Business Systems Modelling: Function Modelling (Tutorial 1)

Starting in the Right Place

The essential starting point for good business modelling – and that includes data
modelling – 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 gathering
2. Analysis and investigation
3. Modelling
4. Feedback
5. Implementation
Information Gathering
Effective information gathering is the cornerstone for effective results so it i
s worth taking the pains to get it right first time.
Information gathering is be done in three main ways:
1. Using existing documents
2. Running strategic interviews
3. Running modelling workshops
These methods are not mutually exclusive! In a well run business modelling proje
ct each of them will be used as appropriate.
Strategic interviews with senior executives are essential for success and yet th
ey are the one step that most analysts miss out. Inexperienced analysts miss the
m out because they are afraid of wasting the time of busy people. Many “experience
d” analysts miss them out because they already “know” what the business needs and do n
ot need to ask anybody. Good analysts never miss them out.
Business analysts are experts in analysis and modelling. They are not business e
xperts and should never try to be. This is a common error that de-rails all to m
any projects.
Analysis and Investigation
Documentation is not analysis!
Too many analysts gather large amounts of information – often from the wrong sourc
es – and then produce weighty documents and think that they have done analysis. Co
mmon mistake!
Information gathering is only the beginning. The information must now be analyse
d and the business functions and other business objects extracted from it.
The Integrated Modelling Method provides the means to consistently analyse all g
athered information and extract the required business objects, missing nothing.
Extracting Business Functions
The following is an extract from an interview with the manager of the sales depa
rtment 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 produ
cts or services that are required.
• If the order is taken by phone we chase the customer for payment of overdue invo
ices if there are any.
• We check that the goods are in stock and, if they are, we dispatch them to the c
ustomer.
• We send the delivery note to the invoicing department to confirm that the goods
have 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 or
ders.
• We invoice private customers at the end of each week, we invoice commercial cust
omers 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 Functions Actual Business Functions
sell products and services to authorised customers Sell Products and Servic
es
receive applications from prospective customers Accept Applications from Prospec
tive Customers
vet prospects Vet Prospective Customers
register prospects as authorised customers Register Authorised Customers
receive an order from a customer Accept Orders from Customers
identify the products or services that are required Identify Products or Ser
vices Required
order is taken by phone Accept Orders from Customers
chase the customer for payment of overdue invoices Request Payment from Cus
tomer
check that the goods are in stock Carry out Stock Check
dispatch them to customer Dispatch Products to Customers
send the delivery note to the invoicing department Confirm Order Dispatched
confirm good have been sent Confirm Order Dispatched
place a purchase order with suppliers Order Products from Suppliers
receive the goods from the suppliers Accept Products from Suppliers
complete outstanding customer orders Dispatch Products to Customers
invoice private customers at the end of each week Invoice Customers
invoice commercial customers at the end of each month Invoice Customers
This short extract has yielded thirteen separate Business Functions.
The items in the column on the left above were phrases that suggested Business F
unctions. 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 Mech
anisms. Business Functions are WHAT the business OUGHT to be doing and mechanism
s 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 the
objective of the action described by the candidate?” The objective is the Functio
n.
2. Choose good verbs: Choose a strong, positive, active verb with which to
begin the Function name.
3. Remove any ambiguity: For example, “vet prospects” is ambiguous because, rea
ding it in isolation, we would not know what “prospects” are. Are they prospective e
mployees, suppliers, customers? If the Candidate Function does not make this cle
ar then we need to to return to the extract from which the candidate came and cl
arify this. From this extract we see that “prospects” refers to prospective customer
s 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 Giv
e to a Customer” we would change this to “Develop Plan for Customer”.
5. Capitalise all major words: Function names should be written using initi
al capitals on all verbs, nouns and adjectives, for example, “Issue Parts from Sto
res”, “Book Passenger on Flight”.
Function Catalogue
A long list of Business Functions is not easy to work with.
In Integrated Modelling Method the Functions are arranged into a hierarchy calle
d the Function Catalogue – this is the core model of the method and an essential m
odel in every business.
Arranging the above list of functions into a hierarchy would give us the followi
ng:
Sell Products and Services
Manage Customers
Accept Applications from Prospective Customers
Vet Prospective Customers
Register Authorised Customers
Manage Sales
Accept Orders from Customers
Identify Products or Services Required
Carry out Stock Check
Dispatch Products to Customers
Confirm Order Dispatched
Manage Revenue
Invoice Customers
Request Payment from Customer
Manage Stocks
Order Products from Suppliers
Accept Products from Suppliers
This is a simple hierarchy that will grow as we work throw each interview an wor
kshop 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 is
repository based i.e. has a database in which each function needs to be defined
only once and can be re-used on as many diagrams as are required.
Know the Business
The Function Catalogue is the one model that allows you to see the whole of the
business from end to end without duplication of any elements.
It is a unique catalogue of all core business activity that tells us what the bu
siness is all about.
What Next?
Having built the Function Catalogue for all or part of a business we can now go
on and build any other models we need.
• Process Models: Processes are simple the linking together of Business Functions
into a particular order to achieve a particular business result.
• Data Structure Model: The shows the relationships between the data entities crea
ted and used by Business Functions.
• Information Flow Model: This shows how information flows between Business Functi
ons within the business and between Business Functions and the outside world.
• Data State Model: This shows how data entities from the Data Structure Model are
transformed by Business Functions.
• Procedure Model: This shows the mechanisms by which Business Processes are execu
ted day-to-day.
In the next tutorial we will look at how to build a process model. Many organisa
tions start their modelling efforts at this level which can lead to confusion so
we will explain the important difference between process models, function model
s and procedure models plus provide some practical techniques to help you build
your own process model.
Exercise
Using the techniques provided here, assess whether your organisation possesses a
n 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 t
he business. Use the comments section below to post questions for John and we'll
help you complete the exercise correctly. We'll also be running regular coachin
g calls with John to help solve your modelling queries.

Useful Resources
IMM Website
IMM Approach
Business Function Modelling
Data Structure Modelling
Business Process Modelling
Information Flow Modelling