CHAPTER 1
WHY THE DECISION MODEL? INTERESTING CHARACTERISTICS OF DECISION MODEL
WHAT IS BUSINESS LOGIC?
• Business logic is simply a set of business rules
represented as atomic elements of conditions
leading to conclusions.
• Business logic represents business thinking
about the way important decisions are made.
• Business logic is the underpinning of an
organization's identity, integrity, innovation,
and intelligence.
• Business logic represents the "rules of the
business" that operates perhaps thousands of
times a day in service to customers and
partners.
WHY SEPARATE BUSINESS LOGIC?
They are important consideration in implementing
change and delivering enterprise agility
They are one worthy of being managed separately for
other dimensions of business assets.
THE NEED FOR A NEW MODEL
Is there a model of business logic that is simple to
create, interpret, modify, and automate?
Is there a rigorous. repeatable, and technology-
independent model that is based only on the inherent
nature of business logic itself and nothing more?
THE ADVENT OF THE DECISION MODEL
Decision Model was tested and refined instigated
through several years of research. At present, the goal is
to promote a wide-scale usage of the decision models
and continue its evolution.
UNDERLYING PREMISE OF THE DECISION MODEL
The Decision Model structure is based on the premise
that business logic has its own:
1. existence
2. independent of how it is executed
3. where in the business it is executed?
4. whether or not its execution is implemented in
automated system.
1. It defines technology-independent way of
organizing an important, somewhat intangible
business intellectual asset
2. The Decision Model is a pure representation of
business logic.
3. Despite being independent of technology, it is
easily implementable in technology and
transcends current and future technology
products.
4. The Decision Model is neither a language nor a
grammar. It is a Model.
5. 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.
DECISION MODEL AS AN IMPETUS FOR CHANGES
01. IT and business management methodologies that
promote business decisions and corresponding Decision
Models to the level of prominent management levers.
02. Commercial automation software that supports
decision services derived from Decision Models
03. Commercial modeling and requirements software
that enable specification and governance of Decision
Models from business to technology
04. Delivery of domain-specific logic that become
standards commodities.
05. Business leaders who will view, value, challenge,
and stimulate to their own business logic, before, after,
and even if it is not, automated.
 CHAPTER 2

AN OVERVIEW OF THE DECISION

MODEL

WHAT IS THE DECISION MODEL?

Decision Model is an intellectual template for

perceiving, organizing, and managing the business logic
behind a decision model.

DECISION MODEL AS AN INTELLECTUAL TEMPLATE

As an intellectual template, the Decision Model is a

logical representation of business logic.

DECISION MODEL AS A MODEL

As a model of business logic, the Decision Model is a

unique representation of business logic, unlike other
representation.
RULE FAMILY TABLE
EXAMPLES OF BUSINESS LOGIC
A Rule Family Table provides a complete view of the
- A person who has not had any jobs in the past five content of a Rule Family.
years is considered to have a poor job history.
PRINCIPLES OF DECISION MODELS
- A person with more than ten jobs in the past five years
is considered to have a poor job history. THE STRUCTURAL PRINCIPLE Goal 1: Structural
Simplicity
- A person with a poor job history, a large mortgage,
and a significant number of miscellaneous loans is THE DECLARATIVE PRINCIPLE Goal 2: Declarative Nature
considered very likely to default on loan. THE INTEGRITY PRINCIPLE Goal 3: Optimal Integrity
- A person with a low credit rating must not be granted
an unsecured loan.
BUSINESS LOGIC AND RULES
- A person's credit rating is computed according to
proprietary formula A154. CONSIDERATION NO. 1: "Logic is of a purely business
nature"

Logic of a purely business nature does not include logic

for determining data quality, data transformations,
workflow routing, or driving interface sequence.

CONSIDERATION NO. 2: "Logic is intuitively represented

as conditions and conclusions"

Web of interconnected logic emerges based on the very

nature of logic itself.

CONSIDERATION NO. 3: "Logic has a natural boundary"

Logic is about business reasoning, not other kind of

DECISION MODEL DIAGRAM
The Decision Model diagram depicts only the Decision
Model's structure and not the detailed content of its
Rule Families.
reasoning.
CONSIDERATION NO. 4: "Logic is not known otherwise"
Logic lies buried within system code, peoples' heads, or
in imprecise, outdated manual.

CONSIDERATION NO. 5: "Logic needs to change often"

Business logic that changes provides traceability for

impact
 CHAPTER 3
The Business Value of Decision
Models
The Nature of a Decision Model’s Business Value
The business value denotes all considerations by which
a Decision Model aims to contribute to the health and
well-being of a business. These considerations include
the following:
1. How much the Decision Model accelerates
business agility
2. How the Decision Model proves useful in
normal, complicated, and threatening times,
and in times of crisis
3. How much profit, reputation, consistency, and
quality the Decision Model delivers to the
marketplace
4. How much valuable, expensive, and rare
business knowledge the Decision Model secures
5. How much the Decision Model corrects
shortcomings in today’s best practices, such as
Business Process Management (BPM) and
Business Decision Management* (BDM).
Business Decision’s Business Value
Three characteristics of a business decision
Characteristic #1: Each business decision has an
operative context.
Characteristic #2: Each business decision varies in its
volume-based economic impact
Characteristic #3: Each business decision varies in the
complexity of its business logic.
Impact of the three characteristics on business
decision and decision model
1. The operative context determines how a
Decision Model solves a business problem or
opportunity.
2. The volume-based economic impact provides
insight into the financial value of the Decision
Model.
3. The business logic complexity assists in
understanding the cost of developing and
managing a Decision Model.
Characteristic #1: Its Operative Context
• The Simple context, where the input consists of
“Known knowns.”
• The Complicated context, where the input
consists of “Known unknowns.”
• The Complex context, where the input consists
of “Unknown unknowns.”
• The Chaotic context, where the input consists of
“Unknowables.”
Characteristic #2: Its Volume-Based Economic Impact
• An interesting observation about business
decision volume is that it often occurs in inverse
proportion to its individual economic value.
• A strategic business decision may be made only
once in a long period of time, but a single
strategic business decision may have a profound
economic value.
• The overall economic impact of a business
decision to the enterprise is the product of its
volume and its individual economic value.
Characteristic #3: Its Complexity of Business Logic
• The complexity of the business logic of a
Decision Model is most often considered to be
high when there is a large quantity of Rule
Families, where each single Rule Family consists
of a very large quantity of fact types and many
logic statements in a Rule Family
• The complexity of the business logic of a
Decision Model is considered low when a Rule
Family contains few fact types or perhaps only a
single formula for its conclusion fact type
• As the complexity of the business logic
increases, the Decision Model also serves as a
mechanism for discovering that complexity,
possibly simplifying it, and positioning parts of
the Decision Model for appropriate automation
or for human handling.
 Chapter 4 – Changing the Game
Business Process Management and Business
Decision Management
What is a business process?
A business process is defined as a series of repeatable,
defined activities taking place in a planned sequence by
actors (being individuals or systems) within a defined
scope of an organization where the tasks add value to a
good or a service for a customer.
Goals in managing business processes
1. To provide customers with outstanding
products or services
2. To lower business costs
3. To perfect business performance
What is a decision-aware business process?
• Is designed to distinguish between tasks that
perform work (i.e., process tasks) and tasks that
come to conclusions based on business logic
(i.e., decision tasks)
• A business process is procedural in nature,
while a business decision is declarative in
nature.
• However, without a clear understanding of the
declarative versus procedural nature, the
common practice involves creating business
process models in which business decisions are
loosely represented as just another part of the
business process.
Distinguishing a Procedural Task from a Declarative
Decision
Procedural Task
1. step-by-step details
2. Sets of ordered tasks
3. It answers “HOW” things need to be done
Declarative Decision
1. specifies what needs to be done
2. These are sets of unordered business logic
3. WHAT the work to be done is
Examples of business decisions separated from the
business process
Example #1: Separation of Business Decisions
fromBusiness Process
Example #2: A Business Process Model Never Reveals
AllBusiness Logic
Example #3: Simplicity, Productivity, and Cost Savings
Example #4: When Business Logic Requires
DeliberateSequence
Example #5: Separation of Business Decisions
forNonoperational Business Decisions
Example #6: When Business Process Excellence Alone
IsInsufficient for Competitive Advantage
Example #7: The Power of Smart Decisions
behindBusiness Processes
Example #1: Separation of Business Decisions from
Business Process
• Allows a much simpler business process model
• Easily highlights all possible combinations of
conditions
• Permits changes in the Decision Model without
changing the business process model
• Permits changes in the business process model
without changing the Decision Model
Example #2: A Business Process Model Never
• Reveals All Business Logic
• Business logic is not directly visible in the
business process model, some of it must be
buried in one or more of the tasks.
• Mingling business decision logic with process
flow does not necessarily expose all of the
business logic in that process flow.
• The Decision Model can be viewed, managed,
and executed as one whole set of business logic,
as a black box evaluating conditions and
reaching a conclusion.

Example #3: Simplicity, Productivity, and Cost Savings
• Decision Models represent all of the business
logic alluded to in the original deliverable but
more completely, accurately, and visually;
• It may contain visible anchor points and
Decision Rule Family;
• Faster and easier to revise the business process
models, decision models and populated rule
families
• Easier to implement in the target technology
than the original deliverables
Example #4: When Business Logic Requires Deliberate
Sequence
• The deliberate sequence of the process tasks
enforces the sequence of Decision Model
execution because business process models
enforce sequence and Decision Models do not.
• However, there are business circumstances that
require separate business decisions and
decision models
• First, each business decision may be governed
by a different group, hence having separate
Decision Models facilitates separate governing
bodies for the business logic.
• Second, there may be a process task that needs
to take place after one conclusion based on the
first conclusion before arriving at the other
conclusion such as sending a message based on
the first conclusion.
Example #5: Separation of Business Decisions for
Nonoperational Business Decisions
• Pitney Bowes purposely formalized its
acquisition business process, identifying places
where important business decisions were
needed, and creating rigor around
corresponding fact-based business decisions.
• The management of business decisions and
Decision Models is valuable for decisions made
at various management levels:
1. strategic,
2. tactical, and
3. operational.
• The Complex operative context and how much
that may be reduced to a Simple context. If all
the facts can be known, the business decision
functions in the orderly operative context and
can be modeled fully in a Decision Model.
Example #6: When Business Process Excellence
Alone Is Insufficient for Competitive Advantage
• An excellent example of business process
excellence alone being insufficient for
competitive advantage is Dell. Within 4 years, it
slipped to 3rd place with dropped stock price
• Dell’s operational excellence, delivered through
its hyper-efficient business processes, failed to
provide the feedback that would warn of the
changes in the marketplace.
• Its business processes appear not to have had
the ability to make the necessary adjustments
Dell’s failure
• Dell failed to recognize that the general
consumer was transitioning to laptop
computers, and so Dell remained focused on
desktop computer sales.
• Hewlett-Packard and other computer
manufacturers were able to achieve and exceed
the efficiencies of Dell’s supply chain and direct
supply model
• Dell remained focused on the U.S. market, and
failed to recognize that the international market
was rapidly catching up to the U.S. market in
size and importance.
• Dell’s response to its cost and product
disadvantage was to continually ratchet margins
down to meet the competition, which it was
unable to offset by any further saving in
operational expense
Learnings from Dell’s failure
• The key business processes must not only be
efficient and consumer-friendly, they must also
be smart and agile.
• Business processes become agile when
declarative business decisions are separated
from procedural business process tasks.
• Business processes become smart when the
business decisions are governed appropriately
by business leaders.
• Business decision governance involves
monitoring the business decision performance
against objectives and recognizing when events
occur that raise the operative context of a
business decision into the complicated,
complex, or chaotic realm.
• When the business leadership clearly
understands the business logic behind the
business decisions, the impact of those
 decisions can be ascertained, and the business
can quickly and easily make adjustments. Then,
those decisions are smart and serve as
intelligent business levers
Example #7: The Power of Smart Decisions behind
Business Processes
• Parker Hannifin separated the business
decisions from the business processes, tied
specific targets of performance to the business
decisions, and implemented the means to
measure that performance;
• researches the pricing of each and every
product it manufacturers, and tracks feedback
on those products from its customers over time
to constantly validate and adjust the price;
• the focus was on the added value of the
product to their customer;
• continues to monitor the value of products to
ensure that the price remains competitive while
delivering a good return to the company.
What is Business Decision Management (BDM)?
• The practice of managing smart, agile decisions
is called Business Decision Management (BDM)
• BDM is often referred to as Enterprise Decision
Management
How to establish BDM?
Consideration #1: Recognize business decisions as key
business assets that drive business processes;
Consideration #2: Adopt the Decision Model as
a separate, cohesive representation of the
detailed business logic behind business
decisions.
Consideration #3: Define the active role of
business people in creating, changing, and
governing the important Decision Models.
Consideration #4: Use the Business Decision
Management Maturity Model (BDMM) to develop
aroad map toward the implementation of BDM
Consideration #5: Establish a center of excellence for
BDM to outline the methodology, deliverables,
standards, and training.
Consideration #6: Evolve the current state of
businessrequirements to include Decision Models
Consideration #7: Prepare the technology
Modeling tools for creating and managing decision
models
1. Decision Modeling Tools for Business Analysts
2. Decision Modeling Tools for Business People
3. Decision Model Tools for Enterprise Architects
4. Decision Modeling Tools for Everyone
Chapter Summary
A business process is wide in scope, an end-to-end
chain, rather than a functional narrow view.
Most business process models today do not separate
business decisions from business processes, and
thereby fail to deliver maximum business agility.
A decision-aware business process distinguishes
between process tasks that perform work from those
that carry out business decisions and separates the
details of the business decisions from the business
process model into their own model.
A business process model is a procedural solution
because it prescribes a set of tasks that are to be carried
out in a particular sequence
A Decision Model is a declarative solution because it is a
set of unordered business logic, not a set of ordered
tasks.
There are, however, certain circumstances when the
sequence of business logic execution is relevant to
arriving at the correct conclusion. In such
circumstances, a single Decision Model does not suffice.
The management of business decisions and Decision
Models is valuable for business decisions made at
various management levels: strategic, tactical, and
operational. The operative context and how much it can
be simplified are important aspects.
Squeezing inefficiency out of a business process is a
tactic available to all competitors in the marketplace.
Competition is not only about business process
efficiency but also about the smart decisions behind
those business processes.
Business processes become agile when declarative
business decisions are separated from procedural
process tasks.
Business processes become smart when the business
decisions are governed appropriately by business
leaders.
Separating business decisions from process tasks
dramatically simplifies the business process model,
offers more creativity in organizing the business logic,
and delivers the business logic in a form that transcends
technology options.
The practice of managing smart, agile decisions is called
“Business Decision Management” (BDM). ◾ A whole
array of new tools to support the creation and
maintenance of Decision Models is likely.
CHAPTER 5: HOW THE DECISION
MODEL IMPROVES
REQUIREMENTS, BUSINESS
ANALYSIS, AND TESTING
Requirements
The Institute of Electrical and Electronics Engineers (IEEE)
provides the following definition:
• a condition or capability needed by a user to solve a
problem or achieve an objective;
• a condition or capability that must be met or possessed
by a system or system component to satisfy a contract,
standard, specification, or other formally imposed
document;
• a documented representation of a condition or capability
as in definition (A) or (B).” (IEEE, (Std 610.12-1990))
Categories of Requirements
FUNCTIONAL REQUIREMENTS —Requirements for
functions that the system performs to directly execute the
mission of the software. These include process steps,
calculations, data manipulations, or reporting activities.
NONFUNCTIONAL REQUIREMENTS —Requirements for
constraints on the system. These include constraints about
system performance, reliability, maintainability or ease of
use, cost, and other overall characteristics.
Nature of Requirements
- The nature of requirements varies among
methodologies. In some methodologies,
requirements are only the needs that
business users describe at the highest level
of abstraction.
- In others, the needs may be described at a
greater level of detail, including many
specific design elements that are elements
of system design, such as screen design
Ways of expressing requirements
• TEXTUAL STATEMENTS : A series of textual statements
has been long used as the principal means for expressing
requirements. These have the form of “The system shall
…” (for mandatory or obligatory requirements), or “The
system should …” (for preferred requirements).
• BUSINESS USE CASES : A business use case is a step-by-
step narrative of a single business user (“Actor”)
interacting with the system, where the narrative yields a
valuable result. An example of a business use case for an
online banking system is “Prequalify a Loan Request.”
• MODELS : description or analogy used to help visualize
something (as an atom) that cannot be directly observed”
(Merriam-Webster Online Dictionary “model”)
: is the cost-effective use of something in place of
something else for some cognitive purpose
: represents reality for the given purpose; the model is an
abstraction of reality in the sense that it cannot represent
all aspects of reality
: are used to tease apart the “big ball of mud”
: represent different aspects of the real system (i.e.,
borrowing from the phrase in the aforementioned
definition, “aspects of reality”) so that each aspect may be
addressed individually, in a simplified manner.
Sample Aspects that can be Modeled
Motivation – the “why” of the system, the rationale and
motivation for the system and equirements. The motivation
may reflect the organization’s internal objectives, or those of
xternal organizations such as regulatory agencies. The
Business Motivation Model (BMM) is a odel of the various
considerations of motivation.
Organization – the people and roles that interact with the
system.
Location – the physical locales of system hardware and
software.
• PROTOTYPES : Prototypes are a mock-up of the software
solution that permits the business user to visualize the
software by displaying the user interface of the proposed
solution.
: The value of prototyping is that it provides the business user
with a more tangible idea of the software than even a model
can provide.
• PROGRAM CODE : The Agilists’ goal is to deliver rapidly,
based on what is known, and then to evolve quickly based on
what is learned from each iteration. So, requirements, evolve
through iterative deliverables. “The urge to write
requirements documentation should be transformed into an
urge to instead collaborate closely with your stakeholders and
then create working software based on what they tell you”
(Ambler, 2007a).
: In other words, Agilists do not consider requirements to be
an asset that is maintained in addition to and separate from
the working system. Models and business use cases serve only
as aids to shared understanding and guidance for developers
and testers.
Business logic In classical Functional Requirements
▪ Business Motivation Model (BMM)
- It is a model that support business planning
and manage business motivations that drives
projects and related system
- It captures courses of action that implement
strategy and related tactics, to achieve a
desired result driven by goals and objectives.
▪ Business Process Model (BPM)
- The business process model and the Decision
Model are connected via the decision task (or
business rule task) in the business process
model
- This connection is best strengthened by using
the same naming conventions for the business
decision and the decision task. Not shown is
that the Decision Model and the business
process model share the following common
metadata: Business Policy, business
Objectives, and Business Tactics (which is also
common to the BMM.)
- The connection between the business process
model and the Decision Model is extremely
powerful in developing an agile business
process. It also completes the connections
among the business process model, Decision
Model, and BMM. These connections create
complete traceability from a single task in a
business process model to a business decision
in the Decision Model to a directive in the
BMM
▪ Business Use Case (BUC)
- The connection between a business use
case and the Decision Model occurs at
those use case steps identified as decision
steps. In practice, the use of decision-
oriented words, such as determine,
calculate, estimate, validate, and so on,
are good clues that a business decision
exists behind the step.
- Once the decision steps in a business use
case are identified, a Decision Model is
needed, if one is not already in existence.
The use case step needs a unique identifier
for each business decision noted in it, the
connection point between the use case
step and the Decision Model.
- Decision steps in a business use case are
similar to decision tasks in a business
process model and become the connecting
points between the business use case and
the Decision Model.

▪ Semantic Models (SM)

- A semantic model is a representation of
the pieces of information referenced in a
Decision Model, as conditions or
conclusions.
- A range of semantic models are developed
to serve as requirements artifacts. They
include the following:
a. Glossary of fact types – It is
simply a list of the fact types
used in the decision Model with
corresponding business
definitions and, often, domain
specifications.
- It is required to support a Decision Model
so that the model can Be interpreted
correctly.