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Published by: iroko on May 07, 2011
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Business Systems Modelling: Function Modelling (Tutorial 1) Starting in the Right PlaceThe essential starting point for good business modelling – and that includes datamodelling – is to model the Business Functions.“Know the Business Functions and you know the business.”All other business models can be derived from the Function Model.Effective business modelling has five facets:1.Information gathering2.Analysis and investigation3.Modelling4.Feedback5.ImplementationInformation GatheringEffective information gathering is the cornerstone for effective results so it is worth taking the pains to get it right first time.Information gathering is be done in three main ways:1.Using existing documents2.Running strategic interviews3.Running modelling workshopsThese methods are not mutually exclusive! In a well run business modelling project each of them will be used as appropriate.Strategic interviews with senior executives are essential for success and yet they are the one step that most analysts miss out. Inexperienced analysts miss them out because they are afraid of wasting the time of busy people. Many “experienced” analysts miss them out because they already “know” what the business needs and do not need to ask anybody. Good analysts never miss them out.Business analysts are experts in analysis and modelling. They are not business experts and should never try to be. This is a common error that de-rails all to many projects.Analysis and InvestigationDocumentation is not analysis!Too many analysts gather large amounts of information – often from the wrong sources – and then produce weighty documents and think that they have done analysis. Common mistake!Information gathering is only the beginning. The information must now be analysed and the business functions and other business objects extracted from it.The Integrated Modelling Method provides the means to consistently analyse all gathered information and extract the required business objects, missing nothing.Extracting Business FunctionsThe following is an extract from an interview with the manager of the sales department of a distribution company.We sell products and services to authorised customers.We receive applications from prospective customers all the time.We vet prospects and, if they pass, we register them as authorised customers.When we receive an order from a customer we make sure that we identify the products or services that are required.If the order is taken by phone we chase the customer for payment of overdue invoices if there are any.We check that the goods are in stock and, if they are, we dispatch them to the customer.We send the delivery note to the invoicing department to confirm that the goodshave been sent.If the goods are out of stock we place a purchase order with our suppliers.When we receive the goods from the suppliers we complete outstanding customer orders.We invoice private customers at the end of each week, we invoice commercial customers at the end of each month” From such a transcript we will extract a list of Candidate Business Functions an
d the convert these to actual business functions.Candidate Business FunctionsActual Business Functionssell products and services to authorised customersSell Products and Servicesreceive applications from prospective customersAccept Applications from Prospective Customersvet prospectsVet Prospective Customersregister prospects as authorised customersRegister Authorised Customersreceive an order from a customerAccept Orders from Customersidentify the products or services that are requiredIdentify Products or Services Requiredorder is taken by phoneAccept Orders from Customerschase the customer for payment of overdue invoicesRequest Payment from Customercheck that the goods are in stockCarry out Stock Checkdispatch them to customerDispatch Products to Customers send the delivery note to the invoicing departmentConfirm Order Dispatchedconfirm good have been sentConfirm Order Dispatchedplace a purchase order with suppliersOrder Products from Suppliersreceive the goods from the suppliersAccept Products from Supplierscomplete outstanding customer ordersDispatch Products to Customersinvoice private customers at the end of each weekInvoice Customersinvoice commercial customers at the end of each monthInvoice Customers This short extract has yielded thirteen separate Business Functions.The items in the column on the left above were phrases that suggested Business Functions. We listed these and converted them to actual Functions.The conversion technique is as follows:1.Eliminate Mechanisms: Most Business Functions will be hidden behind Mechanisms. Business Functions are WHAT the business OUGHT to be doing and mechanisms are HOW it currently does it. Most business functions hide behind mechanisms.In order to convert the candidate to a real Function ask the question “what is theobjective of the action described by the candidate?” The objective is the Function.2.Choose good verbs: Choose a strong, positive, active verb with which tobegin the Function name.3.Remove any ambiguity: For example, “vet prospects” is ambiguous because, reading it in isolation, we would not know what “prospects” are. Are they prospective employees, suppliers, customers? If the Candidate Function does not make this clear then we need to to return to the extract from which the candidate came and clarify this. From this extract we see that “prospects” refers to prospective customers and so “Vet Prospective Customers” is a good name for the Function.4.Remove extraneous words: If we had a Function named “Develop a Plan to Give to a Customer” we would change this to “Develop Plan for Customer”.5.Capitalise all major words: Function names should be written using initial capitals on all verbs, nouns and adjectives, for example, “Issue Parts from Stores”, “Book Passenger on Flight”.Function CatalogueA long list of Business Functions is not easy to work with.In Integrated Modelling Method the Functions are arranged into a hierarchy called the Function Catalogue – this is the core model of the method and an essential model in every business.Arranging the above list of functions into a hierarchy would give us the following:Sell Products and ServicesManage CustomersAccept Applications from Prospective CustomersVet Prospective CustomersRegister Authorised Customers
Manage SalesAccept Orders from CustomersIdentify Products or Services RequiredCarry out Stock CheckDispatch Products to CustomersConfirm Order DispatchedManage RevenueInvoice CustomersRequest Payment from CustomerManage StocksOrder Products from SuppliersAccept Products from SuppliersThis is a simple hierarchy that will grow as we work throw each interview an workshop session. A good modelling tool will enable you to draw hierarchy in diagram form –making it even more usable. When choosing a modelling tool make sure that it isrepository based i.e. has a database in which each function needs to be definedonly once and can be re-used on as many diagrams as are required.Know the BusinessThe Function Catalogue is the one model that allows you to see the whole of thebusiness from end to end without duplication of any elements.It is a unique catalogue of all core business activity that tells us what the business is all about. What Next?Having built the Function Catalogue for all or part of a business we can now goon and build any other models we need.Process Models: Processes are simple the linking together of Business Functionsinto a particular order to achieve a particular business result.Data Structure Model: The shows the relationships between the data entities created and used by Business Functions.Information Flow Model: This shows how information flows between Business Functions within the business and between Business Functions and the outside world.Data State Model: This shows how data entities from the Data Structure Model aretransformed by Business Functions.Procedure Model: This shows the mechanisms by which Business Processes are executed day-to-day.In the next tutorial we will look at how to build a process model. Many organisations start their modelling efforts at this level which can lead to confusion sowe will explain the important difference between process models, function models and procedure models plus provide some practical techniques to help you buildyour own process model. ExerciseUsing the techniques provided here, assess whether your organisation possesses an accurate function model for your part of the business.If it doesn't then follow the steps above to create one for a critical area of the business. Use the comments section below to post questions for John and we'llhelp you complete the exercise correctly. We'll also be running regular coaching calls with John to help solve your modelling queries. Useful ResourcesIMM WebsiteIMM Approach

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