1. Modeling of Business Enterprises with the Resource-Event-Agent (REA) Ontology G. L. Geerts (University of Delaware) & W.E. McCarthy (Michigan State University)
Semantic business process model developed initially at Michigan State University
Ontology extensions (vertical and horizontal)
Refereed literature in accounting & computer science
Successful way of teaching modern accounting and business systems
Candidate for standard use
UN/CEFACT & ebXML
ISO Open-edi
EEC e-commerce integration (ECIMF)
Now at point of increasing formalization need:
Protégé
KIF
Connections to upper ontology

2. Pattern: A prototypical constellation of entities
REA is an accounting transaction (BP) pattern that has been expanded for full enterprise use
Can we standardize the world of ERP business objects and business object connections with a library of BP patterns ?
Can we standardize collaboration space with collaboration patterns ?

4. Cookie-Monster (the customer) and Elmo (the entrepreneur) meet in the (real or virtual) marketplace, thus setting the stage for an Economic Exchange

5. Cookie-Monster (the customer) and Elmo (the entrepreneur) engage in a SHIPMENT (transfer of Cookie Inventory)

6. Cookie-Monster (the customer) and Elmo (the entrepreneur) engage in a PAYMENT (transfer of Cash)

7. {transfer, transformation}
Economic
Resource
Economic
Event
Economic
Agent
duality
{transfer, transformation}
participation
{outside, inside{accountability}}
stock-flow
{outflow{use,consumption,give}, inflow{take,production}}
Sale
Economic Event
participation
{accountability}
Salesperson
Economic Agent
Cookie
Economic Resource
stock-flow
participation
{outside}
Customer
Economic Agent
duality
{transfer}
participation
{outside}
Cash
Economic Resource
stock-flow
Cash-Receipt
Economic Event
Cashier
Economic Agent
participation
{accountability}

8. Horizontal expansion of BP pattern (Porter Value Chain)??
PORTFOLIO of ATTRIBUTES: (Lancaster)
ingredients
baked
advertised
delivered
guaranteed fresh

9. Value Chain $$ $$ raw materials $$ $$ labor $$ manufactured goods
Cash payout
Cash payment $$ $$
raw materials
purchase
payment $$ $$
logistical operation
shipment
labor
payment
labor acquire $$
manufactured goods
delivered raw materials $$
labor
facilities, services & technology
payment
service acquire
manufacture job
material issue
manufacture operation
delivered manufactured goods
payment
sale $$
advertise campaign
serv. & labor cons
targeted product & customer services
advertising service
Value Chain

10. Value Chain financing procurement transportation human resources
Cash payout
Cash payment
financing $$ $$
raw materials
purchase
payment $$
procurement
transportation $$
logistical operation
shipment
human resources
labor
payment
labor acquire $$
manufactured goods
delivered raw materials $$
labor
facilities, services & technology
payment
service acquire
manufacturing
manufacture job
material issue
manufacture operation
delivered manufactured goods
procurement
payment
sale $$
advertise campaign
serv. & labor cons
targeted product & customer services
sales
marketing service
advertising service
Value Chain

11. Vertical expansion of BP pattern (ISO Open-edi)
Negotiation
Identification
Planning
Post-Actualization
Actualization

12. PLANNING

13. Cookie-Monster plans his acquisition

14. IDENTIFICATION

15. Cookie-Monster and ELMO identify their potential trading partners
after

16. NEGOTIATION

17. Cookie-Monster negotiates with ELMO until they reach a contract
Offer
Counter-offer
Instrument of offer
Instrument of acceptance

18. ACTUALIZATION

19. Cookie-Monster and Elmo do the deal
THE “HAPPY PATH”

20. POST
ACTUALIZATION

21. n-to-1 1-to-n 1-to-1 delivery penalty payment SELLER BUYER
event stream
BUYER
deliver
pay
n-to-1
pay
deliver
1-to-n
deliver
pay
1-to-1
pay
deliver
fail to pay
deliver
return
fail to deliver
pay
delivery
penalty
payment

22. To accommodate this wider view of business process modeling, what changes ?
Declarative:
Use the basic REA pattern
Abstract up to types
Account for the future with commitments
Establish Aggregations
UP (value chain)
DOWN (workflow)
Procedural:
Use a state machine for continuous monitoring and reporting

23. Declarative Extensions

24. Planning & Control level
Named Set of Groups
Cashiers
Salespeople
Economic
Agent Type
Abstraction
Planning & Control level
Knowledge level
Typification
Operational Level
Harry
Jane
Named Set of Objects
Tom
Dick
Ashley
Salespeople
Tom
Dick
Ashley
Harry
Jane
Named Set of Objects with Labeled Clusters
Group & Name Clusters
Cashiers
Economic
Agents
Source: Geerts and McCarthy, type paper

25. reciprocal duality executes cookie shipment commitment to ship
Economic Contract
cash payment
duality
executes
commitment to pay
reciprocal

26. Resource Type Economic Commitment Event Type Business Role
specifies
Economic Commitment
specifies
Event Type
specifies
Business Role
Source: Geerts and McCarthy, ontology paper

27. Payroll Process Maintenance Revenue Process Process Acquisition
Car
Cash
Payroll
Process
Labor
Labor
Cash
Labor
Maintenance
Process
Maintained Car
Revenue
Process
Used Car
Labor
Car
Labor
Labor
Maintained Car
Used
Car
Cash
Acquisition
Process
Cash
Used Car
Used Car
Car
Revenue
Maintained
Car
Customer
Rental
Agent
Labor
Used Car
Rental
Contract
Car
Car
Give
Take
Exchange
Cash
Receipt
Cash
Used Car
Cash
Customer
Cashier
Accept Customer Contact
Find Car & Provide Keys
Assess Customer Needs
Check Out Car
Check Car File & Choose
Assess Insurance Options & Credit
Return Car
Fill in Contract
Update Files
Customer Pays

28. Standards Models

29. UN/CEFACT

30. Bilateral Collaboration Economic Resource Type Mediated Collaboration
ISO Open-edi Ontology Collaboration Model
Bilateral Collaboration
governs
Economic Event
Economic Resource
Economic Agent
stockflow
from to
Economic Contract
Economic Commitment
reciprocal
fulfills
establish
duality
Economic Resource Type
typifies
specifies
Economic Event Type
Business Role
qualifies
reserves
involves
Partner
Third Party
Mediated Collaboration
Business Transaction
participates
requires
Agreement
Regulator
constrains
SOURCE: Adapted from ISO , W.E. McCarthy

31. ECIMF

32. Why are we here ??
Connection to Ontolog and core components (UBL) and (hopefully) SUMO
Learn more about formalization for extensions (Protégé and KIF)
For further REA information: