business rule
What It Means
Business rules are the specific policies, procedures, and decision-making criteria that define how your organization operates day-to-day. They're the 'if-then' logic that governs everything from who can approve purchases over $10,000 to how customer refunds are processed. These rules get embedded into software systems to ensure consistent operations across the organization.
Why Chief AI Officers Care
AI systems must understand and follow your existing business rules while also creating new automated decision-making rules that align with company policy. When AI makes decisions that contradict established business rules, it creates compliance risks, operational inconsistencies, and potential legal liability. CAIOs need to ensure AI governance frameworks properly capture, validate, and enforce business rules across all AI applications.
Real-World Example
A bank's business rule states that loan applications over $500,000 require manual review by a senior underwriter, while smaller loans can be auto-approved if credit scores exceed 720. When implementing an AI lending system, this rule must be hardcoded into the AI's decision logic, ensuring the system never auto-approves large loans regardless of how confident the AI model is about the applicant's creditworthiness.
Common Confusion
People often confuse business rules with business requirements or processes. Business rules are specific decision criteria and constraints, while requirements describe what a system should do and processes describe the sequence of activities to complete work.
Industry-Specific Applications
See how this term applies to healthcare, finance, manufacturing, government, tech, and insurance.
Healthcare: In healthcare, business rules ensure clinical and operational compliance while maintaining patient safety and regulatory...
Finance: In finance, business rules automate critical compliance and risk management decisions, such as credit approval workflows...
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Includes:
- 6 industry-specific applications
- Relevant regulations by sector
- Real compliance scenarios
- Implementation guidance
Technical Definitions
NISTNational Institute of Standards and Technology
"Definition, constraint, dependency, or decision criteria that determine the method of execution of a task or tasks, or influences the order of execution of a task or tasks. Business rules assert control, or influence the behavior, of a business process within computing systems."Source: IEEE_Guide_IPA
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