Business rules describe rules that are defined for automated processes or for processes whose degree of automation is to be established or increased. Business rules therefore usually have their background in the field of (business) information technology, digitization and other technical issues. However, they can also describe business, i.e. entrepreneurial, matters.

Example for new customer discount

For instance, a new customer discount of twenty percent on initial registration in an online store is both an entrepreneurial, economic rule and a process-related rule in the digitized creation of a customer account as well as in the subsequent ordering process.

Depending on whether the customer is already registered, the discount is granted or another process is started based on the available data.

Advantages of business rules

Business rules are not strategic guidelines in themselves, but instructions to be followed; they are applied in the workforce, in the processes, and in the business practices and IT systems of a company. Ideally, business rules are stored and defined centrally; for example, in a requirement document for software developers. If the business rules are properly maintained, they can help the company and in particular the relevant processes to better achieve the corresponding goals, minimize costs, eliminate obstacles, optimize communication and comply with legal requirements.

Business rules in application software and BRMS

When business rules describe how a computer program or a process controlled by software should run, they are comparatively simple if-this-then-that scenarios that, when accumulated, enormously simplify or accelerate very complex processes by running automatically. However, a large number of business rules can increase the complexity and unwieldiness of a process or program and increase the risk that individual rules will not complement each other but also contradict each other. For this reason, there are so-called business rule management systems (BRMS). These enable processes and computer programs to be developed and deployed on the basis of business rules. The BRMS should enable the business rules to be made centrally available to other programs or requirements at any time by separating the rules from other levels of the software program.

In contrast, business rules and the corresponding BRMS in rule-based systems in the broader context of artificial intelligence take on a much higher level of complexity.

Business rules and rule-based systems

Rule-based systems provide a way to represent business rules. Three elements make up the rule-based system: the fact base, the rule base, and the business rule engine. The fact base is a database that contains the facts from the business processes. The rule base, in turn, is a rule database that contains the set of rules. The business rule engine forms the control system that identifies the rules in a business process (based on the fact base), applies the appropriate rules, and also updates the rule database with new rules.

Characteristic for a rule system is a query according to the scheme If-Then-Else. Thus, a specific rule is being broken down and represented. Particularly in the case of automated processes, very complex business rules can emerge that express a supposedly simple issue in an elaborate manner, but nevertheless, make the business process sustainable and more efficient.

Example of a rush order

A company’s decision to accept a rush order is always a procedural challenge. What criteria are used to accept a rush order and what are the consequences for all the processes involved? Here, business rules facilitate decision-making on the one hand and ensure on the other that attached processes continue to run quickly and smoothly.

The relevance of Business Rules and BRMS

Every company has business rules, even if they are not written down and stored anywhere. Products and services are being procured, manufactured and marketed ever faster. At the same time, they are subject to numerous regulations and requirements such as laws, quality standards, specifications and guidelines that affect all areas of the company, such as production, accounting, sales or IT.

Thus, all business processes already move within a framework defined by rules, which is expanded by corporate decisions. Explicitly formulated business rules, which are stored in their entirety, can be used to distinguish between two types of business process automation. On the one hand, there are simple decisions that are made very frequently, as in the example above with the new customer discount; on the other hand, there are very complex decisions that occur infrequently but involve a great deal of technical complexity, as the example with the rush order shows.

Centrally managed business rules enable a company to keep the processes and applications it practices flexible (and thus to change them if necessary), to review them, to make them transparent, and also to simulate them by means of a BR


Business rules are used to establish automated processes, make them transparent and increase their efficiency. They can include both technical processes and business instructions. A business rules management system (BRMS) is used to store and manage business rules.

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