Why SBVR? - OMG...1 Why SBVR? “Towards a Business Natural Language (BNL) for Financial Services”...

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Why SBVR? “Towards a Business Natural Language (BNL) for Financial Services” Panel

“Demystifying Financial Services Semantics” Conference New York,13 March 2012

Donald Chapin Chair, OMG SBVR Revision Task Force Business Semantics Ltd [email protected]

Why Do We Need an fBNL? • For the same reason we need an English or French dictionary

• The financial business natural language already exists in all the communications in the financial industry

• … but the meanings can be fuzzy or not shared between authors and all the readers

• To minimize ambiguity in contracts, governance documentation & regulations

• Industry jargon needs definitions that are clear and unambiguous

• Terms often mean different things in different contexts or communities

• To have the meanings of financial industry terms in software tools that can understand the meanings

• To be able to extract more structured information from text documents

• To support semantic integration of business documentation and IT data

• To define requirements & design IT systems that implement the business meanings

• To reduce business costs of: • Misinterpretation of policy, data inconsistency, manual reconciliation & software misfits

© Business Semantics / Model Systems Demystifying Financial Services Semantics, 13 March 2012 2

Semantics of Business Vocabulary and Business Rules

• An OMG standard developed to: • Remove ambiguity from business governance documentation, especially

regulations, policies and rules • Improve business communication

• Delivers to the business: • Formal Terminological Dictionary (SBVR vocabulary)

• as a cohesive set of interconnected concepts, not just a list of terms and definitions

• Rulebook (policy, rules, etc.) • that governs the actions of the organization.

• In business natural language • Sufficiently formal to be used in software tools:

• For maintenance as a business asset • To support transformation to other kinds of model


Using SBVR


SBVR model

Vocabulary

Rulebook

Regulations

validate, interpret, form compliance

policies

Best Practices

Industry Standard

Glossaries

validate, adopt, adapt

Business Document Specifications

Contracts

Terms and Conditions

Product/Service Specs

Financial Reports

Compliance Reports

Business Policies

provide content

Speech Community Vocabularies

Internal

Formal

Public

Specialist

define subset views as

Data Processing Specifications

Data Processes

User Interfaces

transform into

govern

provide data specifications for

use in use in

semantic anchors (URIs of business

definitions)

The Business

define meanings of terms used to describe

Semantic Community: Shares the meanings of concepts and guidance French Speech Community: shares French vocabularies for shared meanings

German Speech Community: shares German vocabularies for shared meanings

English Speech Community: shares English vocabularies for shared meanings Employees

Vocabulary includes jargon, acronyms, codes, form numbers ...

Speech Communities and Vocabularies


Specialists Lawyers, Accountants, Engineers ...

Vocabulary is business vocabulary + adopted subset of practice vocabulary

Web site authors, advertising

copywriters, help desk staff. ...

Prospective customers, interested members of the general public

Interested Parties

Vocabulary is informal everyday

language

Product and service specifiers, sales and purchasing staff, accounts staff,

HR staff, compliance officers ...

Customers, Suppliers, Regulators, Financial Authorities ...

Parties in Legal Relationships

Vocabulary is formal, mandated

and strictly policed

SBVR Terminological Dictionary entries interest leg pays interest on notional amount of contract

IR swap

Synonym: interest rate swap Synonym: IR swap contract Synonym: IR swap agreement Definition: swap that has an interest rate that is exchanged for another

interest rate Dictionary basis An agreement to exchange interest rate cash flows, based on a

specified notional amount from a fixed rate to a floating rate (or vice versa) or from one floating rate to another.

Source: www2.isda.org/functional-areas/research/Glossary/#i

IR swap has interest leg Necessity: Each IR swap has exactly two interest legs Necessity: Each IR swap has at least one floating interest leg

vanilla IR swap Definition: IR swap that has a fixed interest leg that has the currency of the

floating interest leg of the IR swap © Business Semantics / Model Systems Demystifying Financial Services Semantics, 13 March 2012 6

Definitional business rules

Noun concept

Noun concept

Industry standard definition that has been formalized

Verb concept

Verb concept

SBVR Rulebook Entries


Regulation A swap dealer can rely on the written representations of a counterparty to satisfy its due diligence requirements under the business conduct standards ...

CFTC: Federal Register / Vol. 77, No. 33 / Friday, February 17, 2012 / Rules and Regulations [page 9792]

Example Business Rules that partly implement the policy:

Each swap transaction that is initiated after April 17 2012 must be transacted under an ISDA master agreement.

Each end user swap transaction that is initiated after April 17 2012 must be transacted under an ISDA master agreement that has a schedule that includes a representation of eligibility that is for the end user counterparty of the ISDA master agreement.

SBVR Vocabulary (of some swap dealer)

Example Business Policy:

Each swap that falls under the new CFTC business conduct rules must be transacted under an ISDA master agreement that includes all due diligence representations required to satisfy CFTC.

Business Object Model

Logical Data model

business-friendly view of

defines

How we do it today


Information System Specification

Data Processes

User Interfaces

basis of

basis of

Defining requirements via discussion of a business-friendly logical data model

Modeler Business User IS Requirements

agree

is presented to

What goes wrong?


Business Object Model

Logical Data model

IS Requirements

Information System

Data Processes

User Interfaces

business-friendly view of

defined

agreed

basis of

basis of

delivered to

was presented to

Why do we still see this so often? Or systems that are not delivered at all?

Modeler

Users thought they were talking about the business Modelers were talking about the data

Business users should be the drivers


Information System Specification

Data Processes

User Interfaces

basis of

basis of SBVR

Vocabulary

owns/defines

is presented to

Business User Modeler

URIs as Semantic Anchors

Logical Data Model

transforms

is transformed to

IS Requirements

agree

Model elements require definitions

Property Attr 1

xxxxx xxxxxxxxxx

Class 1 Class 2

0..1 connects 2

Class Class 2

Class Class1A

Property Attr 2

Class Class1

xxxxxxxxxxxxxxxxxxxxxxxxxxxx

SBVR Vocabulary and Data Model


Class 1

Attr 1 Attr 2

Class1A

Attr 3 Attr 4

Class 2

Attr 6

Class1B

Attr 5

connects▼

2

0..1

Class 1 Definition: xxxxxxxxxxxxx Ref Scheme: Attr 1

Attr 1 Definition: xxxx that xxxxxxxx

Attr 1 references Class 1 Attr 2 Definition: xxxxxxxxxxxxx

Class 1 has Attr 2 Class 1A Definition: Class1 that xxxx xxxxx

Class 1B connects Class 2 Definition: the Class1B xxx ...

Necessity: Each Class1B connects exactly two Class 2s

Necessity: Each Class 2 is connected by at most one Class 1B

Class 2 Definition: xxxx that xxxxxxxxxxxx

Etc ...

SBVR Vocabulary provides definitions

URI

Semantic anchor (URI)

URI

URI

URI

URI

Semantic anchors can reference them

Business Uses of SBVR

• Governance, Risk, and Compliance • Globalization/Localization and Translation • Communication and Documentation • Document and Content Index Creation • Business integration and Performance

Improvement • Training • Business Language–centered Requirements for

Information Systems


For a discussion of these Use Cases see “SBVR: What is Now Possible and Why?”: http://www.businesssemantics.com/BusinessSemanticsLtd/SBVR-WhatIsNowPossibleAndWhy.pdf

http://www.businesssemantics.com/BusinessSemanticsLtd/SBVR-WhatIsNowPossibleAndWhy.pdf



13

Special thanks to John Hall for creating most of this presentation

Contact for OMG’s SBVR Specification: [email protected]

Contacts for OMG’s Regulatory Compliance DSIG: [email protected]

Said Tabet ([email protected])

© Business Semantics / Model Systems

mailto:[email protected]



14

Why SBVR? “Towards a Business Natural Language (BNL) for Financial Services” Panel

“Demystifying Financial Services Semantics” Conference New York,13 March 2012

Additional Slides

“black is white” in seven steps ... Terminological Dictionary

swap that has an interest rate that is exchanged for another interest rate

IR swap Interest rate swap IR swap agreement

Concepts-based: synonyms share the same definition

IR swap contract

Terminological Dictionary


Black Dark Obscure Indistinct Faint Pale Light White

Conventional Dictionary Term-based: each synonymous term has its own definition

Chain of approximate synonyms

Different shades of meaning, if they are important, each have their own concept definition

SBVR: Formal Terminological Dictionary SBVR is an ISO TC 37 Terminological Dictionary – Plus: • Communities as context for sharing meanings and terms

• Term in a given context has exactly one meaning

• Unambiguous understanding of definitions

• Richer terminological semantics • Multidimensional Classification

• Roles and Perspectives

• Reference Schemes

• Enriched concept relations

• Unambiguous understanding of rules © Business Semantics / Model Systems Demystifying Financial Services Semantics, 13 March 2012 16


How SBVR Relates to Existing Language Resources

Formal Terminological Dictionary Business Glossary:

• Noun Concepts, Definitions & Primary Terms + Taxonomy:

• General/Specific + Whole/Part Hierarchical Concept Relationships + Thesaurus:

• Synonyms, Acronyms, Abbreviations, etc. + Multilingual Terms • Verb Concepts --. Relations among Concepts around Verbs that are patterns in sentences • Individual Concepts e.g. Business Events & Business Entities

+ Additional SBVR Semantic Features: • Business Communities as a context for sharing meanings and terms • Term is a given content has exactly one meaning -- shared across languages • Unambiguous Concepts -- definitions composed of adjectival phrases • Definitions, Relationships & Rules specified in formal logic • Enriched Concept Relations -- multidimensional classification, roles & perspectives • Reference Schemes for Individual Concepts

Rulebook + Behavioural Business Guidance:

• Business Policies, Rules and other kinds of Guidance governing Business Actions

= SBVR Business Vocabulary + Rules

“Why Isn’t an Ordinary Business Glossary Enough?”

1. No “good practice” used for creating business glossaries • Need definitions that are clear and unambiguous • Definitions need to reflect the meanings business people use when they

write governance documentation

2. No ability to ensure each meaning is entered only once • or to support semantic integration of multiple terminological dictionaries

3. No ability to define the same word/phrase differently in different context • while still ensuring that each term has only one meaning in a given

context

4. No basis for cohesion between definitions • or conceptual integrity of the glossary as a whole

5. Does not include defined sentence patterns that have specific meanings


SBVR: business owners/authors SBVR Vocabulary (Terminological Dictionary)

• Defines what the business is, using: • Noun concepts: concepts of things in or relevant to the business • Verb concepts: relationships between things • Definitional business rules: constraints on relationships and roles of things

• Enterprise-wide view: • Concepts have to be consistently understood across the entire business (especially if

different terms are used) • Business owners/authors:

• Lawyers, product/service owners, HR, accountants, marketers ...

SBVR Rulebook • Governs what the business does, using:

• Business policies: broad intent for governance of business processes • Behavioral business rules: directly actionable, to realize policies

• Defined using the business’s SBVR Vocabulary • Focused on functional areas,

• E.g. product/service development, marketing, production, sales, distribution, HR, accounts • Business owners/authors:

• Owners/managers of functional areas


Vocabularies and Data Models

• A terminological dictionary (SBVR vocabulary) is not a logical data model: • It provides business concepts in natural language that

are the basis of data model constructs • Semantic anchors (URIs of SBVR vocabulary elements) can

provide traceability from business definitions to IS models

• It is the basis for design transformations to create logical data models

• What is the concern?


The Great Leap Forward


Interest Rate Swap Contract

Interest Rate Observable

OTC Interest Rate Option

Bachman Diagram

In the 1960s, Charles Bachman introduced logical data structure diagrams to aid database design

IT people and business users began to understand each other a whole lot better

Data modelers started to use business terms on their diagrams and to discuss requirements in those terms

I can understand

him!

Interest Rate Observable

OTC Interest Rate Option

Interest Rate Swap Contract

Rate Treatment

is underlying

has has

M N

1

Index Tenor

Chen Entity-Relationship Model

By 1976, Peter Chen had developed methodology for entity-relationship logical data modeling

The problem? • A logical data model isn’t a model of the business:

• It’s a model of the data needed to support the business • Its vocabulary (although it uses familiar business terms) isn’t a

business vocabulary: • It’s the vocabulary of the data

• The model and the vocabulary are controlled by the modeler, whose focus is often on getting an IS specification that: • Complies with the standards (UML, XML, Xpath ...) built into the

modeling tools • Will be implementable with available technology

• As the data specification becomes more detailed: • Business users understand less of the “nuts and bolts” ... ... but the familiar-seeming vocabulary lulls them into expectations ... that turn out not to be satisfied by the systems delivered


SBVR Vocabulary and Data Model (1)


Class 1

Attr 1 Attr 2

Class1A

Attr 3 Attr 4

Class 2

Attr 6

Class1B

Attr 5

connects▼

2

0..1

Data model (in UML Class Model notation)

Property Attr 1

xxxxx xxxxxxxxxx

Class 1 Class 2

0..1 connects 2


Class Class 2


Class Class1A

xxxxxxxxxxxxxxx

Property Attr 2

xxxxxxxxxx

Class Class1


Data modeling tools can support the model diagram with definitions of each element (class, property, association, etc. These definitions are usually developed element by element in informal text with hyperlinks between named elements.

If you start out by defining a data model, you can create these definitions But if you have already developed a business vocabulary in SBVR ...

Property Attr 1

xxxxx xxxxxxxxxx

Class 1 Class 2

0..1 connects 2

Class Class 2

Class Class1A

Property Attr 2

Class Class1


SBVR Vocabulary and Data Model (2)


Class 1

Attr 1 Attr 2

Class1A

Attr 3 Attr 4

Class 2

Attr 6

Class1B

Attr 5

connects▼

2

0..1

Class 1 Definition: xxxxxxxxxxxxx Ref Scheme: Attr 1

Attr 1 Definition: xxxx that xxxxxxxx

Attr 1 references Class 1 Attr 2 Definition: xxxxxxxxxxxxx

Class 1 has Attr 2 Class 1A Definition: Class1 that xxxx xxxxx

Class 1B connects Class 2 Definition: the Class1B xxx ...

Necessity: Each Class1B connects exactly two Class 2s

Necessity: Each Class 2 is connected by at most one Class 1B

Class 2 Definition: xxxx that xxxxxxxxxxxx

Etc ...

SBVR Vocabulary already provides definitions

SBVR Vocabulary and Data Model (4) • A business’s SBVR vocabulary provides definitions that are:

• More formal than those typically developed in data modeling tools • In the business language of the users

• The SBVR definitions are elements of a coherent business model – the SBVR vocabulary: • They are not written piecemeal to support data model elements

• The SBVR vocabulary drives development: • First, the users write what they mean • Then, the IS modelers transform it into IS models (in practice there is to-and-fro development – but business intent

should drive the process)

• The transformation is usually straightforward, but requires decisions on how business concepts will be modeled in data. • SBVR concepts might be modeled (in a data model) as classes,

attributes, values, states ... • Some will probably belong in documentation model


A self-defeating optimization • There is an approach that avoids a transformation

from SBVR vocabulary to data model: • constrain the business vocabulary to be only what will be in

a data model: i.e. develop a logical data model but document it in SBVR

Structured English. • Why is this not a good idea?

• It simply perpetuates (with a different notation) what we have been doing for the past 40 years – and getting wrong with depressing frequency

• There are standards much better than SBVR for data modeling – more mature, with immeasurably more practitioner experience and a much wider range of tools – in UML, XML and Xpath

• SBVR is best used for its intended purpose: defining businesses by means of vocabulary and rules.



SBVR Formal Terminological Dictionaries Provide Semantic Anchors for Data

IT Uses of SBVR Terminologies & Behavioral Guidance

• Document Browse and Search and Text Analytics

• Business Intelligence and Data Analytics

• Data Architecture, Management and Quality

• Message-Based Middleware Architecture

• Business Process Management Systems

• Advanced Intelligence Capabilities

• Rule-based Application Software Development, Generation and Configuration

• Software Localization

• Reverse Engineering Software to Business Requirements

• Software Assurance © Business Semantics / Model Systems Demystifying Financial Services Semantics, 13 March 2012 28

For a discussion of these Use Cases see “SBVR: What is Now Possible and Why?”: http://www.businesssemantics.com/BusinessSemanticsLtd/SBVR-WhatIsNowPossibleAndWhy.pdf


Why SBVR? - OMG...1 Why SBVR? “Towards a Business Natural Language (BNL) for Financial Services”...

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