Sources of Business Systems Design Direction

Introduction

Business system designs are driven by business needs. However, the end system design must:

1. be a logical, rational, reasoned approach to the work to be performed. Each component of the system must be justifiable, not only in terms of its existence but in terms of its placement within the flow of the business and its scope.

2. reflect the known and unavoidable business constraints. These constraints may be internal or external, reasoned or arbitrary.

3. reflect the known business needs as reflected by current work being performed and projected business needs as reflected by requirements analysis.

4. reflect the changes identified to correct known processing deficiencies and the changes to reflect new capabilities, flexibility and efficiencies.

5. reflect the goals and objectives of the firm's management and its operational personnel.

6. reflect the strategic and tactical business plans of the firm as far out as the planning horizon can be extended.

At the highest level the design must reflect the ideal state of the firm. As the design is refined, a balance will be achieved between this ideal state and what is feasible, practical and in some cases achievable. This balance will reflect the capability of the firm to make the needed system changes, the resources it can devote to making those changes, the time it will take to to fully implement all the changes, and it time within which the changes must be made.

The products of the framework phase are a set of blueprints or models each of which is accompanied by a set of definitions, descriptions and narrative explanations. Because of the limitations of modeling constructs and techniques, and to keep the blueprints or models relatively easy to understand, each blueprint or model identifies an aspect of the system change set, and the structure within which those changes must be made. These blueprints or models incorporate the set of one or more factors, influences, driving or controlling forces which together act as primary determinants on the structure of the system, the detail procedural changes which need to be made and the data which are needed by each detail procedure. These models or blueprints are interrelated and changes to one are almost always accompanied by changes in the others.

Business System Design Determinants

When completed each component of each of the models which comprise the framework product should be directly tied to, supportive of, and derivable from one or more of the primary determinants of business, its goals, objectives, missions, strategies, etc.

While in some instances a specific framework product component may also be a determinant of the framework itself, generally speaking these determinants represent external influences to the firm and the framework product components represent the firm's business actions and reactions in response to those external influences.

Since the sum of these determinants usually constitute the determinants of the strategic planning model of a firm, the framework level can also be thought of as the strategic business systems plan of the firm. The remainder of this chapter will be devoted to the identification and definition of some of the most common framework determinants followed by a brief discussion of each determinant. The determinants are presented alphabetically and not in order of importance.

Application

Definition:

An application is a specific set of managerial or operational activities or processes

Applications are usually discussed within the context of systems automation. An automated systems application is a set of computer programs designed and written to support the routine processing requirements of a specific set(s) of users. An application may support one or more activities within a given user area or given set of user areas, or it may include all activities within a given user area or set of user areas. In some cases an application may cross managerial, responsibility and authority lines.

Since most firms have some level of automation already in place, the manner in which many of the firm's processes and tasks are performed and the sequence in which they are performed are dictated by the operations of these automated applications.

In many cases the only documentation of procedures, data coding structures, editing and validation rules and business rules themselves appears within the program code of these applications.

In redesigning systems, the firm's reliance on these existing systems, the difficulty of changing them, and the investment in time and resource which they represent all have a strong influence on any systems redesign. In addition, since in most firm's these applications have a heavy interdependence of both data and processing special care must be taken to examine them thoroughly and to plan the changes around the firm's ability to change these applications in a concerted and coordinated manner.

Assumption

Definition:

An assumption is something that is taken for granted or a presupposition on the future course of events necessary to form the basis for a logical argument or for a decision on a course of action. (In Strategic planning, assumptions may constrain the arguments or courses of action, they may indicate areas of opportunity, or they may describe the environment.)

In any business environment, and thus in any system redesign plan both management and operational staff must make certain assumptions about business growth which in turn affect processing volumes. They must also make certain assumptions with respect to what the competition will or will not do, what legislation and regulations will or will not change, what technological changes will occur, what will happen to their sources of supplies, what social and economic trends will develop, what changes will occur within their client or customer populations, etc.

They must also make certain assumptions with respect to the financial health of the firm which in turn will affect the amount of funds the firm can devote to the systems redesign effort. Other assumptions might have to do with manpower and skill availability, management stability, firm ownership, stock market growth or decline, etc.

Budget

Definition:

A budget is an an itemized summary of probable expenditures and income for a given period. Budgets are usually developed for an entire firm, and may be developed for parts of a firm, divisions, groups, departments, or sections within the firm. Budgets are usually developed such that each item of probable income and expense are reflected on a given line within the budget. Budgets are usually categorized in to kinds of income and kinds of expense.

Budgets are usually also developed for major projects, not as much to project income as to project and monitor project expenses. The design project budget is usually a part of some other budget or budgets within the firm. The project budget is one of the single most controlling factors in determining project scope, since it is the budget which determines the resources available for the project effort.

Business Activity

Definition:

A set of tasks which are organized and decomposed into a set of procedures to accomplish a specific goal. Business activities are the third level of aggregation or grouping in the hierarchy of system, process, activity and task.

Although this book uses activity as part of a hierarchy of task groupings, many other works use different definitions of these terms and thus different hierarchies.

The hierarchy of system, process, activity and task, is arbitrary and the size and number of groupings of tasks within each is also arbitrary.

Business Function

Definition:

A series of related activities, involving one or more entities, performed for the direct or indirect purpose of fulfilling one or more missions, goals, or objectives of the firm. Business functions usually correspond to managerial control points, since functions are inherently managerial concepts devised for organizing and assigning responsibility for the performance of sets of activities. Functions can be organized around any set of related activities. The central point is that the function is responsible for ensuring that the activities are performed.

Functions may generate revenue for the firm, service the customers of the firm, produce the products and services of the firm, or manage, administer, monitor, record or report on the activities, states or conditions of the entities of the firm.

Business Process

Definition:

A sequence of related activities, or related tasks. These tasks or activities are usually interdependent and there is a well defined flow from one activity to another or from one task to another. Processes are generally repetitive, well defined and easily

automated. Business processes are the second level of aggregation or grouping in the hierarchy of system, process, activity and task.

Business Subject Area

Definition:

A business subject area is a concept which represents the universe of function, systems, processes, activities and tasks related to an area of interest to the enterprise. A business subject area might be contracting, item management, transportation, human resource management, or financial operations. A business subject area includes all data related to or used by the business area tasks.

Business subject areas are a method of producing and discussing a level of grouping of tasks aggregates one level higher and one level broader than that of functions.

Business subject areas may also be narrower than a function and can be organized along a horizontal perspective of business activities rather than the traditional vertical perspectives.

Business System

Definition:

A group of interacting, interrelated or interdependent business processes activities or tasks. Usually, although not always, these groups of business processes, activities or tasks are managed by a single functional manager. Business systems are the highest level of aggregation or grouping in the hierarchy of system, process, activity and task.

As business systems are integrated, they begin to span more and more functional management areas. The process of integration causes a break in the traditional linkage between functions and the systems and processes they traditionally managed. Most redesigned business systems cross functional or managerial lines. Many systems, especially data collection systems, have no functional manager or responsibility point but are treated as common systems to the firm.

Business Task

Definition:

A specific piece or amount of work; often expected to be finished within a certain time. Tasks are means, not ends. They are easily definable and of short-term duration. Tasks are the lowest level in the hierarchy of system, process, activity and tasks.

Tasks are usually performed by a specific individual or group of individuals and are usually performed in conformance to a set of written step by step instructions incorporated in a procedure, standard, or manual.

Tasks are repetitive and measurable. Most managerial activity is directed to monitoring, controlling, measuring and predicting the products at the task level.

Client

Definition:

A client is any person or company that obtains goods, services, or other benefits from the firm, usually in return for payment.

Clients are also known as customers, patrons, etc. Clients are usually one of the core data entities of the firm and are both determinants of the business and one of the entities which the firm needs to know most about.

Clients determine what products the firm will produce or distribute, what services it will offer, how much of those goods and services will be offered, and consumed, what quality and features will be incorporated into those goods and services, and how much the firm may charge for those goods and services. Clients may also to some extent determine the accountability the firm must assume for any harm caused by its goods and services, and how much profit the firm may make as a result of doing business.

Critical Success Factor

Definition:

Key areas of a business in which predefined performance is necessary for the organization to achieve its goals.

A critical success factor is usually stated in terms of a number or range of numbers, which are targets or goals of operating performance. Critical success factors may be stated in terms of measures of internal or external states or conditions, and are usually in terms of a formula bringing together several individual business measures. Critical success factors may also be stated in terms of comparisons between one measure and another, ratios of one measure and another, or test between measures.

Critical success factors are hierarchical in nature and in many instances one or more critical success factors may be used to create still another critical success factor.

Decision Support Objective

Definition:

A decision support objective is some state or condition which the firm wishes to achieve with respect to its ability to perform the traditional management activities of monitoring, controlling, directing, measuring, predicting, estimating, or reporting on the activities of the operational areas of the firm, or on other areas of business performance.

Decision support objectives are usually stated in terms of information availability, measurability, or historical information accessibility. Decision support information is usually analytic in nature and usually comparative of period against period.

Data Subject Area

Definition:

A data subject area is a concept which represents the universe of data related to an area of interest to an enterprise. A data subject area may be a single person, place or thing, such as a contractor, item, or employee or a focus on a set of tightly interrelated persons, places or things. A data subject area includes all tasks in all business areas which use its data.

Data Entity

Definition:

A real person, place, thing or logical person, place or thing which can be definitively described, and which is of immediate and/or ongoing interest to the firm as a whole or to some aspect of the firm. An entity may also be an idea, concept or convenience.

An entity may also be an event, or set of events, states or conditions.

A data entity is some person, places, thing, etc., about which the firm collects and need to collect data on an on-going basis. The need to collect information about the data entities is what determines much of the processing requirements of the firm.

Functional Objective

Definition:

The generalized intent of a set of actions; performance. The appropriate or assigned duties, responsibilities, mission or task of an office, individual or organization. Functional objectives are derived from and supportive of general objectives. The results of or performance expected of a person or group of persons.

Goal

Definition:

An end or purpose toward which an endeavor is directed. Goals are ends, not means. They represent a state of perfection and are therefore intrinsically unattainable. They have a very long-term time frame. they are usually not quantifiable. Goals are the highest level in the hierarchy of goals, objectives, strategies and tasks. A goal may be equated to the existence of an ideal state or set of conditions within the firm.

Guideline

Definition:

A statement of policy or procedure. Guideline is the lowest level in a hierarchy of policy, legislation, regulation, standard and guideline.

Information Objective

Definition:

a generalized statement of data requirements which describe the universe of and state of company data in terms of scope, availability, detail and accessibility. An information objective is usually stated in terms of a conceptual entity, entities, or groups of conceptual entities. Information objectives are derived from and are supportive of general objectives.

Inhibitor (Constraint)

Definition:

A force which prevents or conditions an action. A constraint limits actions by the imposition of physical, moral or circumstantial force. A constraint may limit action through the restriction of access to some needed resource, or through the imposition of time limitations.

Issue

Definition:

A point of debate, discussion or dispute; especially culminating points leading to decisions.

Issues are usually recognized points of dispute which need to be resolved before some action or set of actions can be take. Issues may also highlight areas of disagreement which must be resolved before decisions can be made or directions set.

Legislation

Definition:

A proposed or enacted law, or group of laws. Legislation is the second level in a hierarchy of policy, legislation, regulation, standard and guideline

Legislation governs what the firm may do, how it may do it, what charges it may levy, what liability it must assume as a course of doing business, what responsibilities it must undertake in order to do business, what profits it may make, what kinds of products it may produce or services it may offer, how it must compensate its employees and what benefits it must offer its employees, what information it must make available to the public, what records it must keep, how long it must keep those records, how it must treat its competition and how when and where it may compete. Legislation governs where it may get it raw materials from and to whom it may or must sell its products or services.

Location

Definition:

A physical place where a resource or asset is located. The resource or asset may belong to the firm or may be held for the firm by another party.

Locations are also where the firm does business, where its employees work, or where its customers or clients may be found.

Mission

Definition:

The chief function or responsibility of an organization. Mission statements, also called charters describe what the firm is empowered to do and why. Missions describe roles, responsibilities and authorities. Missions state what activities the firm or parts of the firm may or may not engage in and under what circumstances the firm may engage in those activities.

Objective

Definition:

Something aimed at or striven for. Objectives are ends, not means. They are definable, attainable and usually quantifiable. They have a mid-range time frame (5 to 10 years). Objectives are the second highest level in the hierarchy of goals, objectives, strategies and tasks. Objectives describe a state of being or set of conditions which the firm wishes to exist as a result of some planned set of activities.

Organization Unit

Definition:

An identifiable, formally or informally sanctioned number of persons having specific responsibilities and authorities, and who are recognized as having a particular and specific purpose

Organizational units are usually managerial concepts and are most closely equated with functions in that they are managerial conveniences for aggregating business activities and assigning responsibilities and authorities for the performance of those activities.

Plan

Definition:

A detailed scheme, method, program or schedule, worked out beforehand for the accomplishment of an objective.

Plans are developed for almost all projects or activities undertaken within a firm. Plans usually include a schedule of activities, assignment of roles, responsibilities and authorities for the accomplishment of those activities. Specific plans may also be drawn up reflecting allocation of financial resources (a budget), interactions with other groups both within the firm and external to it who must participate or who must be informed of progress of the activities. Plans may also be drawn to reflect manpower allocation and participation in the project activities.

Policy

Definition:

specific courses of actions and guidelines for implementing strategies. A plan or course of action designed to influence and determine decisions, actions and other matters. A course of action, guiding principle or procedure considered to be expedient, prudent, or advantageous. Policies are the highest level in a hierarchy of policy, legislation, regulation, standard and guideline.

Program

Definition:

A program is an organized list of procedures or activities: a schedule for solving a problem. Programs may be developed for accomplishing a set of activities or for solving a business problem. Programs are sequences of instructions or directions for accomplishing a task. Programs are detailed plans for solving problems or accomplishing tasks.

Regulation

Definition:

A principle, rule or law designed to control or govern behavior. A governmental order having the force of law. Regulation is the third level in a hierarchy of policy, legislation, regulation, standard and guideline.

Resource

Definition:

A resource is something which is or can be used to assist in the performance of a task or assignment. Resources are usually tangible, and may be people, things, places or ideas. Resources may also be financial. Resources are usually thought of as assets

Stakeholder

Definition:

Any group or individual who has a distinct interest, or stake, in the processes, policies or products of an organization.

Stakeholders, may be customers, clients, stockholders, employees, or any group of persons or companies that are directly benefited by the firms performance (positively or negatively).

Standard

Definition:

an acknowledged measure of comparison for quantitative or qualitative value, criterion. A value, measure or criterion commonly used and accepted as an authority. Standard is the fourth level in a hierarchy of policy, legislation, regulation, standard and guideline.

Strategy

Definition:

A scheme or plan for achieving some purpose, especially to create a different position of power with respect to competition; a means to some end. A specific major action for the attainment of objectives; Strategies are means not ends. Strategies ate the third highest level in the hierarchy of goals, objectives, strategies and tasks.

Tactic

Definition:

A tactic is an expedient for achieving a goal; a maneuver. Tactics are the techniques for securing the objectives designated by a strategy. The strategy of a firm defines what the firm wants to do, or what state or condition it would like to achieve, and the tactics of a firm designate what activities the firm will undertake to achieve that strategy.

A firm usually has one strategy (or set of strategic objectives, and many sets of tactical plans as to how to achieve those objectives. Tactical plans are usually generated by each level of management and passed down to the next lower level.

Technology

Definition:

The application of science to industrial or commercial objectives. The entire body of methods and materials used to achieve such objectives. Technology affects every area of the firm from the materials and methods used to design its products, to the machinery used to produce those products and the manner in which that product is transported and delivered to the firm's customers. Technology affects the machinery used by the firm to process its data, and the methods in which data enters and leaves the firm. Technology determines what financial resources will be available to the firm, and how those resources will be made available.

Although technology is usually associated with the physical sciences, it also encompasses all natural and social sciences as well. Technological changes in the areas of philosophy, psychology, information sciences and theory and mathematics may also affect how, when and where the firm does business.

Data Directed Systems Design - A Professional's Guide
Written by Martin E. Modell
Copyright © 2007 Martin E. Modell
All rights reserved. Printed in the United States of America. Except as permitted under United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without the prior written permission of the author.