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Process Modeling
SF DAMA, August 2, 2006
Bob Conway
BobConway@BreckInstitute.com
303-885-4811
©Copyright, Information Engineering Associates
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Presentation Outline
• Evolution of Process Modeling
• Process Modeling Technique
• Application of Process Modeling
– OLTP Application Design
– Business Process Re-engineering
– DW Project Scope/ROI
• Q&A
• Exercise
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What is a Data Model?
• Data Model – a structured inventory of
information maintained to sustain the
business
• Data Model Purpose/Usage
– Blueprint for data integration
– Specification for database design
– Standardize definitions and business rules
– Communication tool between IT and business
– Preserve corporate intelligence
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What is a Process Model?
• Process Model - A structured inventory of
the ongoing business activities performed
to sustain the business
• Process Model Purpose/Usage
– Blueprint for integrated application portfolio
– Specification for application design
– Communication tool between IT and business
– Source of all data
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Evolution of Process Modeling
Structure Analysis & Design
1970s
Mainframe/COBOL
1980s
PC, RDBMS, 4GL
1990s
Client Server
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2000s
Web, Wireless
Data Flow Diagram
CUSTOMER
MASTER
BULK
CLAIM
CC-STATEMENT
ACCEPT
FUNDS
CREDIT
PAYMENT
DEPOSIT
PAYMENT
RECORD
PAYMENT
COMMISSION
NOTE
PAY
COMMISSION
COMMISSION
INVOICE
FILE
DUN
DEADBEATS
DELINQUENT
INVOICE
Courtesy, Tom De Marco, Structured Analysis and System Specification, Yourden Press, 1979, Page 101.
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Evolution of Process Modeling
Structure Analysis & Design
1970s
Mainframe/COBOL
Data Modeling, Info Eng/CASE
1980s
PC, RDBMS, 4GL
1990s
Client Server
©Copyright, Information Engineering Associates
2000s
Web, Wireless
Process Modeling Techniques
•
•
•
•
Functional Decomposition
Process Flow Diagramming
Process/Data Matrix
Process Simulation
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Functional Decomposition
Process Hierarchy Diagram
LOANSRUS
ORIGINATE
LOAN
PURCHASE
LOAN
SERVICE
LOAN
SECURITIZE
LOAN
MANAGE
PROPERTY
MANAGE
HUMAN
RESOURCES
OPEN
APPICATION
EVALUATE
LENDER
SETUP
LOAN
EVALUATE
INVESTOR
EVALUATE
PROPERTY
UNDERWRITE
APPLICATION
ANALYZE
PORTFOLIO
PROCESS
PAYMENT
CONFIGURE
PORTFOLIO
REFURBISH
PROPERTY
APPRAISE
PROPERTY
NEGOTIATE
LENDER
RECOURSE
MITIGATE
LOSS
NEGOTIATE
INVESTOR
RECOURSE
RENT PROPERTY
NEGOTIATE
TERMS
REGISTER
LOAN
TERMINATE
LOAN
TRANSFER
ASSET
SELL PROPERTY
CLOSE LOAN
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MANAGE
FINANCIAL
RESOURCES
Functional Decomposition
• Describe WHAT the company is doing
– Now HOW, WHO, WHY, or WHEN
• Name process as a VERB-OBJECT
– OBJECT are often data entities
• Define major functions
– Line-of-Business (Product Lifecycle)
– Support Functions (HR, Fin, Info. Mgt., etc.)
• Fan out ratio 1:5-7
• 3-4 layers of decomposition
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Resource Management
Lifecycle
PLAN
MONITOR
DISPOSE
ACQUIRE
CONTROL
UTILIZE
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Process Flow Diagram
ORIGINATE LOAN
PROPOSED
TERMS
APPLICATION
UNDERWRITE
APPLICATION
FINAL
TERMS
NEGOTIATE
TERMS
OPEN
APPLICATION
CLOSE
LOAN
CLOSED
LOAN
APPRAISEL
PROPERTY
APPRAISE
PROPERTY
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SETUP
LOAN
Process Flow Diagram
•
•
•
•
One PFD per Process Hierarchy node
Include all ‘sibling’ process
Include flows to ‘cousin’ processes
Define inputs/outputs as data entities
– Watch for ‘black hole’ process
– Watch for ‘super nova’ process
– Watch for ‘do nothing’ process
– Watch for ‘orphan siblings’ or too many
‘cousins’
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LoansRUS Data Model
APPLICANT
OPENS
PROPERTY
COLLATERAL FOR
LENDER
BORROWER
INVESTOR
RESPONSBILE FOR
COLLATERAL FOR
APPLICATION
LOAN
APPLIED TO
PAYMENT
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SOURCE OF
TRANSFERED TO
Process/Data Matrix
Process
Model
Data
Model
F1
P1
P1.2
P1.3
P2.1
E2
P2.2
E3
s
ntitie
All E
el
ev s
-L se
af es
Le roc
P
CRUD
Matrix
P1.1
PROCESSES
P1.1
P2
ENTITIES
E1
E2
C
E3
E4
U
R
P1.3
C
D
D
C
P2.2
D
R
C
E5
CU
P1.2
P2.1
E1
R
D
D
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E4
E5
Application Design
Accept Order Procedure
• Read ORDER
• Read CUSTOMER
– IF new CUSTOMER
• Create CUSTOMER
– ELSE CUSTOMER is valid
– Check CUSTOMER credit
• Read CUSTOMER_CREDIT
• IF CREDIT_RATING <3
• Process Poor-Credit Order
– Create ORDER_REJECT
– Print REJECT_NOTICE
• ELSE Process Order
Courtesy, James Martin, Information Engineering, Book III, Prentice Hall, 1990, Page 73.
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PM for Application Design
• Only done for elementary processes
• Procedural logic for a single process cycle
• Pseudo-code for program modules, screen
design and program flow control
• Syntax closely coupled to CASE tool code
generator
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Evolution of Process Modeling
Structure Analysis & Design
1970s
Mainframe/COBOL
Data Modeling, Info Eng/CASE
1980s
PC, RDBMS, 4GL
DW, ERP
1990s
Client Server
©Copyright, Information Engineering Associates
2000s
Web, Wireless
Process Re-Engineering
• Less concerned with processes as system
specifications
• Fundamental changes to underlying
business processes to drive out costs,
inefficiencies and improve business
effectiveness
• Organizationally positioned out of IT
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Process Re-Engineering
• For each business process
– Frequency (cycles/unit of time)
– Residual time per cycle
– Operating cost per cycle
• Number of resources performing process
• Capital investment required
– Business contribution per cycle
– Process metrics
• How do we measure the effectiveness of this process?
• Process simulation
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Process Modeling and DW
• DW methodology is data-driven
• DW Assessment (Critical Success Factors)
– Business/IT Partnership
– Program Management
– Architecture/Methodology
– Resources/Organization
– Tools and Technologies
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DW Program Management
• Incremental - Sequence of small projects
(7-10 people) (3-4 months)
• Opportunistic - solve a business problem
or exploit a business capability
– Define problem/opportunity in terms of
processes, not data
– ID data necessary to solve that problem
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DW Project Charter
• DW Project Scope Statement
– Business questions/capability
– Business processes in/out scope
– Source systems in/out scope
– Departments/locations in/out scope
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DW Project ROI
• Problem/Opportunity – defined in terms of
processes that will be improved
• What are process metrics?
• Baseline of metrics (estimates)
• Target of metrics (realistic)
• Contribution ($) of metric improvements
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Functional Decomposition
Process Hierarchy Diagram
LOANSRUS
ORIGINATE
LOAN
PURCHASE
PORTFOLIO
SERVICE
LOAN
SECURITIZE
LOAN
MANAGE
PROPERTY
MANAGE
HUMAN
RESOURCES
OPEN
APPICATION
EVALUATE
LENDER
SETUP
LOAN
EVALUATE
INVESTOR
EVALUATE
PROPERTY
UNDERWRITE
APPLICATION
ANALYZE
PORTFOLIO
PROCESS
PAYMENT
CONFIGURE
PORTFOLIO
REFURBISH
PROPERTY
APPRAISE
PROPERTY
NEGOTIATE
LENDER
RECOURSE
MITIGATE
LOSS
NEGOTIATE
INVESTOR
RECOURSE
RENT PROPERTY
NEGOTIATE
TERMS
REGISTER
LOAN
TERMINATE
LOAN
TRANSFER
ASSET
SELL PROPERTY
CLOSE LOAN
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MANAGE
FINANCIAL
RESOURCES
Resource Management
Lifecycle
DW Opportunities
PLAN
MONITOR
DISPOSE
ACQUIRE
CONTROL
UTILIZE
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DW Program Management
• Prioritize projects based on
– business impact
– project interdependency
– alternatives/regrets
• Consistent project management
• Architecture/methodology compliance
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Evolution of Process Modeling
Structure Analysis & Design
1970s
Mainframe/COBOL
Data Modeling, Info Eng/CASE
1980s
PC, RDBMS, 4GL
DW, ERP
1990s
Client Server
eCommerce
©Copyright, Information Engineering Associates
2000s
Web, Wireless
Process Modeling Summary
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•
•
•
•
Process/data modeling complementary
IE/CASE - limited success in IT
ERP shifted attention on process model
BPR – not just As-Is processes but To-Be
Data Warehousing
– Not about acquiring/delivering data
– Improving business processes
– Demonstrable ROI
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Questions?
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