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July 26, 2002

Point of Return

Justifying BI projects is much easier when you can clearly link expense with return

by Sudhi Sinha

Continued from Page 1

For the same layer, the Data column contains the list of business entities and the Time column holds the list of major business events. Together, the contents of these cells reflect the scope of the return being set. The return scope can be defined using the major functions, locations, and organizations — information contained in the remaining three columns of the Contextual layer.

The Conceptual layer translates the perceptual requirements into an enterprise solution model. This model is used to describe how the different aspects of the solution correspond to the requirements. The REM framework uses this layer to analyze the points of return corresponding to the range of factors in the scope represented in the earlier contextual layer. Business plan or objectives indicate why this particular solution is suitable for the problem. You can define and control the various points of return through the business plan — in other words, points of return can be associated with the business plan or objectives. The semantic model and schedule of the conceptual model mirror the points of return. Any new solution will entail new business processes, a new logistics network, and further interfaces with the workflow. These factors influence the range for the different points of return, and that's why they constitute the "elements" for this layer.

Logical Solution

You've covered the problems and modeled a solution. The next step is to design the solution in a logical outline by using the Logical layer to design the points of return for the REM framework.

Business rules in the motivation cell lay out the mechanisms by which the business plan will yield the returns; in that sense, the business rules act as the control point for the return design. The data model in the Data cell and the processing schedule or the system events described in the Time cell detail what shall be done (and when) as a part of the solution, so they reflect the design points of return. The opportunities and constraints of the application, distribution, and human architectures of the solution can manipulate the system design positively or adversely. The same manipulation levels can extend to the designing of elements of return.

The Structural design for any information systems solution will encompass detailed specifications on creating the technical solution. The technology model takes into account the models or layers discussed earlier and deciphers how the actual solution will be built.

At this stage of architecture design, the issue of spending raises its head. As the return has been defined and designed before this stage, with extent of return as a limitation, the expense to be incurred in creating the solution can be specified and limited. The different components of technology model can qualify the expense specifications. Business rule design and operating characteristics stipulated in the Motivation cell control the development and execution of the solution, and so you can use them to control the expense specifications. The data design (Data column) and job scheduling or program control structure (Time column) reflect the modus operandi of the solution and, thus, emulates the expense. System design, system architecture, and presentation architecture affect the structural design. You can exploit these elements to manipulate the specified expenses.

The Physical or Detailed Representations layer is where all design activities conclude, and physical build of the system solution is executed. Consequently, all the expenses involved with a solution are executed in the several sections of this layer. The business rule specification restrains the other sections of this layer and the overall build of the solution. As a result, planned expenses can be controlled through the elements contained in this cell. Features of the data definition from Data column and timing definition from the Time column reflect the constituents of expense. The physical system and, subsequently, the expenses can be plotted with the programs, operating network, and security and access architecture. These parts of the solution system are the tactical points of expense execution.

The final layer portrays the actual system. Functional architecture implements the solution for use to tackle the necessities encountered in the first layer. Therefore, this layer can record the actual expenses assimilated from upper layers for any audit requirements. For such expense recording, the columns in this layer will have a one-to-one correspondence with the column cells in the upper layers.

Warnings and Advice

To create such a return-expense model, it's extremely critical that you follow one simple rule: At each layer, granularity decomposition should strictly follow the granularity of the previous layer. While this decomposition occurs, bullets or items of a cell should have strict correspondence to the bullets or items of the same column cell in the previous layer. For example, a project goal could be "increased operational profitability in inventory management." The business plan to accomplish this goal could be to eliminate excess inventory and determine a more accurate cost of inventory. Thus, in the next layer when business rules are modeled, they should be done individually for identifying and purging excess inventory and assigning more accurate inventory turns.

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The REM framework provides the basis for logically approaching the issues regarding financial aspects of a project. The success of its usage lies in how simply it's applied, how strictly it's adhered to, and how much detail is captured at each stage. Each row and column of the framework is interrelated; this framework will work only if the iterative nature of the modeling process is preserved.

The REM framework proposed here has been primarily designed for large and complex BI projects. Nevertheless, you could customize it for very small and focused initiatives. Due to the generic nature of the framework, you can also apply it to any enterprise solution program.

Sudhi Sinha [sudhisinha@hotmail.com] is an enterprise systems consultant for Tata Consultancy Services (www.tcs.com). He specializes in implementing multitiered ERP and BI systems.