10 business rules examples and how to automate them
Key takeaways:
Business rules are directives that define how an organization operates, such as who gets a discount or which purchases need approval. Common business rules examples include discount rules, sales commissions, loan rate eligibility, fraud triggers, and approval thresholds. A business rules engine runs these rules automatically and consistently, so teams can change them without rewriting code.
Business rules and logic play a critical role in the efficient operation of an organization. They set expectations, provide guidelines on work performance, ensure compliance, and help organizations automate their processes. In this article, we will look at 10 common business rules examples to illustrate their potential real-world applications.
What are business rules?
Business rules are directives that define an organization’s business activities. They are important because they clarify an organization’s objectives and detail how processes will be performed. Business rules can be informal, written, or automated.
When it comes to automating rules, a business rules management system (BRMS) plays an incredibly important role. A BRMS is a software solution that is used to define, deploy, execute, monitor, and manage business rules. There are a broad range of business rules systems available, but they all have three key components.
First, business rules are stored in a repository. A repository is a database infrastructure that collects, manages, and stores data rather than embedding rules within an application’s code. Second, a BRMS provides easy-to-use development tools that allow users to define and manage business rules without the need to write code. Finally, a runtime environment allows applications to invoke the applicable business rules and execute them using a
Note that a business rules engine can also be purchased independently of a BRMS. Organizations that stand to benefit from a BRMS include:
Organizations that are governed by defined business rules or internal policies.
Organizations seeking to improve efficiency while making more informed decisions.
Organizations that are concerned about compliance issues and want to reduce the possibility of legal and regulatory actions.
Organizations that prioritize flexibility to adapt to changing market conditions.
Business rules vs. business logic
A business rule states what the organization requires, for example "orders over $2,000 need supervisor approval." Business logic is how a system carries that rule out: the conditions it checks, the data it reads, and the action it takes. A business rules engine keeps the rule separate from application code, so the people who own the policy can change it without a development project.
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Business rules are commonly used to offer customers discounts.
For example: IF a customer spends more than $5,000 in a calendar year, THEN apply a 15% discount on each item.
Subscription service auto-suspension
Subscription fee models are common in nearly every industry. Yet manually managing subscription billing and service eats away at your bottom line. To make it easy, you may automate suspension of service for nonpayment.
Rule: IF a payment is more than 30 days past due, THEN suspend the customer's service.
Automated sales commissions
Many employees are compensated on a commission basis or awarded bonuses based on performance. For example: IF an employee sells more than $50,000 in a calendar year, THEN award a $5,000 bonus.
Assigning assets to new employees
Employee onboarding is a time-consuming process. Employees must be trained, granted system access, and assigned assets, among other things. Rule: IF a new employee record is created, THEN generate an email address and system credentials.
Home loan interest rate business rules
Banks are required to collect a lot of data when originating a mortgage, like information about the home being purchased and the borrower’s credit history. Business logic plays an important role in automating manual loan processes. As an example: IF the borrower's credit score is below the minimum for a rate tier, THEN do not offer that interest rate.
Suspicious transaction triggers
Rule: IF an out-of-state card transaction exceeds $1,000, THEN require a representative to verify it with the cardholder.
Generating student ID numbers
Business rules can help streamline the application process as well as enrollment. Rule: IF a student is accepted, THEN generate an ID number with the required prefix and length.
Declined applications based on scores
Creating rules to approve or reject applications can streamline the rental process. For instance: IF the applicant's credit score is below the set threshold, THEN decline the rental application.
Auto calculating shipping rates
Rule: IF a shipment weighs more than 10 pounds, THEN charge $2 per pound for the first 10 pounds and $1.50 per pound after that.
Purchase requests by amount
Rule: IF a purchase request is under $2,000, THEN approve it automatically; otherwise, route it to a supervisor.
Automate business rules with Decisions.
Every example above follows the same pattern: a condition, a decision, and an action. The Decisions rules engine lets business and IT teams build these rules visually, test them before they go live, and run them inside the workflows they govern. Rules can use data from your existing systems, so they keep working as policies change.
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A business rule is a directive that defines or constrains how an organization operates, such as who qualifies for a discount, which purchases need approval, or when a transaction needs verification. Business rules can be informal, written in policy documents, or automated in a business rules engine.
What are some examples of business rules?+−
Common business rules examples include customer discount thresholds, subscription suspension for nonpayment, sales commission bonuses, loan interest rate eligibility, fraud verification triggers, rental application approvals, shipping rate calculations, and purchase approval limits.
What is the difference between business rules and business logic?+−
A business rule states what the organization requires. Business logic is how a system applies that rule: the conditions it evaluates, the data it uses, and the action it takes. Keeping rules separate from application code lets policy owners update them without a development project.
How do you automate business rules?+−
Write each rule as a condition and an outcome, for example IF an order is over $2,000, THEN route it for approval. Then manage those rules in a business rules engine or BRMS, which runs them automatically and consistently inside your processes.
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