What is Business Logic?

Troy Holmes

A business is a commercial entity that sells products or services to a consumer. Each business has specific functional requirements, which are executed to create these products and services. Business logic is best defined as a formal functional activity that is performed based on specific operating procedures within a business.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

Business process modeling is a technique of designing and capturing the business logic of a company. Understanding the internal business procedures is critical in the determination of how an organization can become more efficient. These business models give companies a tool to communicate their current procedures in a standard manner.

All processes within an organization consist of multiple layers of business logic. Imagine the process that is required to access a computer. Typically the computer requires the user to enter a name and password. This name and password combination is then verified and validated. Incorrect passwords cause the computer application to prompt the user to re-attempt the required credential business logic process.

Business logic is also used in the are of business process re-engineering. This is a technique used by many organizations to streamline and improve existing business processes. Manufacturing is an industry that typically requires specific steps to complete a process. Improving these steps can increase productivity and profits for the organization.

A car assembly line is a good example of a manufacturing business process. Each area of the assembly line has specific business logic that defines how a task will be completed. The specific area depends on the prior process to complete an entire car assembly.

The logic of a individual business requirement can be broken into three areas. These are the required inputs, internal process, and expected outputs. Each piece of the business process will define the specific entry point criteria, internal process step, and exit point criteria.

A mail processing center is another good example of business logic within an organization. As packages are delivered into the mail center they are sorted based on destination and urgency. This sorting process requires the proper identification and validation of a destination address. Sorting packages based on destinations and importance creates a more efficient business process. Shipping routes are based on delivery mechanisms. Local addresses are typically delivered by truck whereas packages with far-away destinations would require air transportation.

The business rules of an organization are typically considered proprietary. This is because they help make a company more profitable and unique within an industry. Proprietary business logic is the secret sauce for many organizations.

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