When we think about how enterprises create or manage business capabilities, the words that spring to mind are People, Process, Information, and Technology, otherwise known as PPIT. But as I often point out to the businesses I work with, there's something missing. And no, the expression I'm thinking of isn't 'business rules'. It's 'knowledge'.

Watch Gladys' latest video blog entry below.

The Importance of Managing our Knowledge

Knowledge comprises strategy, business concepts, business rules, operational business decisions, and key performance indicators (KPIs). In this day and age, experts often like to say that we're in a 'knowledge economy'. But if that's the case, then how can companies gain a competitive advantage without efficient knowledge management?

Knowledge management makes us more agile, more cost-efficient — I've had clients tell me that business rules have saved them up to 75% per project — and more compliant. In the past, several compliance officers have thanked me by telling me that business rules provide them with the necessary traceability to answer to auditors.

Knowing Your Rules Means Knowing Your Business

"I don't know why; the system made me do it" or "Because the system says so" are all things I've heard from people who don't know their business rules. Executives have come to me to say "Gladys, just tell me how our pricing system works — we don't know why our rates are what they are." Yet again, to answer those questions, you need to know your business rules.

Not only do business rules help you understand how your business works, they also ensure that you provide consistent results. All too often, people are provided with different answers according to which employee they speak to; one clerk will say yes to a request, only to be contradicted by the next one. This is symptomatic of an organization that doesn't have the right business rules in place.

Put simply, business rules are there to tell you WHY — why you get a certain rate, outcome, or result, and this is why they are of utmost importance to organizations.

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