What is Business Modelling?
There are two main areas of activity that are referred to as “business modelling”. The first is that set of activities carried out by financial experts, economists, etc. that are concerned with analysing, modelling and predicting the financial performance of a business, business sector or an industry.
The second is all about modelling what a business does, or OUGHT to be doing, in order to ensure that it is doing the right things in the most effective and efficient ways possible.
The essential areas to model for a business are:
| Business Functions | These are the core activities of any business. A properly built Function Model is a definition of exactly WHAT it is that the business OUGHT to be doing, independent of who does it or how it is done. The function model should be built first and all other models are based on it. |
| Data Structure | This defines the elements and structure of the data required to support the Business Functions. This key model is the one most often omitted by business analysts because, remarkably, very many business analysts cannot do data modelling. This disconnection of data from function during the business analysis stage of projects is a major contributing factor to ineffective databases and poor data quality. |
After you have done the Function and Data Models, you can produce the following models, as and when they are needed.
| Business Processes | In formal terms, a Business Process defines the order in which Business Functions need to be carried out in response to a specific Trigger, in order to arrive at a predefined outcome. Less formally we could say “Whenever the event X happens we would like to get result Y, what functions do we need to carry out and in what sequence in order to achieve this?” Process Modelling is, perhaps, the most widely misused and abused of business modelling techniques. |
| Information Flow | This is all about showing how information flows around the business and between the business and the outside world. |
| Procedure Modelling | This is a means of modelling HOW things OUGHT to be done in the business for maximum effectiveness. |
There are several other models that can be built as an when required but the models above will cover 100% of your needs 80% of the time.
If you would like to know about Business and Data Modeling in far greater detail then click here to read all about the Integrated Modelling Method.
If you found this post interesting then please feel free to leave a comment below. I would love to hear from you.
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2 comments
Hi John,
Just read your post and I think its great. Its good to see someone getting this stuff right! I look forward to seeing more of your work and I’ll have to read more of your blog.
Another great post by John. Good description of the business process modeling world and its best practices.
I believe the key issue or challenge with process modeling is the unfamiliarity of most business users and even analysts with how to do this and also the lack of availability of easy-to-use tools that are better than just using Visio or PowerPoint.
Our team has been using the AccuProcess Modeler in the recent months and have found this to be a great tool which anyone can use without a lot of formal training. It includes process modeling, documentation and even process simulation for the as-is and to-be processes. It is available at: http://www.accuprocess.com
Thanks.
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