Second day of blogging from EBRC today and first up is Ron Ross - From Rule Management to Business Governance. Ron started by giving me a hard time about blogging (hi Ron) and then asked why companies are not working smarter given how obvious many of the problems (and solutions) are. He then told a long rambling story about his son and challenges with compliance at a professional sports team. His son found, when checking sponsorship contracts against invoices, contradictions, impossibilities (like selling more sponsorship minutes than actually exist in a game), deals that were completely custom and described in terms that could not match to actual opportunities and so on. Clearly the rules for running this process were broken and, while he could fix the problems, he would also take all that knowledge with him when he left (he was just a summer intern). This company, like many, is not running itself in a smart enough way. With that, Ron tried to start presenting and managed to kill the computer that was running the presentation instead! Eventually we got started with his presentation on how rule management relates to business governance and how business governance is critical to productive companies.
Business changes like mandated transparency, more savvy and demanding customers, more complex technologies and shorter time frames as well as the decreasing time someone spends in a single company (meaning less experienced staff) make running a business harder. If you think about any business process there is a whole guidance sphere around it that includes the policies, guidelines, instructions and so on for completing the process. In most companies this guidance sphere is fragmented (policies are separate from regulations, some is coded in programs and some is in people's head - at least until they leave) resulting in lack of standardization, improperly applied rules, inconsistency, conflicting rules, data used incorrectly etc. Not only is this a problem, the time spent trying to figure out what went wrong is often huge. There is no traceability and no impact analysis when stuff goes wrong - you can't tell which rules are being applied, where or how.
Ron considers this a governance problem and he describes business governance as "a process, organizational function, set of techniques, and systematic approach for creating and deploying policy and rules into day-to-day business operations" - a nice definition. He identified three problems with business governance in most companies:
- There is no single source of policies and rules in an organization because there is no organized, reliable, authorized process to create, modify and source these policies and rules
- Each stove pipe or department has its own vocabulary and semantics making it hard to apply rules and policies in multiple areas
- There are no effective feedback mechanisms to see how well we are doing and fix problems and respond quickly to new risks or opportunities - no closed-loop for decisions
Huge amounts of money, and of people's time, is being wasted because of these problems. People are spending their time on this kind of stuff instead of being more productive and doing more creative and useful work. To solve the problems he suggested some solutions:
- Database your business rules - put them into a single (logical) repository so you can trace deployments, maintain traceability, coordinate semantics and so on. This becomes a corporate memory to some extent especially if the interpretation and traceability of the rules are retained.
- Re-engineer governance process to eliminate the "white space" - to connect all the steps in the process so that rules are measured, coordinated, rapidly adapted and so on.
- Reorganize for governance administration and engineering
Good advice and, as Ron pointed out, you can't wait to do this as the world won't wait and your people probably can't run any faster...
He also had a great phrase - Rule Activity Monitoring! Monitoring how effective our rules are at meeting our business objectives. He also discussed calling this Decision Quality Management. There's a neat idea here and I shall have to talk to Ron about it and come up with some thoughts on it. Ron also mentioned the Business Rules Manifesto and you might want to check it out. Ron's slides are here.