Unit 1: The

Context of
Decision
Models
Decision Model
• It is a new model aimed at representing business logic.
• It impacts not just technology trends, but also business management
practices.
• It brings to the world of business rules a well-defined structure based
on the inherent nature of logic, extended with integrity and
normalization principles.
• It is an intellectual template for perceiving, organizing, and managing
the business logic behind a business decision.
How It Began
• constant expansion of the functionality of computerized business
systems.
• critical processes were documented as a set of tasks and important
checkpoints, along with guidance for carrying out decisions along the
way.
• The documentation together with training informs the processes and
evolves them over time.
• In the age of commercial computer processing, important business
processes, or parts thereof, have become ideal targets for
automation.
What Is Business Logic?
• It is a set of business rules represented as atomic elements of
conditions leading to conclusions.
• It represents business thinking about the way important business
decisions are made.
• It is a prescription for the way business experts want to evaluate facts
in order to arrive at a conclusion where the conclusion has both
meaning and value to the business.
Examples of Business Logic
• A person who has not had any jobs in the past five years is considered
to have a poor job history.
• A person with more than ten jobs in the past five years is considered
to have a poor job history.
• A person with a poor job history, a large mortgage, and a significant
number of miscellaneous loans is considered very likely to default on
a loan.
• A person with a low credit rating must not be granted an unsecured
loan.
 Figure 1.2 for a quick glance at obvious visual
differences among data, process, and Decision Models.
 5 Most Interesting Characteristics of the Decision Model

• It defines a technology-independent way of organizing an important,

somewhat intangible business intellectual asset.
• It is a pure representation of business logic.
• It is easily implementable in technology and transcends current and future
technology products.
• The Decision Model is neither a language nor a grammar. It is a model.
• It is a model that addresses an important unsolved problem: how to
effectively manage business logic and business rules, not as lists or
annotations attached to or buried in other models, but in a model of their
own.
Potentials of Decision Models
• IT and business management methodologies that promote business
decisions and corresponding Decision Models to the level of prominent
management levers
• Commercial automation software that supports decision services derived
from Decision Models
• Commercial modeling and requirements software that enable specification
and governance of Decision Models from business to technology
• Delivery of domain-specific decision logic that become standard
commodities
• Business leaders who will view, value, challenge, and simulate their own
business logic, before, after, and even if it is not, automated
From Business Logic to Decision Model Structure

• Gathering Business Logic Input

• Creating the Decision Model Structure
• Populating the Decision Model Content
Gathering Business Logic Input
Example:

A person who has a poor employment history, a poor mortgage

situation, and a high miscellaneous loans assessment is highly likely to
default on a loan.
Creating the Decision Model Structure
Example:

A person who has a poor employment history, a poor mortgage

situation, and a high miscellaneous loans assessment is highly likely to
default on a loan.
Populating the Decision Model Content
• Do all decision makers agree with these conditions leading to this
conclusion?
• What exactly is meant by Person Employment History? What are values
other than Poor?
• What is meant by Person Mortgage Situation? What are its other possible
values?
• What about Person Miscellaneous Loans Assessment? Which kinds of loans
are included and excluded?
• What is mean by Person Likelihood of Defaulting on a Loan and what are its
possible values?
• What if Person Employment History is not Poor? What rows are needed in
this Rule Family?
 Distilling Sentences from the Decision Model
• If/when Person Employment History is Poor and Person Mortgage Situation
is Poor and Person Miscellaneous Loans Assessment is High, then (the
business concludes that) the Person Likelihood of Defaulting on a Loan is
High.
• A Person with Poor Employment History and Poor Mortgage Situation and
High Miscellaneous Loans Assessment has a High Likelihood of Defaulting
on a Loan.
• A Person has a High Likelihood of Defaulting on a Loan if all the following
are true:
− Person Employment History is Poor
− Person Mortgage Situation is Poor.
− Person Miscellaneous Loans Assessment is High.
Changing the Decision Model Content
 Relating Decision Model Structures

Interim Decision- is a conclusion determined during the course of a transaction, but which may not be
permanently stored in a database.
The Role of Rule Patterns

Rule Pattern = It is a set of Rule Family rows with a common set of condition cells that are populated.
 Rule Families of Decision Model and Decision Table

• Rule Family adheres to a full set of principles whereas a traditional

decision table does not do so.
• Not only may each Rule Family be related to other Rule Families, but
Rule Family relationships are managed carefully.
• Traditional decision tables are not so related. So, out of these
disciplined and related Rule Families, a Decision Model is formed.
The Decision Model Diagram
• The Decision Model diagram depicts only the Decision Model’s
structure and not the detailed content of its Rule Families.
• It begins with an octagonal shape that represents the entire business
decision.
• It is this shape that relates to tasks within business process models
and to steps within use cases, precisely at places in those models
where the business decision is in play.
• The business decision shape also connects to business objectives,
business tactics, and business requirements.
The Rule Family directly connected to the business
decision shape is called the Decision Rule Family
because its conclusion is the conclusion sought by
the entire Decision Model.
Rule Family Table
• A Rule Family table provides a complete view of the content of a Rule
Family.
• Each Rule Pattern in the diagram may represent from one-to-many
rows of business logic statements.
• The Decision Model diagram enables a view of the structure of the
model without having to deal with the detailed content.
Principles of Decision Model
• Goal 1: Structural simplicity (The Structural Principles)
• Goal 2: Declarative nature (The Declarative Principles)
• Goal 3: Optimal integrity (The Integrity Principles)
Decision Model Normalization
• Normalization principles applied to a Decision Model ensure that it
meets a certain level of integrity.
• Decision Model normalization is a philosophy for analyzing and
decomposing Decision Model structures into a different set of
structures that are technology independent, process independent,
and more desirable than the unnormalized structures.
Basic Forms of Decision Model normalization
• Imposition of a discipline on the content so that the model can be
represented and interpreted in one and only one way.
• Elimination of functional dependencies (i.e., inferential
dependencies) involving only part of the condition key of a Rule
Pattern.
• Elimination functional dependencies (i.e., inferential dependencies)
among conditions.
Business Logic Considerations
• Consideration #1: The Logic Is of a Purely Business Nature
• Consideration #2: The Logic Is Intuitively Represented as Conditions
and Conclusions
• Consideration #3: The Logic Has a Natural Boundary
• Consideration #4: The Logic Is Not Known Otherwise
• Consideration #5: The Logic Needs to Change Often