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How to Create Decision Trees for Business Rules Analysis
An underused business analysis technique you need to learn
Business rules are a key ingredient for making business decisions. Which customers can be offered a higher credit limit? How much taxes to charge on a transaction? What purchases qualify for installment payments? These decisions require both the data (the parameters that will be evaluated) and the business logic (business rules).
Capturing business rules can get complicated. Traditional textual representation only works for straightforward rules and small number of variations. The more If-Then-Else constructs you have to use, the harder it will be to make textual representation clear and unambiguous. Just try reading some of the Terms and Conditions that you usually skip, or any the tax rules and regulations.
When we need to evaluate multiple conditions e.g. use a set of business rules to make a decision, two techniques — decision tables and decision trees — are useful to master.
A decision tree is preferred when each condition has no more than two or three outcomes. A business analyst skillful with this technique can become fast friends with the development team: a decision tree can be easily translated into the programming logic, and developers will appreciate the clarity and ease of validation.
