CHAPTER TWO
MODELING FUNDAMENTALS
Dr. Rami Gharaibeh
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CHAPTER TWO
Model Fundamentals
Every model we have ever created is wrong, as is
every model you will ever build.
Dr. Rami Gharaibeh
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CHAPTER TWO
Model Fundamentals
Being wrong is part of the nature of a model. The world
that we model is much richer, much more complex,
and much stranger than the models that we build of it.
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CHAPTER TWO
Model Fundamentals
statistician George Box said it best:
“All models are wrong. Some models are useful.”
Sometimes people discuss whether a model is right or
wrong, but that discussion is pointless since all models
are wrong. Instead people should discuss whether the
model is useful.
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CHAPTER TWO
Model Fidelity
The fidelity of a model is a measure of how closely the
model approximates the real world.
Fidelity is an inverse measure of wrongness:
a high-fidelity model is less wrong than a low-fidelity
model.
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CHAPTER TWO
Model Fidelity
Fidelity is all about shades of gray.
A model can be a sort of accurate reflection of reality
(for its purpose), and another higher-fidelity model can
be more accurate.
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Higher-fidelity models
But higher-fidelity is sometimes worse than lowerfidelity. Higher-fidelity models take longer for people to
understand all the extra detail. They are more
expensive to build because extra detail must be created
and extra time spent to check that the model is right. As
the world changes, models must be maintained, to keep
them up-to-date with the world they model. Higherfidelity models are more expensive to maintain: there is
more detail that must be kept aligned with the changing
world.
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CHAPTER TWO
Model Validity( org chart example
reporting relationship )
A model is valid if it meets all the constraints, and it is
invalid otherwise.
Validity is a property of the model itself. Does the model
meet the constraints? Then it is a valid model.
All models have these two qualities: validity and fidelity.
Validity is true or false. Either a model meets the constraints or it
doesn’t. There is no middle ground. Validity is very different from
fidelity in this respect. Fidelity is all about shades of gray. A
model can be a sort of accurate reflection of reality (for its
purpose), and another higher-fidelity model can be more accurate
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CHAPTER TWO
Classical business models
1.organizational chart
The org chart focuses on the employees and the
reporting relationships. The org chart he shows is a
kind of business model, a model of his business. It is
certainly a simple representation; you can understand
it all in a few minutes.
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CHAPTER TWO
Organizational chart
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CHAPTER TWO
Classical business models
2.Balance sheet
The financial statements focus on how much money
the restaurants are earning and what financial assets
and liabilities they have. The two business models
serve different purposes, and they are complementary.
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CHAPTER TWO
Balance sheet
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Classical business models
 Financial statements and org charts are
classic business models.
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CHAPTER TWO
Four new model disciplines
Recently four newer business models have become
important, models that complement the classic models.
Instead the four new models focus on some different
parts of the complex reality of business.
These new models open up some new views of
business —new views for new purposes.
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CHAPTER TWO
Four new model disciplines
The four new models are business motivation models,
business organization models, business process
models, and business rule models.
Each of these four kinds of models is a model
discipline.
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CHAPTER TWO
Four new model disciplines
A model discipline includes a set of constraints for
determining whether a model is valid. The constraints
are different from one model discipline to another.
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CHAPTER TWO
Four new model disciplines
Each model discipline has a different focus, different
questions that it can answer, and different analyses
that it supports.
When modeling a business, you usually build models
in several different model disciplines, to look at the
business from different angles.
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CHAPTER TWO
Four new model disciplines
The four model disciplines also complement the
classic accounting and organizational disciplines.
If you wait long enough, everything important
eventually shows up in the accounting, but sometimes
not until it is too late to fix.
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CHAPTER TWO
Four new model disciplines
example
a restaurant can have good books this year but be
slow to seat and serve guests. This will lead to
customer dissatisfaction and lower demand.
Accounting will show this next year, as the revenues
decline.
A business process model of how people are seated
and served will illuminate the problem today.
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CHAPTER TWO
Four new model disciplines
example
a restaurant can have good books this year but be
slow to seat and serve guests. This will lead to
customer dissatisfaction and lower demand.
Accounting will show this next year, as the revenues
decline.
A business process model of how people are seated
and served will illuminate the problem today.
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CHAPTER TWO
model discipline maturity
Accounting is mature, with a long history and hundreds
of thousands of professional practitioners around the
world, accountants who focus their efforts on creating
and interpreting accounting models.
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CHAPTER TWO
model discipline maturity
Business process modeling is not mature enough yet.
Until then, we must content ourselves with degrees of
fidelity, without any professional consensus about how
much fidelity is enough. Until consensus is achieved
we must rely on our own judgments.
**Generally Accepted Accounting Principles (GAAP), a
framework for how to create accounting models for different
real-world situations. GAAP is a standard for accounting
fidelity, for judging when an accounting model is an accurate
enough reflection of the company modeled. No such business
process GAAP exists. Business process modeling is not
mature enough yet.
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CHAPTER TWO
model usefullness
WRONG BUT USEFUL
“All models are wrong. Some models are useful.”
To be useful, a model must have enough fidelity for the
intended purpose.
But fidelity alone is not sufficient. Models are read and
interpreted by people, sometimes by the same people
who built the model, and usually by others as well.
An overly large model is not useful; it cannot be
comprehended, and so the purpose of the model will
not be achieved.
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CHAPTER TWO
model usefullness
The following diagram shows strategy alternatives for
Adelina restaurant and the consequences of the
different alternatives.
There are 14 model elements in and 18 associations
among these model elements. If a model is too big and
complex to be understood, it will be ignored.
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CHAPTER TWO
model usefullness
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CHAPTER TWO
model usefullness
Beginning modelers often build models that are too big and
too complex; they often ignore the limits of human
comprehension.
If a model is too big to be understood, it will be ignored. If you hope to train
some people with the model, they will fail to learn what you are teaching. If
the model is to be analyzed to transform your business, the analysts will
ignore the model and rely on their own judgments and biases. If the model
is to serve as requirements for software development or implementation,
the resulting systems will not match the business need. An overly large
model is a bad model: It cannot be comprehended,
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CHAPTER TWO
model usefullness
How big is too big?
A useful rule of thumb is that a model should have no
more than nine elements. Nine is about how many
things a typical person can keep in her head on a good
day. Beyond nine, people often get confused. And if
the model you built confuses the people who read it,
the fault is yours, not theirs. Your model is not easy to
understand.
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CHAPTER TWO
model attractiveness
Attractive models are easier to understand and more
readily accepted than ugly models. Attractive models
are therefore more useful.
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CHAPTER TWO
model attractiveness
The following example shows the activities performed
by a server, a bartender, and a cook in taking drink and
dinner
orders in a restaurant, preparing them, and serving
them.
This is a valid business process model, and it is simple
enough, but it is ugly.
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CHAPTER TWO
model attractiveness
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CHAPTER TWO
model attractiveness
the following example shows the same business
process model after a makeover; it has the same
modeling elements
and flows, but they are arranged in a manner that is
visually appealing.
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CHAPTER TWO
model attractiveness
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CHAPTER TWO
model attractiveness
The unconscious emotional response to an attractive
model has another effect: It makes the model more
persuasive. As described in Chapter 1, models are not
just used for communication. They are also used for
persuasion.
attractive models are much easier for people to
understand and accept than ugly models.’ Attractive
models are therefore more useful
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CHAPTER TWO
Modeling tools
Some models use special-purpose modeling tools that
exist just for creating business models. Other modelers
use general-purpose diagram drawing tools (such as
Microsoft
Visio™) that are used both for creating business
models and for many other diagramming uses.
Both provide functionality to make models attractive:
fonts, colors, and model element layout.
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CHAPTER TWO
Modeling tools
Visio offers no special support for recording the typical
duration of an activity or for noting the sub-process
behind
an activity. Visio understands the activity as a
rectangle in a drawing, not as an activity in a business
process.
The special-purpose modeling tools are better for
business modeling. These tools understand business
activities as activities, not as rectangles.
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CHAPTER TWO
Modeling tools
Special-purpose modeling tools also make it easier to
build valid models.
Many tools support business process simulation,
allowing you to experiment with prospective business
processes to see what happens. Some tools support
direct execution in a business process engine, allowing
you to turn your business process model into
executable workflow.
HW#.1 googel it for 3 modeling tool products ?
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Modeling tools
Some of the existing tools support a single modeling discipline. For
example, there are numerous tools that support only business process
modeling and not the other three disciplines. Some tools support multiple
disciplines. These discipline-crossers have the right primitives to create
models from two business model disciplines, three disciplines, or even all
four, allowing you to create a business process model, a business motivation
model, a business organization model, and a business rule model.
Most of the tools check for model validity. Validity checking can be done
by highlighting invalid parts of a model either as it is built or as a command
that can be run to find all the invalid parts. Some modeling tools actually
prevent modelers from creating invalid models at all.
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CHAPTER TWO
Application interface and publication
Business modelers work with a modeling tool to create models
and analyze the models they create. But every model built by
a modeler will be consumed by others, probably a great many
others: business analysts who analyze the models, managers
who use the models to make decisions, and trainees who read
the models to understand the business. These consumers of
business models do not have any modeling tools loaded on
their desktops, and even if a tool is installed, they do not know
how to use it.. to make models accessible to this wider
audience, many of the business modeling tools have
publication functionality. A model can be published to a variety
of accessible formats: HTML, PDF, Microsoft Word
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CHAPTER TWO
Simulation
Sometimes it is difficult to understand the implications
of a business model, particularly complex business
models and models that have many interacting
elements.
Simulation is a technique for running a model to get a
deeper understanding. Many business modeling tools
support simulation. A model that simulates is more
useful than one that does not.
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CHAPTER TWO
Simulation
what is simulation, really?
First, simulations are based on models. Within SimCity
is a model of a city: houses, neighborhoods, roads, rail,
parks, and malls and the
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CHAPTER TWO
Simulation
First, simulations are based on models. Within SimCity
is a model of a city: houses, neighborhoods, roads,
rail, parks, and malls and the interactions of people
who live in those houses, travel on those roads and
trains, play in those parks, and shop in those malls.
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CHAPTER TWO
Simulation
Second, a simulation shows how a model behaves over
time. Things happen in SimCity over time: houses are
built, existing roads become congested, crimes are
committed, and neighborhoods improve or slide in
disrepute.
These changes are not scripted; the decline of a
neighborhood in SimCity is not preordained by the
application. Rather, things happen the way they do
because of the gradual interaction of all the elements of
the city model over time.
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CHAPTER TWO
Simulation
Some business simulations are also playable, like
SimCity.
But most business simulations are not playable. They
are simulated purely for understanding behavioral
results of a new process or strategic environment.
Simulation becomes another method of analysis.
Usually many different simulation runs will be made of a
non-playable simulation, to explore a space of
possibilities, and the results will be summarized in
graphs or statistics.
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CHAPTER TWO
Simulation
For example, you might create a business process
model of how Portia customers experience the
restaurant. A customer arrives, perhaps waits for a
table, is seated, orders a meal, pays, and departs. Of
course, the customer’s quality of experience will be
affected by the food, but it will also be affected by
delays and customer service. Simulating the process
model will reveal where delays are present and allow us
to experiment with alternative techniques—more
servers, fewer reservations, etc.— to reduce those
delays.
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CHAPTER TWO
Simulation
No one is playing this Portia simulation.
Rather, this non-playable simulation allows us to better
analyze and understand the process.
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CHAPTER TWO
Traceability
In examining a model, it’s always useful to ask about
the purpose of individual model elements. Why do we
enforce this rule? Why do we perform this business
process task?
The answers to the questions of purpose are usually
model elements in other models. We enforce this rule
because of a particular strategy we are working.
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CHAPTER TWO
Traceability
Traceability is connecting model elements between
models, explaining a model element in one model by
referring to a model element in another.
Traceability answers “why” questions—questions
about rationale, purpose, and intent. Some business
modeling tools support traceability.
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CHAPTER TWO
Traceability
At fast-food restaurants, takeout restaurants,
and many other places, food and beverages
are ordered together.
Why do the servers at our restaurant work first
on the drinks and only then on the food?
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model attractiveness
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CHAPTER TWO
Traceability
One reason is that customers will drink more if
they are served drinks first, and drinks are
high-margin items for the restaurant.
Another reason is that at more sophisticated
restaurants, taking the drink order and dinner
order at the same time is considered to be
rushing the customer and is inconsistent with a
high-end image.
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CHAPTER TWO
Traceability
the following figure shows part of the restaurant’s
motivation model—the goals that the restaurant are
trying to achieve and how it is trying to achieve those
goals.
Asking for drink orders first is a tactic, a short-term
course of action that is meant to channel effort toward
objectives or goals.
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Traceability
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Traceability
Of course, this is only a small example. A more
complete motivation model for our restaurant would
include many more tactics, objectives, and goals as
well as other motivation model elements such as
influencers and threats.
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CHAPTER TWO
Traceability
The activities of a business process model are
connected to the tactics, objectives, and goals of a
business motivation model through tracelinks.
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CHAPTER TWO
Traceability
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CHAPTER TWO
Traceability
Note that tracelinks are not relationships between
whole models. We are not tracing the whole business
process model to the whole business motivation
model.
Rather, we are tracing two individual elements of the
business process model to a single element in the
motivation model. We are not answering broad
questions about the purpose of the business process
model. Instead we are answering narrow questions
about the purpose of serving drinks first.
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CHAPTER TWO
Traceability
Traceability is useful for understanding the impact of a
change. If we change this tactic, what activities must
be changed? By examining the tracelinks that point
from activities to the tactic, we can determine which
ones are affected. With the right tracelinks in place, we
can continue our traceability walk, looking at which
systems support the activities that are affected by the
changed tactic.
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BUSINESS MODELING
STANDARDS
 Page 37
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Summary
A business model is a map of a business, a simple representation of the
complex reality. A business model can be valid or not, depending on
whether it adheres to the rules of its modeling discipline. A business
model can be of high or low fidelity, depending on how accurately it
models the business.
To make business models more useful, we use specialized tools for
creating them. These tools support us in building useful models—
models that are valid,
simple, attractive, and of high fidelity. We usually analyze the business
models we have built. Often we simulate them. Sometimes we deploy
them into an execution engine. There are four business modeling
disciplines: process modeling, motivation modeling, rules modeling, and
organization modeling. Each discipline has its own standards
describing what valid models are and what they
mean.
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