CSUN Information Systems
Systems Analysis & Design
http://www.csun.edu/~dn58412/IS431/IS431_SP16.htm
Business
Modeling
IS 431: Lecture 5B
1
Business Modeling:
Why, What , How ???
 An IS professional can add value in helping an
organization to define and improve its business
processes and design appropriate IS.
 What are business processes and how can they be
designed to support an organization’s objectives?
 How do we design information systems that collect,
maintain, and process the data needed to generate the
outputs required by management to effectively
manage business processes in the information age?
 “HOW MANY processes and data items are
needed for an information system ? ”
 Semantic models  models of real world actions or
phenomenon, REAL Business Process Modeling
IS 431 : Lecture 5B
2
The Value Chain
VALUE
FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS
OUTBOUND
LOGISTIC
MARKETING
& SALES
LOGISTIC
COST
IS 431 : Lecture 5B
SERVICE
MARGIN
3
Value-Added Activities
 Customer-Value-Added Activity (maximize)
– a business process that a customer is willing to pay for
 Business-Value-Added Activity (minimize)
– a business process that is essential to managing an
organization
 Non-Value-Added Activity (eliminate)
– customer will not pay for; business value will not be
increased
 Goals of a business system: effective, efficient,
competitive.
IS 431 : Lecture 5B
4
Business Processes
Acquisition/Payment
Conversion
Business Process
Business Process
Human Resources
Financial Resources
Supplies
Inventories
Property, Plant and
Equipment
New Ideas (R & D)
Miscellaneous services
Operations
(Varies widely
depending upon
the industry;
Sales/Collection
Business Process
Marketing and Sales
Service
Promotion
Outbound logistics
Collection and Credit
E-Commerce
SAP industry
solution maps)
IS 431 : Lecture 5B
5
Acquisition /
Payment Process
 Regardless of the type of good or service being acquired, the
following are typical operating events in the acquisition /
payment business process:
–
–
–
–
–
–
Request goods or services.
Order goods or services.
Receive and inspect goods or services.
Store and/or maintain goods.
Pay for goods or services.
Return goods.
 Specifics may vary
IS 431 : Lecture 5B
6
Sales/Collection Process
 Although there is some diversity across the types of goods
and services sold, the sales/collection process typically
includes the following events:
–
–
–
–
–
–
Receive an order for goods or services.
Select and inspect goods or services to be delivered.
Prepare goods or services for delivery.
Deliver goods or services.
Receive payment for goods or services.
Accept customer returns of goods.
 Specifics may vary
IS 431 : Lecture 5B
7
Conversion Process
 General activities in the conversion process include:
–
–
–
–
–
–
–
–
–
–
–
–
Assembling.
Growing.
Excavating.
Harvesting.
Basic manufacturing (e.g., metals, woods, and chemicals).
Finished manufacturing (e.g., tools, instruments, components).
Cleaning.
Transporting.
Distributing.
Providing (e.g., power, water, protection, communication).
Training.
Discovering (e.g., research and development).
IS 431 : Lecture 5B
8
Business Process Events
 A business process is “a series of activities intended to
accomplish the strategic objectives of an organization.”
 Operating Events are the operating activities performed within
a business process to provide goods and services to customers.
 Information Events include three activities: recording data
about operating events, maintaining reference data that are
important to the organization, and reporting useful information
to management and other decision makers.
 Decision/Management Events are activities where
management and other people make decisions about planning,
controlling, and evaluating business processes.
IS 431 : Lecture 5B
9
Business Process and
Business Events
Event 1:
Marketing
Event 2:
Take Customer
Order
Event 3:
Ship the
Goods
Event 4:
Collect
Payment
Business Process: Delivering Goods and Collecting Payment
IS 431 : Lecture 5B
10
Business Process Activities (Events)
Decision /
management
events
Define &Trigger
Operating
events
Trigger
Trigger
Information
events
IS 431 : Lecture 5B
11
Processes that Trigger Information
System Responses
Business
events
Information Needs
of Decision Makers
Record (event data)
Trigger
Trigger
Information
processes
Information
processes
IS 431 : Lecture 5B
Maintain
(agent, resource,
location data)
Report
(in many formats)
12
Process Analysis: Golden Pizza
Decision/Management
 Analyzing the
market,
competitors, and
customers.
 Deciding what
pizzas to place on
Golden’s menu.
 Determine if the
cooked pizza is
correct for
presenting order
form.
Operating Events
 Receive customer
pizza order.
 Receive customer
payment.
 Make pizza.
 Deliver pizza to
customer.
Trigger
Information Events
 Generate a customer
analysis report.
 Generate a report of
sales by pizza type.
 Generate a gross
margin analysis.
 Generate a report of
lost sales (due to the
20 minutes
guarantee.)
Trigger
IS 431 : Lecture 5B
13
Developing a REAL
Business Process Model
 REAL Business Process Modeling is a formal
method of identifying and representing the essential
characteristics that collectively describe business
processes and events.
 REAL = Resources, Events, Agents, and Locations.
 Preparing a REAL Business Process Model requires
the identification of strategically significant
business activities and essential characteristics
about these business activities.
IS 431 : Lecture 5B
14
Developing a REAL
Business Process Model …
 Step 1: Understand the organization’s Environment and
Objectives
 Step 2: Review the business process and identify the
strategically significant operating events
 Step 3: Analyze each event list in #2 to identify
Resources, Events, Agents, and Locations
 Step 4: Identify the relevant behaviors, characteristics,
and attributes of REAL
 Step 5: Identify and document direct relationships within
REAL
IS 431 : Lecture 5B
15
Step 1: Understand The Organization’s
Environment and Objectives
 REAL modeling is an aid in analyzing an organization
and its activities.
 Collect data and insights about the organization’s
objectives, industry, value chain, strategies, product
lines, and customers.
 Pay attention to the organization’s people, structure,
technologies, and measurements.
 A better understanding of these factors will enhance the
evaluation of effective and efficient business processes
valuable, competitive, meeting the organization’s
objectives.
IS 431 : Lecture 5B
16
Understanding the Business Environment
Industry
The Company
Objectives
Competitors
Strategies
Technologies
Measurements
People
Capital
Technology
Value Chain
Products
Structure
IS 431 : Lecture 5B
Economic
Forces
Customers
17
Step 2: Review the Business Process and
Identify the Strategically Significant Operating
Events
 Begin by dividing the organization into its business
processes. “What happened? How and Why? ”
 REAL graphical model—include the strategically
significant operating events that comprise a business
process. (The ones that the organization wants to plan,
evaluate and execute/or control)
 Begin REAL graphical model by representing events
with a descriptor.
IS 431 : Lecture 5B
18
Step 2 example: MrKool’s Retail Model
Events
Sell
merchandise
Receive
customer
payment
IS 431 : Lecture 5B
19
Step 3: Analyze Each Event Listed in Step 2
to Identify R E A L
 Describe essential characteristics of the Events—the
characteristics which:
– if omitted, would render an inaccurate or incomplete
description of the event.
– form the basis for generating outputs for information customers
to plan, execute, control and evaluate organization activities.
 What kinds of Resources were involved?
 What roles are performed and who/what Agents
perform the roles?
 Where did the event occur? (Location)
IS 431 : Lecture 5B
20
Step 3 example:
MrKool’s REAL Model
RESOURCES/
LOCATION
EVENTS
Merchandise
AGENTS
Salesperson
Sell
Merchandise
Register
Customer
Receive
Customer
Payment
Cash
IS 431 : Lecture 5B
21
Step 4: Identify the Relevant Behaviors,
Characteristics, and Attributes of REAL
 At what time or sequence in the process should the
event occur?
 What are the exceptions to the “normal” ordering of
events in the process?
 What is the proper authorization or approval to execute
this event?
 What is a reasonable amount of resources associated
with this event?
 What are the acceptable locations for executing this
event?
IS 431 : Lecture 5B
22
Step 4 example: MrKool’s REAL Model
 What is an acceptable time period between events in a
business process?
 How might the order of events vary by customer?
 Does the location from which goods are shipped matter?
 How many salespeople are assigned to each customer?
 Should a sales order clerk have custody of cash?
IS 431 : Lecture 5B
23
Sequence of Events
Ship merchandise
Receive payment
OR
Receive payment
Ship merchandise
Provide Credit
Cash in Advance
 The sequence of events may also be a function of the
physical characteristics of the event (in production)
 Sometimes the sequence of events is dictated by
business policy
IS 431 : Lecture 5B
24
Example: MrKool’s Business Rules
 Each sale takes place at a specific register
(location).
 Each sale involves only one customer (external
agent).
 Only one salesperson (internal agent) is
responsible for each sale.
 Each sale involves one or more items of
merchandise (resource).
IS 431 : Lecture 5B
25
Example: MrKool’s Business Rules …
 Additional rules:
– The salesperson and customer do not have a direct
relationship, The customer and salesperson are related
only through the sale.
– Sales can only involve merchandise, not fixed assets.
– Sales cannot involve more merchandise (quantity)
than McKool has on hand.
– Sales cannot involve merchandise McKool does not
offer.
– The store keeps records on who sold which
merchandize to whom at a specific cash register
IS 431 : Lecture 5B
26
Step 5:Identify and Document Direct
Relationships within REAL
 Draw a line from each event to each resource, internal
agent, external agent, and location associated with that
event. On the line, add a meaningful term or phrase that
describes the relationship between the objects.
 Graphically display events that are related to other events
to show the required sequence of events in a business
process. Draw lines from event to event in the correct
sequence
 Document direct relationships between pairs of agents,
locations, and resources that exist independently of an
operating event. Connect the pairs with a line.
IS 431 : Lecture 5B
27
Template
(Relationship Descriptions on the Lines)
Internal
Agent
Resource
Event
Location
External
Agent
Resource
Internal
Agent
Event
External
Agent
Location
IS 431 : Lecture 5B
28
Step 5 example: MrKool REAL Model
Merchandise
Salesperson
Sell
Merchandise
results in
Register
Customer
Receive
Customer
Payment
internal agent
Cash
IS 431 : Lecture 5B
29
Linking Processes
 Business processes are linked together in two
ways:
– sharing common resources or
– an event in one process triggering an event in another
process.
 Collectively business processes result in the
acquisition of goods and services  the
conversion of acquired goods and services into
goods and services for customers  the
delivery of the goods and services to customers
 the collection or payment from customers.
IS 431 : Lecture 5B
30
Linked Processes
Acquisition
Inventory
(Share a common Resource)
Sales
(One triggers another)
Collection
IS 431 : Lecture 5B
31
Linked Processes
1.0
1.0
D1
2.0
2.0
1.0 and 2.0 share the same
resource (data store D1)
IS 431 : Lecture 5B
1.0 triggers 2.0
32
Summary:
A Model of Business Events
Internal
Agents
Resources
Event
Location
•
•
•
•
•
External
Agents
What happened?
When did it happen?
Who was involved?
What resources were involved?
Where did it occur?
IS 431 : Lecture 5B
33
From REAL Model ...
Resources
Events
Agents
Inventory
Sales
Salesperson
Customer
Cash
Cash
Collection
Cashier
IS 431 : Lecture 5B
34
…to ERD
Inventory
M
Include
M
M
Sales
Sell
1
Salesperson
M
M
Sell to
1
Pay for
M
Cash
1
Include
M
Cash
Collection
IS 431 : Lecture 5B
1
M
Customer
Receive
from
M
Receive
by
1
Cashier
35
Information Systems
Requirements
 Recording operating event data (INPUT)
 Maintaining (updating) reference data about
resources, agents, and locations (PROCESSING)
 Reporting useful data to system users (OUTPUT)
IS 431 : Lecture 5B
36
Define Necessary
Processes/Functions
for the System (DFD)
 One recording process for each business event
object in the application’s REAL model
 One maintenance process for each resource, agent,
and location in the application’s REAL model
 One reporting process for each required output view
(Source documents for next processes, preformatted reports, ad-hoc reports)
IS 431 : Lecture 5B
37
A Generic DFD for an
Information System
1.0
EXTERNAL
AGENT
D1
Enter
Data
D2
D3
Business Event
Resources
External Agents
2.0
Maintain
Data
D4
D5
INTERNAL
AGENT
(Manager)
Internal Agents
Locations
3.0
Report
Data
IS 431 : Lecture 5B
38