The Most Important and Most Neglected - Business Rules

Over the years the most important issue I have seen neglected on a transofrmation project is an honest thoughtful discussion on Business Rules. What should the process look like under the different conditions. Business rules come in all forms and levels of complexity. I share a few examples below for the purpose of clarity.

 

A healthcare provider member who wishes to renew her policy for her 7 year old child and 19 year old college student. The business requirement can have different rules, here are some:

• Rule A: Income Level: Family is low income and hence have an extra 10 day grace period
• Rule B: Residence: Family lives in rural counties of the state and hence is eligible for a 45 renewal window, versus same family living in the major cities of the state which has only a 30 day window for renewal.
• Rule C: Age: 19 year old child reached his 19th birthday less than 90 days prior to his policy expiration is treated differently than more than 90 days prior to expeiration date.

 

An example from the supply chain vertical related to demand forecasting and planning could be dependent on order cancellation business rules, for example:

• Rule A: Orders returned due to defective items that are reordered on the same order, should not be removed from demand
• Rule B: Orders returned due to defective items and are reordered on a new order, should be removed from the demand of the month of order, and reapplied to the month of the new order.

 

Projects of all sizes usually neglect business rules when designing and delivering a system. Business rules are the most important part of the process, for indeed that is where decisions are made. Decisions are where the bug are found in the system. Poorly thought through business rules automatically equates to bugs, miscalculations, data quality issues, rework, frustration and utlimately redsign and worse sometime a compelte overhaul of the architecture

 

 

The Cookie Cutter Project

We all come across these straight forward projects, right? The project that was done half a dozen times before, that it almost feels like an operation to the project team. Deploying a new infrastructure at the fifth location of the company, or extending an automated software application service to a new region after three successful deployments elsewhere. Sounds familiar?

Many project teams come across these cookie cutter projects each year, and also many of them end up having a hiccup. NASA shuttle program is one well publicized example. It was not the first few times a mission was launched when it blew up into flames. The program has been very successful for years with dozens of missions. Smaller projects experience the same. Several things project teams need to keep in mind with cookie cutter projects are:

Projects are Projects
A project is still a project, even if done before in a similar context. the fact that a scope of work has been identified by someone as a project means it inherently has some risk, and is deemed by the some in the organization to require closer baby-sitting than a typical operation. On a recent project I was leading for a high tech materials company supply chain, the team viewed the project as a cookie cutter and saw no need for tight toll gates, reviews and checks and balances. After all it was their fifth time to deploy this service for ordering the end product by their business customers. It took extensive coaching and education to explain to the team that if the project came to us, it means that the supply chain service line, as well as the IT PMO have determined it unique enough to be staffed as a project, rather than an operation.

Identical is not Similar
Studying geometry in eight grade was not a total waste for those who did not end up studying engineering. Similar and identical triangles are not the same. Unless a project is identical, to a previous project it should be considered unique and requires progressive analysis. Similar projects will have one-off requirements, or some special handling, or a change that occurred since the latest iteration of the similar project. This is exactly what happened with my project, during the time between the latest deployment at location A and the deployment at location B was five months. A couple of key processes changed across the the supply chain on the other side of the ocean. This change added risk and requirements that location A did not need to deal with. the project team for location B was not aware of this enterprise level change. Similar is not identical.

Humility Pays Back
We all are well aware of Titanic, the vessel that supposedly would survive a crisis in the middle of the water. Watching reconstruction videos of airplane mishaps occurring 40,000 feet high over a vast ocean, and how these failures were resolved has been not only intriguing for me as an engineer and project manager, but also an eye opener. No matter how advanced we human beings become, no matter how many sensors we have on an aircraft, or an Internet of Things (IoT), we will never beat the power of unknowns and unseen, nature and the Creator's will. Humility in dealing with projects' technical scope, technology, science, external factors, human behavior and automated electronic processes that usually run in the background undocumented properly is just good business sense at minimum.

So a cookie cutter project is more than a cookie, its a cake with some custom toppings that could mess up the whole cake if not properly placed.

Enjoy the cake !

Using the Theory of Constraints & Six Sigma to Fix Critical Components of the Economy

Constraints are all around us. The theory of constraints is a lean problem-solving concept based on a simple concept, that a process can not move faster than the slowest part of the process.

Our economy as a complex enclosed system has constraints and it will respond to stimulus as quick as the slowest link in the economy. The chart on the left illustrates some major components of the economy. They all need to be improved for the stimulus to realize benefits, otherwise it will be a temporary patch.


The root of the problem lies in three areas:

1. The concept of printing money and the process followed to release cash into the market. The Federal Reserve Bank - which is not a government entity - is provided the authority to distribute the nation's currency and supervise banks which are members in the system. When the US releases currency into the market it requests the Federal Reserve Bank to print dollar bills in return for an interest payment on the amount. No real assets are provided as collateral to backup the value of the printed currency. The value of the currency is only backed up by the reputation and promise of the US government to accept the currency as a form of payment. As users of the currency lose faith in the governments ability to keep the promise the value can drop significantly. One reason for the poor confidence in the currency, is the automatic depreciation of the currency the day it was printed. For every US dollar printed a small percentage is due to the Federal Reserve Bank as interest on that printed dollar, in a sense every dollar released into the market is really worth 0.98 of a dollar, if we assume an interest rate of 2%. Add onto this, the fact that the US government is running into a non-stop deficit in social security, and other areas leading to increase in bond issuing to countries such as China and India, further diminishing the value of the US currency.

2. Interest rate or usury is another problem in the overall system. The fact that currency value depreciates today based on some future value determined by an interest rate automatically leads to inflation, and future depreciation of natural resources. Charging interest is like pumping steroids into a body builder, eventually at some point the body will collapse.

3. Selling what we don't own. The idea that goods and services can be sold without actually owning them creates a virtual commodity system, not backed up by real commodities or assets.

Unless these areas are fixed no stimulus package can work on the long term. Some simple steps to address this issue are:

a. Identify the constraints of the financial and monetary systems
b. Exploit the constraint or re-engineer
c. Subordinate other steps in the overall process to the improved constraint
d. Revise the constraint if it has not been eliminated by steps b and c
e. Repeat the steps above for other constraints

Applying this into practice can be as follows:

a. Identify the constraints of the financial and monetary systems
- Currency not backed by a true tangible asset (some natural resource like gold or silver)
- Currency being depreciated the day it is printed, solely due to interest
- Distribution and sale of products that do not exist (example lending money to a business when the bank does not have the exact cash reserved, selling a commodity that one does not own and has not yet paid for)
- Using interest rates to discount projects, assets and commodities to a future value, leading to valueless future assets, commodities, natural resources

b. Exploit the constraint or re-engineer
- Re-engineer the monetary system that issues a currency based on a true asset and not just a promise
- Re-engineer the concept of future valuation
- Re-engineer the concept of wealth circulation

c. Subordinate other steps in the overall process to the improved constraint
- Use a sustainable natural resource to backup the value of an issued currency
- Use joint partnerships, gifting (0% loans) and entrepreneurship, moving away from interest bearing loans of money that is not owned by lenders.
- Base future valuation on true-value (value proposition) provided to global society rather than a discounted interest rate.

d. Revise the constraint if it has not been eliminated by steps b and c
e. Repeat the steps above for other constraints