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What is the Decision Model?

Barbara von Halle and Larry Goldberg

The Decision Model is an intellectual template for perceiving, organizing, and managing the business logic behind a business decision. 1 An informal definition of business logic is it is a set of business rules represented as atomic elements of conditions leading to conclusions. A more formal definition of business logic is “a means by which a business derives a conclusion from facts.” So, business logic is a prescription for the way business experts want to evaluate facts in order to arrive at a conclusion where the conclusion has both meaning and value to the business. Therefore, a business decision is defined as a conclusion that a business arrives at through business logic and which the business is interested in managing.

It follows then that business logic itself is intellectual in nature because, it represents business thinking about the way important decisions are to be made.

To make business logic tangible, common practice is to translate the business thinking into a visible, communicable form, which often is a set of business rules or business statements. These vary in format: free-form text, fill-in-the-blank templates, decision tables, decision trees, or sentences adhering to specific syntax or grammar. Regardless, it is these business rules or statements (more accurately, their intended logic) that are modeled in a Decision Model structure adhering to the Decision Model principles.

First, it is important to understand what it means for the Decision Model to be an intellectual template.

The Decision Model as an Intellectual Template

As an intellectual template, the Decision Model is a logical representation of business logic. It is, by deliberate intent, not a physical model of how that business logic is to be implemented in specific technology. It is not even a model for how that business logic is to be communicated through procedure manuals or training materials. Instead, it is an intellectual template for the full and rigorous specification of that logic. From this full and rigorous specification, if the goal is to automate it, a Decision Model can be translated into one or more target technologies through appropriate design methodologies. If the goal is for humans to follow it, a Decision Model can be translated into whatever format is most easily referenced by humans.

It is also important to understand that the Decision Model is a model and not just a list.

The Decision Model as a Model

The Decision Model is not simply a list of business rules or business statements. Rather, it is a model representing a structural design of the logic embodied by those statements. (See Figure 1.)

Figure 1. A Decision Model

As a model of business logic, the Decision Model is a unique representation of business logic, unlike other representations. For example, it is, by deliberate intent, not a model of how that business logic relates to processes, use cases, information, or software models. It is not a notation added to data models, fact models, process models, or any other kind of model. Instead, it is an independent representation of business logic based on the premise that business logic has its own existence, independent of how it is executed, where in the business it is executed, and whether or not its execution is implemented in automated systems. The Decision Model can be anchored to any and all other kinds of models, but maintained independently of them.

Having its own existence implies that a model of business logic has a recognizable structure that is not the same as the structure of other kinds of models.2 Not only that, the Decision Model is distinct in its representation of business logic because a Decision Model aims to be:

  • Simple to interpret and manage
  • Declarative so as to be independent of technology or processing requirements
  • Optimal in integrity, meaning that its business logic is consistent within itself
  • and aligns with business direction

As a separate model with these characteristics, the Decision Model elevates business logic to the status of a valuable organizational asset that would remain elusive without such a representation.

Examples of Business Logic

Earlier, this chapter defined business logic as a means by which a business derives conclusions from facts. The following are statements by which conclusions can be reached from facts:

  • A person who has not had any jobs in the past five years is considered to have a poor job history.
  • A person with more than ten jobs in the past five years is considered to have a poor job history.
  • A person with a poor job history, a large mortgage, and a significant number of miscellaneous loans is considered very likely to default on a loan.
  • A person with a low credit rating must not be granted an unsecured loan.
  • A person’s credit rating is computed according to proprietary formula A154.

First of all, each of these statements is expressed in the way that a business person might express it. None is stated in terse, forced, unnatural, or pseudocode format. The expressions are business-friendly and serve as a starting point. The goal is to discover the intended business logic behind the statements and translate it into a more rigorous form in a Decision Model. In fact, a natural language statement can be generated from the Decision Model that is more precise than the raw material from which it started.

For now, each of the foregoing statements is, simply, one business conclusion. That is, each statement comes to a simple or complex conclusion (e.g., a loan applicant is considered to have a poor job history) based on facts (e.g., how many jobs a person has held in the past five years).

The first two statements come to a conclusion about a person’s job history. The third one arrives at a conclusion regarding a person’s likelihood of defaulting on a loan. The fourth comes to a conclusion about granting an unsecured loan. And, the fifth comes to a conclusion about the value assigned to a person’s credit rating. In the fourth statement, the conclusion seems like an unconditional constraint because it defines a situation that must never be true. In the fifth statement, the conclusion is the result of a computation because it provides a specific formula. Regardless, each of these statements still arrives at a conclusion using certain facts as input (i.e., conditions) specified by business leaders. Capturing business logic, from conditions to conclusions, and refining it until

it is atomic, precise, unambiguous, and aligned with business objectives is what the Decision Model and its principles are all about. A Decision Model is a prescription for how the business arrives at fact-based conclusions that collectively represent the intended business logic behind a business decision.

These individual conclusions and their representation in a Decision Model are independent of whether they support complex custom software, purchased software packages, or processes carried out by humans. In fact, a Decision Model conforms to all Decision Model principles regardless of type of automation or lack thereof. In practice, it is best to develop a Decision Model up front and then determine whether the Decision Model is best carried out by technology or by humans. If technology is most appropriate, the Decision Model can assist in selecting the technology that best fits the characteristics of the business logic behind the business decision.3


1The concept of a business decision is discussed later in this chapter and covered in more detail in the next chapter. For now, it is sufficient to recognize that a Decision Model is the business logic behind one business decision, and hence has very specific boundaries

2Examples of other kinds of models include process models, data models, object models, and other kinds of architectural models (e.g., enterprise architecture, system architecture, and technology architecture models).

3One characteristic of business logic, for example, is whether it is very computation-oriented or more inference-oriented. Therefore, the characteristics of the business logic behind a business decision, its complexity, and its political sensitivity should be understood up front so that the most appropriate technology for its automation can be selected.

Read more IT Process Improvement

This article is an excerpt from:

The Decision Model: A Business Logic Framework Linking Business and Technology

The Decision Model provides a framework for organizing business rules into well-formed decision-based structures that are predictable, stable, maintainable, and normalized. More than this, the Decision Model directly correlates business logic to the business drivers behind it, allowing it to be used as a lever for meeting changing business objectives and marketplace demands. This book not only defines the Decision Model and but also demonstrates how it can be used to organize decision structures for maximum stability, agility, and technology independence and provide input into automation design.

About the Authors

Barbara von Halle is managing partner of Knowledge Partners International LLC (KPI) and the recipient of the 1995 International DAMA Outstanding Individual Achievement Award. Known as a pioneer in data architecture and business rules, she is co-developer of the Decision Model. An author of several books, she served as co-editor of Auerbach’s Handbook of Data Management and was a popular columnist in Database Programming and Design magazine for years.

Larry Goldberg is managing partner of Knowledge Partners International LLC (KPI) and is co-developer of the Decision Model. Larry currently serves as the editor of the Business Decision Management Bulletin (a monthly electronic publication) and as chair of the Business Decision Symposium series of Conferences. Larry has founded several software companies, leading them through acquisitions. Prior to joining KPI, he sold a company to Sapiens Americas Corporation and served as Senior VP Sapiens Americas Corporation.