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Business Process vs. Business Rule: What’s the Difference?

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Business Process vs. Business Rule: What's the Difference?

This is about business process vs. business rule.

You’ll learn:

  • What a business process is
  • What a business rule is
  • What the difference is between a business process and a business rule

So if you want to learn that basic of business processes, then this article is for you.

Let’s get started!

Contents

What’s the Difference Between a Business Process and a Business Rule?

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Comparing a business process vs. business rule can be difficult, because they may appear to do the same thing.

Both set guidelines for how to run your company, but the guidelines apply to different aspects.

A business process tells you and your employees how to run your business on a larger scale.

It can include the activities you and your team need to do to meet specific goals. You can also use a business process for smaller goals and tasks.

Either way, a business process focuses on how you and your company will reach a goal.

You find here an in-depth explanation of what a business process is: Why Is Business Process Management Important to Any Business?

However, a business rule should lay out what you do or don’t want your employees to do in your company.

A business rule could include how to price your products and when and how to offer discounts to customers.

You could also use a business rule to describe how you want managers to make certain decisions.

Choosing a Business Process vs. Business Rule

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If you can’t decide between a business process vs. business rule, consider what you need to explain.

Both business processes and rules can work for different things. You can apply each to small details or larger projects.

In general, a business process is better for how you want to run your company.

Business processes include administration, customer service, and operations.

The specific processes can layout how you want those departments to work.

On the other hand, business rules focus on more specific things.

If you run a retail store, you can set a rule for how to price your products and when to offer discounts. You can also set a rule for when to accept customer returns.

Business rules can also tell your employees how to do other things, such as how to interact with customers.

You can set rules for how to take in a shipment of inventory and who to contact with problems.

Both rules and processes are essential to any growing  business.

However, you should understand what each is for and what to include when setting them up.

What to Include in a Business Process

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Any business process that you create should describe the goals you have for your business and how you plan to reach them.

Especially if you have many employees, you should provide written information for any process.

The way you format your business processes will depend on your goals and the type of business you have.

A service-based business will not need to worry about how to work with a manufacturer, for example.

Meanwhile, a product-based business will need a process for taking in inventory and sending orders.

Your business size can also affect the business processes that you need and how much detail you need to include.

Specific Goals

Any business process should state the specific goals you want to achieve by following the process.

You may have many goals, so you may need different processes. Consider a few things you can use a process for:

  • Acquire new customers
  • Creating a marketing plan
  • Dealing with inventory and orders
  • Meet a sales goal
  • Tracking customer and employee information

The business process you use to get new customers may be similar to that of creating a marketing plan.

However, you will need a separate process for how you will manage inventory and orders. Consider how different the goals are, and if they need individual processes.

Service businesses will need a process for how to book clients and provide the service. If you know what goal you have for your company, you can work backward.

That way, you can create a business process that will help you reach your objectives.

How to Achieve Them

Once you have a specific target that you want to reach, you need to figure out how to achieve it. T

his is the transformation stage of a business process, and it can make or break your success.

Your business process should include the steps you want yourself or your employees to take while reaching the goal.

A business process can consist of everything from sending forms to signing them.

If you’re setting up a business process for the first time, include as many details as possible.

You may be able to take out some steps, but you don’t want to have any confusion. Before you send out that process, have someone review it to make sure it makes sense.

You can also set certain parameters that your employees have to meet for the process to work.

For example, they have to receive a shipment before they can categorize it with store inventory.

What to Use

When setting up a business process, you should determine what resources to use.

Resources will vary depending on the specific process but can include labor and raw materials. You may also have a business process that involves a certain software program.

If you know what your end goal is and how you plan to reach it, you will have a better idea of what you need.

Then, you can gather those resources so that you can effectively reach your objectives.

You can also set up your goals in the opposite direction.

If you know what resources you have but don’t have specific ideas of what to achieve, starting with your resources might be easier.

However, if you have a variety of resources available, you can start with your goal and the steps.

Don’t be afraid to get specific about what you have.

Then, you can choose the best resources to help you through the business process.

What to Include in Business Rules

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Your business rules can work with your processes, but they aren’t the same.

A business rule determines what you can and can’t do, so you can use your rules to determine your processes.

However, you need some separation between your business rules and processes.

If you don’t have that, you’ll need to change your process every time you change your rules. Still, you need business rules to control some parts of your company.

Without business rules, your managers may make decisions that they think work better. But those decisions may not always be what you want.

As the owner, you need to provide rules so that everyone is on the same page.

Depending on your industry, you may have to set your business rules based on federal regulations.

For example, a bank should follow the rules set by the government when it comes to holding large deposits.

Budget Approvals

Every business has a different budget, and your budget can change over the years.

If you have a larger company, you may need to have a board of directors approve any budget changes.

You can set a business rule for who can approve budgets and how they should do so.

Budget approval or denial can change how you run your business. It’s one reason why you shouldn’t tie your rules to your processes.

However, in the case of a budget, changes can affect how much you pay employees and how much inventory you can afford.

Setting a business rule for the budget can determine how easily you can reach your business goals with your processes.

Luckily, you can combine your business budget with other factors set by your rules.

Pricing Calculations

Whether you sell products or offer services, you should set a rule for how to calculate prices.

Especially if your company works out of multiple cities and states, you should know how to set prices accordingly.

You can adjust your prices based on the local cost of living and average income levels.

A store in Los Angeles can probably afford to charge more than one in rural Texas.

Another thing to consider when pricing your products or services is sales tax.

Consider the sales tax amount for each state or city you operate in.

Sometimes, you may want to charge more or less based on the tax rate.

You’ll also need to raise prices every so often.

Your business rule for pricing can include how and when you want to do that.

Discounts

Many businesses will offer a discount or sale at one point or another.

You can set a business rule that states when your employees and managers can offer sales.

Some companies have sales around major holidays, while others markdown items more often.

If you sell products, you can set a rule for how long inventory has to sit before it can go on clearance.

After a few weeks, you can put items on sale to help get them out of the store.

Then, you can add new items to your inventory.

You can also set a rule for when employees can use a discount and how much it is.

Some restaurants might offer employees a free meal during their shift.

A retail store may offer a specific percentage, such as 20 percent, regardless of an employee’s work schedule.

Discount rules are also useful if you have a store membership.

You can offer deals to members while other customers have to pay the full price.

And you can use your business rules to determine when to offer those sales.

Business Process FAQs List: More Business Process FAQs

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Do you know why business process management is important to any business or what’s the difference is between a business process and a business funtion?

If you want get those questions answered and learn lots more, then you’re in the right place.

Let’s kick things off with this list of more remarkable business process FAQs and their answers.

Now It’s Your Turn

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Hopefully, you found this article about “Business Process vs. Business Rule: What’s the Difference?” helpful.

And now it’s your turn:

  • Did this article answer your questions?
  • Do you have anything that’s missing?
  • Is there anything you need to know that wasn’t covered here?
  • Maybe you have questions about something in the article?
  • Or you just want to share your thoughts.

Either way, go ahead and leave a comment below right now.

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