Presentation given at the IIR Business Process Management Conference, San Diego, CA, November 13th, 2007. It focuses on the difference between rules and processes, the integration points of BPMS and BRMS, and ways to get started.

1. Integrating Business Processes
and Business Rules
Michael zur Muehlen, Ph.D.
Center of Excellence in Business Process Innovation
Howe School of Technology Management
Stevens Institute of Technology
Hoboken NJ
Michael.zurMuehlen@stevens.edu
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2. Private university, founded 1870
‣ 1800 undergraduate, 2600 graduate students
‣ Located in Hoboken, NJ (across the Hudson from Manhattan)
Four Schools
‣ Technology Management
‣ Engineering
‣ Systems and Enterprises
‣ Arts & Sciences
Rankings:
‣ Top 5 technology management program, on par with Stanford,
MIT, CMU, Babson (Optimize Magazine)
‣ #1 for best distance learning program (Princeton Review)
‣ Top 25 for most connected Campus (Sloan Foundation)
http://www.stevens.edu
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3. Offers MBA in Technology Management, Master of Science
(IS, Telecom Mgmt, Mgmt, EMTM), Bachelor’s Degree
(Business & Technology)
Programs taught on campus and off-site in corporate
locations
Clients: ADP, Avaya, BASF, Bristol-Myers Squibb, Chubb,
Citigroup, Deutsche Bank, J&J, Lockheed, Merrill Lynch,
PaineWebber, Pearson, Prudential, PSE&G, UBS, UPS,
Verizon and others
Research centers with focus on
‣ Process Management
‣ Project Management
‣ Product Innovation
http://howe.stevens.edu
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4. Rules + Processes =
Simpler Processes
Higher Agility
Better Risk Management
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5. Why don’t Users
like Processes?
Abstract
Restrictive
It’s not Excel
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6. Too Abstract
Process thinking requires a lateral view of the
organization
Process thinking requires to generalize from
the day-to-day business
Process thinking is expressed in (semi-)
formal notation
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7. Too Restrictive
Try modeling the following:
Manufacturing can start anytime after the payment
from the customer has been received
An inventory check, a credit check, and a
regulatory check have to be performed - in any
order
After quotes from 3/4 of the eligible suppliers have
been received, or after three days (whichever is
earlier) a selection is made
Users tend to think in “If-Then”
scenarios
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8. Example
Completed questionnaire
...
After 5 days
Send Send
... questionnaire reminder
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9. It’s not
Excel
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10. BPM: The Promise of Agility
We deployed BPM to achieve three things:
“ Shorten Processing Times
Increase Revenue
Enable Business Users to Change their Processes
We have achieved the first two, but failed on the third.
Royce (2007)
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11. Managing Change
Claims processing at major US Insurance company
12 Process Steps
>5,000 Business Rules
What do you think changes faster?
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12. How many rules exactly?
>90 product types and their associated product rules
>700 data edit rules
>70 claim pending rules
>200 types of correspondence letters
>250 claim processing and payment approval authority rules
>70 claim quality review sampling rules
>1,000 special client claim handling rules
>2,000 federal/state regulatory rules
>850 accounting rules
>600 published claim processing guidelines
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13. Integration Points
Control Flow Decisions
Assignment Decisions
Monitoring of Policies and
Exceptions
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14. Control Flow Decisions
Using Business Rules Engine to make data-based
decisions about the sequence of processing steps
From Workflow: Workflow-relevant data
From BRMS: Branching decision
Useful if multi-criteria decisions are needed
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15. Manual
Decision
Making
15

16. Manual Decision
Process Case
Type A
Review Process Case
Application Type B
Application
received
Process Case
Type C
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17. Multi-Step Decisions
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18. Control
Flow
Decisions
18

19. Control Flow Decision
Straight-
>770
through
Process
680<=770
Check Credit Manual
Score Review
Application
received
<680
Reject
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20. Simpler Processes
Loos (2007)
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21. Decision Rules
Sample Applications
Customer Contact Scripts
Validation of data before processing
Complex decision scenarios
Mining of rule criteria from runtime data
Model process with high fidelity
Run process and record audit trail
Apply statistical analysis techniques to uncover correlation
between process data and process path
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22. Assignment Decisions
Use BRMS to route work to the most qualified
performer
From Workflow: Assignment-relevant Data
From BRMS: Identifier of qualified resource(s)
Useful if assignment decisions are made based on
data of the workflow object
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23. Assignment Decision
>770 Review by
Intern
680<=770
Check Credit Review by
Score Manager
Application
received
<680 Review by
CSR
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24. Sample Rule
If channel equals agency,
and plan equals mortgage term or whole life,
and region equals Midwest,
and age is greater than 18 and less than or equal to 65,
and face amount is more than $250,000 and less than $1,000,000,
and policy is a conversion from existing policy
Then assign to Midwest Level 1 Underwriter Group.
No Channel Region Age Face Amount Conversion? Assignment
250,000 Midwest Level 1 Underwriter
1 Agency Midwest 18<=65 <=1,000,000 no Group
East Level 2 Underwriter
2 Brokerage East 18<=65 >=1,000,000 yes Group
3 Agency South 18<=65 <250,000 no Underwriter Assistant Group
Source: Royce (2007)
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25. Original System
4. Underwriting
3. Application is assigned
1. Application is 2. Data is entered
Begins
to Underwriter during
scanned into Into Admin
indexing process.
FileNet. Systems.
Network
Workflow
FileNet Administrative
Image System Systems
5. Workflow and associated route work through the business process based on the kind of policy.
Source: Royce (2007)
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26. Rule Engine Driven Assignment
1. Application is 2. Data is entered into
3. Applications are distributed based 4. Underwriting
scanned into Admin Systems and
on availability and skill level Begins
FileNet. used by Rule Engine.
and Admin Systems Are Updated.
Assignment
Engine
Network
FileNet Workflow,
Administrative
Image System Rule Engine and Robot
Systems
Source: Royce (2007)
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27. Practical Experience
“Right before going into production the underwriting
department re-organized requiring the change of almost
100 assignment rules. These were all done by the business
“ analyst who continues to make changes today.”
“The rule engine was also used to “auto-issue” some of the
highest volume insurance products. Currently over 20% of
the most popular products are issued without a review by
an underwriter.”
Source: Royce (2007)
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28. Moving to Exception Based
Underwriting Underwriter reviews APS’s
and some complex cases
Rule Engine validates
Data Entry
App is Scanned Application information
And Validation
and OCR’ed and Issues some policies
24/7 Issue System Admin System
Imaging System Workflow
and Rule Engine
Producer
receives policy
for delivery.
Expanded Rules with Automatic Interface functionality may include:
Straight-through processing
Intelligent requirement processing
Source: Royce (2007)
Automated issue
Minimized admin system entry
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Workload Balancing

29. Cross-Process Policies
Use BRMS to coordinate across process instances
Example: During labor action, hold all non-critical orders
Requires API for process control at the BPMS level
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30. Business Operations Control
Predictive
Historical Real Time
Simulation
Dashboards
Analytics Data Mining
Alerts &
Event Detection & Actions
Optimization
Correlation
Event Bus
EAI
ERP BPM ECM
Legacy Custom
Shapiro (2007)
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31. Real Time
Actions & Alerts Dashboards
Alerts &
Rules Actions
Engine
KPI Evaluation
Process Goals
Metrics Thresholds
Risk Mitigation
Email and
Cellphone
Actions notification
Web Service Call
or
Execute Script
Process
Event
Triggers
Action Schedule
Shapiro (2007)
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32. Managing Risks
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33. Compliance
Compliance means adherence to rules and regulations
Process models provide execution rules
Control flow: What happens when?
Task allocation: Who is involved?
Role models: Who may do what?
But what about context?
Business object dependencies: Value/Customer Type
Environmental dependecies: Season/Off-season processing
Regulatory compliance: Documentation/Audit
Correlation of multiple processes
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34. Managing Risk with BPMS
Use formal Process Models to ensure process compliance
Process Models can be scripts or maps
If Scripts: Use BPMS to automate control flow, task allocation,
application/service invocation
If Maps: Use collaborative tools to allow execution flexibility
BPMS provide risk management services
Authorizations / Access Control
Enforcement of routings, reviews
Audit capability to document compliance
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35. Managing Risk with BRMS
Use Business Rules to ensure contextual compliance
Document process objectives to prevent business rules from
turning into process rules
Performance Objectives combine BAM with BRMS
Decision rules allow context-dependent enforcement of oversight
Use Business Rules Management System to enforce compliance
Document rules limit the state changes on documents
Example: Can’t go from draft to approved without review
Customer rules configure case handling
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36. Standards?
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37. BPMN - Modeling Notation

38. BPMN 1.1
Mainly cosmetic changes
New symbol for Multiple Event
and Gateway (used to be star)
New Signal Event
Separation of “catching” and
“throwing” events
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39. 0
30
60
90
120
Normal Flow
Task
End Event
Start Event / Event
Pool
Data-Based XOR
Start Message
Message Flow
Text Annotation
Parallel Fork/Join
Gateway
Lanes
Sub-Process (Collapsed)
Association
Data Object
Intermediate Timer
End Terminate
Intermediate Message
Sub-Process (Expanded)
End Link
Default Flow
Inclusive Decision/Merge
Activity Looping
'exception' task
End Message
Start Link
End Exception
Complex Decision/Merge
Event-Based XOR
Group
Multiple Instance
Intermediate Event
Transaction
Compensation
Conditional Flow
Practical Use of BPMN Symbols
End Cancel
Exception Flow
Intermediate Compensation
Source: Sample of
120 BPMN models
Intermediate Link
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Start Timer
End Compensation
Intermediate Multiple

40. goal is quantified by objective
Synonymous Form: objective quantifies goal
end
channels efforts towards
course of action desired result vision
supported by
quantified by
goal objective
strategy tactic
quantifies
Figure 8.3: - Desired Results — Goals and Objectives
BMM - Means and Ends
A Desired Result is an End that is a state or target that the enterprise intends to maintain or sustain. A Desired Result
supported by Courses of Action.
Compared to an Objective, a Goal tends to be longer term, qualitative (rather than quantitative), general (rather than
specific), and ongoing. Compared to a Goal, an Objective tends to be short term, quantitative (rather than qualitative)
specific (rather than general), and not continuing beyond its timeframe (which may be cyclical).
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Objectives differ from Goals in that Objectives should always be time-targeted and measurable. Goals, in contrast, ar
not specific in these ways.

41. directive is motivated by potential impact
Synonymous Form: potential impact provides the impetus for directive
means
governed by
supports
governs achievement of
course of action directive desired result
formulated based on has achievement
supported by
source of
business policy business rule
strategy tactic
Figure 8.8: - Interrelating Directives with Courses of Action and Ends
BMM - Means and Ends
As the name suggests, Directives indicate how the Courses of Action should, or should not, be carried out — in other
words, they govern Courses of Action. Specifically, a Directive defines or constrains or liberates some aspect of an
enterprise. It is intended to assert business structure or to control or influence the behavior of the business, and is stated
in declarative form.
Directives govern Courses of Action. For example, the Business Rule quot;Pizzas may not be delivered beyond a radius of
30 milesquot; governs the Strategy quot;Deliver pizzas to the location of the customer's choice.quot; This governance applies to
Tactics as well. For example, the Tactic quot;Encourage rental extensionsquot; is governed by the Business Policy quot;Allow 41
extension of rentals by phone.quot;

42. SBVR
Semantics of Business, Vocabulary and Rules
Formally defined taxonomy to describe elementary business
operations and rules
Meta model expressed in UML
Business-level specification aims at enterprises to formally express
their operations
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43. 43

44. Production Rule Representation
Exchange format for Business Rules (Production Rules)
Defined by Fair Isaac & Co and ILOG
Current revision submitted 09/03/2007
PRR Core defines basic meta model
PRR OCL defines conditions and actions
44

45. Initiative), although they are a subclass of Computer Executable Rule rather than Rule t
confusion with other uses of “Rule” as a metamodel class.
Rule
IntegrityRule DerivationRule ProductionRule TransformationRule
ReactionRule
InferenceRule
SQL:1999 SQL:1999 View ECAPRule ECARule ProdeduralRule
Assertion
{OR}
XSL 1.0 Rule
SQL:1999 Trigger
OCL 2.0 Invariant
ILOG JRule BlazeAdvisorRule
Oracle 10g XSB 2.6 Prolog
MS Outlook 6 Rule Jess 3.4 Rule
SQL View Rule
PRR Focus
Rule classification
per Gerd Wagner, RuleML
PRR Taxonomy
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46. SWRL and RIF
Semantic Web Rules Language - Proposal submitted to W3C
Rules Interchange Format - Initiative within W3C
SWRL combines OWL and RuleML, some use in practice
RIF is in very early stages, but keep an eye on it
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47. Getting Started
Some practical advice
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48. Business Rules Business Processes
Business Objectives Business Activities
govern & prioritize
Process Objectives Core Processes
govern
govern
Business Rules Business Processes
use
govern
Operational Rules Work Processes
use
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49. Identify Business Identify Business
Objectives Activities
Identify Process Identify Core
Objectives Processes
Create Rules Model Processes
Model Detailed
Create Detailed Rules
Processes
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50. Classifying Change
Frequency Hourly Daily Monthly Infrequent
Scope Company-wide Multi-Process Process Activity
Responsibility LOB Biz Analyst System Analyst Programmer
Trigger External Biz Partner Internal
Predictability Low Medium High
Persistency Instance Days Months Permanent
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51. Thank You – Questions?
Michael zur Muehlen, Ph.D.
Center of Excellence in Business Process Innovation
Howe School of Technology Management
Stevens Institute of Technology
Castle Point on the Hudson
Hoboken, NJ 07030
Phone:
+1 (201) 216-8293
Fax:
+1 (201) 216-5385
E-mail:
mzurmuehlen@stevens.edu
Web:
http://www.cebpi.org
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