Businesses today deal with massive amounts of data and complex decision making processes. Ensuring consistent, optimized decisions across an organization can be extremely difficult without the right systems in place. This is where business rules engines come in.
A business rules engine (BRE) is software that executes predefined business rules to automate decisions and improve efficiency. Instead of employees or managers manually evaluating information and making judgment calls, you can configure rules that automatically run this logic for you.
In this comprehensive 2800+ word guide, we’ll cover everything you need to know about business rules engines, including:
- Growth in business automation adoption
- What business rules engines are
- Types of business rules engines
- Real-world examples and use cases
- Key benefits
- How to select the right BRE
- Implementation best practices
- Leading BRE platform recommendations
- No code rules engine options
- Conclusion and call to actions
Read on to learn how implementing a flexible and scalable business rules engine can save you time and money while enabling greater scalability and innovation across your organization.
The Growth of Business Automation
Implementing technology to automate repetitive business procedures has become a priority across enterprises looking to improve productivity.
Research shows business automation adoption saw rapid acceleration through the COVID pandemic:
- Nearly 70% of organizations have begun automating additional business functions as a result of the pandemic according to Appian research. This trend continues in 2023.
- Separate McKinsey surveys found the acceleration to digital transformations driven by automation jumped between 25 to 50% across major European and Latin American economies.
- The international market for Robotic Process Automation (RPA) and AI-driven business automation alone is forecasted to reach $13.74 billion by 2028, expanding at an annualized rate of 33.6% according to Grand View Research.
Organizations recognize automating repetitive tasks, decisions, and workflows boosts:
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Productivity
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Operations efficiency
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Business agility
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Customer experiences
Within this context, implementing dedicated business rules engine (BRE) platforms to optimize and scale decisions emerges as a growing imperative across many functions and teams.
What is a Business Rules Engine?
A business rules engine is a software program that applies pre-determined business rules and logic to data to automate decisions, approvals, recommendations, and more based on specific combinations of facts, conditions, priorities, and outcomes organizations want to drive.
For example, common types of business rules configured across organizations include:
Eligibility Rules:
Determine if an applicant qualifies for credit cards, loans, special services, or other offerings by evaluating attributes like:
- Income
- Existing debt
- Credit score
- Past account behaviors
Pricing Rules:
Customize pricing displayed or apply targeted discounts automatically by factoring data like:
- User demographics
- Purchase history
- Cart composition
- Sales or seasonal promotions
Recommendation Rules:
Show related products, attachments, or other relevant offers personalized based on:
- Individual interests
- Behavioral data and intent signals
- Inventory availability
- Highest margin or revenue outcomes
Routing Rules:
Direct customer service requests, approvals, or other items across teams by automatically assigning based on:
- Case priority
- Required competencies
- Agent availability
- Prior relationships
Nearly any decision-making process based on predefined policies can be fully automated through a flexible business rules management system.
How Do Business Rules Engines Work?
Modern business rules engine architectures contain three key components:
1. User interface – Where authorized users can view, add, edit, enable/disable rules through business friendly tools. No coding needed.
2. Rules repository – Central catalog that stores and organizes the business rules and decision logic for the software to reference.
3. Inference engine – High performance rules execution engine that evaluates facts and data against rules in the repository and determines what actions to trigger automatically.
When data enters the business rules management system, the steps followed include:
- Facts and event data capture in real-time
- Inference engine checks rules repository
- Rules engine evaluates which logic applies based on data
- Actions linked to triggered rules execute
- Decisions log and optimize
For example, when an e-commerce customer places an order:
- Data on the order, user, cart contents, and more enters the BRE
- Inference engine checks the rules repository for any promotions, recommendations, etc. that apply
- The rules engine finds a free 2-day shipping rule for orders over $100
- Inference engine evaluates order meets required total criteria
- Applies free expedited shipping offer automatically
No human intervention required!
Key technical features provided by advanced rules engines systems include:
If-then logic support
- Allows simple expression of complex decision logic using natural language.
Data integrations
- Connects with existing CRMs, ERPs legacy systems to feed decision-making evaluation
Cloud scalability
- Manages billions of transactions without slow down through cloud infrastructure
Simulation tools
- Models the impact of rule changes safely without impacting real-time customers
Transparent tracking
- Logs the exact data and rules logic followed across every individual automated decision
With all the architectural pieces to apply, monitor and adjust flexible rules at scale, BREs enable organizations to cost effectively embed trusted automation across all types of use cases.
Real World Business Rules Engine Use Cases
Business rules engine platforms enhance operations in many industries:
Banking
Banks use BREs to evaluate applications for financial products by checking applicant details against key eligibility and risk criteria including:
- Income
- Credit score
- Loan to value ratios
- Debt to income thresholds
- Collateral requirements
For example, Citibank employs business rules management systems across functions such as:
- Auto loan origination – Applies custom qualified rate offers based on 800+ risk algorithm rules
- Credit card application approvals – Checks applicant against 50+ standards to authorize or deny
- Fraud analytics – Identifies patterns across billions of transactions daily to deny suspicious charges
- Portfolio risk evaluations – Assigns probability of default ratings to outstanding positions across all products
This allows them to accelerate application response times to customers while avoiding bottlenecks from manual case-by-case evaluations. Customers also receive pre-qualified offers tailored specifically to their financial profiles thanks to granular segmentation.
Insurance
Insurers leverage BREs for policy underwriting and quoting using guidelines like:
- Risk Profiles
- Historic claims
- Coverage types
- Vehicle models
- Age brackets
- Demographics
By encoding complex actuarial science into business logic, personalized premiums and optimized product bundles get issued in seconds online versus days or weeks. Allstate saw 30% lift in customer conversion rates after implementation. Humana achieved over 50% efficiency gains in call center operations using BREs to triage inquiries.
Retail & Ecommerce
Online and omnichannel retailers use BREs to tailor merchandising through tactics such as:
- Targeted promotions – first-time buyer coupons, loyalty member sales, coupon code rules
- Dynamic pricing – VIP level markdowns, competitor price matching
- Recommendations – purchase history, search keyword rules, seasonal rules
Leading marketplaces drive 5-15% revenue increases applying rules engines for merchandising decisions historically requiring dozens of analysts and IT resources. Macys saw 20% larger average order values (AOVs) from improved cross-sells and upsells based on BRE tailored recommendations.
The capabilities of modern rules engines streamline nearly all areas of operations – from finance and customer service to supply chain and HR.
Benefits of Implementing a Business Rules Engine
Let‘s explore 5 major ways investing in a flexible BRE solution drives value:
1. Faster Operational Agility
BREs save massive amounts of time otherwise spent in manual evaluation and approval steps across organizations. Logic codified into rules automatically runs in microseconds.
Workers focus on higher judgement tasks vs mundane analyses. IT resources get redirected towards innovation from maintenance.
The business gains ability to model decisions differently as competitive dynamics shift vs waiting months. This agility powers continuous optimization.
2. Greater Decision Consistency
Rules engines uniformly apply the exact same logic the exact same way every single time vs risk of human deviation across complex policies. No interpretation wiggle room.
This ensures absolute consistency in organizational decisions – a key ingredient to excellence in customer and employee experiences.
3. Lower Compliance Risk
Codifying rules governing decisions provides transparency needed for both internal and external audits (e.g financial services). Detailed reporting shows each step.
Simulations also allow fine tuning logic until aligning perfectly with changing regulatory policies before rules reach production. Reduces costs of non-compliance by orders of magnitude.
4. Improved Decision Quality
BREs allow small rule tweaks and simulations to empirically test impact on business KPIs from revenue to defaults. Optimize until ideal mix found.
Ongoing multivariate testing continues to maximize decision quality automatically.
5. Scales Growth
Cloud-based rules engines easily handle extreme peak volumes across the enterprise without delays.
No capacity planning needed even as exponential decision complexity challenges arise from entering new markets, M&A moves, diversifying products.
In total implementing a business rules engine to codify policies, resource constraints, risk thresholds and other criteria to optimize decisions automatically instead of manually reviews unlocks immense value.
How to Select The Right Business Rules Engine
With business rules engines enabling game changing results – from 3-10X efficiency gains to millions in additional revenue – choosing the right solution provider proves critical.
Factor decision drivers like:
Skill Levels
What expertise does your team have? Code-free drag and drop interfaces support business users configuring workflows themselves without IT. Other solutions require developer involvement.
Use Case Complexity
Simple eligibility rules require different features than personalized property risk estimates or dynamic pricing engines. Ensure BRE has built-in functionality for needed data science.
Legacy Infrastructure
Will the rules engine embed within existing architectures through APIs? Cloud vs on-premise installation requirements? Mind both connectivity and data security.
Additionally prioritize engines guaranteeing:
Rapid Prototyping – Spin up test projects in days/weeks not months
Enterprise Scale – Availability and security vetted to support entire organizations
Flexibility – Adapts as needs change without requiring platform rip-and-replace projects
Transparent Governance – Full visibility and control over rule lifecycles from creation to retirement
Choose solutions balancing business friendly usability for configuring complex logic with IT grade scalability, security and support.
BRE Implementation Best Practices
Once you select the right software for automating decisions, focus on driving rapid user adoption through:
Executive Sponsorship
Secure C-level endorsement and targets for rules adoption. Fund small multi-function pilot projects demonstrating quick hits.
Hands-On Workshops
Train staff on building sophisticated rules no coding needed. Boost expertise until teams self-sufficient.
Community Building
Encourage tips and template sharing between groups exploring BRE functionality. Share success stories internally.
Incentives Tracking
Celebrate metrics for usage, rules published, simulations run. Friendly competition motivates!
Investing in change management ensures your organization realizes the full quality, efficiency and innovation possibilities from codifying complex decisions into easily manageable business rules.
Leading Business Rules Engine Recommendations
Mature business rules management systems with extensive successful deployments exist to evaluate.
My top platform recommendations to explore based on capabilities are:
Pega Decision Management
Best For: Enterprise-grade decision automation
Capabilities:
- Natural language interface
- Scenario testing
- Real-time customer analytics
- Cloud and on-premise options
- Integrates across Pega‘s CRM and workflow automation offering
Clients Include: Citi, United Healthcare, Invesco
FICO Decision Modeler
Best For: Risk and compliance focused use cases
Capabilities:
- Guided rule authoring
- Reason codes for auditability
- Scenario analysis impact comparison
- Xpress Mosel modeling language
- Model version control
Clients Include: AvantCredit, Bridgecrest, Sterling Payment Technologies
Bosch Decision Management
Best For: IoT and edge use cases
Capabilities:
- Cross-cloud deployment flexibility
- Open architecture connects systems
- Containerized for portability
- Real-time stream analytics builder
Clients Include: Mercedes Benz, Deutsche Bahn, Ericsson
These industry leaders surface frequently in analyst reports on rules platforms driving the highest Enterprise satisfaction and project success levels. Ready to scale from early departmental use cases up through mission critical automation relying on hundreds of billions of optimized decisions annually.
No Code Rules Engine Options
Emerging business rule solutions allow subject matter experts to automate decisions without coding including:
Kapow Rules Engine
- English based authoring
- Audit trails for compliance
- Advisor guidance to improve logic
ABACUS.AI
- Natural language interface
- Contextual recommendations
- Embedded analytics and reporting
While capabilities more lightweight today than traditional BREs, no code options will experience rapid innovation through 2023 and beyond. The democratization promises game changing flexibility in embedding automation withoutdependencies on technical staff.
These citizen development platforms lower barriers for turning institutional knowledge into systematized business logic usable across applications.
In this comprehensive guide, we defined what business rules engines are, how they work, real-world applications, plus all key considerations around implementing BRE solutions to drive automation and improved speed, efficiency and innovation in business decision making.
Key learnings included:
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Business rules engines execute predefined logic encoded into conditional “if/then” statements automatically once input conditions trigger
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System architectures made for enterprise scale processing to apply codified rules across millions of decisions per second without delays
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Use case applications span personalized recommendations, dynamic pricing, next best actions, eligibility assessments, approvals and more
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Top benefits range from 10x faster decision velocity to millions in savings from improved risk analysis or micro-segmentation targeting
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Cloud platforms enable secure and reliable BRE adoption from early departmental needs up through organization wide mission critical use cases
As discussed, advanced rules management systems now allow configuring sophisticated decision logic safely by business users without coding dependencies, opening automation possibilities once bottlenecked.
Recommended next steps include:
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Take the self assessment on decision making needs requiring better scale across teams
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Quantify efficiency and revenue expansion opportunities from improved decisions
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Explore top rated software providers and enroll in custom product evaluations
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Discover tactical opportunities to begin embedding machine executable logic across existing business policies
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Institutional knowledge not yet automated remains trapped inside workers’ minds limiting quality, growth and responsiveness. Business rules engines offer the keys to unlocking this value at last.
Now equipped with a full picture of capabilities, use cases and implementation insights, your organization can chart a path towards revolutionizing entire categories of business decisions through modern automation platforms.
Contact our technology advisors to map your possibilities.
