What is a Business Rules Engine?

Updated Sep 8, 2022.
business rules engine

Functional businesses have important processes and functions that are vital to their operations. 

Although many companies have a detailed documentation process, problems arise when specific company policies, rules, and regulations are not communicated to stakeholders. The situation becomes chaotic when multiple teams and external stakeholders get involved.

Rules are instrumental in guiding your employees to make the right decisions and steps. However, dictating rules without any support plan or structure leads to more errors. 

A Business Rules Engine is the ideal solution for overcoming these challenges. This guide explains the concept of a Business Rules Engine and how it proves an invaluable tool for process owners and workers.

Let’s get started.

What is a Business Rules Engine?

A Business Rules Engine (BRE) is a program-based software application that manages a business's decision and automation processes using predefined business logic to improve the organization's productivity and predict likely outcomes. 

By affording businesses the ability to automate their complex business processes with the least human attention required, the Business Rules Engine enables organizations to reduce costs and increase efficiency while minimizing likely errors. 

Business rule engines are helpful for organizations with complex dependencies that find themselves in situations where their regulations are constantly being changed and in dire need of logical changes. 

As a software system, Business Rules Engine, BRE is used to effectively check, automate, and execute business rules to near perfection by validating and enforcing business rules in various domains, be it finance, healthcare, insurance, or others. 

Most Business Rules Engines consist of three components: a domain model used to define data entry, an interference engine tasked with evaluating likely outcomes, and a practical action mechanism that implements considered actions. 

Elements and principles of the questionnaire response validation system
Source: Brcommunity

What are Some Examples of Business Rules?

The decisions made in a year globally cannot be quantified as millions of decisions are approximated to be made daily. 

Regarding decision tables, there is not a sharp realization that the decisions being made are primarily governed by a set of laid down rules working in the background. 

With this in mind, each company system must apply the proper decision logic to its operations and essential processes to achieve the desired business goals.  

Business Rules Infigraphic
Source: Sydle

Health Insurance Companies Business Rules Example

An example of business rules in action is in the case of health insurance companies plagued with deciding if a potential new customer meets its eligibility requirements.

Financial Institutions Business Rules Example

Another example of a set of rules that define a business operation is in the case of financial institutions that constantly need to verify if a loan meets all requirements before they are approved. 

Insurance Companies Business Rules Example

Insurance companies have laid down rules and guidelines consisting of paperwork aimed at mitigating risks while dealing with a wide range of constantly changing state and federal regulations, expectations of customers, and corporate policies. 

Retailers' Business Rules Example

Retailers must decide the criteria for offering customers free shipping and other free services and the minimum and maximum limits for holding transactions with their customers. 

Benefits of Using Business Rules Engines

You stand to gain numerous benefits by choosing to use a Business Rules Engine. It improves your own processes and helps you generate audit trails, which helps you stay in compliance with regulations. 

As companies effectively navigate their decision trees, they must consider their future and how they plan to handle future business processes.

Here are some of the numerous benefits of using Business Engine Rules.

1. Increased Efficiency

One of the many standout benefits you gain from using a Business Rules Engine is its unique ability to improve your operations' efficiency through automating your decision-making processes.

The Business Rules Engine makes decisions based on data that enables it to execute decisions automatically, taking away manual decision-making from your organization's operations.

2. Improved Accuracy

A Business Rule Engine improves the accuracy of decisions in your organization by ensuring all quarters make decisions in compliance with prior set rules.

3. Increased Flexibility

Business Rules Engines allow organizations to make quick and adaptable changes to their business rules when required. 

The perk of using a Business Rules Engine is that you do not need to change the underlying code or IT infrastructure before enacting such changes.

4. Reduction in Costs

Manual decision-making is characterized by its own cost that drives up the operational expenses of a business. 

Most rules engines help organizations significantly reduce the cost of decision-making by automating their decision-making processes.

5. Improved Customer Satisfaction

Business Rules Engines can effectively automate your organization's customer service processes to improve your customers' overall satisfaction by providing a faster and more detailed response to all customer inquiries. 

Using the Business Rules Engine, you can access an automatically customized response system that generates accurate responses to customer inquiries based on relevant customer data for much-improved customer satisfaction.

6. Enhances Your Business Agility

Fast and easily adaptable changes to your business rules can enhance the agility of your business and make it more responsive to these changes.

The Business Rules Engine provides a centralized master process management system for your business rules that offers access and ease of updating necessary changes to business users.

With this, IT involvement in business processes is significantly minimized. The Business Rules Engine ensures the needed changes are effected consistently.

7. Improved Quality of Decisions

Automating your organization's decision-making process, in the long run, translates to a much-improved quality of decisions as the rules engine guarantees the consistency and accuracy of these decisions. 

With Business Rules Engine, BRE, businesses get to define rules and decision logic guiding every decision.

The Business Rules Engine uses a set of simple rules that ensure that the same decisions are made when applied across a wide range of possible scenarios. This move translates into an improved accuracy of decisions, reducing the hours users spend making decisions.

How Does a Rules Engine Work?

Rules engines are software programs designed to assist businesses in effectively managing and automating decisions made in the company. 

They define decisions about the business based on what to do next with the available information obtained from the manual data entry. 

Components of a ThingsBoard Rule Engine Module
Source: ResearchGate

As a decision-making program, rules engines automate decisions based on what is expected to happen next in a process.

When combined with an application or system software with all the master data management required, rules engines are better positioned to perform their tasks. 

The decision-making program of the rules engine comes with its detailed input and output data alongside a set of rules that instruct it on how to go about the decision-making process. 

The decision-making program of the rules engine
Source: Springer

All rules governing a Business Rules Engine, BRE, are often obtained from the company policy, legal regulations, or other criteria that govern its operations. 

The ultimate goal of the rules engine is to bring about less-complicated decisions through advanced technologies and computations that help save organizational time and further lessen the margin of error. 

Decisions made by the Business Rules Engine are solely autonomous and guided by a set of rules that are not open to modification or change without unauthorized access to the software program.

Decisions made by the Business Rules Engine
Source: Amazon AWS

Drawbacks of Using Business Rules Engine

As with its numerous benefits, there are certain drawbacks that you need to consider when using a Business Rules Engine for your business process management system (BPMS). 

Here are some of the drawbacks that come with using a Business Rules Engine, BRE.

1. Complexity

Process owners have to deal with complexity when using a business engine as the complexity of processes makes it very difficult to implement, control, and maintain. 

The complexity of using a Business Rules Engine is brought about by the need for a thorough understanding of the business domain and its specific rules guiding its operations before implementation.

2. High Cost

Besides the complexity of using a Business Rules Engine, its system is generally costly to purchase and implement in your business processes.

The high cost of using a Business Rules Engine is enormous because it is a Commercial Off-The-Shelf (COTS) product, hence its hefty price tag.

3. Impacts Performance

Another potential drawback that using a Business Rules Engine brings to a business process is its negative impact on performance.

With the way the rules engine is designed, there will always be a need every time a rule is in play, and this persistent need can significantly increase the system's overhead.

4. Flexibility

Although flexibility is an advantage to your business process, there are unique scenarios where flexibility can be inflexible and cause more bad than good. 

This situation usually arises because your process needs a specific format to operate on the same level as the data under its management, making it difficult to integrate with other systems or make necessary changes to the implemented rules. 

Types of Business Rules Engines

Every office administration has documents that spell out how a process should be performed, consisting of a list of stakeholders, conditions, steps, and operations. 

Company employees use free templates, project boards, and various visual mediums to interpret their data to minimize errors. 

The Business Rules Engine works automatedly and steps to the next level with project boards and templates to make the grades faster and easier. 

Here are the main types of Business Rules Engines that set the tone for how a process is expected to be carried out.

1. Workflow-Based Business Rules Engine

A workflow-based BRE offers unique workflow features that allow employees to build workflows that enable them to perform their routine tasks automatically, such as updating fields, sending emails, and routing functions to other users in the system. 

The workflow-based BRE is the most basic form of the Business Rules Engine and is best used in simple yes/no decisions scenarios in the workflow.

Workflow Based Business Rules Engine
Source: Toptal

2. Coding-Based Business Rules Engine

The more advanced your Business Rules Engine is, the more significant the amount of coding and robotic process automation your process requires to build bots and assign a list of tasks to them.

A coding-based BRE functions through these bots by analyzing a wide array of files, networks, and applications, seeking to make sense of all the data and use it to perform various other functions.

You would likely need developers and proper deployment functions to build a coding-based BRE. It requires a sensible amount of coding for your robotic process automation solutions.

3. Logic-Based Business Rules Engine

Logic-based BRE is poised to perform simple workflows up to logical rules and regulations. It seeks to bring in the potential of coding without involving its complexity in its processes. 

Simple logic and formulas based on mathematics are knowledge that employees easily understand as it is natural. Logic-based BRE allows business users to automate decisions in their process using simple logic and formulas without the need for coding.

Logic Based Business Rules Engine
Source:  IBM Developer

Logic-based BRE simple rules make it easy for business users to automate their decisions, create digital forms, initiate approval workflows, and assign users to tasks. 

Also, you get to reduce manual data entry by creating its own automated data entry channels, all according to its preset rules.

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Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.