Business modeling is one of the frequently cited words in the literature of management sciences. Generally speaking, business model refers to the entire supply chain of a business, which includes the various components comprising a business entity, the various functional departments in a business as well as the generation of revenues or expenses in a particular business entity (Gao, 2008). In fact, regardless of the size of a particular business, the organization is operating within a particular set of business model. In this article, the role of business modeling in the context of information systems development, integration and evolution will be discussed.
Researchers tend to have various definitions for the term of business model. Currently, many of the literature on the topic of business model focus on the discussion of business process modeling. This is not surprising as business process is a too important topic to be ignored, where the formulation, execution and derivation of the business process of any organization will ultimately affect the performance of that firm in the marketplace. In fact, to attain competitive advantages in the market place, it is crucial for any firm to formulate and operate according to an effective and efficient business process consistently (Samavi, Yu & Topaloglou, 2009).
Definition of business process. It is widely defined that the business process is the organization and structure of people, materials, energy, equipment and procedures into the work flows of a particular organization in order to achieve a specific results. Generally, the various business processes are being categorized into three groups, namely the value adding operational process, the management process as well as the supporting process (Gao, 2008).
Business modeling defined. Business modeling or more frequently referred to as business process modeling (BPM) is the activities of analyzing, representing, and outlining the various processes in a particular organization, so that the existing processes in the organization can further be analyzed and improved (Samavi, Yu & Topaloglou, 2009). Very often, business modeling is performed by management to improve the processes in an organization and to enhance the quality issues in the firm. Although the implementation of BPM may not involve the development or changes in the information systems in a particular organization, it is however often combined with information systems in an organization to yield better organization results ad performance (Zeng, Lei, Koyanagi, Ohsaki & Chang, 2007).
Information System is the integration of people, software, hardware, communication equipments, network and data management system that processes, manages, and interprets data and information for the attainment of certain objectives. Consistent with the rise of information technology as well as the emergence of knowledge economy around the world, coupled with the ever importance of internet to the business and economic landscape nowadays, information system is becoming more crucial for the success of any organizations competing in such a turbulent economic environment (Samavi, Yu & Topaloglou, 2009).
The Roles of Business Modeling in the Development, Integration, and Evolution of Information Systems
Complexity is a norm in the current market and economic environment, and very few individuals are able to understand the organizational business process in a firm. Often, management in an organization is also lacking of proper and comprehensive knowledge on the business processes available in the company. It is thus not surprising that many of the firms are unable to operate effectively and efficiently as the management who is supposedly to have knowledge on such areas are not able to perform up to expectation (Gao, 2008). Thus, business process modeling plays a crucial role in handling such an issue; so that the critical business processes in an organization can be modeled, analyzed and improved. Apart from that, implementation of information systems is one of the key agenda for corporations in competitive business environment nowadays (Zeng, Lei, Koyanagi, Ohsaki & Chang, 2007). However, information system is a broad subject, and effective implementation of information system is not possible without in-depth and accurate business process modeling. In the following sections, the various roles of business modeling in the context of information system will be articulated.
Business modeling enables an abstract representation of the business process, structure and system for a particular organization (Ball, Albores & MacBryde. 2004). As argued above, due to the complexities of people, markets, and the business environment in which a particular company operates, many of the people working in a firm are unable to fully comprehend the various processes flows in the organization. For example, it is normal for the technical experts to only understand their areas and the business experts know theirs. As such, business modeling can be important as it plays a critical role to connect these two domains into a big picture. In the context of information system, this is crucial as a proper and accurate business model will enhance the organization’s ability in collecting, interpreting, analyzing, distributing and using the information gathered from the external environment (Ball, Albores & MacBryde. 2004).
Business modeling enable quantitative analysis of the information system and other critical organization processes in the organization (Ball, Albores & MacBryde. 2004). Only when the business process and the information system in a firm can be properly and accurately modeled, quantitative analysis on these processes and systems in the organization can be performed. This is important because in the context of management sciences, it is critical for management to able to measure many of the key performance indicators in the firm. Without the ability to measure a certain area or system, it is hard for management to ferret out the areas for further improvement, or simply to comprehend the key issues or challenges creating bottleneck for a particular business (Samavi, Yu & Topaloglou, 2009).
Business modeling facilitates and assists in the creation, storage and application of knowledge in a particular organization. Under the management of information systems for a particular firm, knowledge management is a crucial element not to be ignored. It simply cannot be denied that in the new knowledge economy, the management of knowledge in any organization is critical for attainment of competitive advantage in the market place. Business modeling plays a crucial role in such context, whereby it explicitly enables the representation, analysis, and management of the knowledge learned and assimilated in a particular enterprise. By incorporating the knowledge learning, acquisition and utilization processes in the business model, a powerful and effective information system can be formulated. Such a business model will provide a basic framework for the organization to learn and adapt fast to the every changing external environment (Koubarakis & Plexousakis, 2002).
Business model articulate the value proposition to the market place for an organization and how such value proposition is incorporated into the information system of that firm. It is arguably that any business process begins with defining a value proposition to be delivered to the end users. The formulation of a business model to outline the value delivering process as well as to include the value proposition of a business is often required before the organization can streamline its value chain (Zeng, Lei, Koyanagi, Ohsaki & Chang, 2007). Specifically, the business model is useful in specifying the market segment that the value offered by the firm will be delivered; and to identify the relevant resources that is required in the value delivering process. In such a scenario, the business process model will define the value chain relevant to a particular organization and such a framework will be utilized in the information systems for a particular firm (Samavi, Yu & Topaloglou, 2009).
Business model is useful in describing the position of a firm within the value network linking suppliers and customers; and helpful in identification of probable complementors and competitors in the value network. It is the role of business modeling to identify and explicitly illustrates the complex value network in a particular organization (Sara & Saven, 2004). The linkages between various departments, functional areas, and people will be modeled comprehensively under a well-designed business model. This is important as the various network or linkages in the business model is to be utilized and incorporated into the design of an effective information system. Only by identifying the linkages and flow of information in a particular organization, the design of an information system can become highly effective and comprehensive. Without a proper understanding on the basic business model or framework, the advantages can be offered by an information system cannot be optimally extracted (Gao, 2008).
Business model is crucial to formulate the game plan to attain superior financial performance as well as competitive advantage in the marketplace; which is one of the key objectives of a practical and successful information system. It is management imperative to utilize and design the information system in a firm to achieve competitive advantage in the challenging business environment (Zeng, Lei, Koyanagi, Ohsaki & Chang, 2007). In fact, it is all too common for management to capitalize on the advantages offered by an effective information system to form competitive strategy for a particular business. Business model plays such a role, whereby an accurate business model contributes in providing a practical and useful framework for the reference of information system management. The design of information system will be based on the key areas modeled by the business model; and by ensuring both the information system and business model defined are internally consistent and mutually supportive, the benefited offered by the information management systems can be maximized (Samavi, Yu & Topaloglou, 2009).
In short, a business process is the combination of activities within an organization, and the respective business model will explicitly define the network, linkages, structure and system for the particular business process (Sara & Saven, 2004). It is evidenced that business modeling is useful in enhancing the comprehensive understanding of an organization and the respective business processes pertain to that organization. Only by having a proper, accurate and comprehensive business model, the various dimensions or elements in an organization can be analyzed, investigated, managed, and improved (Samavi, Yu & Topaloglou, 2009). In fact, as we have deliberately argued in the paragraphs above, an accurate and comprehensive business model is critical for the successful implementation of an information system. In fact, it can be safely concluded that the business modeling process will enable the information system to focus on the interaction, linkages and information flows in various people in a corporation (i.e., particularly a complex organization). The success or effectiveness of any information system design will strongly based on the accuracy and the degree of parsimonious in a particular business model. Business model simply has too many important roles in the development, integration and evolution of information systems in any firm (Barjis, 2008). Particularly in the context of information system development and integration, the business model will serve as the basic guiding framework and foundation of the implementation of a successful information system.
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