Foundation in Business Analysis Session 5 MODELLING BUSINESS SYSTEMS MODELLING BUSINESS PROCESSES Business analysts often investigate business situations in order to identify opportunities for improvement and resolve problems. One approach to doing this is to build a conceptual model of the business systems and compare this with the current situation. The soft systems methodology described in the next slides provides an approach and techniques for building conceptual models based upon the business perspectives of stakeholders

Soft Systems Methodology Understand the current situation – using Rich Pictures Identify and model various business perspectives – using Root Definitions and CATWOE Model the essential activities necessary to support each individual CATWOE – using Business Activity Modelling Fuse the various resulting BAMs into a consensus BAM – using synthesis of BAMs Identify the differences between the activities on the consensus BAM and the current real situation – using gap analysis One approach open to the business analyst identifying the best way for a business to move forward is to take a “soft” approach to analysis. Unlike the “hard” approach which focuses on what is currently taking place in the organization, the soft approach tries to conceptualize what the business should be doing in order to be where it wants to be in the future

Checkland’s soft systems methodology KPI

Analyzing stakeholders’ perspectives CATWOE technique is a helpful approach to analyze and define the different elements of a business perspective Customer: the beneficiary or victim of the system Actor: the person or organization that undertakes one or more of the organization’s activities Transformation: The core business activities that are carried out to transform an input into an output of some values to the customer World View: an encapsulation of the beliefs and values of a given stakeholder in relation to the business system and why it exists Owners: Environment: The constraints or givens against which the business system operates

Business Activity Model A BAM is essentially a ‘conceptual model’ (the term used by Checkland) that shows the business activities we would expect to see in place, given the business perspective from which it has been developed, in order to achieve the transformation successfully. Developing a BAM therefore requires the analyst to use both analytical ability and creative thought.

BAM approach There will be one BAM for each business perspective. A separate BAM is needed to describe each perspective. These will subsequently be overlaid to form a consensus model, possibly covering all relevant perspectives. The BAM helps in the analysis of the business situation and the identification of improvements. The model is not concerned with who carries out the activities or where they are carried out.

BAM’s types of activities All business systems can be described in terms of five types of business activity and the dependencies between them. planning activities; enabling activities; doing activities; monitoring activities; control activities.

BAM example

Process for building a BAM Develop CATWOE Identify Doing activities Define other activities Build consensus model

Producing a consensus model Create a tentative consensus model, by combining all individual BAM activities, events and dependencies; Derive a new, consensus business perspective for the area of study; Test the tentative model against the new business perspective, adding, removing or modifying activities as necessary, in order to satisfy the consensus view; Finally, check the consensus model to ensure that it fully satisfies the new business perspective and the objectives of the area of study and the change project.

Business Events AND Business Rules Business Events happen in the real world. For example, customers place orders, suppliers send in invoices and employees resign. All of these events trigger the business system to do something – typically an activity or a series of activities – in order to respond to the event. For the activities identified in the BAM, there will be Business Rules governing their performance

Types of events External: these events originate from outside the boundary of the business system. Internal decision points: these events are usually internal decisions made by business managers. Scheduled points in time: these are the events that occur regularly.

Types of Rules Constraints: these restrict how an activity is performed. They may include laws and regulations and – if these cannot be challenged – business policies. Operational guidance: these describe the procedural rules that dictate how activities should be performed. An example for a travel organisation would be the guidance on how to calculate discounts on holidays where there is a group booking.

CSF AND KPI CSFs (CRITICAL SUCCESS FACTORS) are those things that must be in place, or that organization must do well, in order to succeed KPIs (KEY PERFORMANCE INDICATORS) are those things an organization measures to see if it is on course.

Use of BAM in GAP analysis When we compare the BAM with the current reality in the organization, we will find the following: Some activities are in place and are quite satisfactory Some activities are in place but are not satisfactory Some activities are not in place at all

Foundation in Business Analysis Session 2 MODELLING BUSINESS SYSTEMS MODELLING BUSINESS PROCESSES It is an important technique in business analysis used for: - to find out how things are done, possible because the processes have developed organically over time and no one is quite sure what happens For use in he induction and training of new members of staff As part of an accreditation application under quality assurance standards such as ISO9001

Organizational context

Alternative view of an organization

The organizational view of business processes

Porter’s value chain Michael Porter’s value chain helps us to structure our thinking and possibly identify areas of process that we may have missed.

Example value-chain activities for a manufacturing organisation

Developing the business process model

Types of process models AS IS process model TO BE process model

SIX SIGMA An alternative approach to process improvement is embodied in the Six Sigma approach, developed by Motorola in the 1980s and based on ideas from statistical process control. Define the problem. What is going wrong? Is it one problem or many? What is the visible evidence? Where is it and where does it come from? How serious is it? Measure the data. This means identifying the symptoms. Do they occur all the time or from time to time? Analyse the results so far. Be creative and prepare theories about the causes of the problems. Document the theories and test them.. Improve the process. Assess alternative improvement methods. Design and test the chosen method. Implement the chosen method. Control the new process and monitor its effectiveness.

Thanks you! References: Business Analysis 2nd edition by Debra Paul (Editor), Donald Yeates (Editor), James Cadle