Through a rule, darkly

David Stodder makes a good point in an article in intelligent Enterprise. Business rules take many forms in a large corporation but today they are quite opaque. Rules that define even basic terms like “gross margin” may not only be buried away in complex spreadsheet models or ERP systems, but are in practice usually held in many different places, with no guarantee of consistency. I know of one company where an internal audit revealed twenty different definitions of “gross margin”, and that was within just one subsidiary of the company! In these days of stricter compliance such things are no longer merely annoying.

My observation is that business customers need to take ownership of, and be heavily engaged with, any process to try and improve this situation. It cannot be an IT-driven project. It is not critical whether the ultimate repository of this is a data warehouse, a master data repository or some different business rules repository entirely, but it is key that the exercise actually happens. At present the opaquenes and lack of consistency of business rules is not something that most companies care to own up to, yet it is a major controls issue as well as a source of a great deal of rework and difficulty in presenting accurate data in many contexts.

I was amused by the readership poll quoted that said that 61% of respondents say that they have “no standard process or practice” for business rules management. This might imply that 39% actually did, a number I would treat with considerable caution. Personally I have yet to encounter any that does so on a global basis.