Business Terms in Rules and Decision Management

on February 8, 2024
business terms

What are Business Terms?

Surprisingly, when you type “business terms” in merriam-webster.com or dictionary.com, you won’t get any results. Yet, businesses use business terms everyday. They’re the words and phrases that represent the culture, metrics, and operations of an organization. In other words, they’re shorthand for how a business conducts business. 

For example, a business can calculate return on investment (ROI) in many ways. Costs and benefits can be direct and indirect, monetary and non-monetary, short-term and long-term. Therefore, ROI not only represents a value but also the methodology or set of calculations that generated the value. So when a manager asks, “What’s the ROI?” in response to a new initiative, the manager is communicating several things:

  1. The company culture is such that they do not start a new initiative without first evaluating the return on investment (ROI).
  2. The employee presenting the new initiative should have already known this.
  3. The employee should have already calculated ROI according to the company’s methodology.
  4. If no company methodology exists, the employee should have created one in advance of the presentation. 

Decision Management and Business Rules

Decision Management is a discipline for managing automated decisions in software applications and systems. Technologies like business rules engines and decision management platforms isolate the business logic from the systems that use them. These technologies also provide an environment where business analysts and non-technical domain experts can define, test, deploy, monitor, and update business logic independently of those applications and systems. Users typically define business logic as business rules in some form of syntax.

Decision management platforms like Sparkling Logic SMARTS™ supports various decision logic representations including scorecard models, lookup models, and machine learning models. However business rules can get complex fast and managing them can become increasingly cumbersome over time. To simplify rules authoring and maintenance, SMARTS™ enables users to define business terms or business concepts which can then be used to express rules. Similar to how ROI is shorthand for the calculations used to generate a value, a business term in SMARTS™ is shorthand for a set of conditions that can be true or false.

Business Terms in Decision Management

Business terms are useful in situations where sets of rules are reused in multiple decisions and change regularly due to regulatory and business changes. For example, an insurance company may offer various insurance products where each product has the same age requirements by state. A business analyst could create a business term “Of Age” to represents all the age requirements. This way, when the analyst is writing business rules for quoting or underwriting for each of the insurance products, they would only need to express “Is Of Age” rather than expressing each of the age requirements by state. Business terms not only speeds up rules authoring but also simplifies overall management. If age requirements were to change, the business analyst would only need to update the business term.

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