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News & Events > Meeting with FTC Commissioner Orson Swindle 

Part 2 - Business Rules: A Technology Overview for Business Leaders  Back Next

Some thoughts about how competitive businesses are pushing the line, and sometimes going over the line and breaking the rules

by 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..."

Compliance & Productivity Challenges Facing Business and IT

high-level introduction to Business Rules and Expert Systems technology, 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 rules are.

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' programmers.

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 Productivity

by 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 government side."

How Expert Systems help Government Reduce Compliance Costs to Business

by Edward Stern, 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 assisting somebody.

"It's a tool that can deliver expertise just as if an expert or a panel of experts were present assisting somebody." - - Edward Stern, OSHA

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

 

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Meeting Handouts
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As is the custom when they speak, please be aware that Mr. Swindle and Mr. Stern are speaking only for themselves and not their agencies.

 


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