Algol (562407), страница 12

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The importance of the omission of information flow and temporal considerations cannot be over-emphasised. There is rarely any disagreement on what an organisation does, but there is always disagreement on how it does it. Flows can be added later, once functionality has been agreed.

The second level breaks down into finer detail each of the first level activities. Again, this is a logical grouping, and any temporal or informational links are implicit and/or coincidental. A second level breakdown for the SELL activity of a manufacturing business might be:

• NEGOTIATE CONTRACT - all activities involving negotiations and setting up of contracts with a customer.

• TAKE ORDER - all activities relating to order taking

• DELIVER GOODS - all activities relating to delivery

• ACCEPT RETURNS - all activities relating to return of unwanted or unsatisfactory goods

• INVOICE CUSTOMER - all activities relating to invoicing

• ACCEPT PAYMENT - all activities relating to acceptance of payment

In practice there are likely to be at least double these activities for a particular business type. A second level breakdown for the PLAN activity for elderly care provision was derived in a workshop as:

• Order to start planning

• Collect information

• Analyse information

• Set up strategic goals

• Set operational goals

• Arrange Resources

• Negotiate with actors

• Make proposal

• Consult / liase

• Approve plan

• Implement plan

Again, this took about two hours to agree and has survived six months of scrutiny.

Finally, the second level activities can be broken down into third-level groupings. For the elderly care planning system, this was only done for the PLAN and MONITOR/EVALUATE activities, as these are the principal focus of the system being developed. A third level grouping for the INVOICE activity in a manufacturing business might be:

• Identify goods delivered and accepted

• Price goods

• Apply discounts

• Print invoice

• Issue invoice

Again, this is a little simplistic, and it is likely to involve at least twice as many activities in a given business. The third level activity for Analyse Information in PLAN was:

• Analyse need/demand

• Analyse qualitative output

• Analyse quantitative output

• Analyse material input

• Analyse immaterial input

• Analyse effectiveness

• Analyse productivity

• Analyse economy

• Analyse efficiency

• Analyse equity

• Identify problems and explanations

• Identify successes and explanations

• Produce projections of future demand

• Evaluate against state of the art

This was extended towards the end of the project from a much shorter list. The lesson to be learnt is that the third level is more open to changes. Practical experience of trying to break down to four levels shows that it is very difficult to gain agreement, and becomes much more related to how a business operates rather than what it does.

Having obtained agreement on the third level of activity, it is possible to describe each activity in some detail. This has not yet been done for the PLANEC application. For a manufacturing company, such a description can take up many hundreds of pages. However, the principle value of the activity modelling approach is its conciseness and brevity. Detailed descriptions are at times either too vague or too prescriptive. However, for some purposes, such as software tendering, it is vital to elaborate on activities for a third party to understand.

The initial value of constructing a business activity model

It can be seen that the above breakdown is in some sense simplistic, and it leaves out a lot of detail. However, experience shows that there is considerable value in the process of constructing such a model. The following benefits have emerged:

• It is possible to construct the model with business personnel, without consideration of the operation of computer systems, or indeed any consideration of software design issues.

• Agreement is easy to obtain up to three levels.

• Summarising a business in such a way, which can usually be printed on a single sheet of A4 paper, provides a framework for discussions which is manageable.

• The process clarifies terminology.

• The model can be constructed in two or three days using personnel with a high-level view of business operations.

• Although it is a systemic view of a business, it can be understood easily by anyone with very little introduction.

• It builds consensus, and emphasises areas of commonality.

• By focusing on function rather than organisational structure, it can be used as a basis for discussion in business process re-engineering, and it can build a bridge between software functionality descriptions and business organisation descriptions.

Strategic uses of a business activity model

Perhaps the greatest value of an activity model at this level is its ability to provide a concise, easily explained terminology, organised in a simple framework, which uses the phraseology of the domain. Some of the uses to which they have been applied successfully are listed below.

Mapping current IT solutions

Using the activity model as a checklist, it is possible to identify all IT systems in use within a business. This is a gross level map; for example a manufacturing business may have different types of manufacturing plant using different software systems. It may be desirable to produce a number of maps for the business, depending on organisational structure, say one for each production stream.

The result of doing this for one organisation highlighted the radical difference in IT support between similar organisations in different countries, from one using over a hundred systems to one using thirty to achieve the same purpose in similar markets. The experience of using this framework was very positive, as it was possible to identify possible changes in IT usage within different businesses, and to relate them to possible business process changes.

Scoping of a package

It is possible to rate a package against each activity. The author has worked with various numeric ratings. The most effective scheme, however, has been to rate the package against each third-level activity according to the scheme:

• FULL - the IT package supports all aspects of the activity where IT support is reasonably expected

• PARTIAL - the IT package supports some aspects of the activity, but not all, where IT support is reasonably expected

• NONE - the IT package supports none of the IT requirements of the activity

• NOT APPLICABLE - the activity requires no IT support

In the process of rating the package, the partial support ratings should be accompanied by a description of the deficiencies of the package.

Comparison of packages

Using a rating scheme as above, it is possible to provide a very descriptive and concise overview of the similarities and differences of two or more packages.

Request for tender

The activity model can be used as a checklist for a package supplier or systems developer. By highlighting the activities which need IT support, the supplier can be asked to address the needs of the business. This requires a full description of the activities.

Identifying strengths and weaknesses of IT provision

This was done by the PLANEC group, to establish market needs for the proposed PLANEC system. The activity model was used to construct a questionnaire to identify strengths and weakness of the IT provision in different organisations which need to support the planning of elderly care provision. By collecting information in this form, it is possible to relate the current market to the planned functionality of PLANEC.

Identifying actors

By cross-referencing interested parties with activities, it is possible to gain an understanding of how a system may be used. This was done by the PLANEC partners in their own countries, and it opened up a number of organisational differences between the countries. In each case, there are different actors operating elderly care provision.

Analytical uses of a business activity model

So far, temporal and information flow aspects have been omitted from the model. The reason for this is that at the functional level similar businesses rarely differ. However, at the operational level they do. By introducing temporal and information flows, analysis of different aspects of a business can be incorporated. Two simplified examples drawn from actual projects are given below. They use activities defined in the activity model to indicate information flows, and the effect of delays on information flows.

A problem of invoice errors

Chinese whispers within a group of companies indicated that one company had cut its invoice error rate from 5% of all invoices having an error, to almost zero, by changing from one computer package. This was being used as an argument for a wider utilisation of the given package. To substantiate the claim, an analysis was done of the business process before and after the package installation. Prior to the installation, the information flow relating to orders was:

Changes to standing orders were taken by the salesman visiting the customer. These were taken on paper, and by the time the salesman had returned to the office, and the changes recorded on the computer system, an average of ten days elapsed. The consequence was that a high number of deliveries, approximately 5%, were not as the customer now wanted them. Therefore there were returns which the depot recorded on paper, and sometimes extra emergency deliveries. Returns took five days to record on the computer system. However, the practice was to issue invoices the day after delivery, and the standing orders were used. The customer would then query the invoice, usually at the end of the 30 day payment period; then they would pay the re-issued and correct invoice at the end of a further 30 days payment period.

The net effect of 5% of invoices being paid 30 days late is that the company needs approximately half a percent of its annual turnover needlessly tied up in cash, which for a multi-million pound turnover is a substantial cost to the business. The system looked ridiculously inefficient, but it had been set up fifteen years earlier in a more stable marketplace with fewer products, and when batch processing was the most cost-effective means of providing IT support.

A new system was introduced which allowed telephone ordering, and for the depot to record directly onto the computer system any returns. A burden was taken off the sales force, who could then concentrate more on selling to new customers rather than servicing existing ones. Customers were sold the new process on the basis that they could adjust their stock levels more easily, and therefore reduce their own working capital demands. The result was that hardly any deliveries did not match customers expectations. There were some added benefits of increased customer satisfaction and reduction in extra deliveries to meet needs of customers. The change in the flow of information was as follows.

Explained in this way, it was clear that the new software package was not of a higher quality, thereby reducing invoice errors, but that it facilitated a change in business operation which allowed the errors to be removed. The decision to adopt a change in IT to tackle similar problems could then be taken in a more informed way; arguably changes could have been made to existing systems to achieve the same effect.

Stock reduction

Another Chinese whisper about a computer system in another business area was that it reduced stocks in the warehouse and reduced the number of stock-outs. Again, analysis of the process using information flows between activities indicated the full reason for the improvement in stock management. The flows before the new system were:

Customers would typically order about 15 days in advance of delivery, to fit in with their own production schedules. Orders were taken, irrespective of stock levels in the warehouse. Production would then schedule its activities to maintain stock levels in the warehouse. The new system added an information flow that allowed the production activity to see the orders. This meant that production could respond to changes in order levels rather than changes in stock levels. The result was that stocks could be reduced.

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