How Business Rules Power Successful Companies

Let’s take a closer look at some of the most common use cases of business rules examples across different industries.

Business rules have an important role in managing the operational decisions of a company — they represent best practices, regulations, and performance goals while automating processes at the same time. Business rules powerful conditional statements such as“If-Then”, and “If-Else”, Popular use cases include providing personalized online shopping recommendations, surge pricing, automated underwriting, and fraud detection.

Why Are Business Rules Important

Business rules help organizations to manage and automate processes that are time-consuming, demanding, and error-prone.

They express an organization’s business goals and describe how business processes need to be performed; when they start, stop, or need to be changed.

For instance, lenders examine applicants’ data such as income, assets, and liabilities when deciding whether to approve loans. Business rules can be set up to reject those applicants that don’t meet specific criteria.

Business Rules Use Cases

Let’s take a closer look at some of the most common use cases of business rules examples across different industries.

Automated Insurance Underwriting

Insurance in underwriting is the critically important process of collecting and analyzing an applicant’s personal information to determine the scope and price of a policy. 

The underwriter typically considers the applicant’s occupation, salary, family health history, lifestyle choices, etc. to come to a decision.

The challenge facing insurers is that underwriters are overwhelmed by the huge volume of applications, which prevents carriers from responding in a timely fashion. Unsurprisingly, this causes frustration and hurts the customer experience.

Business rules streamline the underwriting process for insurers by performing accurate risk assessments in a fraction of the time required by a human underwriter. If a candidate meets all the necessary requirements expressed by business rules, then the application is passed on to a human underwriter for final approval.

Simple cases are processed in minutes allowing underwriters to focus on more complicated cases that require nuance.

Variable Pricing

Dynamic pricing is a strategy made popular by retailers that continually changes prices based on countless factors, such as customer demand or seasonality. 

The aim is to offer the same product at different prices under different situations.

Discounts

Companies use business rules to create and manage discounts. For instance, a company can reward customer loyalty by establishing a discount strategy that gives a 10% discount when a regular customer spends over $500 a month.

An employee can write business rules that provide discounts when a certain amount has been surpassed.

Interest Rates

Financial institutions rely on huge volumes of data when originating a mortgage such as a borrower’s credit history. Again, business rules play a critical role in automating lending processes.

For instance, lenders use a business rule that checks for a minimum credit score necessary to receive a favorable interest rate. 

Shopping Recommendations

Online retailers use business rules to display personalized products to shoppers.

For example, business rules can show items purchased by other customers to visitors who have similar interests.

Business Rules Benefits

In order for organizations to take properly leverage the power of business rules, they need to use a rules engine that automates them.

Business Rules Engine

A business rules engine is a pluggable piece of software that enables non-technical subject-matter experts to write and manage business rules without having to rely on support from the IT department.

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