The Living Transaction

Transaction automation can help your business keep pace with quickly changing markets

By Presley Becerra

Executive Summary

Presley Becerra In a competitive market, companies need to respond quickly and efficiently to change. Your company will have a strategic advantage if you can make changes to your e-business faster than your competitors. One way to manage change efficiently is through automating your transactions and business processes. A rules-based system can save you valuable IT hours by automating functions such as design, transactions, and maintenance.

Your business depends on software. So if your company is going to keep up with the pace of change, you must capture operational business policies and practices in flexible automated systems. Companies will increasingly need to automate the development of the business logic and processes that power e-business.

A highly competitive business environment puts a premium on change. Today, if your company deploys applications, you need to support iterative development because early in a project, a complete understanding of all your project requirements is rare; requirements are likely to continue changing even after deployment. Those building e-marketplaces or exchanges are in a race to claim "first to market" status. But the race doesn't end at the finish line. Companies in the running can transform the threat of competition into strategic market advantage if they can make successive changes to their Web operations faster than their competitors.

Yet2.com, an intellectual property exchange, found that taking an established business online entailed much more change management than it had anticipated. As detailed in the sidebar, "Intellectual Inventory," Yet2.com discovered that automating business logic allowed the company to get to market quickly and handle the amount of change its customer base required.

"At the simplest level, the e-business craze is all about giving consumers exactly what they want, when they want it, and at the price they want it," observed Jon Ekoniak and Timothy Klein, senior research analysts at U.S. Bancorp Piper Jaffray in the The B2B Analyst Newsletter. Rules-based automation, which affords companies a high degree of responsiveness in a dynamic demand environment, presents tremendous advantages to you when you are ready to optimize the value of customization for customers and partners.

In what follows, I first identify the e-business value of transaction automation, then I summarize the stages of building a rules-based system from developing an object model to making changes, and I outline the benefits of an automated system over conventional methods at each step. I also offer a brief case study illustrating how Yet2.com deployed its Web site quickly and made ongoing changes efficiently.

Managing Change Intelligently

Businesses first used Web sites for transactions such as ordering, fulfillment, payment, customer service, and supply-chain management. Now companies want to manage a growing number of operations and business processes on the Web, and, where possible, adapt them to the integration challenges and rigorous change requirements of e-business.

But whether your company plans to implement an online asset management system, broker relationships with buyers and sellers, or create online customer self-service, moving business processes online creates special demands for new, Web-based applications to handle transactions currently consuming people, time, and system resources. Most of all, companies like yours need the agility to deploy critical transaction-based Web applications in record time, and the flexibility and speed to make ongoing changes as fast as business opportunities arise.

Your company must be ready for constant change because as e-business rapidly evolves to include new partnerships and customers, the network of interrelated roles swiftly changes. Your e-business applications must be flexible enough to support this constant change without delay and with minimal error. Equally important, systems deploying new Web applications must integrate existing business processes.

To meet the change requirements unique to e-business, your must automate your transactions and business processes. One solution is to automate business logic and processes so that you need only specify the set of business rules governing various transactions and interaction processes. Then you can let rules-based technology optimize, sequence, and execute the business logic. Thus the rules are now extracted from the system-level coding layer, making change far easier and faster.

Automated Business Rules

The ubiquity of business rules, and their centrality in executing business strategy and policy, makes them an ideal point of entry for automation-based efficiencies. Virtually all businesses specify business rules, whether as policies, procedures, or in corporate data models. A business rule dictates how the organization executes business decisions, processes, and constraints essential to the company's strategy.

Many types of business rules exist. For example, a business rule might specify the constraints under which a preferred customer receives a discount such as, "Gold customers receive a 15 percent discount on all merchandise and free shipping within the continental United States." Or a business rule might define attributes that must be validated, such as "Dealers in Europe must be only from France and Germany." A business rule might express process-driven events, including notification procedures such as, "On orders that exceed $300,000, notify the sales manager."

Companies are rising to the challenge of e-business while human resources - particularly highly skilled professionals in Internet technology - have rarely been tighter. The shortage of IT personnel highlights the fact that most businesses would like to restore more control of business decisions to business managers and stem their reliance on Java programmers and other IT support.

Fortunately, this scarcity in human resources happens to coincide with the next level in "a continual raising of the level of abstraction" in computer systems according to Chris Date, an independent researcher specializing in relational databases, in his recent book, What Not How: The Business Rules Approach to Application Development. (See Resources.) While presentation and database aspects of applications have long been automated, aspects of applications that implement business functions have not been automated until now. In most cases, developers still hand-code business rules in an onerous, time-consuming, and error-prone process. One rule typically represents more than 100 lines of code, and a developer codes 50 lines of code per day.