FIS 431/631Financial Information Systems: Analysis and Design

Process ModelingJoe Callaghan

Oakland UniversityDepartment of Accounting &

Finance

Objectives

Process Models– Functional Hierarchy Diagrams– Process Modeler

Oracle 9i Introduction– From DBA point of view– Designer 9i– Accounts verification

Designer 9i Implementation Apply to Belgium Chocolate Company Case

Analysis Tasks Review

• Decides what processes are needed to implement business strategy

• Decides how processes interrelate

• Decides what data is needed • Identifies areas for systems

design• Involves users extensively

• Creates activity models (FHD, PM)

• Creates interaction models (REA)

• Creates a fully normalized data model (ERD)

• Identify modules, which contain business logic to enforce business rules

• Remains independent of technology and current systems

Analysis Tasks with REA Interaction Modeling

SystemsDesign

ActivityAnalysis

Interaction Analysis 1

InteractionAnalysis 2

PLD, ELC

FHD, PM

REA

Data Analysis

ERD

Activity Models• Record the activities of interest to the

business (i.e., the things the business does or should do)

• Involves decomposition of business processes from the highest level (AMP of Resources, Conversion Processes, MSC Processes) to the lowest (elementary processes), FHD

• Also involves the specification of process dependency events, to refine decomposition of the processes, PM

HEART OF ORGANIZATION

Conversion

Processes

Customers

Finished Goods and Services to Customers

MSCProcesses

Supply goods and services

Receive payment

Activity Models: Template for Decomposition of Business

Processes (IPSO)Suppliers

AMP Processes

Input Resources to

the Organization

Requestinput

resources

Pay for inputresources

Adds value

RBMSSource: Hollander, Denna & Cherrington (2000), adapted

Business Process Types and Business Processes

AMP Processes

Human ResourcesFinancial ResourcesSuppliesInventoriesProperty, Plant and Equipment

Conversion Processes

Operations

Varies widely depending upon the industry

MSCProcesses

MarketingSalesCollection and Credit

What is a process?

A process is group of related business events intended to accomplish the strategic objectives of the enterprise

Business event (often used synonymous with business activity): an activity performed by the business, e.g., “take customer order”

(Hint:Each event should contain a verb and a noun)

Business Process Type: MSC

Business Processes and Their Events

Place TV adTake customer

orderCollect payment

Ship goods

Business Process: Simple MS

Simple MSC Process

Ship goodsTake customer order

EventsMost events are easy to identify because the

business records data on forms or files. • Events are characterized by the fact that they

happen or have duration– For activity and REA models, they are characterized by

at least a verb and a noun, but could have an adjective, take customer order, deliver customer order, pay supplier

– For data models (ERD), they are characterized by a noun, e.g., Order header, Order detail, Sales header, Sales detail, Cash receipt

Objectives of Activity Analysis

• To understand the processes of the firm independent of: organization structure, existing IS, and technology

• To verify the understanding with users

• To lay the foundation for system design

Business Activities Terminology

• Function – a group of activities that together completely support one aspect of furthering the mission of the business (e.g., AMP of Resources, Conversion, MSC of Products/Services)

• Process – a group of related business events• Elementary process – an event, and

maintenance of RALs• Procedure - How the lowest level (elementary)

processes are carried out

Naming a Process

• Processes (events) are named using a verb (action) plus a noun (an entity type or attribute), e.g. TAKE ORDER, STAFF PROJECT

Process versus Procedure

• Process - what the business does, a specific action the business requires, e.g. CHARGE CUSTOMER

• Procedure - how the action is carried out, e.g. PRINT INVOICE

Activity Analysis Techniques

• Decomposition - Functions decompose into smaller functions or processes, processes into smaller processes. This is represented in the Function Hierarchy Diagram (FHD)

• Dependency Analysis - This shows the conditions necessary to enable one process/event to execute and thus the dependency of one process/event on another. This is shown in the Process Modeler (PM) (PM confirms the FHD).

Hierarchy Diagramming

ROOT

FUNCTION A

FUNCTION B

PROCESS X

PROCESS Y

Decomposition Rules• Processes may be decomposed into sub-

processes • Processes may be decomposed ultimately into

elementary processes• An activity that is decomposed must be broken

down into two or more activities (parent has at least two children)

• An activity is totally described by its subordinates (sum of children should explain entire parent)

Decomposition Using Business Events

• Identify process that follows an important business activity

• Activity - Customer returns defective product

• Subsequent events (making up the process) - Give customer an exchange, Refund money, Return defective product to supplier

Elementary Processes: The Lowest Level of the Hierarchy

• Achieves a useful business result

• Leaves the business in a consistent state, i.e. preserves referential integrity, data integrity of attribute values, and integrity of the business transaction

• In general performed by one person, in one location, until complete

Functional Hierarchy Diagram: Partial Business Function Decomposition

Process Modeling (PM)

• Determine the conditions necessary to enable the execution of a process (lowest level process is an event or maintenance of RALs).

• Since one process step (or event) can supply the conditions necessary for another process step to execute, this shows dependencies between processes steps (or events).

Process Modeler• Verifies the process decomposition because

sibling processes should be interdependent– if not, there may be a missing process or a

superfluous process

• Adds to business understanding by– identifying data needed to execute a process and the

information that it provides– exploring sources of imports and destinations of

exports of a process

Process Dependency Occurs When

The post condition of one process is the necessary precondition of another process

REVIEWINVENTORYITEM

LOW STOCK PLACE ORDER

Dependency Types

Sequential Dependency

SELECT PRODUCT

SELECT DISTRIBUTOR

NEGOTIATEPRICE

Dependency Types

Parallel Dependency

PLACEORDER

CANCELORDER

REVISEORDER

RECEIVE GOODS

Prerequisite event

Dependent events

Dependency Types

Mutually Exclusive Dependency

OINTERVIEWAPPLICANT

MAKE JOBOFFER

REJECTAPPLICANT

Oracle 9i Introduction

• From DBA point of view

• Designer 9i

• Accounts verification

Tool: Oracle Designer 9i™

Designer 9i Implementation

• Northwind Example

• You Apply to Belgium Chocolate Company Case (Phase 1) for Next Time

For Next Time

• Complete BCC Phase 1

• Complete Oracle 9i Tutorial

• Prepare for REA Modeling

• Questions?