Less Rules, More Rules? Better Rules!
There is a lot of discussion nowadays about deregulation, simplification, and regulatory compliance. Some would argue that less rules make it easier to comply with the basic requirements without losing the freedom to fill in the details. Others would argue that more and stricter rules make it easier for business to guarantee compliance because there is less uncertainty.
Is "Less or More" really the issue? Do more rules automatically lead to well-organized, transparent, and compliant business processes? Do fewer rules guarantee simplicity and flexibility? Not necessarily. It depends on the rules and how we use them.
Interpretations and conversions
If we look at how regulations are commonly managed, described, and implemented, the quantity and size of the regulation should be considered less important than its quality. Because regulations have to be described, implemented, and enforced by various economic actors, it is important that they are easy to understand, easy to implement, unambiguous, and complete. Interpretations, conversions, and translations can lead to errors and should therefore be avoided as much as possible.
Take an ordinary, daily example: medical insurance. I realize there will be huge differences between countries, but the situation should be recognizable across different health care systems.
In my country (Belgium), rules and regulations about medical insurance for employees are conceived by federal government. Normal medical insurance is part of the social security system and is paid by social security taxes. (Additional private insurance can be obtained, but that is out of the scope here.)
If I were to undergo medical treatment, the hospital would have to apply the government rules and send the bill to the medical insurance institution I subscribe to for reimbursement of the hospital bill. The insurance institution checks all incoming invoices for correctness and compliance with government regulations and pays (most of) the bill if everything is OK. As you can imagine there are lots of rules about reimbursements of medical treatments, compatibility issues, timing, and patient constraints, etc.
In order to apply the regulations, both the hospital and the insurance institution have built (or acquired) systems that implement the medical insurance laws and regulations. The regulations are the same, but the systems may be different. The systems also serve different purposes ... have different goals. The point, however, is that both organizations have to interpret, formalize, implement, and maintain the same regulations (Figure 1).
Figure 1. Applying the same regulations
More duplicated work
Even in a small country, there are multiple social security institutions and multiple hospitals. Of course, not every hospital will build its own invoicing software. Most of them will apply solutions from specialized service providers. So each of these providers and each of the social security institutions will have to analyze, interpret, formalize, and implement the same regulations.
What if the regulations change? Each of the partners involved has to examine the impact, implement the new changes, and maintain the systems.
How business rules can avoid these inefficiencies
Wouldn't it be nice, and much more productive, if the basic regulations were well defined, well managed across all partners involved, and almost ready for implementation. It would save all partners the burden of examining and interpreting the same complex legal documents. Inconsistencies and omissions could be solved at the source, and the rules of the (medical insurance) business would be compliant by design. The business rules could then be implemented by different partners in the systems of their choice.
Are we ready for this simple solution? If yes, what are we waiting for? If no, what are we waiting for ? ...
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BRSolutions Professional Training Suite
All About Concepts, Policies, Rules, Decisions & Requirements
We want to share some insights with you that will positively rock your world. They will absolutely change the way you think and go about your work. We would like to give you high-leverage opportunities to add value to your initiatives, and give you innovative new techniques for developing great business solutions.
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