Business Model
Put three business managers in a room and ask them the question “What is a business model?” and you will get at least four replies – none of which may be correct!
The usual picture that comes to the minds of business people, consultants and analysts when they hear the term “business model” will be:
- a “dot.com” model
- a “utilities” model
- an “air transport” model
What these models represent are Commercial Classes of business. They “model” the financial structures these classes of business ought to have. They define how a business in the class ought to be capitalised and structured from a financial point of view, its key financial performance indicators, its anticipated profit profiles, etc. Strictly, they should be referred to as “Commercial Business Models”.
Commercial business models are very important but they are only a small part of the overall picture. What they miss out is the ESSENCE of the business – what it is that the business does and the information needed to do it. Without knowing these things it is unlikely that any business can be made to perform in the manner that the commercial business models predict.
And yet it is amazing how many businesses try to operate without this ‘essence’ model!
If a business person has a factory he/she will have plans of this showing the overall shape, entrances, exits, services, machinery layout, etc. These plans are essential to successfully managing the factory. No business would think of being without them.
Yet the factory is only the place where the business is carried out. Far more important than the factory (and more complex) is the business itself and yet few businesses have a model of this – not outside the heads of managers! It is not surprising that most businesses fail to meet their full potential.
Business Systems Model
This model. which is ESSENTIAL to EVERY business, is called the BUSINESS SYSTEMS MODEL. This is a model that shows (as a minimum):
- what it is a business does (or ought to be doing)
- the structure of the information it needs to do it
Additionally the model can also show, when needed:
- the order in which activities need to be carried out.
- how information flows between these business activities.
- how data is changed from one state to another.
- how activities, data, departments, technology are related to each other.
- the manner in which functions are executed.
Integrated Modelling Method - IMM™
IMM™ was created by John Owens in order to provide business management and business analysts alike with a set of tools that would enable them to model the systems of a business of any size with ease and accuracy.
More importantly, the models built using IMM™ will bring REAL benefits to the business and its employees.
Business Modelling Tool Box
IMM™ can be thought of as a ‘modelling toolbox’ for use by business managers or business analysts. As with any toolbox, not all of the tools are used all of the time. The most suitable tool for the job is chosen and used with skill. Modelling is a craft and needs to be practiced. But knowing the right tool to use and the correct way of using it means that, with just a little practice, business managers and analysts can achieve high quality results.
Find out more about Business Systems Modelling
