OCEB2F 04 Business Motivation Modeling
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Module 4. Business Motivation Modeling⌘
Source of Information⌘
Business Motivation Model Specification, V 1.1
 | Martyn Ould - Meghan-Kiffer, Business Process Management: A Rigorous Approach, 2005 [ ISBN-10: 0929652274 ] |
Business Motivation Model⌘
- The Business Motivation Model provides a scheme for developing, communicating, and managing business plans in an organized manner.
- BMM answers following questions:
- Why a company exists?
- How it plans to make money?
- OMG Business Motivation Model:
- identifies factors that motivate the establishing of business plans.
- identifies and defines the elements of business plans.
- indicates how all these factors and elements inter-relate.
- is a structure that is methodology-neutral; it will support a range of approaches for creating and maintaining a BMM for an enterprise
Motivation behind BMM⌘
- Many different books define business vocabulary used in business plans differently
- Software which needs to support business plan and connections to business processes and rules has to have unified vocabulary and clear object model
- Creating legal and IT system from clearly defined business plan saves a lot of time and money
- http://www.omg.org/spec/BMM/
- http://www.businessrulesgroup.org/second_paper/BRG-BMM.pdf
BMM Overview⌘
BMM Motivation⌘
The Ends, Means, and Influencers are related to each other in order to answer the following two fundamental questions:
- What is needed to achieve what the enterprise wishes to achieve?
This question is answered by laying out the particular elements of the business plans — in other words, the Means necessary to achieve the desired Ends. - Why does each element of the business plan exist?
This question is answered by identifying the particular Ends that each of the Means serves, and the Influencers that underlie the choices made in this regard. This is what is meant by motivation.
SYSTEM THINKING⌘
- System thinking is a highest level unique approach to problems solving and managing the complexity.
- It views certain 'problems' as a part of the overall system so focusing on these outcomes further develops the undesired element or problem.
- Some methods use this in BPM
What is not defined by BMM⌘
- The OMG's BMM is not a full business model
- The elements of business plans do not prescribe in detail any of the following, each of which is an essential part of a full business model.
- Business Processes (see BPDM - Business Process Definition Metamodel)
- Workflows (see Workflow Management Facility)
- Business Vocabulary (see SBVR)
BMM Ends⌘
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Vision⌘
- Describes the future state of the enterprise, without regard to how it is to be achieved.
- The ultimate, possibly unattainable, state the enterprise would like to achieve.
- Often compound, rather than focused toward one particular aspect of the business problem.
- A Goal, in contrast, should generally be attainable and should be more specifically oriented to a single aspect of the business problem
- Vision is supported or made operative by Missions.
- It is amplified by Goals
Vision Diagram⌘
Vision Examples⌘
Desired Result⌘
- A Desired Result is an End that is a state or target that the enterprise intends to maintain
- A Desired Result is supported by Courses of Action.
Desired Result Diagram⌘
BMM Goal⌘
- Compared to an Objective, a Goal tends to be:
- longer term,
- qualitative (rather than quantitative),
- general (rather than specific),
- and ongoing
- focused enough that Objectives can be defined for it
- A Goal is a statement about a state or condition of the enterprise to be brought about or sustained through appropriate Means
- A Goal amplifies the Vision – that is, it indicates what must be satisfied on a continuing basis to effectively attain the Vision
Goals Examples⌘
BMM Objectives⌘
- Compared to a Goal, an Objective tends to be
- Short term,
- quantitative (rather than qualitative),
- specific (rather than general),
- and not continuing beyond its timeframe (which may be cyclical).
- A statement of Objective
- attainable,
- Time-targeted (by January 2007, in 2 years, etc..)
- measurable (doneness)
target that the enterprise seeks to meet in order to achieve its Goals.
Objectives are “SMART”: Specific, Measurable, Attainable, Relevant, and Time-Based.
Statements of Objective⌘
- Statements of Objective should always begin with the time-targeted phrase, followed by a quantified noun.
- Example time-targeted phrases:
- By 09/01/2001, ...
- Effective immediately, ...
- After 2 years, ...
- Within 5 weeks, ...
- On or before June 1, 2002, ...
- On April 15, 2001, ...
Objectives⌘
- An Objective quantifies a Goal - that is, it provides the basis for measures to determine whether the Goal is being achieved
- Conversely, the Goal is quantified by these measurable Objectives.
- For example,
- the Goal "To provide industry-leading customer service" is quantified by
- the Objective "Effective immediately, a ranking of 8 or better on a monthly customer satisfaction scale of 1-10" and by
- the Objective "By Jan. 1, 2001, a B+ grade level on the annual Better Business Bureau ratings."
Objective Examples⌘
Interrelating Desired Results (include relation)⌘
Desired results decomposition⌘
- One Desired Result can include other Desired Results; a Desired Result can be included in some other Desired Result
- In other words, there can be a ‘parts explosion’ of Desired Results.
- This connection should be used only to associate like instances — that is, Goals only to other Goals and Objectives only to other Objectives.
Parts Explosion⌘
- A ‘parts explosion’ of Desired Results happens when there is a decomposition of some higher-level Goal (or Objective) into lower-level Goals (or Objectives)
- Such decomposition occurs, for example, when elements of the business plans created by one level of management are handed down to a lower organizational level for more detailed planning or implementation
- For example, the Goal “To keep customers satisfied” includes the sub-Goal “To deliver pizzas in an expedient amount of time” and the sub-Goal “To produce tasty pizzas.”
BMM Metrics⌘
- Metrics
- Measures of performance are defined in an enterprise's BMM as objectives.
- They may be based on risks and potential rewards identified in assessments.
- KPI/CSF are not especially distinguished in BMM
- Each Goal can have one or more measures of performance
- For example, a metric of the Goal “To be profitable” is the measure of performance ‘annual net revenue.’
- Objectives should always be measurable. Therefore Objectives, by definition, will have metrics.
Metrics and Goals⌘
Means⌘
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Mission⌘
- Mission, like its counterpart Vision, indicates a correspondingly long-term approach — one that is focused on achieving the Vision
- Like Vision, Mission is not very specific; it is something broadly stated, in terms of the overall functioning of the enterprise
- Indicates the ongoing operational activity of the enterprise
- Describes what the business is or will be doing on a day-to-day basis
- A Mission makes a Vision operative — that is, it indicates the ongoing activity that makes the Vision a reality
- A Mission is planned by means of Strategies.
Mission Diagram⌘
Statement of Mission⌘
A Mission statement should consist of the following:
- An action part
- e.g. "provide"
- A product or service part
- "pizzas"
- A market or customer part
- "customers city-wide"
The Mission statement should be focused on day-to-day operations, generic enough to cover all Strategies, and broad enough to cover the complete area of operations
Mission Example⌘
Courses of Action⌘
- A Course of Action is an approach or plan for configuring some aspect of the enterprise involving things, processes, locations, people, timing, or motivation, undertaken to achieve Desired Results.
- CoA channels efforts towards Desired Results.
- CoA are governed by Directives.
- CoA are the basic elements of a general plan or overall solution
- CoA is an overall approach that the enterprise will take to achieve its Desired Results
- CoA are NOT Business Processes
- CoA can be realized (made operative) by Business Processes
Course of Action Diagram⌘
Strategies and Tactics⌘
- Compared to Tactics, Strategies tend to be longer term and broader in scope
- A Strategy is implemented by Tactics, Tactics implement (support) Strategies;
- Strategies usually channel efforts towards Goals, Tactics channel efforts towards Objectives
- Determining whether a Course of Action is a Strategy or a Tactic may be impossible without in depth knowledge of the context and intent of the business planners
- In the course of developing and analyzing business plans, some elements may change category as the target problem is understood better
BMM Strategy⌘
- A Strategy is a component of the plan for the Mission
- A Strategy represents the essential Course of Action to achieve Ends – Goals in particular
- A strategy usually channels efforts towards those Goals.
- A Strategy is more than simply a resource, skill, or competency that the enterprise can call upon
- Strategy is accepted by the enterprise as the right approach to achieve its Goals, given the environmental constraints and risks
Strategy Examples⌘
BMM Tactic⌘
- A Tactic is a Course of Action that represents part of the detailing of Strategies.
- A Tactic implements Strategies
- e.g. the Tactic "Call first-time customers personally" implements the Strategy "Increase repeat business."
- Tactics generally channel efforts towards Objectives
- e.g. the Tactic "Ship products for free" channels efforts towards the Objective "Within six months, 10% increase in product sales."
Tactic Examples⌘
Directives⌘
- Represent encoded (i.e., written down) knowledge that ensures the highest possible chances of success for the Courses of Action
- A Directive always has to do with governance or guidance
- A CoA, in contrast, identifies an active approach in moving toward the Ends
- A CoA is always action-dominated (action-oriented)
BMM Directive⌘
- Directives indicate how the Course of Action should, or should not be carried out – in other words, they govern Course of Action.
- Specifically, a Directive defines or constrains or liberates some aspect of an enterprise.
- It is intended to assert business structure or to control or influence the behaviour of the business, and is stated in declarative form.
Directive Diagram⌘
“Governs” relationship⌘
- Directives govern Courses of Action
- e.g. the Business Rule "Pizzas may not be delivered beyond a radius of 30 miles" governs the Strategy "Deliver pizzas to the location of the customer's choice."
- This governance applies to Tactics as well
- e.g. the Tactic "Encourage rental extensions" is governed by the Business Policy "Allow extension of rentals by phone."
Business Rule Enforcement Level⌘
- A Business Rule has an enforcement level from "strictly enforced" (if the rule is violated, the penalty is always applied) to "guideline"
- Enforcement levels represent alternatives in a graded or ordered scale, each of which indicates the severity of action imposed to put or keep a rule in force
- Deciding what enforcement level is to be applied to a Business Rule is often a Tactic within business plans
- In the Model, Tactic effects enforcement level of Business Rule
Business Rule and Business Policy⌘
- Business Rule is highly structured and is carefully expressed in terms of standard vocabulary
- Business Rule should be discrete and atomic — that is,represent only a single aspect of governance or guidance
- Business Policy tends to be less structured, less discrete, and usually not atomic — that is, not focused on a single aspect of governance or guidance
- Business Policy tends to be less compliant with standard business vocabulary, and less formally articulated
Directives Automation⌘
- Some Business Rules could be automated in software; some are practicable only by people.
- Business Policies are not directly automatable.
Policy Examples⌘
- EU-rent
- Rental contracts are made under the law of the country in which the pick-up branch is located
- Rentals must comply with relevant laws and regulations of all countries to be visited
- Pizza Company
- Safety in the kitchen, and in the streets, comes first.
- E-Business Company
- A business representative will personally contact each customer who makes a complaint.
Business Rule Examples⌘
Examples of “qualitative” words⌘
Ends and Directives usually use “qualitative” (judgemental or comparative) words:
These words should be avoided in expressing Missions, Strategies, and Tactics when the words actually refer to a desired end-state.
Influencers on the Ends and Means⌘
- An Influencer can be anything that has the capability to ‘produce an effect without apparent exertion of tangible force or direct exercise of command, and often without deliberate effort or intent.’
- The Influencers specifically of concern to business plans are those that can impact the enterprise in its employment of Means or achievement of its Ends. This impact has influence that is judged in Assessments.
- Influencers are always neutral
- Influencers must be assessed to determine implications for business plans
Categories of Influencers⌘
BMM categorizes influencers for analysis of the kinds of changes and resulting assessments and decisions
It provides:
- Two broad Influencer Categories: External and Internal
- A set of general categories
It suggests that each Influencer is categorized as (at least) one of the general categories and as either internal or external
Influencers Categories⌘
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Influencer |
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external |
internal |
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competitor customer environment partner regulation supplier technology |
assumption corporate value habit infrastructure issue management prerogative resource |
Assessing the Impact of Influencers on
Ends and Means⌘
- Influencers are neutral — they are more or less simply just ‘there’ until someone makes an Assessment of them as they relate to Ends and/or Means.
- Such an Assessment represents a judgement of an Influencer with respect to its impact on Ends and/or Means.
- Specifically, the Assessment indicates that the Influencer affects the employment of Means and/or affects the achievement of Ends, in certain ways.
Assessment⌘
- Different people or groups of people might make different Assessments of the very same Influencers on the very same Ends and Means
- The same person or group of people at different points in time can assess things differently as well.
- It is very important to indicate which person or group of people makes which Assessment of an Influencer at which point in time, so that an audit trail exists for future reference
Categories of Assessment⌘
- SWOT - Strength, Weakness, Opportunity, Threat - is a frequently-used set of categories for Assessment
- There are other approaches, but if an enterprise does not have another preferred set, SWOT is a sound default
- SWOT is used as the illustrative approach for discussion and examples in the rest of this presentation.
Strength⌘
- Advantage or area of excellence within the enterprise that can impact its employment of Means or achievement of Ends.
Weakness⌘
- Area of inadequacy within the enterprise that can impact its employment of Means or achievement of Ends.
Opportunity⌘
- Influencer can have a favourable impact on the organization’s employment of Means or achievement of Ends.
- For example, the bankruptcy of Pizza Company’s major competitor in Region-Y is assessed to be an Opportunity in its Goal “To increase market share.”
Threat⌘
- Indicates that some Influencer can have an unfavourable impact on the organization’s employment of Means or achievement of Ends.
Separation of Concerns⌘
The distinction between:
- Ends and means - what an enterprise wants to be, as opposed to what it has decided to do.
- Means can be changed without changing the ends.
- Changes caused by influencers and assessment of their impact.
- The impact of a given change may be assessed differently by different people in the enterprise.
- Assessments, and the decisions based on them.
- “How” and “How well.”
- Courses of action define how capabilities will be used; measures of how well they are used are defined within objectives they support.
- Objectives can be changed without changing courses of action.
Core Concepts of the Business
Motivation Model⌘
The Business Motivation Model, Business Governance in a Volatile World
Ould's 8 Principles for Process Modelling⌘
More: Business Process Management - A Rigorous Approach - Introduction by Martin Ould
- One: If we must have abstractions, let's make them meaningful. When we model processes – what people do – we need a limited set of concepts and depict things as they are, they should be concrete enough to someone looking at our model to readily understand
- Two: The real world is messy, but at a high level of abstraction any process can be made to look neat and tidy. When we model organizations, we are most interested in dynamics.
- Three: A model must mean something, but only one something: the notion should have a unique shared meaning
Ould's 8 Principles for Process Modelling⌘
- Four: Process models are about people, and for people
- When we model a process we are describing what people do.
- The notation has to make sense to people.
- Five: There's what people actually do, and there's what they effectively do
- We won't try to reconcile concrete and abstract models.
- There are two different views of the same thing.
- Six: People work in functions, but they do processes
- Seven: It's what people do, a process is about doing, deciding and cooperating.
Module 4. Questions⌘
- What is the difference between Goal and Objective?
- Can you describe BMM architecture?
- What is SWOT?
- Can you describe Ould's Principles for Process Modelling?
