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Reference Model Design: An Approach and its Application

Conference Paper · January 2012

DOI: 10.2498/iti.2012.0419

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doi:10.2498/iti.2012.0419
Reference Model Design: An Approach and its Application
Dejan Pajk, Mojca Indihar-Štemberger, and Andrej Kovai
University of Ljubljana, Faculty of Economics, Kardeljeva pl. 17, 1000 Ljubljana, Slovenia
E-mails: dejan.pajk@ef.uni-lj.si, mojca.stemberger@ef.uni-lj.si, andrej.kovacic@ef.uni-lj.si
Abstract. The main idea of reference modelling
is to reuse business knowledge to create efficient
business processes to be deployed inside an
organisation. Reference models provide a set of
generally accepted recommended practices. One
of the management challenges facing today's
organisations involves the development and
reuse of business process reference models. We
present a reference model design approach with
a focus on a business process merging phase.
Process merging is an approach that brings
together several business process models with
the objective to create a new model. We base our
findings on a case study of three big Slovenian
companies from the metal industry sector.
Keywords. Reference models, Reference model
design, Process merging, BPMN
1. Introduction
The past decade has seen the rise of business
process management (BPM) as a general
approach to improving business processes. The
demand for BPM is grounded in the pressure to
align all aspects of an organisation with the
wants and needs of its clients. BPM attempts to
improve processes continuously.
There is strong industry interest in process
standards, for example the widely accepted
BPMN (Business Process Modelling Notation),
or business process reference models, such as
ITIL (Information Technology Infrastructure
Library), SCOR (Supply Chain Operations
Reference model) or the SAP R/3 reference
model. Reference models are generic conceptual
models that formalise recommended practices for
a certain domain [15].
As organisations reach higher levels of BPM,
they tend to gather large collections of business
process models. Nowadays, one challenge for
management is the formalisation and reuse of the
company’s best practices. Developing process
models from scratch is a time-consuming and
methodologically challenging task. Reference
455

models can be used as a starting point to develop
specic conceptual models [2]. Two main
scenarios make use of reference models. The first
involves application of a reference model, e.g.
when that model is adapted to the specific needs
of an organisation. The second scenario entails
the design of a reference model. In the paper the
term reference model design relates to all
activities that are necessary to design and
develop reusable business process reference
models.
In the literature we can find some suggestions
for reference model design methods [7, 13].
However, we were unable to find an approach
that considers a reference model for merging
processes based on existing business process
models within the specific industry. This paper
aims to suggest an approach to the design of
process reference models based on collections of
an organisation’s business process models.
The paper’s structure is as follows: the
opening section introduces and generally
describes reference models. The next section
explains an approach to the design of a process
reference model based on existing research,
while the last section presents the application of
the suggested approach in a case study based on
a European project.
2. Reference models
Process design is a key phase in the redesign
of business processes. The resulting model forms
the basis for implementation and execution.
Ensuring such modelling quality can be very
time-consuming. The use of process templates
significantly increases the efficiency and
effectiveness of the process design phase.
Process templates are generally called business
process reference models [10].
A reference model encompasses one or more
pre-engineered and integrated organisational
views. For example, one type of reference model
might be a business process reference model, or
a depiction of data flows [4]. It integrates the

 




  

well-known concepts of business process
reengineering, benchmarking, and process
measurement into a cross-functional framework
[18].
A reference model is based on a small number
of unifying concepts and may be used as a basis
for education and explaining standards to non-
specialists [1]. In the science literature we can
find several definitions of reference models.
Rosemann [14] defines reference models as
generic conceptual models that formalise
recommended practices for a certain domain.
Fettke and Loos [6] contend that a reference
model represents a class of domains.
Reference models have the following
characteristics [6, 7, 10, 16]:
- a representation of best practices (providing
best practices for conducting business);
- universal applicability (representing a class of
domains, not a particular enterprise); and
- reusability (they can be understood as
blueprints for developing information systems,
they can be structured to allow easy adaptability
to company-specific situations).
Reference models play an increasingly
important role in activities such as business
engineering [17], information system
development [23], customising ERP systems [15]
and training and research [19]. In order to be able
to use reference models, they must be adapted to
the requirements of a specific enterprise.
Reference models represent the content of
various domains. The most important types are
the following [10, 6]:
- industry reference models (representing the best
practices of a specific industry sector);
- software reference models (these can be
traditional applications such as ERP systems, or
a reference model representing a sub-process
supported by service-oriented architecture
(SOA);
- procedural reference models (e.g., a project
management reference model); and
- company reference models (representing best
practices within a company or a company group).
The use of reference models has different
economic effects on the modelling process [7, 8,
10, 12]:
- a decrease in costs (reference models can be
reused so the development costs of the reference
model can be saved);
- a shortening of modelling time (the knowledge
contained in the reference model reduces
learning and development time, allowing the
456
identification of and a direct focus on critical
processes);
- an increase in model quality (reference models
are proven solutions and provide better model
quality and an awareness of own deficiencies);
- a lessening of modelling risk (the risk of
failures during reference model usage can be
reduced because reference models are already
validated); and
- the reference model content usually bridges the
business and the IT domains. For example,
business process models can be linked with
predefined interface definition models and Web
service models.
Despite the many positive effects for
business, they are still rarely used in practice.
The reasons for this can be found in the
accessibility or complexity of reference models
as well as the implementation methodologies. A
possible disadvantage of using reference models
is that an organisation might lose some
advantage of its unique and perhaps better
business practices. If a reference model is widely
used by an industry sector, then it can hardly
represent a source of a company’s competitive
advantage.
3. Reference model design approach
The initial intention of designing a reference
model is to create generally used and easy to
understand business processes. The scope of our
suggested approach is the phases and activities
that are required to design reference models
based on existing organisation business process
models. The suggested reference model design
phases are: Scope definition; Business process
modelling; Process merging; and Reference
model verification (Fig. 1).
Business Reference
Scope Process
Definition
Process
Merging
Model
Modelling Verification
Figure 1. Reference model design approach
3.1. Scope definition
The objective is to define the scope of the
project. We must identify and select business
processes that are reusable and can therefore be
classified as process reference models. The
questions of why we need a standardised
business reference model, what are the costs of
designing it and what are the expected positive
economic effects should be answered in this
phase. It is also important to define all the
additional constraints of the suggested project as
well as the selection of the modelling language
and the modelling tool.
3.2. Business process modelling
A business process model is an abstraction of
a business that shows how components of the
business are related to each other and how they
operate. Its ultimate purpose is to provide a clear
picture of the enterprise’s current state and to
determine its vision for the future [20].
The objective is to develop and describe
business process models based on interviews and
documentation received. We adopt the business
processes modelling methodology used in many
Slovenian projects by the Institute for Business
Informatics (IPI) at the Faculty of Economics,
University of Ljubljana [9].
3.3. Process merging
We distinguish between vertical and
horizontal scenarios of process merging.
Horizontal scenarios involve the merging of
process models at the same level of abstraction
and usually in the same modelling notation,
whereas vertical scenarios involve models at
different levels of abstraction. An example is the
merging of a business process model and its
underlying implementation [12].
Our scenario presented in the next section
involves the merging of existing organisational
processes (“as-is process 1, company 1” vs. “as-
is process 1, company 2” vs. “as-is process 1,
company 3”) with the objective of designing a
reference business process model (“to-be process
1”). This scenario is presented as a purely
horizontal process merging scenario.
The goal of this phase is to identify a set of
activities that are common to the described
domain. In order to be more efficient, we can
take advantage of comparison tools (e.g.
comparison tables, tree structural views,
graphical comparison). A key technique for
process merging is the ability to establish
correspondences or relations between the
elements contained in business processes. These
relations allow parts of process models to be
clearly identified and provide the basis for
systematic process merging [12].
The first step is a detailed comparison of the
business process reference models in order to
detect similarities and differences. The
457
comparison is not only made on the process
level, but on a more detailed, descriptive level.
Based on the comparison we can identify the
following possible types of relations:
- 1-to-1: the as-is 1 activity has a direct relation
to as-is 2 activity;
- 1-to-0: the as-is 1 activity does not have a
related as-is 2 activity;
- 1-to-many: the as-is 1 activity has several
related activities in the as-is 2 business process
model;
- many-to-1: several as-is 1 activities have one
related activity in the as-is 2 business process
model; and
- 0-to-1: the as-is 2 activity does not have a
related as-is 1 activity.
Common problems of business process
merging are:
- similar activities/processes are named
differently;
- processes are designed on a different level of
detail;
- parts of processes are missing; and
- processes are too complex to be merged.
3.4. Reference model verification
In this phase, the designed reference model is
examined with regard to its consistency and the
fulfilment of user requirements [6]. Validation
can be done by conducting interviews. It is
recommended to involve the same people who
participated in the business process modelling
phase because they are already familiar with the
project. The interview should start with a
description of the source business process model
to ensure that we understand the process in the
same way. After that, we present the proposed
reference model and validate whether the
reference model is a good representation of the
business processes.
In practice it is hard to validate a designed
reference model. One way of validation is to
practically apply the reference model in the
domain area and measure the degree of fit.
Another approach to validating a reference
model involves business process simulations.
The results of such simulations enable the effects
of possible experiments in business process
models to be measured [5]. Modelling tools play
an important role in business process simulation.
With graphs, reports and animation of the
simulation, we gain a better insight into the
effectiveness of the process. In the first step we
need to carry out business process simulations
for the as-is business process models and then
compare the results with the to-be reference
model. Based on the results we update and
improve the to-be reference model to achieve a
better degree of fit. A limitation of this approach
is that the simulation results always depend on
the input parameters, which are not always easy
to obtain or measure.
4. Case study
The case study is used extensively as a
research strategy in practice-oriented fields such
as management. As a research strategy it has a
distinct advantage in situations when “how” or
“why” questions are being asked about a
contemporary set of events over which the
investigator has little or no control [21]. Case
studies typically combine data collection
methods such as interviews, questionnaires and
observations.
A consortium of participating companies is
dealing with a large number of customers and
suppliers. They employ different ways of
communication, depending on the existing
capabilities. Procurement and sales processes
require the intensive exchange of information
and documents. These processes are usually
carried out through traditional communication
channels. This calls for a lot of manual work
(e.g. integration) which increases costs, causes
delays and can be a source of transaction errors.
The consortium of participating companies sees
an opportunity in having a shared portal which
would solve these problems. The project aimed
to develop an environment of open-source
services for electronic data exchange with
partners in order to increase efficiency and
streamline communications.
We were involved in this European project as
business consultants and as support for the
business process team. The team’s purpose was
to identify, model and redesign consortium
business processes that would represent a basis
for implementing the shared e-business platform.
4.1. Scope definition
The first issue we dealt with was which
business processes to model and at what level of
detail. We started the modelling by drawing a
geographical map. The map describes material
flows in a geographical context [18]. We placed
companies in the consortium, their suppliers and
customers on the map and connected them with
458
the physical material and information flows. In
addition, for each node we identified level-two
SCOR processes.
Based on the selected reference model, the
key business processes were Source and Deliver
SCOR level-two processes:
- S1 (Source Stocked Product);
- S2 (Source Make-to-Order Product);
- D1 (Deliver Stocked Product); and
- D2 (Deliver Made-to-Order Product).
The selected processes were nominated by
key personnel from the consortium companies.
These processes represented the starting point of
the modelling activities.
Next, we selected the modelling standard, the
world renowned standard BPMN, and the
business process modelling tool iGrafx.
We also identified some additional constraints
in the proposed project:
- to deal only with those processes that represent
the basis for implementing the e-business
platform;
- to identify (but not describe) customer or
supplier business processes; and
- to treat Source and Deliver business processes
separately, and not as one supply chain.
4.2. Business process modelling
The processes were modelled by interviewing
people from the companies that perform the
activities. First we organised workshops at which
employees from all three participating companies
learned the basics of business process modelling,
modelling notation and modelling tools.
Each company in the consortium modelled
business process models separately. This phase
lasted one month. Since the models reflect
business operations, key personnel from the
companies were involved and the final version of
the as-is model was validated by the business
process modelling team.
4.3. Process merging
We compared the processes and found that
they can be largely standardised. The processes
were very similar to each other. The reason could
be that the companies work in the same industry
and are also in the same size range.
The comparison was very useful because we
identified weaknesses in the as-is processes. We
improved the as-is processes for each consortium
company. Based on the comparison we identified
all types of relations between the activities. If an
as-is 1 activity did not have a related as-is 2
activity then it was frequently the case that the
activity was missed during the modelling phase.
The results of the graphical comparison were
to-be reference models that have characteristics
of all three participating companies’ business
processes.
4.4. Reference model verification
The reference models were validated by the
key and end-users from the consortium
companies. We held two sessions at which we
received comments and questions that provided
input for redesigning the reference model.
In the next phases of the project the reference
models designed in this way were also
practically validated. They were used as a basis
for implementing the new shared e-business
platform. To further validate the reference
models we also performed business process
simulations.
All parameters needed to perform the
business process simulation were collected
during the business process modelling phase. In
the first step we identified the performance of the
as-is business process models. We compared the
results with the designed reference model and
modified parameters (activity duration, delay,
decision output possibilities etc.) in order to
achieve a closer fit. The business process
simulations were useful in this situation, but
required very precise models and input
parameters.
5. Conclusion
The design of reference models is often cost-
and time-consuming. The concept of reference
modelling has been introduced to overcome these
failures and improve the development of
enterprise-specific models. The paper’s
contribution is the reference model design
approach to merging processes based on existing
business process models within a specific
industry. The suggested approach is still a work
in progress and in the future will be validated via
additional case studies.
Possible future work in the area of reusable
subprocesses, as reference model components,
could involve use of the parsing technique RPST
(refined process structure tree) suggested by
Vanhatalo, Völzer and Koehler [22]
. Dijkman, R. (2010). Merging business
459
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