What are business rules? | IBM

Business rules guide the everyday decision-making within businesses by outlining the relationships between objects, such as customer names and their corresponding orders. This translation of an organization’s business activities into concrete business logic allows software engineers and business analysts to apply these rules within workflow tools or other applications to enable process automation. Without them, updating processes can become more arduous and time-consuming, and documents can be subject to more human error and inconsistencies. By implementing business rules across an organization, a business can save time and money by streamlining work to the right stakeholders and reducing churn. 

Business rules vs. business requirements 
 

Some people can confuse the terms, business rules and business requirements, but they are actually very distinct and different. As a result, it’s worth noting how they are used within business settings.

Business rules provide the foundation for automation systems by taking documented or undocumented information and translating it into various conditional statements. For example, when conducting a purchase order, there may be a different approval process depending on the cost. Tools and services that are under five thousand USD may only need manager approval, but as costs get higher, they may require approval by the C-suite. Business rules formalize this process by setting thresholds under which invoices are sent to upper management vs. first line managers. Conditional statements, such as these, are applied across a number of business processes.

Business requirements establish the success criteria for a given project. By specifying the tasks and resources needed to complete the project, teams can more clearly see the gaps and barriers to achieving their goal. This exercise is usually completed at the start of a business project to set expectations among stakeholders and address any additional needs for project completion.