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Engineering a Better Business

Enterprise modeling tools model, document, and even "fix" some of the business processes—and supporting information systems—within an enterprise. And now with e-commerce, that fixing can be between two enterprises within the supply chain.

Missing in past implementations of business process reengineering (BPR), enterprise resource planning (ERP), and other organizationally disruptive technologies has been a mechanism for change.

Enter enterprise modeling. This software helps you design your enterprise—and the information systems that support your enterprise. It helps configure your information systems around the way you run your business, rather than the other way around, which most ERP implementations demand.

This software is different than the three types of BPR tools explained in last month's "Designing a Better Business": flowchart diagramming, enterprise simulation, and workflow. Enterprise modeling tools, says Martin Owen, UK Consultancy Manager for Popkin Software and Systems, Ltd. (Leamington Spa, Warwickshire, United Kingdom), are not so much modelers as knowledge management tools that check and verify that the models are semantically correct, optimized, and conform with best practices—or the enterprise's own standards.

Enterprise modelers, adds Dennis Wisnosky, CEO of Wizdom Systems, Inc. (Naperville, IL), focus on the vertical integration of enterprise, functions, processes, and procedures. The horizontal integration involves the integration of procedures. This, says Wisnosky, is what people normally think of as workflow. "The difference between the enterprise modeling software and the workflow modeling software is that the enterprise modeling software focuses on integrating horizontally and vertically, whereas the workflow modeling software focuses on integrating horizontally."

Enterprise Modelers
Enterprise modeling tools combining the main features flowchart, simulation, and workflow tools. For instance, System Architect 2001 from Popkin Software supports business, process, object, and data modeling—from high-level business objectives and hierarchical makeup, through event-driven business process modeling. It uses Integrated Computer Aided Manufacturing (ICAM) DEFinition methodology (IDEF) business and process modeling notations and Unified Modeling Language (UML), a new standard for component and object-oriented modeling and analysis. It includes activity-based costing (ABC) analysis and simulation. And it supports a broad range of traditional structured analysis and design techniques, such as Yourdon/DeMarco, Gane and Sarson, and Information Engineering. As a standalone product, System Architect is not limited to a particular database or ERP design. It can be used for rebuilding, implementing, and reverse engineering all leading relational database management systems, including Oracle, Sybase, DB2, SQL Server, and AS400.

System Architect ships with Microsoft's VBA (Visual Basic for Applications) Version 6, which lets users, developers, and partners modify user interfaces, extend third-party application functionality, and easily connect System Architect 2001 with other related applications to create integrated enterprise-wide information systems.

While System Architect is a standalone enterprise modeler, @ctive Enterprise Foundation (@ctiveEF) from Geac Computer Corp. Ltd., which bought JBA International in September 1999, is a component of Geac's System21 ERP system. @ctiveEF consists of three pieces: @ctive Modeler, a business process modeler that gives a conceptual view of the business and its higher-level objectives; work management engine, namely a workflow-execution package; and client interface, which includes an email application.

Last year, AMR Research (Boston, MA) wrote that "the exciting part about [Geac's] @ctive Modeler product is that it holds the promise of combining integrated process modeling, end-user desktop configuration, transaction execution, and workflow document management. The challenge of this lies primarily with tying the process model metaphor of an object traversing a process to the time-stamped,event-based transaction model of an ERP system." AMR continued, saying that no ERP vendor at that time had been able to do that "completely right." Either the vendors didn't have the desktop interface, or the workflow management component, or the process models and the vendor's ERP system were decoupled.

Using ERP system as a backbone, @ctiveEF "links the people in the organization, events, and both external customers and vendors with computer-oriented tasks," says Bruce McIntyre, vice president of Product Strategy for Geac Computer Corp. (Ann Arbor, MI). To do that, Geac preloads all the ERP application sets—templates really—required by the @ctive Modeler. Users still must review this preloaded info, as well as map their organization to the templates. This mapping includes entering key customer and vendor information and defining relevant key performance indicators and best practices.

When System21 is used with third-party applications, such as Symix's advanced planning and scheduling application, @ctive Modeler output is used to configure the database integration points within System21 so that transactions within the ERP system will trigger the right outputs to drive the third-party software.

@ctiveEF includes "more business intelligence tools than you can shake a stick at," says McIntyre. These tools help users extract and analyze the transactional data during the business-model design phase as well as in the execution phase. In the design phase, the tools help stop users from modeling redundant processes; in the execution phase, they monitor processes to determine conformance.

McIntyre admits that users would not necessarily use @ctiveEF daily, except the displays created through its user interface. (In that case, the user interface is indistinguishable from the rest of the ERP system.) However, the enterprise modeler would be critical during ERP implementation and during the fine tuning that comes later.

Enterprise modelers that are producing code and changing the "switches" in ERP easily sell at 6-figure sums. While the individual desktop application itself might sell for $4,000, twenty people or more might be working on the modeling project.

Are Enterprise Modelers Necessary?
The real benefits of enterprise modeling software are coming to the fore in today's world of e-commerce and application hosting, such as in accounting and human resources. (Warning! New acronym: "Application hosting" is being called "business process outsourcing," BPO.) "Anybody who's considering serious e-business implementation uses enterprise modeling tools," says Owen.

In outsourcing, someone has to manage the business processes as well as the technology that supports those processes. More important, points out Dave Boulanger, Service Director, Enterprise Applications Arena, for AMR Research, someone in the enterprise "had better get a process modeling tool to figure out exactly who owns what process—and where your part of the process ends and, for example, the outsourcer's part of the bargain begins." (AMR, in fact, is now seeing business process diagrams as part of the addenda to the contract between e-commerce and outsource partners.) This is especially true for e-commerce transacted between enterprises. Think of automotive assembly: once the car design is finalized, someone is parceling out parts of that design to dozens of manufactures. Eventually, those parts will be assembled as a finished car.

Another benefit of enterprise modelers is to help users through the complex maze of software applications. "Because cross-functional business processes, such as order-to-cash and purchase-to-pay, are now shared among software application components, the organization should develop and maintain a series of scripts to describe the behavior of these processes across components," says Thomas Schaefer, R&D Product Director—Automotive/OEM Suppliers for Industrial & Financial Systems, Inc. (Milwaukee, WI).

There's yet a third reason for enterprise modeling. In e-business, you need the organizational structure to immediately and automatically recognize customers and present information in real time, says Owen. "That requires a huge internal rework of the way a conventional enterprise operates and for ensuring data consistency and data integrity."

Adds Geac's McIntyre, enterprise modelers make the implementation of business more a central focus. "Rather than implementing ERP in a traditional sense, where a company will bring up inventory first, then order entry, and then all the other ERP subsystems, @ctiveEF serves as a foundation for users to implement business processes, such as implementing order fulfillment as an entire process."

"All Problems are Process Problems" "Work doesn't do itself; there are people actually involved in it." Ronald M. Cordes, president of CFM Inc. (Bedford, MA) wants to make this quite clear to all users of enterprise modeling software. The point is that when then modeling a business process, show not only who is doing what, but who follows whom in the chain.

To reinforce this point, Cordes refers to the late W. Edwards Deming, who's life work included telling managers how to manage and businesses how to do their business. One of Deming's contributions was the notion of "customer-supplier relationships." At a macro level, when Company A supplies something to Company B, Company B is the customer. When Company A builds that something, it better have Company B in mind because that is who is going to use that something.

The same holds true at the micro level, which Cordes says is Deming's great insight. If you and I are working on the same project, whether we're in the same company or not, the work I do had better be prepared with your needs in mind. I am still the supplier; you, the customer.

Now imagine a flowchart of your enterprise. There are boxes, representing activities, and there are arrows. For the arrow going from a box in my column to a box in your column, the vertical component shows that a precedence exists between the two boxes. That's a no-brainer. However, the horizontal component of the arrow says that the information or control or work or something - today it's most often information - is flowing from me to you.

That horizontal component is the most important aspect of the whole business process model, according to Cordes, because it identifies customer-supplier relationships. More to the point, that horizontal component represents the people issue within an enterprise.

Unfortunately, it is the piece that most often gets overlooked in most process mapping exercises.

Those horizontal flows are "not just mechanically going to happen-no matter how much you like to think people are automatons and inter-replaceable components within an organization. You can't have work that nobody is doing and responsible for."

"I'm a process junkie," concludes Cordes. "Deep down in my heart, I really believe all problems are process problems. That is, if you look deep enough into a business problem, you'll discover that you didn't get the process right."