A Framework for Efficient Information Modeling - Guidelines for Retail ...

A Framework for Efficient Information Modeling Guidelines for Retail Enterprises1 Joerg Becker, Michael Rosemann, Thomas Rotthowe, Reinhard Schuette Department of Information Systems, University of Muenster, Germany

Abstract: Information modeling is done with respect to the development of information systems and to support the organizational design of an enterprise. In order to achieve these goals information models, since they can be very complex, have to be structured in a framework. Such a framework, as presented in this paper, has two facets: first, a domain specific structure that encompasses the business tasks that have to be fulfilled in a specific industry (e. g. industry, retail, banking), second, guidelines that guarantee the methodical quality of the information models. An example for a domain specific structure is presented with the Architecture for Retail Information Systems, the so-called “Handels-H-Model”1. The quality of modeling is supported by the “Guidelines of Modeling” (GoM), recommendations for an efficient, comprehensive, and correct design of information models. 1

The need for a sound structural framework

The service industry has not been covered as broadly by IS-researchers as the manufacturing industries, although the percentage of the service industry has continuously increased in comparison to the manufacturing industries over the last years (Peterson 1992). Therefore, ISmanagers inquire a structural framework in order to enhance the efficient use of information systems for the retail and wholesale business. In a more general way, without focusing on the retail sector, among others, Scheer (Scheer 1992) has provided an Architecture for Integrated Information Systems (ARIS) (on architectures see also (Ahuja 1988), (Zachman 1987)) which differentiates between levels (requirements definition, design specification, and implementation description) and views (organization, data, functions, and processes). ARIS has been

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Presented at INFORMS Conference on Information Systems and Technology, 28. April 1998 in Montreal, Canada.

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widely applied in business process reengineering projects. However, Scheer’s approach is only a methodological concept without relating to the contents of any specific industry. This paper sets out a structural framework (section 2), an Architecture for Retail Information Systems, within which the components of retail information systems and the main business processes of retail corporations can be positioned. This aggregated reference architecture is supplemented with a framework which consolidates recommendations for a higher quality in information modeling, which are grouped in six guidelines (section 3). Both frameworks are concepts to manage complexity within modeling projects. While the domainspecific Architecture for Retail Information Systems serves as an example to demonstrate the need for a high aggregated view on the business of an enterprise, the general Guidelines of Modeling emphasizes the necessity of modeling conventions. 2

The “Handels-H-Model” as a structural framework

The “Handels-H” puts the various facets of retail information systems into context and, therefore, serves as a basis for understanding the organizational structure and the information systems of the retail business. It presents a structure for information models (data, function, and processes) of the merchandise information system as well as the business administration systems and the executive information systems including controlling. Traditionally, the essential business process for retail businesses has been to bridge the spatial and temporal gap inherent in the warehousing process. The merchandise item (the product) is the determining business object in this process, which itself can be subdivided at the top of the hierarchy into the subprocesses of procurement, warehousing, and distribution. Within these subprocesses the determining objects can be identified as goods procured, goods warehoused, and goods distributed. For procurement (see left column of the “H” in fig. 1), the following processes can be distinguished: contracting, order management, goods receipt, invoice auditing, and accounts payable. The corresponding processes on the distribution side 2

(right column of the “H”) are marketing, selling, goods issue, billing, and accounts receivable. The two sides of the “H” are connected by the warehousing process.

Fig. 1: A Reference Architecture for Retail Information Systems: the “Handels-H-Model”.

The “foundation” of the “Handels-H” encompasses the business administrative tasks, the “roof” the management information system. With the “third dimension”, the functions, data, and processes, each information model can be clearly positioned within the “H”. Each respective object that determines one of the processes shown in the “H” is not a physical object (goods), but an information object. Contracting is determined by the outline agreement (contract and/or scheduling agreement), order management by orders, receipt of goods by the delivery note, invoice auditing by the invoice, and accounts receivable by the payment. The separation between the two columns of the "H" reflects the fact that procurement and distribution activities run independently from each other. Warehouse inventory control, in conjunction with prediction of future trends based on extrapolation, determines the course of procurement activities and the methods by which they are carried out. The distribution side of 3

the diagram (see fig. 1) is predominantly influenced by incoming orders (both wholesale and retail), or by check out of goods and the cashiering process. The two pillars of the "H" are parallel due to the fact that structurally analogous activities are depicted in both. For example, invoice auditing centers around the valuation of goods receipt, while its complement, billing centers around the valuation of goods issue. Thus, the same types of activities are applied to two different objects. The process orientation of the "H" framework is indicative of the fact that the more superior categories are necessary for the operation of the more subordinate ones. The implication of this for data modeling is that the entity type that is used, e.g., for purchasing processes, is less existence dependent than the objects that are utilized for accounts payable accounting. General accounting, cost accounting and human resource management forms the platform of the “H”. These functions are mostly domain-independent. Therefore they can be found within comparable frameworks for other industrial sectors. The information system depicted at the "roof" of the “H” expresses with meaningful representative figures the aggregate quantity and value related data on which strategic business decisions are based. In extensive modeling projects in retail companies we used the intuitively understandable Handels-H-Model for various purposes (e. g. determine the procedure model for the implementation of software modules) and realized a high acceptance for such a kind of model aggregation. Different retail companies declare that the Handels-H-Model represents their real world business. In the modeling tool we use, the Handels-H-Model serves as a transparent access to the various information models. 3

Intention and Design of the Guidelines of Modeling (GoM)

Although architectures like the Handels-H-Model support the acceptance of information models, they are of course not sufficient for high quality information models. Moreover, a 4

methodical framework is required which guarantees that the models fulfill certain quality criteria. Frameworks with a comparable intention were already presented, but they are either focussing only one kind of information models, in particular data models (like the approaches from BATINI

ET AL.

1992 or MOODY, SHANKS 1994), or they contain such high-level-

statements, that it is impossible to derive useful recommendations for modeling projects (LINDLAND et al. 1994). The Guidelines of Modeling, which are presented here, contain six principles to ameliorate the quality of information modeling. These are the principles of correctness, relevance, economic efficiency, clarity, comparability, and systematic design (fig. 2, see also MOODY, SHANKS 1994).

Correctness

Relevance

Economic Efficiency

Information Model Quality

Clarity

Comparability

Systematic Design

Fig 2: The six Guidelines of Modeling

The aim of the Guidelines of Modeling (GoM) is the development of specific design recommendations, whose application increases the quality of models beyond the fulfillment of syntactic rules [(Becker et al. 1995); (Becker et al. 1997)]. The term GoM has been chosen as an analogy to the Generally Accepted Accounting Principles (GAAP). On the one hand, the GoM result from the selection of the relevant aspects for information modeling from the GAAP. On the other hand, the GoM adapt elements of existing approaches for the evaluation of information models. While the observance of the principles of correctness, relevance and economic efficiency are a necessary precondition for the designers and users of models, the principles of clarity, comparability and systematic design have a mere additional character. The architecture of the GoM consists of three levels. Every general guideline (level 1) contains different recommendations for different modeling views (level 2, e.g. data models) 5

and for different modeling techniques (level 3, e.g. the ER-approach). This architecture ensures that the general demands (e.g. design a model which is syntactical correct) are put in concrete forms (e.g. the model has to be consistent with regard to the meta model of the ERapproach). The modeling conventions, which we are using within our modeling projects belong mostly to level 3 and consist among other things of preconditions for the layout of the model (guideline of clarity), for the naming of information objects (guideline of correctness) or for the objects which are necessary for the requirements of a certain purpose (guideline of relevance). While the “Handels-H-Model” supports the GoM by offering a transparent structure for the information models of a retail company (guideline of clarity), the high aggregated “Handels-H-Model” itself can not (and should not) be verified, whether it is conform to the GoM as the GoM are relevant for specific data and process models. 4

Conclusion

In this paper, requirements for efficient information modeling - in this case, carried out for the retail business - were presented. We are positive that both a structural framework for positioning the information models of the real world into an architecture, and a framework for recommendations, which increase the quality of information models, are basic prerequisites for enterprise modeling and relevant in theory as well in practice (Shanks, Darke 1997). At the moment, we are designing a structural framework for the facility management sector and put the GoM in concrete forms for different process modeling techniques (e.g. petri-nets, event-driven process chains). 5

References

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Becker, J.; Rosemann, M.; Schuette, R., "Business-to-Business-Process Integration: Functions and Methods", in R. Galliers et al. (Eds.), Proceedings of the 5th European Conference on Information Systems (ECIS´97), Cork, Ireland, 435-445. Becker, J.; Schuette, R., Retail Information Systems (in German), Verlag Moderne Industrie, Landsberg/Lech, 1996. Lindland, O. I.; Sindre, G.; Sølvberg, A., "Understanding Quality in Conceptual Modeling", IEEE Software, 11, 2 (1994), 42-49. Moody, D. L.; Shanks, S., "What Makes a Good Data Model? Evaluating the Quality of Entity Relationship Models", in P. Loucopoulos (Ed.), Proceedings of the 13th International Conference on the Entity-Relationship Approach - ER ´94, Springer Verlag, Berlin et al., 1994, 94-111. Peterson, R. A., The Future of U.S. Retailing, An Agenda for the 21st Century, Quorum Books, New York et al., 1992. Scheer, A.-W., Architecture of Integrated Information Systems, Springer Verlag, Berlin et al., 1992. Shanks, G.; Darke, P., "Quality in Conceptual Modelling: Linking Theory and Practice", Proceedings of the PACIS'97 3rd Pacific Asia Conference on Information Systems, Brisbane, Australia, 1997. Zachman, J.A., "A Framework for Information Systems Architecture", IBM Systems Journal, 26, 3 (1987), 276-292. 1

The German term “Handel” encompasses wholesale and retail.

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