Business Rules – May 2011

Business concepts need to be well understood both for the purpose of business communication, as well as for data modeling, requirements development, and computation. What exactly does it take for a business concept to be well understood?

Consider the concept ‘gold customer.’ Suppose I give the definitional rule (also called a structural rule in SBVR1)below to indicate whether a customer is or is not a ‘good customer’ for an airline. (My apologies to airlines – I happened to be flying on a plane as I wrote this. Fortunately, the details aren’t important.)

Definitional Business Rule for ‘Good Customer’

At least one of the following always is true for a good customer. The customer:

  • has flown at least 50,000 miles on paid tickets during the last calendar year.
  • has flown at least 50 flight segments on paid tickets during the last calendar year.
  • has flown at least 40,000 miles and 25 flight segments on paid tickets during the last calendar year.
  • has flown at least 25,000 miles and 40 flight segments on paid tickets during the last calendar year.
  • has flown at least 150,000 miles or 150 flight segments on paid or unpaid tickets during the last calendar year.
  • has flown at least 500,000 miles on paid tickets during the last 7 calendar years.
  • has flown at least 500 flight segments on paid tickets during the last 7 calendar years.
  • has flown on at least 10 highest-fare tickets during the last calendar year.
  • has flown on exactly the same route on the same days of the week at least 3 times a month in each of at least 7 months during the last calendar year.
  • has paid a total of more than $15,000 in paid tickets at least one month in advance during the last calendar year.
  • has flown with at least two family members on paid tickets 4 times during the last calendar year.

The definitional rule contributes in several important ways to forming the concept ‘good customer’, as follows.
Extension – The definitional rule gives a long list of criteria for determining whether a given customer is or is not a good customer. The set of all customers that are good customers is the extension of the concept ‘good customer’. The ISO2 terminology standard 10873 defines extension as the totality of objects to which a concept corresponds.

Intension – The definitional rule gives a long list of specifications related to the meaning of the concept ‘good customer.’ That meaning is called its intension. ISO 1087 defines intension as the set of characteristics which makes up the concept. (In the definitional rule above, each of the ‘has’ bullet items expresses a characteristic.)

Are we finished ensuring that the concept “good customer” is well understood? Not yet! To illustrate, suppose this is your business and I am a new hire. Explain to me what a ‘good customer’ is. In other words, tell me in plain English what ‘good customer’ really means for the business. I’m looking for something that I can (a) readily come to grips with, (b) remember, (c) count on to be the same tomorrow, and (d) use to become productive as quickly as possible. Here’s the kind of thing I’m looking for:

Definition [good customer]: a customer with which a profitable business relationship is sustained over an extended period of time

ISO 1087 defines definition as representation of a concept by a descriptive statement which serves to differentiate it from related concepts. Has the proposed definition of ‘good customer’ done that? Yes.

For the sake of argument, let’s say that the business distinguishes only between bad customers, run-of-the-mill customers, and good customers – that’s pretty much it. Has the definition itself (not including definitional rule) given me enough to distinguish ‘good customer’ from related concepts? Absolutely.

Important observations:

  • The full intension (meaning) of the concept is two-part; it requires both the definition and the definitional rule.

  • There is no redundancy in this two-part specification of the intension. (Can you spot any?!) Single-sourcing is a central goal of the business rules paradigm.

  • We have attended to the needs of both people communication (via the definition) and computational logic (via the definitional rule). Both goals are key SBVR drivers.

  • The definition of the concept is a highly stable one. We can use it to build and express (structure) additional know-how without fear of collapse or constant change. That’s good.

  • Particulars of the definitional rule, in contrast, are very likely to change. In the business rules approach, agility is always accommodated through business rules. This is really good too!

The one-two punch of definitions plus definitional rules provided by the business rules approach works magic in fully understanding the meaning of things.


  1. Semantics of Business Vocabularies and Business Rules. For information about SBVR, see SBVR Insider on

  2. International Standards Organization

  3. Terminology Work – Vocabulary – Theory and Application

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Ronald Ross

Ronald Ross

Ronald G. Ross, Principal and Co-Founder of Business Rules Solutions, LLC, is internationally acknowledged as the “father of business rules.” Recognizing early on the importance of independently managed business rules for business operations and architecture, he has pioneered innovative techniques and standards since the mid-1980s. He wrote the industry’s first book on business rules in 1994. With BRS’s client roster of Fortune 500 companies and governments, Ron consults,speaks and teaches worldwide. He has served as the chair of the International Business Rules & Decisions Forum conference since 1997, now part of the Building Business Capability (BBC) conference. Ron is also the author of 10 professional books, as well as the executive editor of the Business Rules Journal. Through these publications, as well as on the online forum BRCommunity and his blog, Ron enjoys sharing his knowledge and experience in consulting and business rules. Outside of work, Ron enjoys walking his dogs, travelling with his three children, and tweeting. For fresh nuggets of information, follow him @Ronald_G_Ross!

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