Enterprise SOA with SAP NetWeaver

Business Rules Management Roadmap

SAP NetWeaver Product Management SOA

Disclaimer: This document is not subject to your license agreement or any other agreement with SAP. It contains only intended strategies, developments, and functionalities of the SAP product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that this document is subject to change and may be changed by SAP at any time without notice. SAP assumes no responsibility for errors or omissions in this document.

About this paper: This road map document should help to understand the strategic direction of SAP in the area of Business Rules Management under the overall umbrella of Enterprise SOA technology. It is therefore part of an overall SOA technology roadmap. For a complete picture, please refer to the roadmaps for SAP NetWeaver Composition Environment (CE), SAP NetWeaver Business Process Management (BPM) and SOA Middleware. The paper contains the following parts: 1. Evolution of Business Rules Management 2. Typical Customer Challenges 3. Definition - what is Business Rules Management? 4. Business Rules Management Accelerates Business Process Management 5. Building Blocks of SAP NetWeaver Business Rules Management Business Rules Modeling and Implementation Business Rules Testing and Refinement Business Rules Execution and Justification End-to-End Change Management 6. Value Proposition of Business Rules Management 7. SAP NetWeaver Business Rules Management - Roadmap Highlights 8. Summary Contact: rajagopalan.narayanan@sap.com

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Evolution of Business Rules Management

1990s
Decision Support
Expert Systems

2000s
Decision Automation
Rule Engines Change Management

2010s
Decision Alignment
Business Alignment

Decision Support

Key Business Drivers

Business Agility Faster decisions Business user control Accurancy and consistency Business Alignment Align decisions with business goals Business Transparency Need for transparent business Compliance requirements

BRM 2.0 and beyond

Business Rules Management (BRM) and Business Process Management (BPM) convergence BRM and Business Intelligence (BI) convergence BRM and Complex Event Processing (CEP) convergence Simulations and replays Optimization and alignment Integrated rules and process analytics

Expert Systems Hardwired business rules

BRM 1.0

Rules externalization First rules engines Application Configuration Change Management

Introduction SAP has been facilitating businesses for more than 35 years by helping streamline business software and align software requirements for companies all around the world. In our very competitive era, organizations need to achieve agility when responding to changing business requirements in todays dynamic market conditions. Business Rules are critical enterprise assets that are very dynamic in nature. Managing fast changing business rules across different software systems and business functions has become more challenging than ever today. Business rules management (BRM) as a management discipline helps business organizations standardize and optimize their business rules in order to achieve greater visibility, centralization and consistency in key business decisions. Business rules management (BRM) as a technology helps organizations create the technical framework (or software products) to compose, execute, deploy manage business rules spanning across various business applications used by different departments within an organization. BRM technology provides considerable added value for a service-enabled platform via securing return of investment and minimizing business risks: Reduced coordination requirements Transparency and centralization Flexibility and agility at an atomic level

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The Evolution of Business Rules Management (BRM) Business rules management (BRM) emerged as a discipline from the areas of Artificial Intelligence and Expert Systems. BRM forms part of a class of intelligent systems called rule-based systems. Other kinds of intelligent systems include neural networks (used in predictive analytics and data mining), fuzzy logic, genetic algorithms, etc. The late 1990s saw the birth of a new breed of intelligent systems called rules engines, which provided value by enabling externalization and automation of business logic. In the mid 2000s, businesses required focus shift from plain decision automation to management of rules and rules driven decisions. This shift has started with and brought increasing adoption and awareness. As rules increase by volume in an organization and as business users show more and more active interest in influencing operational business decisions, the need to manage growing sets of business rules, while continuously optimizing processes for achieving performance goals, has come to the forefront. Major unique business drivers of BRM in the overall SAP strategy: Although rules engines drive decision automation they have been in the realm of IT only up to now. BRM brings immense benefits across the value chain, offering to business users visibility and control of critical operational business rules that drive day to day business decisions on the way of achieving corporate performance goals.

Achieve business agility through faster decisions that are precise and consistent, firmly controlled by business. Enable stable business functions and at the same time allow for dynamic changes at the speed of business. Align operational business decisions and business rules driving them up with organizational KPIs and corporate goals while involving business users. Ensure transparency and compliance in all cases of urgent business requirements or government requirements, enabling decision consistency, as well as informed decision making.

BRM 2.0 and beyond In todays fast pacing business world, organizations require innovative end-to-end perspective on business rules management (BRM 2.0 and beyond). The future trend is to provide businesses with new methods/technology to help them gain agility on an atomic level and align their operational business rules with overall strategic business goals. This may be seen as convergence of various disciplines: Business Rules Management (BRM) with Business Process Management (BPM), Business Intelligence (BI) and Real Time Event Processing (also called CEP) where BRM together with BPM become critical components of Enterprise SOA. From a market perspective BRM functionality in the Enterprise SOA context brings huge benefits to SAP existing and new customers in the following ways: Business Rules Management is an accelerator for Business Process Management - rapid modeling and deployment of rules-enabled composites & business processes. Business Rules Management aligned with Real Time Event Processing (also called CEP). Examples of back-up business scenarios are in fraud detection, Service Level Agreement (SLA) monitoring, etc. BRM capabilities supporting business users end-to-end from business rules capturing, modeling, simulation, refining and optimization for improved and controlled alignment with business goals - rules services for end-toend consumption and collaborative business user rules management. Actionable + integrated process and rules analysis

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Typical Customer Challenges

Zero visibility into business decisions

Business has no visibility into how systems take decisions Critical business rules are locked in code or databases

Change resistant IT systems

Business rules can be very volatile Hardwired business rules make change difficult for IT Unacceptably long testing and change cycle times High costs of correction and rework

Scattered knowledge
Business rules not centrally managed Scattered across code, manuals and as tacit knowledge Inadequate, ambiguous and inconsistent business rules across the

Enterprise
High risk of compliance violation

Typical Customer Challenges Business Rules are ubiquitous, and organizations typically employ conventional techniques for their automation and management. Customers end up facing some typical challenges when they adopt such an approach. Here is a summary of such challenges.

Lack of visibility into how applications enforce business rules When business rules are implemented in code, an IT system may become a big black box. Business cannot look into the system and see how rules are being implemented to drive to particular business decisions. Business rules implemented using conventional methods tend to get hidden across code, databases, manuals, spreadsheets and other documents. Duplicated business rules maintained in multiple repositories are less likely to be discovered which may lead to inconsistency and even failure to meet important regulation requirements.

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Change Resistant IT Systems Many business policies are very volatile by nature. Changing them as fast as business requires may become a challenging task, as it is very complicated to assess what impact a simple change in code base may have - one of the main reasons to start driving informed decision automation in the first place. If business rules are embedded in code there is no way to run separate rules change test cycle and system test cycle, which means that operational and maintenance costs increase, as well as change lifecycle duration. Hardwired business rules can lead to high costs of correction and rework. This is because changes to business rules are difficult to validate and verify because they are owned by the Business, but IT is responsible for implementation. This is called the rules vs. requirements paradox.

Scattered Knowledge For many Enterprises critical business rules are scattered across multiple sources, departments and business systems. Because business rules are not centrally managed, this leads to a situation where business rules are inconsistent, ambiguous and even duplicated across the system. This situation can lead to serious compliance violations. Example is in regulated industries like Banking, Insurance etc.

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What is Business Rules Management?

What are business rules?

Business rules represent the policies, guidelines that drive operational business decisions Business rules are owned by Business, not by IT

Different kinds of business rules

Validation rules, rate calculations, decision rules, recommendation rules Personalization rules, localization rules, exception rules, configuration rules Rules for event correlation, event filtering and event analysis

Sources of business rules

Corporate charters, Management practices and regulatory forces Marketing strategies, Pricing policies Products and services offerings, Customer relationship practices

What is Business Rules Management?

Representation, storing and sharing of business rules in a business user friendly form Externalization and centralized management of all volatile business rules Automation of critical rule-based business decisions Capabilities to test, debug, validate and refine rules

What are business rules? Business Rules describe business behavioral constraints, represent the core business logic of each organization, guide and control all basic business processes that form the back bone of any business transaction. Business rules represent a set of standard business practices or policies that need to be applied consistently across business activities in order to achieve company goals and stable business growth. Business Rules are one of the most dynamic components of any application. Therefore their constant and correct identification and externalization improve organization's adaptability to industry changes and competition. Externalizing business rules from applications ensures that these rules are easily communicated across the organization and managed separately from the application code: business adaptability and flexibility via IT stability.

What is Business Rules Management (BRM)? Modern BRM functionality allows the capture, design, implementation, testing and deployment, governance, fine-tuning and analysis of business rules along with report generation capability. Clear separation between business rules (business requirements) and software requirements Business rules externalized from application logic and centrally managed Ability to represent rules in business user-friendly natural language like format Business users build and edit rules with ease without IT dependency Model and execute complex business rules, ability to access rules remotely and change them in real-time Common understanding and standard interpretation for business rules Business rules versioning, access management, concurrent development and testing

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Business Rules Management Accelerates Business Process Management

Rules are a BPM Accelerator Clear decoupling of process logic from decision logic Accelerated process efficiency with automated decisioning Reusable business rules services Rules based correlations for real-time business events End-to-End Rules Consumption By composite applications Business process composites Service & event composites UIs & situational composites By system-to-system processes By human-centric processes By ABAP business applications

BRM

Business Rules Management as an accelerator for Business Process Management SAP believes that BRM will complement and accelerate Business Process Management on top of the common Business Process Platform. By leveraging the complementary strengths of Process Management & Rules Management, organizations can realize the highest benefits of process efficiency and optimization. BRM will act as an accelerator for BPM and improve efficiency through decoupling of decision logic from process logic, through capturing, automation and alignment of critical business rules and the decisions they drive as reusable services, as well as through rules based correlations for real-time business events. There are documented instances of processes that have achieved 80% - 90% levels of automations. A problem arises when these processes involve activities that require decisions to be taken based on complex business rules. Because of the dynamic nature of rules and the complexity involved in automating and managing them, these processes steps are rarely automated in a manageable fashion.

Example: In this context, lets review a common business process in Manufacturing & Automotive industries, per example warranty claims processing. Some of the major issues in warranty claims processing are as follows:

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Warranty claims processing, validation, review are all manual and prone to error activities. In some cases, the whole process can take up to 6-8 weeks. Warranty policies and contracts are typically not strictly enforced. This in turn can lead to fraudulent claims, incorrect billing and excessive payments. When a suppliers contract changes, these changes may not flow back into the system immediately leading to incorrect billing. Multiple departments (IT, Inventory, Purchase, Recovery) involved may not have the same visibility into the system, or may even use different systems. This can cause delays in payments for approved claims. Mistakes in separating companys warranty responsibilities from those of suppliers or distributors, result in covering costs pertaining to others.

The implication of not improving process efficiency is obvious as summarized below: Time spent and resources engaged in manual processing increase go-to-market costs. Same resources cannot be channeled to perform other important activities, which adds to opportunity losses cost. Unrealized claim value can be in the order of 20%, which could add up to 10s of 1000s of claims a year. Inefficient claims management means that Inventory has to remain stocked. Consequences, as financial balances show, may be huge. Communication gaps lead to poor data sharing about defects. Inefficient claims management may influence relationships with dealers and suppliers and may even affect customer satisfaction adversely.

It is obvious that these activities cannot be automated simply through a hand-coded / hard-coded application exposed as a Web Service. Transferring these activities into the human-centric domain does not obviously solve all problems. When it comes to process automation, one of the first concerns that needs review should be human intervention. BRM enables the automation of operational policy decisions in an agile, precise, consistent, compliant and auditable fashion while giving business users the control to influence business rules. BRM clearly stands out as an effective solution for such business scenarios, where a large scale of human and automated (H2H, B2B, B2H, H2B, A2A) activities have to be performed in a concise, consistent and timely manner, because it enables automation of critical guidelines and policy driven decisions in a transparent and agile fashion.

Scenarios for End-to-End Rules Consumption It is envisioned that Business Rules be available for consumption across the entire application stack. This is because rules are everywhere and business applications of all varieties would find it necessary to take advantage of these capabilities. Here is an overview of the various consumption scenarios for business rules: 1. Compose reusable rules services with SAP NetWeaver BRM 2. Composite applications of all types can use business rules capability (rules services) to deliver rules enabled composites. Specifically: a. Composite business processes b. Composite services and event composites c. Composite UIs and mashups d. Rules-enabled situational composites 3. System-to-system processes can consume reusable rules services. Example of a use case is Destination Determination Rules 4. ABAP applications can consume rules services or rules-enabled composite services

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SAP NetWeaver Business Rules Management Building Blocks

Rules Composer Rules Manager Rules Repository Rules Engine Rules Analyzer Rules Modeling & Implementation

Business user-friendly rich rule formats Support for multiple data models for rules implementation Data model independent business vocabularies

Rules Testing & Refinement

Rules validation, testing & refinement Optimization, simulation, What-Ifs and analysis

SAP NetWeaver Composition Environment

Rules Execution & Justification

Dedicated sequential & inference engines Decision justification & rules execution logging Integrated administration & monitoring

End-to-End Change Management

Business user rules management interface Rules versioning & repository services Permissions, access control & governance

SAP NetWeaver Business Rules Management (SAP NetWeaver BRM) is a set of pure java components that will provide rules modeling, management and execution capabilities. It will be a licensed add-on available with SAP NetWeaver Composition Environment. Architecturally, it will become a first class SAP NetWeaver component providing the following technical sub-components: Rules Composer: The rules composer is the modeling and implementation environment for business rules. Rules Modeling for the Business Analyst Rules Implementation for the Business Rules Developer Support a variety of data model definitions This functionality will be available in two flavors: from within the SAP NetWeaver Business Process Management (SAP NetWeaver BPM) process composer to model rules in a business process context and as a separate perspective in SAP NetWeaver CE to model rules to be used by non-BPM applications. Rules Analyzer: The rules analyzer is the environment for testing, refining, analyzing and optimizing business rules. Rules Manager: The rules manager represents Business user environment. It will provide a web based collaborative functionality for modeling, editing and managing business rules. Rules Repository: The rules repository is the environment that will provide rules versioning, permissions management, access control, alerts and other repository services. Rules Engine: The rules engine represents the runtime for rules execution. Execution will be supported by an integrated capability for rule execution monitoring, control and configuration and execution logging and justification capabilities.
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Business Rules Modeling

Rules Modeling

Business rules modeling for Business Analysts Rich business user-friendly rules formats Natural language-like rules representations Support for multiple data models for rules implementations Resolve conflicts & identify inadequacies Seamless navigation from process to rules through integrated process & rules modeling

SAP NetWeaver BRM intends to provide rules modeling capabilities targeting Business Analysts and rules implementation capabilities targeting Business Rules Developers.

Planned technical capabilities of SAP NetWeaver BRM for business rules composition and modeling: Enable Business Analysts to model complex business rules in an appropriate representative format of their choice, per example: complex guidelines using inference rules, involved decision sequences using graphical modeling, rule based responses to complex patterns of business events, like in fraud detection. Provide both Business Analysts and Rules Developers the capability for inspecting business rules consistency and resolving conflicts. Enable rule developers to model/implement business rules using data definitions (e.g., XSD, Java) of their choice for implementing executable rules. A seamless navigation prom business process to business rules through integrated modeling for processes and rules.

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Testing & Refining Business Rules

Application UI

Rules Refinement and Alignment

Business rules testing for Business Analysts Business rules refinement and validation throughout rules lifecycle Business rules analysis towards optimization and alignment Integrated process & rules analytics

Unit Testing

Regression Testing

Debug

Test in MS Excel

Application UI

Simulate Rules

Analyze Rules

Optimize Rules

Typical Business Questions Every organization has to meet specific business goals in order to be successful, therefore it is essential to formulate policies correctly and concisely in the first place, and on the other hand, to make sure changes to them are introduced correctly as rules evolve over time. Correctly and concisely means that all business rules must behave exactly in the way they are expected to, in order to deliver business decisions in line with business objectives. Lets consider that an automated business decision manager is available: How can organizations help business teams to determine the best policy formulation for each specific business goal? How can business rules be analyzed, tweaked and improved in order to pro-actively optimize them and meet successfully all business goals? There is a need to make a policy change. How to measure the impact of this change on the business?

SAP is intending to address these needs via the new SAP NetWeaver BRM component. It will not only feature business rules modeling, but also rules testing and validation through regular testing methods, simulations and replays. To help businesses to answer such questions, SAP NetWeaver BRM will enable business rules refining and optimization. Capabilities for validating business rules across their life cycle spanning from modeling and change are also planned. Planned capabilities for an Integrated and actionable rules and process analytics will provide businesses with insight into how well business decisions are aligned with overall business goals.

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Business Rules Execution & Justification

Rules Execution

Dedicated inference & sequential engines Out-of-the-box support for rules consumption by

Rules Engine

If { }

Composite applications & business processes ABAP Business Applications

Rules Monitoring & Control

SAP NetWeaver Administrator integrated rules engine administration Decision Justification & rule execution logging

The rules engine is the runtime component that serves as a decision delivery vehicle. Rules engines are always used as components, and are therefore called by an application or a business process. It is intended that SAP NetWeaver BRM will provide dedicated inference and sequential rules engines. It is planned to enable out of the box consumption of rules services by composite applications and business processes as well as ABAP business applications. Also planned is the capability for integrated rule engine execution logging and decision justification capabilities that will provide organizations with the possibility to revise conditions and reasons why certain decisions were made for fulfilling auditing and compliance requirements.

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End-to-End Change Management

Rules Change Management

Web based collaborative business user interface Protected access to business rules Change approval mechanisms Runtime & design time repository services Business rules reports & rules traceability services

It is intended that SAP NetWeaver BRM will provide complete lifecycle change management capabilities for securing, governing and managing business rules. SAP intends to provide rules repository capabilities for both design time and runtime including Rules versioning, permissions, and alerts and so on. It is also intended that business users be able to completely coordinate management, review and change approval activities in a collaborative fashion using a secure and protected web based business UI. SAP believes that Access Control, reporting services, traceability and change approval mechanisms will enable organizations to perform rules asset management, having the security of managing their business rules as concisely as any other organizational asset, and therefore intends to provide such capabilities.

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Value Proposition
VALUE CURVE
Actionable + integrated process and rules analysis Rules services for end-to-end consumption collaborative business user rules management Rapid modeling and deployment of rulesenabled composites & business processes

Delivering Value Across the Business Process Platform

Precise and informed decision automation Flexible IT Systems Improved Visibility for the Business Knowledge Centralization

SAP believes that BRM will offer sustainable value to customer organizations by helping them automate critical complex rules-driven decisions, manage these fast-changing, dynamic business rules, towards aligning them with organizational goals and KPIs. SAP NetWeaver BRM will not only provide technical answers to business challenges, but will go beyond in facilitating customers to react appropriately to business changes, which undoubtedly require appropriate IT infrastructure modifications. By enabling business users to introduce real-time changes to the business logic, BRM will minimize IT impact in the change management loop and reduce maintenance costs for systems in an Enterprise SOA landscape. Powered by SAP NetWeaver Composition Environment the new SAP NetWeaver Business Rules Management component will compliment and accelerate SAP NetWeaver Business Process Management. Together they will become critical components of Enterprise SOA:

Provide integrated rules modeling for all types of composite business processes. SAP customers will be able to leverage SAP NetWeaver BRM jointly, as well as separately from SAP NetWeaver BPM which adds on process flexibility and business agility. End-to-end rules consumption rules ready for reuse across a variety of edge composite applications, business processes, ABAP business applications and back-end applications. Enable Business Analysts and Business Process Experts to drive the definition and optimization of business rules.

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SAP NetWeaver Business Rules Management Roadmap Highlights

Rules Composition
SAP NetWeaver Composition Environment (CE) delivers Business Rules Composition Integrated Business Rules Modeling for pure composite applications and composite business processes Rules made available across the application stack from the Composition Environment extending to the ABAP Business Applications Automate critical rule based decisions involving compliance & regulations, pricing, etc.

Rules Management

Advanced BRM

Integrated Composition Experience

Support complex business decision sequences modeling like under-writing, etc. Integrated support for refinement and validation of business rules

Future Releases

Rule based responses to business events in real-time business scenarios like fraud detection, SLA monitoring.

End-to-end Business Rules Support

End-to-End rules change management

Informed decision automation and justification capabilities

Advanced rules analysis capabilities towards alignment with business goals through simulations and replays

Business Efficiency

Enable business user participation and collaboration towards rules authoring and tactical change management

Advanced BRM capabilities Business rules modeling for Business Analysts

Themes do not correspond to releases

2008

2009

2010

SAP NetWeaver Business Rules Management - Roadmap Highlights SAP is planning to significantly extend BRM functional capabilities, constantly providing added value to its customers in the following three stages:

Stage 1: Rules Provisioning (SAP NetWeaver CE, EhP 7.1.1) It is intended that SAP NetWeaver BRM will empower the business process platform by delivering added agility in the form of automated business decisions functionality. It is planned that the first release of SAP NetWeaver BRM component will provide capabilities integrated into the NetWeaver Composition Environment and will be supporting the following usage scenarios: Composite rule-enabled applications Support for complex business rules modeling using rich rules formats with the rules composer Enable the composition of rules based services and applications covering: Composite business processes UIs composition Services and events composition Information composition, aka situational composites Support for system-to-system processes to consume rules services deployed in SAP NetWeaver CE runtime Support for ABAP business applications to consume rules services deployed in SAP NetWeaver CE runtime
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Stage 2: Rules Management Web based UI for rule-authoring targeting business users they will be able to make tactical changes to business rules, approve changes, generate reports, etc. Support modeling of complex decision-making sequences, per example underwriting decisions, using a graphical modeling capability Integrated environment for business rules testing, validation and refining, as well as capabilities to create and test business rules using MS Excel spreadsheets Enabled end-to-end change management through a rules repository providing rules versioning and governance capabilities Informed decision-making via rules execution monitoring and decision justification capabilities integrated with the SAP NetWeaver Administrator in the form of audit trails

Stage 3: Advanced BRM Simulations and historical replays provisioning for business rules alignment Actionable and integrated rules and process analysis enabling consistent business rules and complete decision alignment with strategic organizational goals Capabilities for building optimization and analytical models for business rules alignment with departmental performance KPIs Enabled independent rules modeling without availability of data definitions (Java, XSD) Capabilities to model and represent rule-based event correlations to respond to real-time business situations (per example: fraud detections, lifecycle alerting, SLA monitoring, etc.)

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Summary

BRM Accelerator for BPM

Innovate on top of the Core Business Extend Application Processes Extend the Business Network

Compose

Accelerate Innovation Faster Time to Process Change

Standardize

Reuse Application Building Blocks Lower implementation costs

Integrate

Standards-based Integration Lower integration costs

BPM for BUSINESS NETWORK TRANSFORMATION

New ways of achieving faster go live may be identified using BRM functionality. Building on the value on top of an Enterprise SOA stack, SAP NetWeaver BRM will enable organizations to build agile business systems. Systems built on top of the Enterprise SOA framework leveraging BRM will offer an appropriate resolution for the challenges previously outlined in detail, securing IT investments already made and fostering new ways to incrementally achieve flexibility and improved collaboration while new systems are being built. The road ahead for BRM SAP believes that SAP NetWeaver BRM will complement and accelerate Business Process Management via the automation, management and alignment of critical business rules. For SAP customers, BRM can be successfully applied in a variety of business scenarios involving pure composite applications at the edge of the application core, in many S2S application integration scenarios (per example: destination determination rules in SAP NetWeaver Process Integration, Precise and Targeted Campaign Management in SAP CRM, etc.). BRM will constantly add value towards integrated Business Process and Rules Management capabilities, providing seamless navigation from business processes models into business rules definitions that drive decisions within processes, as well as integrated rules modeling in a business process model context. A major differentiating factor for organizations tightly integrated BRM in an Enterprise SOA landscape is the acquired agility at an atomic level where business rules are captured in an unambiguous manner providing all capabilities required for business flexibility in different IT systems. Enterprises need to adapt only their business rules according to changing business requirements and not their systems. As a result, an overall real-world competitive benefit emerges with the ability to considerably reduce maintenance and operational costs, and at the same time lower time-to-market pressures.
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