What Are Business Models?
Simply put, a business model is an abstract representation of a business that provides a simplified look at various aspects of the business. A business isn't represented with just one type of “business model.” Different models will emphasize certain business characteristics or concepts while hiding other aspects at the same time. In this way, you can focus on certain relevant information about the part of the business that you want to address. For instance, we are all familiar with organization charts, which are models of a business's overall organizational and management reporting structure (see Figure 2-1).
There are business process models that show the flow of activities (typically within the business) that occur to perform a given business function (see Figure 2-2).
Figure 2-2. Business process model (non-UML) showing the flow of activities in the fast-food ordering process.
Then there are the “business models” you hear about on the financial news reports. These are “models” (typically non-visual, but they could be represented visually) that explain how a business expects to build its markets, generate revenue, and grow the business.
Each of these examples provides a different view of the business, similar to the construction example mentioned in Chapter 1, “Introduction to the UML.” So what views do we need in our context of eventually building an information technology (IT) system? (Remember, we are not modeling just to model.) We need models that will capture the structure and interactions between the following:
The business's organizations or departments.
Their stakeholders—customers, workers, business partners, etc.
The business functions that the business executes, whether for its customers or for internal purposes.
The business assets used to fulfill the business functions.
For geographically dispersed businesses, the locations where the previously listed elements of the business operate. (The fact that a business is distributed is often overlooked and can cause severe constraints and add unexpected complexity to the business and to the design and implementation of its systems. More on this when we discuss architecture in Chapter 4, “Architectural Modeling.”)
“All in all, a business model shows the company's function in the world, what it does, how and when. The model should emphasize the architecture, that is, the static structures in the company, besides explaining the various flows of events, that is, the dynamic behavior of the elements in the architecture.” [JACO1] These models need to show this information for the business as it exists today and as you want it to be tomorrow.
This sounds like quite an undertaking. To do everything in the prior two paragraphs would require a huge commitment of time and resources. This is why most companies do not attempt to develop a fully comprehensive model of their business. Business modeling is usually undertaken at a lesser scope within a division or sub-division or at a smaller, tactical level. In addition, it is almost always undertaken to achieve specific business goals or to eliminate noted weaknesses or acute problems. We will discuss this further in the upcoming section, “Should I Model My Entire Business?.”
In this chapter, we will examine the UML models that will enable us to see and understand all the previously mentioned interacting elements of the business.