TANAUAN INSTITUTE INC.

ELECTIVES (BUSINESS LOGIC)

LOGIC IN BUSINESS: WHY IS IT IMPORTANT?

LOGIC COMPETENCY IN BUSINESS: BUSINESS PROCESS AND BUSINESS LOGIC

MEMBERS:
CARPIO, JANELLA KEIZY
REYES, GIEWHEN B.
TOLEDO, CHRISTINE JOY S.
Redefining Logic:

• No relevancy with gender, age issues

• Result yielded from human brain

• Driven by sceptical and critical state of mind then raised critical thinking

• To have a common ground about something

Why Important?

• Human is Ubermensch

• Focus our mind so we can come up with a logical solution

Common Sense:

• Determines what we do, regardless of what we think

• Helps us to deal with real world complexity

• Provides shortcut to making critical decisions very quickly

Ways of Thinking:

1. Out-of-the-box

2. Critical

3. Strategic

4. Lateral

5. Programmatic
Logic in Business

• Consists of unwritten rules, which set up a framework for companies' mode of action and possibilities for

custom-oriented actions

• Sloan Jr. (1950) "There is a logical way of doing business in accordance with the facts and circumstances

of an industry.”

• Then what need to do? Understand, adapt to it or to break with it, thereby creating something new.

Why so Important?

 Part of business decisions making process

 We may be able to adapt, grow, leverage and capitalize using the same reasoning particularly in

challenging situation

 Logic link cause to effect, action to reaction and input to output in business world

 When applied in strategic management process, it involves generation and application of unique business

insights and opportunities

 In the end, it is aimed to form competitive advantage of an organization

 Done individually or collaboratively to shape organizations future

Logic Competency in Business

1. Systems Perspective - Understand implications of strategic actions and has complete end-to-end system of

value creation, his or her role within it

2. Intent Focused - To marshal and leverage their energy, to focus attention, to resist distraction, and to

concentrate at the max achieving a goal

3. Thinking in Time - Hold past, present and future in mind at same time creating better decision making

and speed implementation

4. Hypothesis Driven - Ensuring creative and critical thinking incorporated into strategy making

5. Intelligent Opportunism - Being responsive to good opportunities

Logic Competency in Business: Business Process and Business Logic

BUSINESS PROCESS is an activity or set of activities that accomplish a specific organizational goal.

Business processes should have purposeful goals, be as specific as possible and produce consistent

outcomes.

BUSINESS LOGIC is the process of deciding what actions to take with collected data based on the given

business requirements. Simply put, it's a reflection of how the various parts of a business work together in

real life. This data can come from a variety of sources, such as user input or external databases.

Separating Processes Logic and Business Logic

 Davenport's distinguishes between process and practice

 Process - the design for how work is to be done (Process Logic)

 Practice - an understanding of how individual workers respond to the real world of work and

accomplish their assigned tasks (Business Logic)

 Following this distinction Process Logic and Business Logic should be modelled and managed separately

 Process Logic - step-by-step flow of work

 Business Logic - applying knowledge to derive a result

Operational Business Decisions

 A decision is characterized by a question

 Examples for decision questions:

 Should the insurance claim be accepted, rejected or examined for fraud?

  Which resource should be assigned to this task?

 Which service should be used to ship this package?

 An operational business decision considers cases arising in day-today business and answers the question

for each case by choosing among potential outcomes.

 Each operational business decision involves business logic (know how) to answer the question.

Decision-aware Business Processes

 A decision-aware business process as one that is designed to distinguish between

- tasks that perform work (i.e., process tasks) and

- tasks that come to conclusions based on business logic (decision tasks)

 This separation enables the details behind a decision task (l.e., business logic) to be represented in a

different kind of model, specific to business logic.

 Separating business decisions from business process tasks

- simplifies the business process model,

- allows to manage business logic in a declarative form,

- offers more creativity in organizing the business logic

- delivers the business logic in a form that transcends technology options

Managing Decision-aware Business Processes

The general approach for dealing with knowledge work in business processes can be specialized to a

procedure model for decision-aware business processes:

1. Process Elicitation

2. Decision Analysis: Identify key questions

3. Modelling

- Process Flow
 - Decision Logic

4. Continuous Improvement

- Business Process Management

- Business Decision Management

Decision Analysis: Capturing Decision Logic

 Decision Analysis identifies and analyses key questions arising in day-today business activity and

captures the decision logic used to answer the question.

 The result of decision analysis is decision logic

- Decision Logic is Business Logic for decision making

- Decision logic is a set of decision rules for cases in scope of a given decision

- A decision rule is a business rule that links a case to some appropriate outcome

 Decision logic should be externalized from decision tasks

- Decision tasks are procedural

- Decision logic should be declarative

Declarative Representation of Decision Logic

 Decision logic should be represented declaratively

 A declarative representation of Decision Logic

 specifies the conditions on which a decision is made

 does not specific how the conditions are tested, in particular it does not specify the order in which

conditions are tested

 Examples of declarative representations of decision logic

  decision tables

 business rules

 Decision Model (von Halle & Goldberg 2010)

 Q-Charts (Ross 2011)

Distinguishing a Procedural Task from a Declarative Decision

 A procedural solution specifies how, in a step-by-step manner, something is to be done.

 So a business process model is a procedural solution because it prescribes a set of tasks that are

carried out in a particular sequence.

 The business process model is the "How" of a unit of work.

 A declarative solution only specifies what needs to be done, with no details as to how, in a step- by-step

manner, it is to be carried out, because sequence is irrelevant to arriving at the correct result.

 A Decision Model is a declarative solution because it is a set of unordered business logic, not a set of

ordered tasks

 Decision Model is the "What" of a special kind of unit of work

Distinctions between Business Process and Business Decision

BUSINESS PROCESS BUSINESS DECISION

Procedural in nature Declarative in nature

Consists of tasks connected by Consists of rule families connected by

sequence inferential relationship (all

independent of sequence)

Is all about how (step by step Is all about what is to be concluded

sequence to carry out work) (the logic leading from conditions to

conclusions)

Improvements in business process aim Improvements in a business decision

 for increased work efficiency aim for smarter business logic

Represented best in procedural Represented best in a declarative

business process model decision model

Improvements by separating business logic from Business Process Model

 Allows a much simpler business process model

 Easily highlights all possible combinations of conditions

 Supports the principle of separation of concerns

 Permits changes in the Decision Model without changing the business process model

 Permits changes in the business process model without changing the Decision Model

Disadvantages to Business Logic in Business Processes

1. Forces unnecessary sequence and constraints on business logic

2. Make changes to business process and business logic difficult

3. Adds unmeaningful complexity to business logic and business process

4. Fails to deliver a visual representation of all business logic

5. Makes governance of business process and business logic difficult to manage

6. Results in business logic and business processes that are not reusable

7. Compromises SOA

A Business Process Model does not Reveals All Business Logic

 If the separation of business processes and business logic is not made conscuously, some business logic

might be in the process model while others is missing It must then be modelled separately, e.g. in the

task descriptions or externally (if it is represented at all)

 Reusability if hampered: Some of the business logic may be used in several of the tasks(maybe even

several processes).

 The Decision Model resurrects all of the business logic in one visual artifact

Business Decision Management

 The practice of managing smart, agile decisions is called Business Decision Management (BDM) or

Enterprise Decision Management (EDM)

 Three elements of BDM:

 Business Motivation: the general business plan, and the specific business objective/s

 Business Metrics: measurements and time periods that are set by the business objectives

 Business Logic: logic underlying the business decision that is implemented to achieve the business

objective