Business organisations use information systems to streamline their operations. May of the activities that would be done by people are performed by software. The rules that the people would have followed are also embedded in the software so that the software would be able to follow the same rules. An example of such rules is: If the due date for an invoice lands on a weekend, move it to the next working day.
Software is built with reference to requirements that have been identified as needed to make the software useful. Manny of these requirements are functional. They specify what that software should do. For example: Generate an invoice when an order has been shipped. This requirement says that the software must a) generate an invoice, and b) only when an order has been shipped.
Other businesses using the same software may want the invoice to be generated just before shipment as they will pack the invoice with the shipment.
One different between functional requirements and business requirements is that a functional requirement is about the purpose of the software. Why are we building it. Business rules are about the contraints that the software needs to follow when it does what it does.
Business rules can come from different areas of the business. Some may come from the accounting department. Some may come from the regulatory compliance department. Some may come from the payments and collection department. Or taxation. Or operations.
What is common is that they are rules that other entities in the organisation also need to follow, whereas the functional requirements are requirements only on the software in question.
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