Business Rules: The Key to Successful BI

by | Aug 23, 2013 | General BI

Reading Time: 7 minutes

iStock_000009409113SmallBusiness intelligence (BI) software providers like to talk about the features and functions of their products. However, the real quality of your BI deployment often rests in the expertise of your BI vendor (or in-house BI specialist) and the ability to effectively translate your organization’s business rules into a BI solution.

In this blog post, we’ll discuss what business rules are, and give you some examples of how they need to be codified in your BI application.

What are business rules?

A typical BI application is designed around the business rules your organization uses to measure and achieve its goals and to govern its operations. The BI application takes information and presents it in the context of your organization’s business rules to give meaning to data.

Here are some examples of common business rules:

  • Business booked in a given quarter must be invoiced and shipped before midnight on the last day of the quarter, based on the local time zone of the global headquarters.
  • Overtime pay is calculated at 1.5 times the standard hourly rate of the employee. It is awarded for all time worked in excess of 40 hours in a week, in 15-minute increments, rounded up. A work week is defined as beginning at midnight Monday morning and ending at 11:59 PM the following Sunday night, based on the local time zone of the employee’s site office.

Business rules can relate to units of measurement, standards, targets, quotas and metrics. Business rules can include data-dependent actions like alerts, compensation, payment terms, discounts, rebates or commissions. Some business rules are simple. Some are complex. And many business rules seem simple, but translating them to BI transformation routines can be quite complex.

Your BI application must be powerful and flexible enough — and your consultant must be skilled enough — to codify the business rules and any exceptions. This separates market leaders from “wannabes.”

“Following the Sun” changes the data horizon too

What if your organization has the added complexity of reporting on data transactions across multiple sites and across multiple time zones? What if your company is multi-national and must both consolidate and separate reporting across multiple currencies? Here the relative context is a moving target, and it takes a little more expertise to deliver a solution that takes into account these global dynamics.

This is exactly the challenge that faced Dynamic Business Informatics (DBI), Dimensional Insight’s UK & Ireland distribution partner, when we first engaged with Colin Burns, group commercial manager from H&K International. H&K is a company that delivers complete kitchen packages to new or existing restaurant sites anywhere in the world. With its global HQ in Dublin, H&K has 17 offices worldwide, spanning major time zones, including Toronto, Dallas, Detroit, Mexico, Beijing, Johannesburg, Tokyo, Beirut, Manila, Auckland and Sydney. One of its key customers is McDonald’s, which operates 33,000 fast food restaurants in 116 countries. Its record with McDonald’s is exemplary, with H&K winning both “Supplier of the Year Award” and “Partner of the Year Award” twice.

H&K needed decision-makers at each business unit to be able to look at their own data in a timely way in their native currency, but also allow the same data to be viewed as part of consolidated reports using either a European standard currency, U.S. currency or the group currency for Central Admin reports. In addition, the financial reports had to incorporate local business rules such as taxation.

How Diver’s ease of use and DBI’s expertise helped H&K manage business rules

Colin engaged with DBI after hearing of our work using The Diver Solution to consolidate reporting for other pan-European organizations. Colin says, “The spanning of so many time zones and areas with multiple currencies proved to be extremely challenging for our reporting needs. We considered implementing a new ERP to achieve this goal but it would have taken too long. We needed the information now, not in a couple of years’ time. We also had to consider cost and potential disruption to our business.”

DBI designed a BI application that extracts all the relevant sales, stock, purchasing, contracts and finance data out from each AS400 machine and consolidates it into a central virtual data warehouse. The “virtual” warehouse concept means the data is standardized and transformed using H&K’s consolidation rules before it is used to build models and reports. The virtual design is more flexible than a traditional data warehouse; this means that rules can evolve as new business units are added to the live environment. By using the virtual warehouse design, DBI could establish the first sites within days, without having to evaluate all the separate rules for each company beforehand.

DBI worked with H&K to apply business rules at several levels.

  • Level 1: The first level was to apply business logic to create actionable reports on data coming out of all its separate Orion AS400 ERP systems at multiple sites. This was fairly straightforward and it’s the type of business analytics that we are all familiar with.
  • Level 2: The second level was to apply rules relating to time zones when consolidating all of this transformed data for reporting purposes.
  • Level 3: The third level was to apply rules relating to the various trading currencies, particularly the two base reporting currencies (Euros and U.S. dollars) for the head offices in Europe and the U.S.

The results

Prior to implementing Diver, any time one of H&K’s field offices had a new reporting requirement, it had to be developed, tested and implemented uniquely for that office, then adapted for other offices. This was both costly and time-consuming. Now, business logic changes are applied centrally and are filtered down to all sites simultaneously, eliminating the need for separate development at each different location.

In addition, if H&K wanted to create a report based on data across all sites, it previously took a long time with the old AS400 reporting system. By the time users received the reports, the data in the reports was often no longer useful because they took so much time to produce. Now with Diver, users are able to quickly create reports across locations so they can make business decisions in a time-sensitive manner.

Finally, the standardization that Diver provides enables H&K users to analyze data across the globe and be confident that reports in say, Ireland is based on comparable information to the same report for Australia.

H&K now automatically delivers more than 300 Diver reports daily. Each site receives reports at the start of business in its own location and in the currency it wishes to see.

Colin said, “We are delighted with the efficiency and cost-effectiveness of the Diver application delivered by DBI. Although it appears to operate very simply, we realize that it has only been possible through DBI’s deep understanding of our business requirements and its ability to translate our business rules accurately.”

Key takeaways from this post

In this example we have seen that:

  1. Applying business rules effectively to your BI application can make the difference between success and failure.
  2. Business rule application starts with a quality consulting engagement.
  3. The ability to codify business rules and apply them to your BI application is facilitated by a flexible and feature-rich BI product.

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