How Business Rules Describe Business Policies for Database Design

Business rules define the policies, constraints, and operational guidelines that govern an organization’s data management. These rules establish what data can be stored, how it should be structured, and what restrictions apply to ensure data integrity, accuracy, and compliance with business policies.
Key Roles of Business Rules in Database Design

1. Defining Data Integrity and Constraints
   • Business rules enforce valid data values to ensure accuracy.
   • Example: A product’s price cannot be negative.
   • Constraint: CHECK (price >= 0.00)
2. Standardizing Business Processes
   • Business rules ensure consistency in how data is captured and used across the organization.
   • Example: Each invoice must be linked to an existing customer before processing.
   • Constraint: FOREIGN KEY (customer_id) REFERENCES Customers(customer_id)
3. Enforcing Security and Compliance
   • Business rules help define who can access or modify data and under what conditions.
   • Example: Only managers can approve orders above $10,000.
   • Constraint: Role-based access control (RBAC) policies in the application or database
4. Governing Relationships Between Entities
   • Business rules define relationships between tables/entities in a relational database.
   • Example: An employee can belong to only one department.
   • Constraint: FOREIGN KEY (department_id) REFERENCES Departments(department_id)
5. Ensuring Business Logic Consistency
   • Business rules enforce logical dependencies between data attributes.
   • Example: A high-school student must be between 14 and 18 years old.
   • Constraint: CHECK (age BETWEEN 14 AND 18)

Types of Business Rules in Database Design

1. Field-Level Rules
   • Define the valid values or formats for a specific field.
   • Example: Phone numbers must follow a specific format (e.g., (XXX) XXX-XXXX).
2. Record-Level Rules
   • Define conditions at the row level, ensuring logical consistency.
   • Example: An order must have at least one product before being finalized.
3. Relationship Rules
   • Define how entities relate to each other in a database.
   • Example: A student must be assigned to a class before enrolling in an exam.
4. Process Rules
   • Define workflows and procedures that involve data processing.
   • Example: A refund request must be approved before a refund is issued.

Conclusion
Business rules "bridge the gap" between business policies and database design by defining how data should be stored, managed, and constrained. Implementing these rules via "constraints, triggers, stored procedures, and application logic" ensures that the database accurately reflects real-world business processes, leading to data integrity and operational efficiency.

Business rules describe the business policies that apply to the data stored on a company's databases. In other words, business rules reflect how a business perceives its use of data. Some business rules are especially important to the database designer because they can be incorporated into the logical schema^[1] of the database. There are certain constraints^[2] that designers apply to ensure that a database honors a company’s business rules. These constraints help preserve data integrity^[3]. Business-rules constraints fall into two categories:

1. field constraints within tables, and
2. relationship constraints between tables.

For purposes of this lesson, we will resort to the language of general database discussions (for instance, table, field, record).
Business rules play a critical role in database design by defining the constraints, policies, and operational logic that govern how data is stored, managed, and used within a system. They ensure that the database accurately reflects the real-world processes, requirements, and relationships of the organization it serves. Here's a breakdown of their purpose:

1. Enforcing Data Integrity: Business rules specify conditions that data must meet to remain consistent and accurate. For example, a rule might require that a customer's age be a positive integer or that an order date cannot be in the future. These rules are often implemented as constraints (e.g., primary keys, foreign keys, or check constraints) in the database.
2. Reflecting Organizational Policies: They translate an organization's operational guidelines into the database structure. For instance, a rule like "employees must have a unique ID" ensures that the database aligns with HR policies, preventing duplicate records.
3. Defining Relationships: Business rules dictate how entities (e.g., customers, orders, products) relate to one another. For example, "a customer can place multiple orders, but each order is linked to only one customer" shapes the design of relational tables and their keys.
4. Supporting Business Logic: They provide the foundation for queries, reports, and application functionality. A rule such as "discounts over 20% require manager approval" might influence both the database schema (e.g., adding an approval field) and the application code that interacts with it.
5. Ensuring Compliance and Consistency: Rules help enforce legal, regulatory, or industry standards (e.g., "all transactions must record a timestamp") and ensure uniform data handling across the system.

In essence, business rules bridge the gap between the abstract needs of a business and the technical structure of a database. They guide the creation of tables, columns, data types, and relationships, ensuring the database is both functional and aligned with the organization's goals. Without them, a database might be technically sound but fail to meet practical requirements.

There are various field constraints that can be imposed on a database to honor business rules. Consider the example below

1. Business rule: We ship our fertilizer to just four states: Texas, New Mexico, Oklahoma, and Louisiana.
2. Field constraint: These states are represented in a Customers table in a field called State as: TX, NM, OK, and LA. A constraint is placed on the State field so that only those four state abbreviations are accepted into the database for that specific table.

Constraints are especially common on date fields, where dates would become meaningless in a database if a product’s ship date, for example, was earlier than the customer-order date for that product, or if an employee’s termination date was prior to his or her hire date.

Relationship Constraints
There are also various constraints that can be placed on the relationships (links) between tables. Consider the example below:
1. Business rule: Every vendor must supply at least one product.
2. Relationship constraint: The relationship between the Vendors table and Products table must be governed by a participation constraint wherein a single record in the Vendors table must be related to at least one record in the Products table.

The following tables illustrate the relationship.

• 

Relationship constraints (discussed later in this course) dictate that certain entities in a relationship have mandatory status, while others have optional status. Documentation continues for the designer, who should be creating a list of business rules for the organization as reflected in any constraints (if applicable) placed on the existing database(s). Developing an eye for constraints is mostly a matter of experience. The next lesson discusses the process of interviewing users of data.

Before moving on to the next lesson, click the Exercise link below to check your understanding of business rules and constraints.
Business Rules - Exercise

[1]logical schema: The overall logical plan of a database; typically a completed ER diagram.

[2]constraints: Rules a database designer imposes upon certain elements in a database to preserve data integrity.

[3]data integrity: A term used to describe the quality (in terms of accuracy, consistency, and validity) of data in a database, in the sense that values required to enforce data relationships actually exist. Problems with data integrity occur when a value in one table that’s supposed to relate to a value in another can’t, because the second value either has been deleted or was never entered.