Function modelling Is the Foundation of ALL good Business Systems Modeling!
Knowing this one fact and keeping it foremost in your mind will enable you to build business models very quickly that are focussed, relevant, rigorous and easy to understand. If you start with any other model when doing business modelling you are off course - and may never get back.
Know Your Functions and You Know Your Business
This is another fact to keep foremost in your mind, because, from your Business Functions (commonly called Functions) you can derive all of your other business models - including information and data models.
But What is a Function?
Here is a definition that you should commit to memory:
“A business function is an activity, or coherent set of activities, that a business must perform in order to meet its business objectives and
continue in existence”.
It is what the business OUGHT to be doing!
I use the term “OUGHT” as businesses are often doing things that are so far away from what they ought to be doing that it is a miracle that they continue to exist.
If you find out from business managers what the business ought to be doing and model this, as opposed to modelling anything else, then your models will enable the business to go to where it ought to be.
Example of business functions are:
-Accept Order from Customer
-Dispatch Goods to Customer
-Accept Payment from Customer
-Pay Suppliers for Good Received
Is a Function a Department?
The term “function” is often incorrectly used to mean a department within a business. People will often refer to the “Finance Function” when they really mean the “Finance Department”. This misuse of the term should be avoided at all costs!
The term “Finance Function” is a valid term only when it is used to mean “all of the finance activities required to support the business”.
So what do you call the Finance Department? Easy, you call it “the Finance Department”.
Is a Function a Process?
This is perhaps the most common and most serious area of confusion. Sadly, far too many analysts - and business people - use the term “process” when what they are actually referring to is a Business Function.
Business functions and business processes are NOT the same thing! A business process is the definition of the ORDER in which Business Functions are carried out in response to a trigger in order to achieve a desired outcome.
So What EXACTLY is Function Modelling?
Function modelling is all about identifying, analysing and modelling business functions, independently of:
-how they are currently done;
-who currently does them;
-the current organisation structure.
The real power of Function Modelling is realised by concentrating on identifying, analysing and modelling WHAT the business OUGHT to be doing as opposed to HOW the business currently does things.
The main reason for this is that how things are done in a business can change dramatically over time (due to changes in such things as policy, technology, etc.) whereas what has to be done, by and large, remains the same.
The Stages of Function Modelling
In order for Function Modelling to be truly effective it must be done in a structured and ordered fashion. In all there are five distinct stages to Function Modelling:
1.Information gathering
2.Analysis and investigation
3.Modeling
4.Feedback
5.Implementation
Because there are five stages this does not mean that Function Modeling takes forever!
If done properly it can be done very quickly, but following the five stages ensures that it is not only done quickly but done correctly too.
Mechanisms and Functions
Mechanisms are the MEANS by which Functions are carried out. One of the most common errors in Function Modelling is to mistake mechanisms for Business Functions. The second most common error is to compound the first by continuing to model the mechanisms as opposed to identifying and modelling the underlying Business Functions.
A prime example of this is the mechanism “Produce Invoice,” which is NEARLY ALWAYS modelled INSTEAD of the two Business Functions it represents, namely “Bill Customer for Product Supplied” and “Request Payment from Customer”.
Another set of mechanisms that are often mistakenly modelled as Business Functions are the production of reports. The mechanism “Print Month End Sales Reports” is a good example as it invariably appears on function hierarchies but it is NOT a Business Function.
When faced with this situation you must ask the business “what do you use this report for?” You might get a reply such as “It tells me what value of product we sold in each sales area”. This gives you the function, namely: “Analyze Sales of Product by Sales Area”.
Here are more examples of functions and mechanisms:
-Mechanism: ring customer for appointment. Function: Make Sales Appointment with Customer
-Mechanism: write to customer to make appointment. Function: Make Sales Appointment with Customer
-Mechanism: produce month end report. Function: Analyze Sales by Value for Specified Period or Analyze Sales by Product Type and Region for Specified Period
-Mechanism: produce invoice. Function: Charge Customer for Product Supplied / Request Payment from Customer
-Mechanism: send chasing letter to customer. Function: Request Payment From Customer
-Mechanism: pass order form to warehouse. Function: Authorize Dispatch of Product
Function Catalogue
The Function Catalogue, probably the most powerful model that a business can have, is the cornerstone of IMM - the Integrated Modeling Method.
It is in essence a catalogue of all the essential activities (Business Functions) of the business.
The most effective way to display the catalogue is in the form of a function hierarchy.
Summary
-Function modelling is the foundation of all business modelling.
-Know your functions and you know your business.
-A business function (=function) is what the business ought to be doing.
-A function is not a department.
-A function is not a process.
-Mechanisms are the means by which functions (the WHAT) are carried out, they are the HOW.
-The Function Catalogue is the most powerful model a business can own.
If you want to reproduce the above article, include it in your ezine or share it with your friends, please feel free to do so. The only condition is that you reproduce the article in its entirety and include all of the following contact information. John Owens, the author of this article and the creator of the Integrated Modelling Method (IMM), can be contacted at: john@integratedmodelling.co.nz