What are Business Modeling Tools? (1/2)

What is business modeling tool?
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Business modeling tools are literally software tools for modeling the business.

A large part of a business modeling tool's nature is determined by its notation rules. So this page describes the requirements for the notations of business modeling.


 

Requirements for business modeling Expression of business factors (5W2H)

When you try to model the business, 5W2H + α of the business should be represented as wide as possible, including WHO, WHEN, WHAT, WHY, HOW, HOW MUCH and others.

In this case, each factor of 5W2H + α in business is like in the following table.

If some business factors in the following table cannot be represented using the notation, you should consider that there is some lack or bias in the notation.

Point of view Examples of keywords in business representation
WHAT Products, service, parts, raw materials, various types of objects, goods, data, concepts
WHY The purpose of process, business strategy, operation strategy, management philosophy
WHEN Plans, schedules, start timing, deadlines
WHO Organization, job title, customers, suppliers, external stakeholders, information systems, robots, automation equipment
WHERE
Regions, sales channels, stores, offices, factories, organizations
HOW
Processing procedures, processes, execution means, sales channels
HOW MUCH
Sales amount, profit, costs, time required, number of employees
Others (+α) Business risk, etc.
Easy to understand

The model shoud be grasped, evaluated and discussed by all the business persons, including executives, managers and field workers. This is same as "an electric circuit diagram must be understood by all the electrical engineers”.

On the other hand, business persons who are not experts in modeling will not attempt to understand the esoteric modeling notation. Therefore, the notation of business modeling should have comprehensibility which allows all the business persons to understand intuitively at a first glance.

Expression of business structure

Many of the objects to be modeled have static aspects and a dynamic aspects. Therefore there can be the static model which focuses on the static aspect of the object, and dynamic model for the dynamic aspect.

Architectural models and clay models of automobiles are classified as static models, and the mathematical model for the movement of celestial bodies and various simulators are the examples of dynamic models.

The business models also can be divided into static models and dynamic models. Organization chart and year-end financial statements belong to the static model, and the business flowchart is an example of dynamic model.

If you will model the business from the total viewpoints, the methodology is required to be capable of representing the both sides of the static and the dynamic, rather than focusing one particular aspect.

Many of the business modeling notations remain just as notations for representing the process and flow such as flowchart and BPMN (see next page). However, these models focusing only on the dynamic aspects of businesses represent just one aspect of the business. Such approaches, paying attention only to the motion without taking the structure into account, is endangered like "sailing without a chart”.


In particular, if you will model the large-scale object, static model is more important. For example, if you will model a process flow like an approval flow in a specified section, flowchart or BPMN may be enough to represent in many cases. However, if you intend to model the whole enterprise, or the entire group of companies, static model will be essential. This is because it is vital to grasp and recognize the structures, players and mutual relationship in the domain in order to model the large-scale domain. Also this understanding of the structure of target field will enable the wide-area and drastic BPR.

Affinity for BPR/BPM

Generally, if you are trying to model the business, the purpose may be BPR (Business Process Re-engineering) in many cases. Accordingly, it is desirable for business modeling notations and platforms to include support functions for BPR projects.
In this case, the support functions for the BPR project mean the features related to representation of business processes as a matter of course, furthermore, following functions are required.

  • 1) Capable of representing the KGI (Key Goal Indicator) and KPI (Key Performance indicator) such as cost of business processes.
  • 2) Enables to simulate the cost and the time required of the process, and also compare the value of As-Is and To-Be.
  • 3) Has the ability to monitor KGI / KPI continuously even after the reform of the process.

In the above, continuous monitoring 3) is a feature associated with the BPM (Business Process Management). The concept of BPM is an expansion of BPR, which offers the ongoing monitoring of the business activity of each field of the company from the viewpoint of efficiency. These activities will lead to the next area to BPR systematically and semi-automatically, then enable the continuous BPR in the corporation to keep competitive power, avoiding the random, intuitional and temporary approach.

Affinity for IT project

Many of the recent BPR projects are realized utilizing IT, and output of the BPR projects will be directly taken over by the system development project. In this case, it is desired that the results of BPR projects shouldl be inherited by the system development project without re-interpretation nor re-configuration.


Also, taking into account that many of the recent system integration projects are based on object-oriented technology, it is also desired that the notation for new business design is based on object-oriented approach, not based only on predicate sentences, in order to smooth the bridge from the BPR project to IT projects.


What are business modeling tools?