Skip to main content

Business Processes and Rules

Sometimes we sell a product to businesses that improves their efficiency. Improved efficiency can help the business achieve:
  1. Increased production or sales volume.
  2. Lower production and operational costs.
There is a discipline called "business process improvement" (BPI) dedicated to the subject of improving operational efficiency. Companies like Dell spend a great deal of time on BPI projects to determine how they can make different aspects of their business more efficient.

Key concepts in BPI include business processes and business rules.

Business processes are the steps a business executes to achieve their objectives. Accepting and processing orders, doing payroll, and hiring and firing employees are all examples of business processes.

Business rules are rules the company follows as it executes its business processes. An example is a pricing rule that states the minimum price or margin a sales person is allowed to negotiate with a customer. You can also view the steps within an established business process as rules; i.e. the rule is that the employees follow those steps.

When we are developing a product for sale to businesses, it's important to understand the business processes and rules of the businesses we are targeting. That way we can understand how best to deliver value - a product that will improve the businesses' operating efficiency.

In my next entry, I will explore the relationship between product requirements and business processes/rules.

Comments

rodgert said…
Hi Roger,

I recently when for an interview where I was asked

Explain the difference between a business requirement and a business rule?
Tue Aug 19, 06:33:00 AM 2008
Roger L. Cauvin said…
My next entry addresses the question you were asked in your interview.
Tue Aug 19, 09:24:00 AM 2008
Post a Comment

Popular posts from this blog

Dancer Test

Are you left-brained or right-brained? Supposedly, your brain lateralization determines how you view this animation. Some people see her rotating clockwise. Others see her rotating counter-clockwise. Some see her unpredictably changing the direction of her rotation. Supposedly, people who see clockwise rotation are right brained. People who see counter-clockwise rotation are left brained. I originally came across this animation here .
6 comments
Read more

Why Spreadsheets Suck for Prioritizing

The Goal As a company executive, you want confidence that your product team (which includes all the people, from all departments, responsible for product success) has a sound basis for deciding which items are on the product roadmap. You also want confidence the team is prioritizing the items in a smart way. What Should We Prioritize? The items the team prioritizes could be features, user stories, epics, market problems, themes, or experiments. Melissa Perri  makes an excellent case for a " problem roadmap ", and, in general, I recommend focusing on the latter types of items. However, the topic of what types of items you should prioritize - and in what situations - is interesting and important but beyond the scope of this blog entry. A Sad but Familiar Story If there is significant controversy about priorities, then almost inevitably, a product manager or other member of the team decides to put together The Spreadsheet. I've done it. Some of the mos...
32 comments
Read more

5 Ways Companies Make Product Decisions

In the last blog entry, we reviewed the  four problems that companies face, or are trying to overcome, as they make product decisions .  Now we'll look at the ways that most companies make their product decisions. Companies that develop, market, and sell products and solutions make strategic and ongoing tactical decisions.  They decide what features to include in their products, what messages they will use to communicate the value of their products, what marketing tactics they will use, what prospective customers they will target, and many day-to-day choices. Whether or not these decisions are deliberate or ad hoc, most companies use some combination of the following ways of making product decisions. (A downloadable "map" that summarizes the product decision landscape is included at the end of this article.) Customer Wants Product decisions based on feature requests, focus groups, and what prospects and customers say they want. Companies are selling products to ...
12 comments
Read more