How to Define Business Rules and Business Requirements

Where do Business Requirements start? Where do Business Rules end? One of the problems for junior Business Analysts is that they may focus so much on the Business Requirements, that they overlook how the underlying Business Rules define how the business truly functions. Unless you’re clear on the difference between the two, you may end up gathering requirements which will need to be revisited later as they contradict or even break a business rule.

Business Requirements – Excel Template

Difference Between Business Rules and Business Requirements?

One area where many Business Consultants get tripped up is confusing Business Rules and Business Requirements. We looked at how to write Business Requirements last week, so let’s look at what Business Rules and Business Requirements have in common and where they differ.
What is the difference between a business rule and a business requirement?

  • Business Rules – these are statements (or conditions) that tell a person whether they can perform a specific action that relates to how the business operates. Business Rules also give you the criteria and conditions for making these decisions.
  • Business Requirement – this may include what you need to do to enable the business rule to be implemented. In other words, a business requirement may not be valid if it contradicts or breaks an existing business rule.

Example of Business Rules

Let’s step back a minute. My Dad has three pet ducks at his home. One water duck and two land ducks. Yes, it gets very loud sometimes.
So, here are some rules regarding the ducks health and safety:

  • Ducks cannot be given bread. It may choke them.
  • Ducks cannot be left unattended when swimming. They are poor swimmers and may drown.
  • Ducks must be given water with all meals. Helps them digest.
  • Duck must have buddies. They’re very socialable and pine when alone.
  • Ducks must be kept out of the kitchen. Yes, I see the irony 🙂

Ok, these are some of the rules we have for the ducks.

From Business Rules to Business Requirements

Now, imagine we were building a new apartment block for millionaire ducks. No doubt there will be many requirements about their lifestyle, feeding, entertainment and transport. While gathering and defining these requirements, we need to consider:

  • The new apartment owners must not allow folks to give bread to the Ducks.
  • If you’re building a swimming pool. They can have a pool if it’s a requirement, but they also need a life guard.

You get the idea, right?

Connection Between Business Rule and Business Requirements

Now that we’ve looked at how Business Rules work, let’s look at how and where they are connected:

  1. Do business rules exist even when you can’t implement a requirement? Yes. The Business Rules inn independent of the requirements gathering process. It can and must exist independently of other processes.
  2. Does implementing a business requirement mean complying with the business rule? Depends. In general, Yes, but there can be exceptions.
  3. Does implementing the business requirement make it easier to comply with the business rule? Yes. The connection will be stronger across all business process and allow greater understanding of how the Business Rules to Business Requirements function.

Sample Business Rule

This is an example of business rules for a bank taking credit card applications over the web.
Example: Taking Credit Card Applications Over The Web

  • Business Rule: Customer has an Email Address.
  • Business Requirement: Ability for bank staff to send and receive emails to the customer.

Now if we change the business rule:

  • Revised Rule: Customer must have a valid Email Address.

Note: A second rule is required to define ‘valid email address’. An Email Address is considered Valid if does not return as ‘undeliverable’ within 60 minutes of being sent out.
Additional Business Requirement to support Business Rule:
System will immediately send email to customer once email address is received. The email is not batch processed but sent in response to each email received.
Note: The smallest change in the wording of the business rule can have significant impacts on other business processes. When testing business requirements make sure that you consider all possible scenarios where the revised business rule will impact other parts of the business.
Recap

  • Business rules describe what you may or may not do in a specific business scenario. It also gives the criteria, conditions and exceptions for making these decisions.
  • Business Requirements capture what a user must do to implement and/or comply with a Business Rule.
  • You may need different sets of business requirements to implement different sets of business rules, for example, when dealing with complex business processes with complicated conditions and exceptions.
  • Business rules are independent of business requirements and shouldn’t be changed to accommodate a requirement.

Be careful when changing a business rule in case it impacts how a business process functions.
Conclusion
There is one final point I want to share. Make sure that ownership of the business rules is properly assigned to someone – and make the person accountable.
One approach is to assign this activity to a business analyst with strong skills in document control and with the ability to push through new versions of revised Business Rules.
Try to find the most practical solution for managing your business rules. We used a networked Excel spreadsheet at a large European bank and it worked very well. All documents were version controlled and we followed a strict naming convention which made it easier to retrieve and update the rules when needed.
Don’t get tripped up on the technology. Once the team understand how the documents are structured, written and shared, then you should be fine. Also, remember to purge out-dated business rules. This means you’ll have fewer documents to manage and should speed up annual audits if/when the auditors want to check your document repository.
Final tip: in the Excel spreadsheet, cross-reference the business rule to the business requirements so you can quickly identify where one change impacts another.
About the Author: Ivan Walsh runs the Business Plan Blog. He also shares Small Business and Small Business Information for Entrepreneurs at Klariti.

12 thoughts on “How to Define Business Rules and Business Requirements”

  1. Hi Ivan,nWhile I appreciate the intention of this article, I think your attention-grabbing headline is misleading, and focuses on superficial differences in delivery rather than on significant differences in quality. The reality is, as always, far more complex than a headline can encompass. You do however offer your readers an important service here by reporting on the content of various courses on offer.nnFirst of all, I have to declare an interest. I am an Associate Lecturer for Sheffield Hallam University’s (SHU) MA in Technical Communication (and a graduate of the same programme). SHU is by any definition a “real world” institution but the MA programme in Technical Commmunication is a Distance Learning course. There are no lectures or seminars, and no attendance is required. Course material is distributed to students all over the world and is supported by web-based discussions, exercises and other activities. However the academic requirements and standards for this course are exactly the same as those of any other MA course offered by SHU.nnIt is neither true nor fair to assume that “online” qualifications – those offered by distance learning or by using web-based materials – are inherently less good than those offered at bricks-and-mortar institutions. Potential students need to consider a wide range of factors when choosing any course. These include cost, duration, syllabus, the perceived value of the qualification, and the convenience of taking part. Distance learning and web-based courses from reputable institutions offer opportunities to many people who would otherwise be denied access to education. (Disreputable providers do of course operate online, but they operate in the “real world” as well.) These people not only include those who are far away from their chosen institution, but also those who are considering a career change later in life, and who therefore have family and other commitments that would prevent them spending three or more years as full-time students.nnIn answer to your question about what sort of graduate I would hire, I would say that anyone who has taken the time and effort to study a topic related to their profession in technical writing has demonstrated that they are serious and committed, and that fact in itself would be significant in any hiring decision.

    1. Hi David,nnThere is a story behind thisu2026nnMy friend spent a few years getting a degree with Open University.nnSheu2019s a single mom and did it in the evenings. Then she moved to Canada and applied for jobs. No go! She was told the degree was u2018too exoticu2019. nnTheir exact words. ???nnSo, if Open University is not recognized as a quality institution, then we have a problem. I’m sure itu2019s great. nNow, other technical writers, mostly young folks or those trying to break into the field, want to do an online course on technical writing but donu2019t know where to go, who to trust, and is it worth it.nnMaybe the STC could help here. Dunno, maybe thatu2019s not their job. nnBut there is a real problem both for those who offer great courses u2013 as I’m sure you do and OU u2013 but donu2019t get the credit. No pun intended. nnDo you see my point?nnSo, what do we need to do?

    2. Excellent comment, David. When evaluating training courses, we might as well check the training team: who are they? What have they published? Which professional society/group they belong too? etc…Another point for recruiting: have candidates take a test, either in house or on-line.nnBTW, Mercer University is missing in the above list… and George Hayhoe is at Mercer!nnBest regards,

  2. My take: a full bachelor’s program, offered by an accredited college that has a quality on-campus program, should be similar in quality whether it’s on-line or on-campus.nnThe so-called “certificate” programs are another story. IMO, they simply contribute to the de-professionalization of technical communication. I might recommend hiring someone with such a certificate, but only for reasons having nothing to do with said certificate.

    1. The cert programs are tricky. I know someone at Oracle who has certs/diplomas for all kinds of things. Beats me what theyu2019re for. nAt Oracle, they carry some weight (with HR) but I donu2019t think other employers will be so impressed. nReally think there is a gap here and the STC could co-ordinate it. nDoes it have the ambition/appetite to do so? nDunno!n

  3. I agree with David that it depends on the institution, the quality of the faculty teaching the program, the quality of the course materials, and the overall design of the program. Today’s technology makes it possible for remote participants to learn as much or more than those attending classes in traditional physical classrooms. If I were considering hiring someone, I’d consider the same things for both kinds of degrees, and I’d look at the candidates’ samples and question them about their coursework, and what they are now qualified to do. If I were considering getting an advanced degree, I’d investigate online programs as well as nearby institutions.

    1. Hi Margaret, nIf I were considering hiring someone, I’d consider the same things for both kinds of degrees, and I’d look at the candidates’ samples and question them about their coursework, and what they are now qualified to do. nSo, maybe the problem is whou2019s doing the hiring. Some HR types may not u2018respectu2019 degrees from online institutions as they would real-world- just my perception. nWhereas those in the frontline, i.e. the person who will be working with the new hire, may be more concerned with what they can actually, as opposed to what the cert says. nI’ve seen many good people get screened out as they didnu2019t have the paperwork but I knew they could do the job. nOne question: who has the final say on hiring? Is it HR or the IT Dept?

      1. Who has the final say in hiring varies with the company. In some companies I have worked in, HR’s job was to screen for appropriate candidates, but the decision was up to the manager of the IT or engineering department where the person would work. In other companies, HR has a lot more clout, and they can veto any candidate they don’t like for whatever reason. I’ve usually enjoyed working where the manager who picked me had the final say.

        1. I’m reading Tom Peters at the moment and heu2019s pretty scathing about HRu2019s role (interference) in the interviews. He reckons that itu2019s down to the dept to hire the people that suit them bestu2026 and chemistry, gut feelings about someone play a big part in choosing the right person.nHow do you think we could change this so that the manager who picked me had the final say?n

  4. Hello Ivan: Thank you for posting this. Regarding the statement that some, “HR types may not u2018respectu2019 degrees from online institutions as they would real-world,” I tend to agree. Also, I took an online course once in technical writing. I’d say that it was “o.k.” but not great. However, it helped me to produce a very decent writing sample when I was starting out. And quality can vary, that’s for sure; certainly the teacher had more of an impact than the fact that the course was online. I agree with your comment that STC perhaps can help us here (by offering suggestions regarding institution quality). If fact, they probably should!

    1. Hi Gina, nSTC perhaps can help us here (by offering suggestions regarding institution quality)nI think there is a real lost opportunity here. There must be many technical writers looking at ways to supplement their income right now. Getting them involved in a team effort to produce the u2018definitiveu2019 online technical writing courseu2026 that would make money, for sure. And there could be DVDs etc as well. nWith the STCu2019s endorsement, I could see it working. Not sure it has the appetite though. nFwiw I have thought about this but my site doesnu2019t have the numbers (traffic) and the influence STC has. n

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