Some thoughts about how
competitive businesses are pushing the line, and sometimes going
over the line and breaking the rules
Commissioner Orson Swindle, Federal Trade Commission.
Toward the end of his speech in Part 1, Commissioner Swindle
said a few words about businesses going over the line and
breaking the rules that segued perfectly into our discussion
about how business rules help government enforce the rules,
and help business comply with the rules
OS: "...I flew fighters in the Marine
Corps, and the essence of a great fighter pilot is one who
can, you know you can graph out the aerodynamics and physics
of a fighter plane. And you can show on a line that if you
do this airspeed and this G-loading at this altitude, you'll
plot over that line. When you get over that line your
airplane starts to unravel, it doesn't break up, but it
starts to go into uncontrolled flight. A good fighter pilot
will put it right on the line and stay there, because that's
where maximum performance is. Businesses, competitive, good businesses
are out there pushing to get right up to that line because
that's where they ought to be, they have that obligation to
the stockholders. And sometimes they go over, they get a
little bit too ambitious.
"Businesses, competitive, good
businesses are out there pushing to get right up to
that line because that's where they ought to be,
they have that obligation to the stockholders. And
sometimes they go over, they get a little bit too
ambitious." - - FTC Commissioner Orson Swindle
We have unfortunately in recent years seen
an awful lot of damn greed going on around the country, and
that's given business a bad name, and given government a bad
name for not doing anything about it. And so we (the FTC)
deal with these things every day..."
introduction to Business Rules and Expert Systems
by Rolando Hernandez, CEO, BizRules.com
RH: "...The whole idea is that government is
passing laws, obviously, to ensure that a company operates
correctly, but it's hard for people and businesses to follow
the rules and even understand what the law is. So that's
where technology can help. One way is to improve compliance,
to help companies comply with the rules.
These rule engines... you said earlier
Orson that one of the problems is that companies are
pushing the limits, moving faster and faster, that that is their
duty to shareholders, to go as fast they can. But the
problem lately is that they're speeding, and now they're
getting ticketed. Martha Stewart, Enron, for example... People are
finally getting caught for going too fast.
Well, one technology that is relatively
unknown but very powerful is a rule engine. Think of it as a radar detector for a corporation. You
go faster and faster, but as soon as you start breaking the
law, for example if you place a trade after 4:30PM to buy a mutual fund,
that radar detector is going to start beeping and send a
notice to maybe the Governance Officer.
Rule engine technology can help companies
comply with rules. That's what Jim Sinur is going to talk
about. The other fellow Ed Stern has used them in government
to help educate people about what the law is, what the rule is,
so that you can figure out how to follow the rule. It's hard
to follow the rules because sometimes you don't even know
what the rules are.
And so the whole point of this technology
called rule engine technology is that it can help companies go faster
and not break the law, not speed. It can help government
educate people about what the law is.
"And so the whole point of rule
engine technology is that it can help companies go
faster and not break the law, not speed. It can also
help government educate people about what the law
is." - - Rolando Hernandez, BIZRULES.com
And one other thing it can do.... there's a big
problem in IT in America which is a lot of jobs are going
to India because they are more competitive at programming than
us. So it makes sense for CEO's to send programming
overseas. Would you believe..."
OS: "More cost-effective".
RH: "It is more cost-effective, it's
cheaper. So we need to be more productive. Would you believe
that the third thing this rule engine technology... number one
it helps companies follow the rules as fast as they can.
Number two it helps government educate people about what the
Number three, this technology is sort of a
faster way to program, so that one programmer using this
technology can do the equivalent work of ten programmers the
old way. Imagine if businesses get it and they start hiring
IT people back to work who are out of work , and then you
don't have to send that work overseas because one US
programmer might be as productive as ten of the 'old way'
That's the third thing it can do, and that
was the whole theme that we want to talk about... I want to
pass it over to them... I want to just let them speak and
educate you about these three points."
How Business Rules help Business Improve
Jim Sinur, Vice President and Distinguished
Analyst, Gartner Research
JS: "Hi my name is Jim Sinur from
Gartner. We've done a number of studies on
organizations that have been early adopters of using a
combination of Business Process Management (BPM) and
Business Rule Engines (BRE). We're finding that separately,
when we do our studies, we're seeing anywhere from 10-15%
ROI on each of those separately. Together, we're seeing
20-30% ROI, and some of the early low-hanging fruit efforts
are in the 40-50% ROI...
Rule-enabled business process engines are
also being used for Sarbanes-Oxley... Now it turns out that
the current version of Sarbanes is tough for companies to
step up to the plate for, but 409 is impossible because you
have to basically report to the government in a near
real-time fashion every event and every rule that's been
fired that looks suspicious, so it gets very complex. I
don't think there's any way companies are going to be able
do it without this kind of technology.
"I don't think there's any way
companies are going to be able do it (Sarbanes-Oxley
409 compliance) without this kind of technology." -
- Jim Sinur, Gartner
And so, while we're seeing the early
adopters get significant ROI, we think once we learn how to
manage this technology as it matures, we will see some of
the ratios that were talked about, 10 to 1.
I think the real power here is we're
putting the business rules back in the hands of the business
users at a maximum, and at a minimum you're changing the way
programmers work in that you don't have to go thru a long
fixed overhead cycle to make changes to the computer
systems. You can change the rules near real-time."
RH: "And Edward, you come at it from the
How Expert Systems help Government Reduce
Compliance Costs to Business
Senior Program Analyst (Economist) - Expert Systems,
OSHA/Dept of Labor
ES: "...I want to talk about what we've done
with Intelligent Technology, which is what rule-based
systems are. Because they're a technique to capture
knowledge, and to use it, not just knowledge, but the
knowledge about how to use the knowledge.
It's a tool that can deliver expertise
just as if an expert or a panel of experts were present
"It's a tool that can deliver
expertise just as if an expert or a panel of experts
were present assisting somebody." - - Edward Stern,
I'm reminded that some years ago I was
talking to the National Federation of Independent Business
Membership Liaison Office, and they told me that members
call and say, 'Are we covered by OSHA', and some are, mostly
they would be, but. And they go on and say, and if so,
'Which rules apply to me?'
That's a very very complicated question
because it all depends on what they're doing, what kind of
materials are present, what kind of equipment they're using,
what kind of conditions exist in the workplace. So finding
out what applies is a rather subtle and difficult matter.
In response to that, we created using
Intelligent Systems, Rule Based Systems, we created a tool
called a Hazard Awareness Advisor. And this system conducts
an interview, much like a doctor conducts a medical history
interview with you.
And as the doctor is talking to you, and
asks a series of questions, when the doctor finds out that
there's been heart disease in the family, well they may want
to go forward and ask some additional questions about that.
But if it doesn't appear, well all right,
he says all right, we're not going to pursue that line,
we're not going to ask you unnecessary questions. The doctor
will do down and ask some questions in a different area.
Because he or she is looking to pick up
information what will clue him or her into the next
intelligent question to ask.
And we did that with the Hazard Awareness
Advisor, and the result is, for example in this one, that a
book store, a dress shop, a real estate office, guess what
even those places do have possible hazards. Not a great many
of them but there's some and they have some obligations
under the law.
That person, that establishment can go
through the system in five minutes.
But if you are running a warehouse with
shipping docks, and power industrial trucks, and industrial
stairs, and other equipment around, well it may take you ten
minutes or more.
Or if you're running a Ford assembly
plant, it could take you fifteen minutes. And in that period
of time, the system is asking screening questions and
intelligent follow-up questions that will get down and
figure out what kind of hazards there are, and therefore,
which rules apply, and write it up.
What's the value of having a
written report, that tells you what hazards are in
front of you in a site, and what OSHA rules apply? -
- Edward Stern, OSHA
What's the value of having a written
report, that tells you what hazards are in front of you in a
site, and what OSHA rules apply? Well people in industry tell me a report
like that would be worth $1,500-$4,000 to have a customized
written report, that delivers the knowledge of a panel of
scientists, engineers, industrial hygienists, doctors,
nurses, lawyers, all the people who put their expertise in.
It's a powerful tool in terms of finding
out what applies."
Ed Stern's comments are
continued in Part 3.
Savings to small
businesses from the Hazard Awareness Advisor amount to
between $40 million and $83 million per year, according to
OSHA. Source: Indirect
Return on Investment, by William D. Eggers