Business vs. Environment in Business Models

Ronald G.  Ross
Ronald G. Ross Co-Founder & Principal, Business Rule Solutions, LLC , Executive Editor, Business Rules Journal and Co-Chair, Building Business Capability (BBC) Read Author Bio       || Read All Articles by Ronald G. Ross

In this one-per-month special 'notepad' series, I am taking a quick look at important issues facing practitioners who are seeking to understand and apply the business rule approach for capturing business requirements and developing business systems.

First, at the risk of stating the obvious, let's be clear about the question.  The question is not whether the business itself can be distinguished from its environment.  Obviously, a business has independent, legal existence within its environment and can be distinguished therefrom.  Rather, the question is whether such a distinction is possible for a business model and, if so, whether it is useful to make one.

Instead of addressing the question abstractly, let's take an example.  Suppose we want to create a business model for a supermarket.  Following Zachman, we will factor the business requirements according to the six interrogatives and examine the results.

What:  A semantic model ... concepts, terms, facts, etc.  We obviously have knowledge of customers.  Customers are in the environment, but our knowledge of them is not.  Inside or outside?

How:  Business processes ...  These are obviously our business processes.  However, they do accept inputs (cash, delivery orders, etc.) coming in from the environment (and paid-for packages of groceries go out the door).  Inside or outside?

Where:  A location model ...  The supermarket is definitely our location, but our drivers pick up from supplier locations, and we deliver to customer locations -- all out there in the environment.  Inside or outside?

Who:  An organizational chart with roles and work product connections ...  This is definitely our organizational scheme, but some of the work products (e.g., bad check returns) come in from the outside (out there in the environment).  Inside or outside?

When:  A business schedule, with events and cycles ...  The IRS requires quarterly reporting on wages and earnings.  OSHA makes unannounced inspections.  Events like that happen in the environment.  Inside or outside?

Why:  A business plan ...  This is definitely our business plan, yet it addresses risks (supply shortfalls, new competitors in the neighborhood, etc.) that are out there in the environment.  Inside or outside?

To return to the question, if you were to try to draw a boundary line between the inside (i.e., the business) and the outside (i.e., the environment), where would it be?  Even if drawing such a line were possible, it would clearly need to be drawn differently for each of the six primitives.  Would such a six-part boundary really help us much?  I can't see that it would.

Brief digression:  I read the other day that NASA is (still) trying to come up with a definition of life, so they'll know if they find it somewhere out there in space.  The question turns out to be a lot harder than you might think.  (One scientist commented that the exercise is like trying to generalize the class (or type) 'life' from a sample of just one instance ("life on earth").)  One of the proposed criteria is that any form of life we can imagine must have some kind of something (e.g., a membrane) to separate the inside from the outside.

That observation would seem to support the separation of business entity vs. environment position.  However, a model (e.g., a business model) is not the business entity itself.  A model is a multi-faceted representation of the business where interconnections across the 'cell' (legal?) membrane are often more interesting than the membrane itself.

A model does not need to be a mirror image of the real thing.  It is a view that as Zachman says, ignores (holds constant) all variables except the one(s) under scrutiny -- which may have nothing to do with where the cell boundary lies.  Any other approach is almost certain to over-simplify, a significant mistake for things as complex as businesses and all other living things!

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Standard citation for this article:

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Ronald G. Ross, "Business vs. Environment in Business Models" Business Rules Journal, Vol. 4, No. 9, (Sep. 2003)

About our Contributor:

Ronald  G. Ross
Ronald G. Ross Co-Founder & Principal, Business Rule Solutions, LLC , Executive Editor, Business Rules Journal and Co-Chair, Building Business Capability (BBC)

Ronald G. Ross is Principal and Co-Founder of Business Rule Solutions, LLC, where he actively develops and applies the BRS Methodology including RuleSpeak®, DecisionSpeak and TableSpeak.

Ron is recognized internationally as the "father of business rules." He is the author of ten professional books including the groundbreaking first book on business rules The Business Rule Book in 1994. His newest are:

Ron serves as Executive Editor of and its flagship publication, Business Rules Journal. He is a sought-after speaker at conferences world-wide. More than 50,000 people have heard him speak; many more have attended his seminars and read his books.

Ron has served as Chair of the annual International Business Rules & Decisions Forum conference since 1997, now part of the Building Business Capability (BBC) conference where he serves as Co-Chair. He was a charter member of the Business Rules Group (BRG) in the 1980s, and an editor of its Business Motivation Model (BMM) standard and the Business Rules Manifesto. He is active in OMG standards development, with core involvement in SBVR.

Ron holds a BA from Rice University and an MS in information science from Illinois Institute of Technology. Find Ron's blog on For more information about Ron visit Tweets: @Ronald_G_Ross

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