature of data flow because programmers would hide this technical complexity from users). • Assume a nationally distributed radar network is tracking air traffic. • An “airplane” business object in the system reflects each airplane in the air. • The information system is physically distributed across nodes of a computing network that runs the application on computers located at each major airport and dynamically optimizes resource use by moving processes and data between nodes. • QUESTION: Business Process Automation or Technology rule? “Move the business object that represents an airplane in the information system to the node that is nearest to the physical airplane at any given time” • The rule involves flow of business information between nodes. • Nodes are information technology objects. • The rule connects a business concept (airplane) to a technology concept (network node) • ANSWER: Technology rule: • Information movement between nodes is automatic • Invisible to applications programmers and users. • Moves information between technology platforms

10. INTERFACE RULES RULES OF INFORMATION EXCHANGE BETWEEN INFORMATION SYSTEMS AND EXTERNAL ACTORS: PEOPLE, INSTRUMENTS, ROBOTS, SENSORS, EFFECTORS, OTHER INFORMATION SYSTEMS • Interface schedule and timing • Batch timing, schedule for refreshing business information being presented at the interface (update cycles), information exchange failures, faults and other anomalous events, availability of the interface and time-outs • Responsibility/Approvals for the interface and its operation • Interfacing file layout, interfacing record layout, interfacing data elements, corresponding formats and units of measure (if any), encryption • Security, including access permission or denial rules (there could be several kinds of permission –to know an item exists, to see its contents and to update its contents) • Presentation of information to a human or automated actor, such as Accuracy, Format (including size limitations), Units of measure, Sort sequences, screens, reports etc. • Terminal devices/Special equipment specifications • File audit & control specifications (such as record balancing or check digit processing) • File or information transfer methods • Relationships between any of these

11. RULES OF INFORMATION EXCHANGE BETWEEN INFORMATION SYSTEMS AND EXTERNAL ACTORS: PEOPLE, INSTRUMENTS, ROBOTS, SENSORS, EFFECTORS, OTHER INFORMATION SYSTEMS INTERFACE RULES • “Key orders into order entry screen” and “Scan item with wand” are interface rules because they describe mechanisms for capturing business information. • “Display service location on a map” and “Show stock prices in fractional format” are interface rules because they are rules about business data presentation and formatting at the system’s human interfaces. • “Highlight all data entry errors in red,” and “The twenty fifth line of the screen will be reserved for error messages” are interface rules because they are rules about human interface standards (screens and data presentation formats). • “Report revenues to the nearest $1000” is an interface rule because it is a rule about the accuracy with which business information must be presented to an actor (human or not.) • “Allow only subscribers access to stock prices” is an interface rule because data access rules are rules about an actor’s (human or not) interface to business information stored in the system. • “Update customers’ S&P credit ratings at Close of Business every day” is an interface rule because it is a rule about timing of an interface to an S&P business data source. • “Present order data in customer number sequence” is an interface rule rule about presenting business information to a human or automated actor . • “Present the Welcome Screen at the Start of Business every day” and “Generate report at Close of Business” are interface rules because they are rules about the timing of human interfaces. • “The system must be continuously available 24 hours a day, 7 days a week” is also an interface rule because it is a rule about the timing of the interface from an actor’s perspective. • Assume that a depository markets a software product for buying and selling financial instruments it holds in trust. Customers who install the software must be activated to allow them to access information on financial instruments held by the depository. In this system “Activate New Customer” is an interface rule of Business Process Automation because it is a rule about enabling, i.e. setting the condition, of a human interface to make it available to customers. • “Scan barcode” is an interface rule because it is a rule about the format for presenting business information to the application • “Convert barcode to EBCDIC characters” is an interface rule because it is a rule about format conversion of business information. • “Commit information when the user hits the enter button” and “Commit the record on confirmation that the transmission is complete” are interface rules because they involve business information transfer methods. • “Alphanumeric fields in XX database Management systems cannot be larger that 1024 characters” is an interface rule because: • It relates a business information formatting constraint to a technology platform (DBMS) • Is a functional feature (visible to users and application programmers). • SMS is a data transfer technology for cellular telephones and wireless hand held devices. The rule “SMS messages cannot exceed 160 characters” is a (business process automation) interface rule because it is visible to both users and applications programmers of devices that support SMS. • “Send batched transactions in compressed format,” is an interface rule because it is a rule about the format in which business information must be presented to another system and is visible to application programmers.

12. SOME INTERFACES ARE INTERNAL TO TECHNOLOGY PLATFORMS • Communications software • Modem Requirements • Transmission Rates • File blocking factors and other technology dependent rules transparent to application programmers and users • Line characteristics & protocols • Communications protocols • RULES ABOUT THESE WILL BE TECHNOLOGY RULES EXAMPLES OF RULES THAT ARE NOT INTERFACE RULES • “Disallow access to memory addresses 1 to 5000.” Memory addresses are internal to the working of the technology platform • “Accept information in GSM format” is an interface rule in the technology layer because • It is a rule about the format in which data must be presented to the wireless device that belongs to the technology layer (GSM is a standard for sending data in wireless telephony). • The rule is a communication protocol internal to the design of the technology platform: the wireless device.. • “Convert the signal from CDMA to GSM format” is a rule about format conversion that belongs to the technology layer because it is internal to the technology platform • CDMA and GSM are two different standards for wireless telephony.

13. TECHNOLOGY PLATFORM CONSTRAINTS & PERFORMANCE RULES EXAMPLES OF TECHNOLOGY RULES • “If memory overflows dump its contents to disk” is a technology rule because it refers to technology concepts internal to the platform for executing software. • “Disallow access to memory addresses 1 to 5000” is a technology rule because it is internal to the technology platform for executing application software. • “Model ZZZ computers will physically execute only one thread at a time” is a technology rule because it is a rule about processes internal to the technology platform. • “The platform must have at least 256 MB of RAM to run the trading system” and “The trading system must be run on Windows 98 operating system” are technology rules because they are relationships between objects that are internal to the working of the technology platform: RAM is computer hardware, and both Windows 98 and Trading System are computer software. EXAMPLES OF RULES THAT ARE NOT TECHNOLOGY RULES • To download stock prices in real time, you must have a DSL modem. • Stock price is business information. • This rule describes an interface mechanism required to access Stock Price, hence it is an interface rule. • To watch the concert in real time, you must install streaming media software and a T1 communications line. • Concert is business information. • T1 communication line is a technology concept • This rule describes an interface mechanism required to access Concert, hence it is an interface rule.

14. BUSINESS RULES Policy/Strategy Exceptions Process Events Vision Value Optimize Technology Platform Performance - Opportunities for improving platform performance, platform reliability and technology standards BUSINESS RULES A single Business Rule may be implemented by one or more information flows BUSINESSPATTERNS Capture common business patterns in components of real-world knowledge and meaning - Reusable business configurations to facilitate business (re)engineering and innovation INFORMATION LOGISTICS INFORMATION LOGISTICS DATA MOVEMENT Usually Customized for each organization -Potential automated data mapping facility -Potential for re-engineering flow, and availability of information Each information flow may support one or more interfaces BUSINESS PROCESS AUTOMATION INTERFACE RULES (HUMAN & AUTOMATION) INTERFACE RULES Business Process Automation Process automation Opportunities - Automated instruments and sensors - Screens& Reports - Potential for re-engineering presentation, format, accuracy and timing of information GUIs & FORMATTING COMPONENTS Each Interface may be realized by one or more platforms/technologies TECHNOLOGY RULES TECHNOLOGY RULES PERFORMANCE OPTIMIZATION COMPONENTS Technology Layer

15. INFORMATION LOGISTICS Business Rule = Take Order Business Rule = Take Order A BUSINESS EXAMPLE