Untitled

This book is also about business modeling - about how to create a business model that represents the reality of a company. One of the reasons business modeling is complex is that there are four different business modeling disciplines.

THE RISE OF BUSINESS MODELING

Of course, organizational charts and accounting models have been used since ancient times, but apart from these two exceptions, business modeling has been rare until recent years. In ten years, we expect business modeling to be commonplace, to be the natural and common way for business people to communicate, just as software modeling is common today for software engineers.

BUSINESS MODELING AND IT ALIGNMENT

As information technology (IT) budgets shrink, IT organizations are using business models to align IT initiatives with business needs. They used business models to ensure alignment of these plans with their business needs.

BUSINESS MODELING AND BUSINESS TRANSFORMATION

Using business models, they connected the details of their desired IT spend to their business goals, business processes and business rules. Everyone already understands the business processes because they have worked within these processes for years.

BUSINESS MODELING AND MANAGING CHANGE

Will Cora Group be completely absorbed or will it keep its reporting under Mykonos. For example, today Cora Group outsources its HR function to a third-party restaurant HR company.

BUSINESS MODELING AND MANAGING COMPLEXITY

The Cleveland Clinic is only one hospital of many on the same contract and only one contract out of thousands that the distributor follows. The distributor is now charging the wrong price to the Cleveland Clinic until it becomes aware of the new affiliation.

THE BUSINESS VALUE OF BUSINESS MODELS

If you actually acquire Cora, you can use business models to explain the change to Cora Group employees. Business models are carefully defined so that any newbie who learns the model is more likely to learn the same.

THE RIGOR OF BUSINESS MODELING

Corporate IT has determined that 1,000 customizations will need to be migrated to the next version of the ERP platform and the next. If the company's managers were to develop business models of their operations and what the ERP package supports, they could realize the extent of the gap.

CHAPTER

MODEL FIDELITY

You might think that a higher reliability model is better than a lower reliability model, and sometimes you're right. Higher reliability models are more expensive to maintain: there are more details to keep in line with the changing world.

MODEL VALIDITY

They are more expensive to build because extra details have to be created and extra time is spent checking that the model is correct. One model may be a kind of accurate reflection of reality (for its purposes), and another higher fidelity model may be more accurate.

CLASSIC BUSINESS MODELS

The team working on this project includes the five kitchen managers, one of the general managers and the director of operations. But this cross-restaurant team is not shown anywhere in the organization chart, and the members of the team report to different parts of his organization.

FOUR MODEL DISCIPLINES

Just as a financial statement and an organizational chart can show two views of the same company, these new models open up some new perspectives on business – new perspectives for new purposes. We describe each of the four model disciplines in Chapters 3–6, with one chapter on each discipline.

WRONG BUT USEFUL

A model that is too large is not useful: it cannot be understood and therefore the purpose of the model will not be achieved. A model that is too large is a bad model: it cannot be understood and therefore the purpose of the model will not be achieved.

FIGURE 2.3 A motivation model with too many elements

MODELING TOOLS

Many tools support business process simulation, allowing you to experiment with future business processes to see what happens. Some tools support direct execution in a business process engine, allowing you to convert your business process model into an executable workflow.

MODEL ANALYSIS

Some tools also support publishing to XML, so a model can be converted into other formats. For example, a business process simulation may be accessible on a website, allowing users to try different scenarios and see the simulated results.

SIMULATION

Are there goals or strategies that have not been modeled that would justify this rule. Our analysis discovers that this rule is not justified by any of Portia's goals or strategies.

TRACEABILITY

We do not reduce the entire business process model to the entire business motivation model. Instead, we reduce two individual elements of the business process model to a single element in the motivation model.

Figure 2.6 shows part of the restaurant’s motivation model —the goals Sam and his staff are trying to achieve at Portia and how they are trying to achieve those goals

MODEL DEPLOYMENT

After the goal is achieved, it is no longer an active goal for the organization. If it is removed, you have lost the knowledge that it was ever a goal as well as the fact that it was achieved.

BUSINESS MODELING STANDARDS

Business Process Modeling Notation (BPMN) and Business Process Definition Metamodel (BPDM), are two industry standards that are discussed further in Chapter 5. 6 shows us which aspects of business modeling practice are not yet part of the standards.

BUSINESS MODELING AND ENTERPRISE ARCHITECTURE

The business modeling techniques described in this book are largely applicable to enterprise architecture. A business motivation model describes what a company is trying to achieve: the company's goals and objectives.

WHY MODEL BUSINESS MOTIVATION?

Business motivation models also include influencers—justifications of the goals and strategies in terms of what is happening in the organization or outside in the larger world. For example, Portia's business motivation model might include the influencer Restaurant Customers Demanding More Variety.

MOTIVATION MODELING AND STRATEGY CREATION

When strategy is created first and modeled later, it does not matter how the strategy was created; the modeling simply focuses on what the strategy is. While a strategy first model later approach is not as good as using modeling to create a strategy, it is still valuable to capture what others have created.

GOALS

For example, Portia is one of the restaurants in the Cora Group and Cora can set the goal 'Expand Menu Variety' for Portia. Each of these sub-goals is an important desired end result; each is a goal. Expanding to other cities has its own sub-goals: Open Baltimore Restaurant, Open Richmond Restaurant, and Open Philadelphia Restaurant.

OBJECTIVES

The Expand to Other Cities goal is complemented by a goal to open restaurants in three cities outside the DC metro by the end of the year. This 3-city opening goal quantifies the Expand to other cities goal: It specifies a measurement – three cities outside the DC metro – and a timeframe – by the end of the year.

DESIRED RESULTS AND COURSES OF ACTION

The difference between actions and desired results is the difference between journeys and destinations. In practice, how can you tell if an attempt at a thing is a desired result or an action.

STRATEGIES AND TACTICS

Courses of action are similar to desired outcomes (goals and objectives) in that both courses of action and desired outcomes are things that the organization is trying to achieve. In selling the idea, he emphasized the benefits of increased media coverage and relegated his goal to an action plan to achieve the newly established goal of increasing media coverage.

INFLUENCERS

If Portia's competitor introduces a radically expanded menu, the new menu will influence Portia's strategies about what to do with its own menu. The declining readership of restaurant reviews in newspapers will affect Portia's strategy to get good newspaper reviews, so this influencer is also important enough to model.

OPPORTUNITIES

And the Cora Group only recognizes it as an opportunity because the opportunity affects the achievement of one of the Cora Group's goals, Open more restaurants in the DC metro. Opportunity can influence strategy use and directly affect goal achievement.

FIGURE 3.7 An influencer and an opportunity

THREATS

An influencer is simply a statement of what is happening, but threats and opportunities are judgments about how an influencer affects the business. In other circumstances, multiple people within a single organization will have different opinions on how to rate an influencer.

ASSESSMENTS

Influencers can be internal to an organization, and an internal influencer can have a rating, also positive or negative. Or strategies can be created in the modeling process itself, in a series of model-based workshops, as described in Chapters 8 and 9.

STRENGTHS AND WEAKNESSES

The Intimate Setting strength represents how Adelina uses the small space to her advantage to create a romantic mood. The same small space that leads to strong Intime placement is also judged as a weakness, Small Space Limits Growth.

Figure 3.12 shows a model of this situation. The influencer Small Space is a simple statement of the fact that Adelina has only eight tables

COMPARING ALTERNATIVES

The three courses of action are alternative approaches to channelizing efforts toward the objective and the three channels. generate double revenue by next December: target. The influencers evoked by the three courses of action are also shown in Figure 3.16.

Figure 3.14 shows the second strategy, Market to Business Events—

CAUSAL LOOP DIAGRAMS

The neighborhood is now less attractive to restaurant owners, and fewer restaurants are now located there. But the neighborhood is becoming expensive (at least in terms of commercial rent), making it less attractive to restaurant owners and causing them to look elsewhere.

Figure 3.17 shows a model of this situation. The actuator Neighborhood Is Known for Restaurants increases, and that actuator causes increases in the actuator Restaurant Customers Dine in Neighborhood

THE BMM STANDARD

4There is a potential confusion between the Business Motivation Model – the standard – and business motivation modeling – the practice of creating models for goals and strategies and the focus of this chapter. A business organization model describes how a company is organized - the business units and departments and work groups within it.

FIGURE 3.21 Goals of the Unisys evidence team

WHY MODEL BUSINESS ORGANIZATIONS?

An organizational model for Cora Group includes Saber Staffing, a company that Cora uses to hire operating staff. An organizational model can be used to represent a past state of a company, its current state, or a future state.

ORGANIZATIONS

First, the business organization model (in Figure 4.1) shows us the organizations that make up Cora Group instead of the people and their roles. The size of the rectangle that describes an organizational unit in an organization model is not important.

FIGURE 4.1 Business organization model of Cora Group

ROLES

If we were to add a fourth level – Cora Group as part of Mykonos – the diagram would be more difficult to understand. Role reporting and organizational composition can be combined. Figure 4.7 shows an example: the reporting structure of a project to deploy a new restaurant reservation system.

EXTERNAL ORGANIZATIONS AND EXTERNAL ROLES

When a role is part of another role, the closed role - the one inside - plays the part of the closing role - the one outside. Local Diner plays the role of Customer in the organization of interest, Portia. Business Traveler also plays the role of Customer.

INTERACTIONS

For example, in the interaction between Technology User and Help Desk in Figure 4.10, the help desk sometimes provides a solution to simple problems directly to the user, without involving second-level support. Between these two model elements, the most important deliverable is the problem that the user provides to the help desk.

Figure 4.10 shows an interaction between Help Desk and Second-Tier Support. The help desk organization provides second-tier support with an incident, a written description of the problem recorded and tracked

INFLUENCE

For these equal trades of the same kind of thing (eg, two professional ball players), a two-way interaction—one with an arrowhead on each side—is appropriate. An organization model should show the interactive deliverable meal, not the steps of the process to create the meal.

WHITE BOXES AND BLACK BOXES

Because of this influence, Diner Services must now remind people not to smoke and place smokers at the bar seating instead of in the restaurant.

ASSOCIATIONS

The roles Head of Department and the three teacher roles are part of the organization Mathematics Department. The role 8th grade student is not part of the organization Middle School, nor is the organization the County Board. The Board of Education creates grading standards for all mathematics teachers, which influences the department's behavior without directly interacting with it.

CREATING GOOD BUSINESS ORGANIZATION MODELS

We saw this arrangement using work earlier in this chapter. Figure 4.3 shows the organizations that are part of the Cora group, including Portia, and Figure 4.4 shows the organizations that are part of Portia. Interactions intersect, making it more difficult to identify which organizations are participating. Figure 4.15 is more difficult to read than the equivalent Figure 4.12.

FIGURE 4.15 Interactions at an overly great distance

ORGANIZATIONS AND BUSINESS MOTIVATIONS

The regulation is the result of an impact pool, the impacting organization—the DC Department of Health—is the source of the impact pool. The goals of a smaller organization can be compared to the goals of the larger organization of which it is a part.

STANDARDS

A business organization model is a description of what is behind the business - the people, their roles and their organizations. In Chapter 5, we explore the how—the business processes a company uses to get things done.

FIGURE 4.17 Customer sales inquiries at a telecommunications services company Or a new customer could contact a large supplier directly, resulting in an indirect sales inquiry to one of the regional sales groups

WHY MODEL BUSINESS PROCESSES?

A business process model is a model of a business process - a model of the work being done and who is doing it. To run a business process as a workflow, a specialized tool must be used to convert the business process into code that can be executed in a business process engine.

ACTIVITIES

When an organization practices knowledge management, it applies knowledge gathered in one part of the organization to another part of the organization. Once the host welcomes the diners, she asks for a name and if they have a reservation.

SEQUENCE FLOWS

The name of an activity need not convey the details of how the activity is performed. Usually an activity is performed by one person, the person who performs the work of the activity.

EVENTS

When the first guest arrives, the host checks the reservations, but does not sit down in the restaurant until the rest of the party arrives. Figure 5.5 shows the process with the Party ArrivesafterCheck Reservations intermediate event. When the rest of the party arrives, the host picks them up and they sit down.

LANES

Some activities have an outgoing sequence that flows to another activity in the same job when the same person performs the next activity. Some activities have an outbound sequence that flows to an activity in another job, when the next step is performed by another role.

GATEWAYS

If the two lanes are far apart—eg, separated by three other lanes—the sequence flow is long. After the appetizers are served, the outgoing sequence flow waits at the gate to be served the first entrees.

Figure 5.10 shows more of the same process. If the party has no reservations and no table is available, the host looks for a way to arrange tables

DEFAULT SEQUENCE FLOWS AND CONDITIONAL SEQUENCE FLOWS

Similarly, for a party that only orders entrees, the second gateway passes the job through Serve Desserts. A conditional sequence flow is a sequence flow that includes a condition, a description of the situation in which that sequence flow is allowed to be received.

SUBPROCESSES

The lower-level process—Figure 5.15—shows the detail of one of the activities in the higher-level process—Figure 5.14. The lower process details of the subprocess are shown in the context of the upper process on the same diagram. Figure 5.16 shows Greet Partyas an embedded subprocess.

Figure 5.15 is an independent subprocess . The lower process is shown as a sepa- sepa-rate free-standing diagram

COMPENSATION AND OTHER CONDITIONS

Some of the Mykonos restaurants have special event rooms that can be rented in their entirety for an evening. If Take Reservation is canceled after the Take Special Event Room Reservation has taken place, the room will have to be cancelled.

Figure 5.20 shows the process for reserving a special event room. The normal process is quite simple

POOLS

And the distributor has no authority over the activities in the procurement specialist pool. Figure 5.22 is a poor model of the equipment procurement process because it implies that some organization has authority over the entire end-to-end process. The same message flow is shown in Figure 5.23, but the message flow is from Ordering Equipment to the black box.

AS-IS AND TO-BE PROCESSES

It is common to have a single process model as is and several different models of the process to be made. The process as it stands is purely manual; No technology supports the host in its work to bring down the client.

BUSINESS MOTIVATIONS AND PROCESSES

By comparing the future process of Figure 5.25 with the as-is process of Figure 5.24, we can see which activities are performed differently and which new activities are needed. An individual activity can also realize a course of action. Figure 5.27 shows the individual activities within the Seat Party with Pagers business process that realize the Use Pagers strategy.

FIGURE 5.26 Business motivation and business processes

BUSINESS PROCESSES, ORGANIZATIONS, AND INTERACTIONS

An interaction between two organizations in the business organization model can correspond to a business process in the business process model, where the business process details the way the two organizations actually interact.

FIGURE 5.28 Business organizations and business processes

THE BPMN STANDARD

Capture business process models as-is to understand how work is done today and challenges with existing process. Create alternative business process models to investigate how work will be performed after different solutions are implemented.

Figure 5.29 focuses on the transportation activities, showing the embedded subprocess Transport Crossers

BUSINESS RULES SHAPE BEHAVIOR

There are business rules about seating customers at tables and managing customers waiting to be seated. Why are business rules textual when the models in the other three disciplines are graphical.

WHY BUSINESS RULES?

When new regulation comes in, the regulation is analyzed for its impact on business rules. If the applications are bound to business rules through a manual requirements process, the new rules and changed rules identify the components of the application that need to be changed.

RULES

When an American Express™ card is scanned, the application rejects the attempt and may display a dialog box with the line: 'A credit card payment is only allowed if the credit card is supported by VISA. ' The rule is the same whether it is enforced by humans or machines. Accepted credit cards: Payment using a credit card is only permitted if the credit card is supported by VISA or the credit card is supported by MasterCard or the credit card is supported by American Express.

BUSINESS RULE FORMS

No Loonies Bis condition "cash payment applies to bill and bill amount is at least $20." When the condition is true, the forbidden situation must be prevented. In the B items of the vegetarian menu, there is a restriction "the ingredient is not meat and the ingredient is not fish".

FIGURE 6.6 The structure of a restricted permissive statement

NOUN CONCEPTS

American Heritage Dictionary of the English Language, Fourth Edition There are dictionary definitions for many of the other Mykonos noun concepts. Rather than expressing the behavior that Mykonos wants, it serves to describe a noun concept and the way the noun relates to other noun concepts.

FACT TYPES

It is better to have all rules build on one coherent set of fact types. The Payment fact type has a payment amount is treated slightly differently than other fact types we've seen. The payment amount is a property of a payment.

Table 6.2 Other Potential Rules That Use the Same Fact Type

RULE VIOLATIONS

The problem with Nonrule 1 is that it is not always possible to know if the rule is being broken. Visible Allergens: It is mandatory that the description of a menu item include an ingredient if the ingredient is a common allergen.

ENFORCEMENT

It does no good to recognize an apparent allergen violation after someone has an allergic reaction to a menu item that is inadequately described on the menu. Better for the server to recognize the violation before the allergic customer orders the linguini.

BUSINESS POLICIES

The business policy Vegetarian-friendly menu, for example, is the reason that the business rule 2 Vegetarian Appetizers exists. 2 Vegetarian Appetizers an implementation of the business policy, a translation of the vague intent of the business policy into the precise, directly enforceable language of a working rule. Figure 6.15 shows the business policy, the business rule, and the derived association between them. The business policy Vegetarian-friendly menus is a part of this larger policy of catering to people with general dietary restrictions. Figure 6.17 shows this part of the relationship between vegetarian-friendly menus and dietary restriction menus.

FIGURE 6.16 A business policy and three business rules

BUSINESS MOTIVATION, POLICIES, AND RULES

Other measurements are supported by other structural rules. Figure 6.20 shows the connections between the target and the two rules. For example, Mykonos may decide that Business Rule 2 Vegetarian Entrees should only be a guideline, with chefs from individual restaurants free to violate the rule without penalty. Figure 6.23 shows the relationship between the business rules and the tactics that specify the enforcement level.

FIGURE 6.18 Business rules govern strategies

BUSINESS ORGANIZATIONS AND BUSINESS RULES

Strategies, tactics, business policies, and business rules are means, all ways an organization tries to achieve its goals.

BUSINESS PROCESSES, BUSINESS POLICIES, AND BUSINESS RULES

Business rules can guide activities as well as gateways.2 An activity is controlled by a business rule when the business rule helps the person performing the activity to do their job. Business rules can guide a conditional sequence flow in the same way they guide the corresponding gateway.

Figure 6.25 shows how the whole of a business process is governed by a business policy and how it is guided by business rules

THE SBVR STANDARD

SBVR is a standard for describing business rules, but it does not describe how rules relate to strategies, goals, organizational units, and other model elements. Software applications that use business rules will be able to exchange those rules with other applications.

THE BUSINESS VALUE OF BUSINESS RULES REDUX

The result is a brand new application that is worse than the old application because it lacks business rules. Either the business rules become requirements for the new application, or they are executed directly.

MODEL VALUE DESTRUCTION

The model value analysis shows a total one-time cost of 120 hours and an ongoing annual cost of 60 hours each year. Or Bill could refine the rather crude details of the model value analysis, perhaps translating the hours into dollars.

SCOPE FAILURES

Controlling the scope also means controlling the depth of the model: for the elements included, how detailed the model should be. For example, suppose you create an organizational model for Mykonos Corporation and you want to manage the scope of the model.

Figure 7.2 shows a scope table for the modeling Mykonos’s organization. The scope table shows what is in and what is out for the breadth: you intend to model only internal functions, not individual restaurants or organizations outside Myko-nos

STRAIGHT-THROUGH MODELING

So at the end of each iterative you should leave the model in a presentable state. There is another reason to have the model deliver at the end of each iteration: situations change.

Figure 7.5 shows an iterative process for creating a business model. 1 The iterative process performs all the activities of the straight-through process (Figure 7.4) many times, once each iteration

MODEL COMPLEXITY

If the model is deliverable at the end of each iteration, then it is deliverable at the end of any iteration. The model does not deliver all the value estimated in his model value analysis from Figure 7.1.