Business Logic: Definition, Components, and Examples

By Indeed Editorial Team

Published May 28, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Business logic is the rules or commands governing how a database interacts with an end-user application. It is highly visible in the workflows it supports, such as the steps or sequences that specify how data and information can flow. Understanding the various logic components can help a business develop effective data procedures and optimize daily production efforts. In this article, we define business logic, explain its purpose, and share examples.

What is business logic?

Business logic, or domain logic, is a collection of computer algorithms that specify the procedures for creating, storing, and processing data in an organization's internal software or server. You can use it to refer to a series of protocols that appear after employees create or change data lines. For instance, domain logic for a retail store may include inventory information, which you can use to determine how many products the business sold during a specified period. Domain logic can determine how numerical data gets calculated for various purposes, including sales and tax information. The following are some important terms:

  • Database: This term refers to organized collections of data frequently kept on a computer's hard drive using customized software. Employees may use company databases to gain access to domain logic necessary to accomplish work objectives.

  • Data management software: This term refers to software that enables you to manage data from multiple databases. It converts data to more user-friendly formats for non-technical employees.

  • Workflow: This refers to the steps necessary to complete an action involving data. Domain logic workflows enable employees to carry out a specific task, such as compiling a customer's purchase history.

  • Trigger: This term refers to code in a workflow that gets generated in response to a particular event. For instance, clicking on a person's name in the payroll software may display their payment information.

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What is the purpose of business logic?

Domain logic enables an organization to manage and access massive amounts of data to support daily work efforts and practices. It converts company protocols to computer-usable data, allowing employees to keep track of critical tasks and update information. Businesses may require domain logic to ensure that basic routines spanning many categories of data remain operational and efficient.

Consider a business that manages inventory and purchases using a cash register program. A technician can use this program's domain logic to define the steps for entering credit card information, generating accurate receipts, and performing similar tasks. To complete one of these tasks, employees can follow the inputted steps on the cash register program rather than read the data directly.

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What are the components of domain logic?

The following are the fundamental components of domain logic:

Data consistency

Data consistency refers to data that gets entered in accordance with business logic guidelines and matches other data in a database. When data is consistent, employees can more easily complete workflows and view the same data. Consider an employee filling out a form with customer information using internal software. To ensure data consistency, the form requires employees to enter specific information in a particular format, such as numeric values when entering a birth date or phone number.

Participant control

This term refers to the process by which a database decides which level of employees see which data lines. It's critical for domain logic to determine what information may be visible to specific employees to streamline their interactions with a computer system. For instance, workflows may permit a sales manager to view data columns about sales quotas for all employees in a company, but a retail employee may only view data about their own sales quota.

Verification of modification

Like participant control, a modification check refers to the mechanism by which a database determines which employees can modify specific lines of data. Because some data may be critical to a business's daily operations, it's important for domain logic to define which users can make more significant changes. Consider a company adhering to legal requirements about the amount of personnel information they can store. Domain logic workflows may restrict access to data for personnel files to employees in the human resources department, as their training requires them to understand those regulations.

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Examples of business logic

Consider the following examples of domain logic:

Data flow

A data flow diagram illustrates how a database processes and filters data in response to a user action. It establishes which events may trigger another to occur. Typically, when creating a data flow, you define the cause-and-effect relationships between lines of data and account for the various ways a user can perform an action. For instance, a data flow diagram might depict the steps necessary for a user to log in to a website, including entering the username, password, and an additional security question.

Data validation

Data validation is a systematic process for ensuring that data is accurate and of high quality. To incorporate data validation into your domain logic, you can create a test procedure within a database program to ensure that users enter the correct data in the right location. For instance, data validation can determine whether a user enters street address data with the correct spelling and format.

The following are some frequently used types of data validation checks:

  • Data type: determines whether an inputted line of data gets classified correctly, such as text versus numerical data

  • Length: determines whether the data entered is the correct length, including whether it is too long for a particular bracket

  • Range: determines whether numerical data falls within a pre-defined range of numbers and integers, such as 10 to 100

  • Data order: confirms if the data is in the correct order, such as a package delivery date recorded after the date a customer ordered it

  • Uniqueness: determines whether a user enters the same line of data twice into the same program, which may result in the appearance of specific errors

Database transaction

Database transaction refers to the procedures used to move data from one state to another. It's critical to write database transactions for domain logic because they enable you to accurately adjust large amounts of data, affecting multiple aspects of a business's daily operations. Consider a bank employee transferring funds between accounts using data banking software. To ensure data consistency, the software only allows employees to enter specific number values on the form, ensuring the correct amount of money gets transferred between accounts.

Data transformation

Data transformation refers to the procedures used to alter the format or structure of a segment of data. It may entail adding data lines, combining sections, or reproducing them entirely in a different type of database. People who write domain logic may transform data to streamline the flow of information between different employees or upgrade a system that a business relies on to perform critical tasks.

Consider a theatre company that makes a mid-season switch to a new ticketing software. As a result, they transform the data stored in their previous program into a format compatible with the new one.

Data calculation

Data calculation combines numerical data to generate an amount that they can use for various purposes, including calculating production costs. Businesses typically use specialized digital tools to accurately calculate numerical data and interpret it for its intended use. For instance, a person writing domain logic may include an algorithm for calculating tax information based on a particular mathematical formula. An employee can use this domain logic to calculate the total purchase amount for a customer by adding the tax amount to their purchase.

Data notification

Data notification refers to the windows that appear when a user accesses specific data or starts a workflow. Domain logic developers can incorporate notifications to help employees understand which data requires their focus. Consider a streaming service that provides subscribers with 10 free videos per day. When a user clicks on their 11th video, an algorithm built into a data system may notify the marketing team. The team can then send the customer an email advertising a subscription upgrade that increases the number of videos they can watch.

ACID and domain logic

Many people use the acronym ACID to refer to the properties of database transactions. The following table summarizes the definitions of each ACID term and its relationship to domain logic:

  • Atomicity: This property refers to the ability of a person to modify multiple sections of data with a single action while accounting for all aspects of the data. For instance, if a customer purchases an item, the atomicity property shows the item got removed from the business' inventory because of the transaction.

  • Consistency: This property shows how a person can alter data only under specific circumstances. It indicates that pre-transaction data accurately reflects the post-transaction state.

  • Isolation: This property explains how data used throughout a transaction remains hidden to some users until it gets fully completed, implying that another user cannot use it concurrently for another transaction. For instance, specific banking applications limit customers to one bank transfer per day to maintain the isolation property.

  • Durability: After a transaction gets completed, the durability property explains how the data effects are permanent, like whether they can remain active even if the database undergoes a future fault. It shows how a database can revert to a pre-transaction state if accidents occur during the process.


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