CHAPTER TWO

MODELING FUNDAMENTALS

Dr. Rami Gharaibeh

CHAPTER TWO

Model Fundamentals

Every model we have ever created is wrong, as is

every model you will ever build.

Dr. Rami Gharaibeh

CHAPTER TWO

Model Fundamentals

Being wrong is part of the nature of a model. The world

that we model is much richer, much more complex,
and much stranger than the models that we build of it.

Dr. Rami Gharaibeh

CHAPTER TWO

Model Fundamentals
statistician George Box said it best:
All models are wrong. Some models are useful.

Sometimes people discuss whether a model is right or

wrong, but that discussion is pointless since all models
are wrong. Instead people should discuss whether the
model is useful.

Dr. Rami Gharaibeh

CHAPTER TWO

Model Fidelity
The fidelity of a model is a measure of how closely the
model approximates the real world.

Fidelity is an inverse measure of wrongness:

a high-fidelity model is less wrong than a low-fidelity
model.

Dr. Rami Gharaibeh

CHAPTER TWO

Model Fidelity
Fidelity is all about shades of gray.
A model can be a sort of accurate reflection of reality
(for its purpose), and another higher-fidelity model can
be more accurate.

Dr. Rami Gharaibeh

CHAPTER TWO

Model Validity
A model is valid if it meets all the constraints, and it is
invalid otherwise.

Validity is a property of the model itself. Does the

model meet the constraints? Then it is a valid model.
All models have these two qualities: validity and
fidelity.

Dr. Rami Gharaibeh

CHAPTER TWO

Classical business models

organizational chart

The org chart focuses on the employees and the

reporting relationships.

Dr. Rami Gharaibeh

CHAPTER TWO

Organizational chart

Dr. Rami Gharaibeh

CHAPTER TWO

Classical business models

Balance sheet
The financial statements focus on how much money
the restaurants are earning and what financial assets
and liabilities they have. The two business models
serve different purposes, and they are complementary.

Dr. Rami Gharaibeh

CHAPTER TWO

Balance sheet

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

Recently four newer business models have become

important, models that complement the classic models.
Instead the four new models focus on some different
parts of the complex reality of business.
These new models open up some new views of
business new views for new purposes.

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

The four new models are business motivation models,

business organization models, business process
models, and business rule models.
Each of these four kinds of models is a model
discipline.

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

A model discipline includes a set of constraints for

determining whether a model is valid. The constraints
are different from one model discipline to another.

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

Each model discipline has a different focus, different

questions that it can answer, and different analyses
that it supports.
When modeling a business, you usually build models
in several different model disciplines, to look at the
business from different angles.
Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

The four model disciplines also complement the

classic accounting and organizational disciplines.
If you wait long enough, everything important
eventually shows up in the accounting, but sometimes
not until it is too late to fix.

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

example
a restaurant can have good books this year but be
slow to seat and serve guests. This will lead to
customer dissatisfaction and lower demand.
Accounting will show this next year, as the revenues
decline.
A business process model of how people are seated
and served will illuminate the problem today.

Dr. Rami Gharaibeh

CHAPTER TWO

Four new model disciplines

example
a restaurant can have good books this year but be
slow to seat and serve guests. This will lead to
customer dissatisfaction and lower demand.
Accounting will show this next year, as the revenues
decline.
A business process model of how people are seated
and served will illuminate the problem today.
Feedbackward controlling vs. feedforward controlling
Dr. Rami Gharaibeh

CHAPTER TWO

model discipline maturity

Accounting is mature, with a long history and hundreds

of thousands of professional practitioners around the
world, accountants who focus their efforts on creating
and interpreting accounting models.

Dr. Rami Gharaibeh

CHAPTER TWO

model discipline maturity

Business process modeling is not mature enough yet.

Until then, we must content ourselves with degrees of
fidelity,
without any professional consensus about how much
fidelity is enough. Until consensus is achieved we must
rely on our own judgments.

Dr. Rami Gharaibeh

CHAPTER TWO

model usefullness

To be useful, a model must have enough fidelity for the

intended purpose.

But fidelity alone is not sufficient. Models are read and

interpreted by people, sometimes by the same people
who built the model, and usually by others as well.
An overly large model is not useful; it cannot be
comprehended, and so the purpose of the model will
not be achieved.
Dr. Rami Gharaibeh

CHAPTER TWO

model usefullness

The following diagram shows strategy alternatives for

Adelina restaurant and the consequences of the
different alternatives.
There are 14 model elements in and 18 associations
among these model elements. If a model is too big and
complex to be understood, it will be ignored.

Dr. Rami Gharaibeh

CHAPTER TWO

model usefullness

Dr. Rami Gharaibeh

CHAPTER TWO

model usefullness

Beginning modelers often build models that are too big

and
too complex; they often ignore the limits of human
comprehension.

Dr. Rami Gharaibeh

CHAPTER TWO

model usefullness

How big is too big?

A useful rule of thumb is that a model should have no
more than nine elements. Nine is about how many
things a typical person can keep in her head on a good
day. Beyond nine, people often get confused. And if
the model you built confuses the people who read it,
the fault is yours, not theirs. Your model is not easy to
understand.
Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

Attractive models are easier to understand and more

readily accepted than ugly models. Attractive models
are therefore more useful.

Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

The following example shows the activities performed

by a server, a bartender, and a cook in taking drink and
dinner
orders in a restaurant, preparing them, and serving
them.
This is a valid business process model, and it is simple
enough, but it is ugly.
Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

the following example shows the same business

process model after a makeover; it has the same
modeling elements
and flows, but they are arranged in a manner that is
visually appealing.

Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

The unconscious emotional response to an attractive

model has another effect: It makes the model more
persuasive. As described in Chapter 1, models are not
just used for communication. They are also used for
persuasion.

Dr. Rami Gharaibeh

CHAPTER TWO

Modeling tools

Some models use special-purpose modeling tools that

exist just for creating business models. Other modelers
use general-purpose diagram drawing tools (such as
Microsoft
Visio) that are used both for creating business
models and for many other diagramming uses.
Both provide functionality to make models attractive:
fonts, colors, and model element layout.
Dr. Rami Gharaibeh

CHAPTER TWO

Modeling tools

Visio offers no special support for recording the typical

duration of an activity or for noting the sub-process
behind
an activity. Visio understands the activity as a
rectangle in a drawing, not as an activity in a business
process.
The special-purpose modeling tools are better for
business modeling. These tools understand business
activities as activities, not as rectangles.
Dr. Rami Gharaibeh

CHAPTER TWO

Modeling tools

Special-purpose modeling tools also make it easier to

build valid models.
Many tools support business process simulation,
allowing you to experiment with prospective business
processes to see what happens. Some tools support
direct execution in a business process engine, allowing
you to turn your business process model into
executable workflow.

Dr. Rami Gharaibeh

CHAPTER TWO

Application interface and publication

Business modelers work with a modeling tool to create

models and analyze the models they create. But every
model built by a modeler will be consumed by others.
These consumers of business models do not have any
modeling tools loaded on their desktops.
To make models accessible to this wider audience,
many of the business modeling tools have publication
functionality.
A model can be published to a variety of accessible
formats: HTML, PDF, Microsoft Word

Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

Sometimes it is difficult to understand the implications

of a business model, particularly complex business
models and models that have many interacting
elements.
Simulation is a technique for running a model to get a
deeper understanding. Many business modeling tools
support simulation. A model that simulates is more
useful than one that does not.
Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

what is simulation, really?

First, simulations are based on models. Within SimCity
is a model of a city: houses, neighborhoods, roads, rail,
parks, and malls and the

Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

First, simulations are based on models. Within SimCity

is a model of a city: houses, neighborhoods, roads,
rail, parks, and malls and the interactions of people
who live in those houses, travel on those roads and
trains, play in those parks, and shop in those malls.

Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

Second, a simulation shows how a model behaves over

time. Things happen in SimCity over time: houses are
built, existing roads become congested, crimes are
committed, and neighborhoods improve or slide in
disrepute.
These changes are not scripted; the decline of a
neighborhood in SimCity is not preordained by the
application. Rather, things happen the way they do
because of the gradual interaction of all the elements of
Dr. Rami Gharaibeh
the city model over time.

CHAPTER TWO

Simulation

Some business simulations are also playable, like

SimCity.
But most business simulations are not playable. They
are simulated purely for understanding behavioral
results of a new process or strategic environment.
Simulation becomes another method of analysis.
Usually many different simulation runs will be made of a
non-playable simulation, to explore a space of
possibilities, and the results will be summarized in
graphs or statistics.
Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

For example, you might create a business process

model of how Portia customers experience the
restaurant. A customer arrives, perhaps waits for a
table, is seated, orders a meal, pays, and departs. Of
course, the customers quality of experience will be
affected by the food, but it will also be affected by
delays and customer service. Simulating the process
model will reveal where delays are present and allow us
to experiment with alternative techniquesmore
servers, fewer reservations, etc. to reduce those
delays.
Dr. Rami Gharaibeh

CHAPTER TWO

Simulation

No one is playing this Portia simulation.

Rather, this non-playable simulation allows us to better
analyze and understand the process.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
In examining a model, its always useful to ask about
the purpose of individual model elements. Why do we
enforce this rule? Why do we perform this business
process task?
The answers to the questions of purpose are usually
model elements in other models. We enforce this rule
because of a particular strategy we are working.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
Traceability is connecting model elements between
models, explaining a model element in one model by
referring to a model element in another.
Traceability answers why questionsquestions
about rationale, purpose, and intent. Some business
modeling tools support traceability.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
At fast-food restaurants, takeout restaurants,
and many other places, food and beverages
are ordered together.
Why do the servers at our restaurant work first
on the drinks and only then on the food?

Dr. Rami Gharaibeh

CHAPTER TWO

model attractiveness

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
One reason is that customers will drink more if
they are served drinks first, and drinks are
high-margin items for the restaurant.
Another reason is that at more sophisticated
restaurants, taking the drink order and dinner
order at the same time is considered to be
rushing the customer and is inconsistent with a
high-end image.
Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
the following figure shows part of the restaurants
motivation modelthe goals that the restaurant are
trying to achieve and how it is trying to achieve those
goals.
Asking for drink orders first is a tactic, a short-term
course of action that is meant to channel effort toward
objectives or goals.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
Of course, this is only a small example. A more
complete motivation model for our restaurant would
include many more tactics, objectives, and goals as
well as other motivation model elements such as
influencers and threats.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
The activities of a business process model are
connected to the tactics, objectives, and goals of a
business motivation model through tracelinks.

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability

Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
Note that tracelinks are not relationships between
whole models. We are not tracing the whole business
process model to the whole business motivation
model.
Rather, we are tracing two individual elements of the
business process model to a single element in the
motivation model. We are not answering broad
questions about the purpose of the business process
model. Instead we are answering narrow questions
about the purpose of serving drinks first.
Dr. Rami Gharaibeh

CHAPTER TWO

Traceability
Traceability is useful for understanding the impact of a
change. If we change this tactic, what activities must
be changed? By examining the tracelinks that point
from activities to the tactic, we can determine which
ones are affected. With the right tracelinks in place, we
can continue our traceability walk, looking at which
systems support the activities that are affected by the
changed tactic.

Dr. Rami Gharaibeh