Business concepts need to be well understood both for the purpose of business communication, as well as for implementation.  What exactly does it take for a business concept to be well understood?

As an example, consider the business concept 'good customer'.  (My apologies to airlines -- I happened to be flying on a plane as I wrote this.)  Suppose I give the following structural rule (also called a definitional rule in SBVR^[1]) to indicate when a customer is or is not a 'good customer':

Definitional Rule:  At least one of the following always is true for a good customer:

• has flown at least 50,000 miles on paid tickets during the last calendar year.
  
  
• has flown at least 50 flight segments on paid tickets during the last calendar year.
  
  
• has flown at least 40,000 miles AND 25 flight segments on paid tickets during the last calendar year.
  
  
• has flown at least 25,000 miles AND 40 flight segments on paid tickets during the last calendar year.
  
  
• has flown at least 150,000 miles OR 150 flight segments on paid or unpaid tickets during the last calendar year.
  
  
• has flown at least 500,000 miles on paid tickets during the last 7 calendar years.
  
  
• has flown at least 500 flight segments on paid tickets during the last 7 calendar years.
  
  
• has flown on at least 10 highest-fare tickets during the last calendar year.
  
  
• has flown on exactly the same route on the same days of the week at least 3 times a month in each of at least 7 months during the last calendar year.
  
  
• has paid a total of more than $15,000 in paid tickets at least one month in advance during the last calendar year.
  
  
• has flown with at least two family members on paid tickets 4 times during the last calendar year.

This definitional rule (which could have been written as a series of separate rules) contributes in several important ways to forming the concept 'good customer', as follows.

Extension.  The definitional rule gives a long list of criteria for determining whether a given customer is or is not a good customer.  The set of all customers that are good customers is the extension of the concept 'good customer'.  The ISO (International Standards Organization) terminology standard 1087^[2] defines extension as "the totality of objects to which a concept corresponds."

Intension.  The definitional rule gives a long list of specifications related to the meaning of the concept 'good customer'.  That meaning is called its intension.  ISO 1087 defines intension as "the set of characteristics which makes up the concept."  (In the definitional rule above, each of the 'has' bullet items expresses a characteristic.)

Are we finished ensuring that the concept 'good customer' is well understood?  Not yet!  To illustrate, suppose this is your business and I am a new hire.  Explain to me what a 'good customer' is.  In other words, tell me in plain English what 'good customer' really means for the business.  I'm looking for something that I can (a) readily come to grips with, (b) remember, (c) count on to be the same tomorrow, and (d) be reasonably productive with relatively soon.  Here's the kind of thing I'm looking for:

Definition [good customer]:  a customer with which a continuing, lucrative business relationship is maintained

ISO 1087 defines 'definition' as "representation of a concept by a descriptive statement which serves to differentiate it from related concepts."  Has the proposed definition of 'good customer' done that?  Yes.

For the sake of argument, let's say that this business distinguishes only between bad customers, run-of-the-mill customers, and good customers -- and that's pretty much it.  Has the definition itself (not including Definitional Rule) given me enough to distinguish 'good customer' from 'related concepts'?  Absolutely.

Here are several important observations:

• The full intension (meaning) of the concept is two-part; it requires both the definition and the definitional rule.
  
  
• There is no redundancy in this two-part specification of the intension.  (Can you spot any?!)  Such uniqueness in expressing business logic is a central goal of the business rules approach.
  
  
• We have attended to the needs of both person-to-person communication (via the definition), as well as logically consistent knowledge bases (via the definitional rule).  Both goals are key SBVR drivers.
  
  
• The definition of the concept is a highly stable one.  We can use it build and express additional knowledge without fear of collapse or constant change.  Particulars within the definitional rule, in contrast, are very likely to change.  In the business rules approach, adaptability is always accommodated through rules.

The Bottom Line:  Maybe other kinds of vocabularies -- e.g., mathematical or engineering vocabularies -- are inherently different from business vocabularies.  For the latter, however, this two-part approach, Definition plus Definitional Rules, works magic.  The business rules approach scores big time on understanding what business things really mean.

References

[1]  Semantics of Business Vocabulary and Business Rules (SBVR).  First Interim Specification, March 2006.  Available as dtc/06-03-02 at http://www.omg.org

[2]  International Organization for Standardization (ISO).  Terminology work -- Vocabulary -- Part 1:  Theory and Application, English/French.  (ISO, 2000).

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