If business management creates and maintains the policies that drive competitive advantage, why can't business create and maintain the business logic that represents these policies?

Business change is a fact of life for companies and results from new product initiatives, compliance with new regulations, back-office efficiency needs, or changes in market conditions. New policies and procedures are created to respond to these changes. However, management is not measured on its creation of policy, but rather on its accountability for successful execution. Companies rely on business applications for this successful execution, and business change often means change to these applications. Business logic within applications is the bridge between policy and execution.

It's often said that a chain is only as strong as its weakest link. In the chain of creating business-driven and flexible software applications to execute business, the weakest links are within the process of the capture, validation, and change of business requirements for business logic. These weak links produce the crippling business mistakes and business errors, such as gaps, ambiguity, conflicts, incompleteness and inefficiency that cause pain throughout an organization.

According to the Standish Group, a market research and advisory firm specializing in strategic software, nearly one-third of IT projects are canceled before completion. Over half the remaining projects are considered 'challenged' and will cost almost double their original estimates with fewer features and functions than originally specified. The firm cites the top-three causes for business errors and mistakes:

1. Incomplete business requirements
2. Changing business requirements
3. Lack of business user involvement.

Business Error Costs
Testing for business errors and mistakes in the late stages of software development, as it is done today, is a poor substitute for preventing errors in the earlier stages of a project life cycle for one reason: Cost (see Figure 1). Software errors cost an estimated $60 billion annually, according to the National Institute of Standards and Technology (NIST), a unit of the U.S. Commerce Department. According to Oracle Corp., the cost of finding and fixing an error in the production phase of application development is often a thousand times more expensive than if it had been prevented during the scoping phase of the project life cycle.

In addition to internal delays with lost productivity and revenue, it's often customers who painfully uncover errors, leaving companies exposed to significant financial or legal liability. Recently, Multidata Systems International Corp., a leading provider of radiation oncology products and systems, discovered it may be facing total damages in the range of $14 million to $28 million for 28 deaths resulting from incorrect gamma ray dosages for their cancer therapy product. This 'business mistake' has been linked to business logic errors within the software that controlled administration of the dosages.

Other examples include:

- Consumer lending: A bank error causes a minor amount overdue discrepancy for a customer, triggering a bank late fee, which after several months is reported to a credit bureau. The result is the customer's credit record becomes damaged. Thousands of dollars per customer are spent reversing what was originally a simple business logic error. A business logic gap allowed this kind of damage. The total cost impact on the financial services sector from an inadequate software-testing infrastructure is estimated to be $3.3 billion.