Business decisions are driven by a variety of information, including customer information and sales figures to market trends and competitor insights. However, gathering, interpreting, and acting on all this information can be complex and time-consuming.
Decision management is an emerging field that combines artificial intelligence and business rules to help organizations manage data and rules that drive business decisions and automate decision-making processes. A business rules management system (BRMS) is a tool that allows organizations to manage business rules and achieve decision automation. In this article, we’ll explore BRMS, how they work, their use cases, and their benefits.
What is a business rules management system (BRMS)?
A business rules management system, or BRMS, is a software system that helps organizations create, store, manage, execute, and optimize their business rules from a centralized platform. These business rules are typically expressed in the form of decision logic that can be executed automatically by the BRMS software to automate decision-making across the enterprise. Check our article on business rules if you want to learn more about them.
How does a BRMS work?
Different BRMS tools provide different functionalities but there are three main components of a BRMS:
- Business rules development environment that allows both technical and non-technical users to create or update business rules.
- Business rules repository that stores the created business rules and allows enterprise applications to access them.
- Business rules engine that receives requests from enterprise applications with relevant data to access the required business rules, provide a decision based on the request and the relevant business rules and execute the decision in a runtime environment. Check our article on business rules engines for a more comprehensive account of them.
For example, business users can determine business rules that govern how a product must be priced and store them in the business rules depository of a BRMS. These rules can regulate product prices depending on external factors such as competitor prices and customer behavior, or internal principles such as “IF the price of a product has changed within the last 10 minutes, THEN do not change it.”
Then, a dynamic pricing system can send incoming pricing data to BRMS, which will evaluate the request and incoming data against relevant business rules and determine the product price using its business rules engine.
These features of business rules management systems allow businesses to separate business logic from the source code of other enterprise applications. This enables business users across departments to create, change, and execute business rules relevant to their functions and automate decision-making without needing to write code or involve IT.
Use cases of BRMS
Loan application processing
By using a BRMS, lenders can create business rules that govern various aspects of the loan application process, from eligibility criteria to credit score thresholds. This streamlined approach helps reduce processing times and improve overall efficiency, resulting in a better customer experience.
Businesses can use a BRMS to:
- Define and store the internal and external standards that they must adhere to as business rules,
- Make changes to their rules as needed,
- Track metrics related to the rules,
- Ensure that they are always up-to-date.
A BRMS can help businesses meet compliance standards by automating compliance processes, providing users with visibility into their rules, and helping them to quickly identify any issues that may arise.
By using BRMS and fraud detection algorithms, businesses can automatically evaluate incoming data, identify potential cases of fraud, and take action accordingly. This enables businesses to detect and prevent fraudulent activity more efficiently and to reduce financial losses from fraud.
Sales teams can integrate their lead qualification tools with a business rules management system to automatically calculate each lead’s score, determine whether they are qualified or not, and specify the method to reach qualified leads according to their scores.
A BRMS can enable HR personnel to create and manage business rules that govern how candidates are evaluated, selected, and hired. An applicant tracking system can access the business rules that govern the hiring process from the repository of the BRMS and process job applications automatically.
Feel free to read our comprehensive article on HR automation.
To explore more use cases of BRMS, feel free to read our article on the examples of business rules.
Benefits of BRMS
A business rules management system helps businesses:
- Achieve decision automation as it allows both technical and non-technical users to author business rules within a single framework and deploy them to automate business processes that require decision-making.
- Improve the consistency in decision-making across the enterprise as it centralizes business logic expressed in business rules.
- Increase business agility as it allows non-technical subject matter experts (SMEs) to create and manage business rules in the domain of their business function without IT involvement.
- Reduce complexity as it separates the business logic from the code of enterprise applications.
We’ve discussed the benefits of business rules engines before, check our relevant section for more.
What is the future of BRMS?
Traditional BRMS faces several challenges:
- Rule maintenance can be challenging, especially if external factors such as regulations constantly change.
- Rigid rules have the potential to be abused by customers or competitors. Consider this example: Two Amazon booksellers used algorithmic pricing to ensure that they were generating more revenue than their competitors, causing a book’s price to increase to $24 million.1
- Machine learning models are widely used in business and they offer continuous learning. Therefore ML models can improve their decisions over time with novel data that can contradict with deployed business rules.
We expect vendors to come up with holistic approaches that help humans and machines collaborate where humans contribute rules or guidelines based on deep domain understanding while machines contribute constant improvement capabilities.
If you have other questions about BRMS, feel free to ask:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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