Creating Business Efficiency with Business Rules

Creating Business Efficiency with Business Rules

Business rules are vitally important for the proper operation of a company — they contain objectives, compliance regulations, and best practices while simultaneously automating processes. Business rules are typically represented using conditional statements such as “If-Then” and “If-Else”.

Why Business Rules Matter

Popular business rules examples include recommending products and services to online buyers, dynamically altering prices, and spotting fraudulent financial transactions.

Simply put, without business rules, managing processes is infinitely more time-consuming, difficult, and prone to error.

Business rules steer different business processes by stipulating criteria that must be respected. 

In other words, they specify which business processes need to be carried out and when.

Common Use Cases of Business Rules

Business rules are designed to do away with manual decision-making processes that are not only time-consuming and error-prone but also increase operating costs. 

Underwriting in Insurance

Insurance underwriting consists of gathering a candidate’s personal information in order to set the scope and price of the plan. To do so, the underwriter analyzes information pertaining to things such as the applicant’s salary, assets, medical history, lifestyle choices, and much more.

The problem that insurance underwriters are experiencing is the fact that very often they are swamped by the enormous volume of paperwork that needs to be handled. As a result, insurers are unable to respond in a timely fashion.

Business rules streamline the entire underwriting operation by performing accurate risk analysis in a fraction of the time it takes an actual person. 

If an applicant satisfies all the criteria, then the application is simply passed on for review by a human underwriter for final approval.

This frees up underwriters to focus on more difficult cases that actually need require their focus and expertise. 

Surge Pricing

This is a sales strategy employed by companies that continually adjusts prices based on external data, very often in minutes. The idea is to offer the same product or service at different prices under conditions.

For example, airlines have mastered dynamic pricing by changing ticket prices according to different factors including the number of seats left and seasonality.

Fraud Detection

Financial institutions along with insurance carriers are one of the industries hardest hit by fraud. This is why financial institutions and insurers use rules-based automation to identify suspicious behavior. Banks typically use business rules to start authentication processes. 

For instance, large credit card transactions that occur outside of the country generally require that the fraud department of the bank get in touch with the client to approve the transactions.

Recommendations

Online retailers employ business rules to display personalized products to individual shoppers.

Therefore, e-commerce businesses can customize their offerings by displaying appropriate items at different stages of the buyer’s journey. For instance, business rules can present products bought by other website visitors to shoppers who viewed identical items.

When properly deployed, recommendations allow e-commerce businesses to upsell and cross-sell, which are proven sales strategies that drive revenue and growth. 

Business Rules Management Systems 

Implementing business rules requires a rules engine, also known as a business rules management system. Companies of all sizes use these robust software solutions to automate critical processes. 

Historically, automation required hard-coding business rules into workflows, making it very difficult to make timely updates in response to changing market conditions because developers and programmers were needed to make even the tiniest amendments.

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