Business Function Model

A Business Function Model (BFM) is a general description or category of operations performed routinely to carry out an organization's mission. They "provide a conceptual structure for the identification of general business functions". It can show the critical business processes in the context of the business area functions. The processes in the business function model must be consistent with the processes in the value chain models. Processes are a group of related business activities performed to produce an end product or to provide a service. Unlike business functions that are performed on a continual basis, processes are characterized by the fact that they have a specific beginning and an end point marked by the delivery of a desired output. The figure on the right depicts the relationship between the business processes, business functions, and the business area’s business reference model.[1]

Business Function Model
source: Infor

Stages in Business Function Modeling [2]

The stages in Business Function Modeling within IMM™ are:

  • Identify sources of Functions or collect information from which Functions can be identified.
  • Analyze all gathered information and sources and extract all “candidate” functions.
  • Convert “Candidate” Functions to true Functions.
  • Build the Function Catalogue.
  • Feed back what has been modelled to the business to ensure that it is correct.
  • Liaise with system developers to ensure that any systems built truly support the Function Catalogue.

The Function Catalogue is the single most powerful business model that there is because:

  • It allows all of a business to be to be seen – on one sheet of paper if necessary.
  • All decomposition can be done through it – painlessly.
  • It enables duplication of activity to be identified and removed.
  • All other models – including process models – are built from it.
  • It suggests good structures for the business.
  • It tells you what modules you need in any computer system.
  • It is a powerful aid for planning computer development projects

See Also

A Business Function Model (BFM) is a structured representation of the functions, activities, or processes that a business performs to achieve its objectives and deliver value to its customers. This model helps in organizing and categorizing business activities into logical groupings based on their purpose or role within the organization. The BFM is instrumental in understanding the operations of a business, identifying opportunities for improvement or innovation, and aligning IT systems and processes with business goals. By visualizing the relationships and dependencies among different business functions, stakeholders can make informed decisions about resource allocation, process optimization, and strategic planning.

  • Enterprise Architecture (EA): Discussing the practice of analyzing, designing, planning, and implementing enterprise analysis to successfully execute on business strategies, within which the BFM serves as a foundational component.
  • Business Process Modeling (BPM): Covering the activity of representing processes of an enterprise so that the current process may be analyzed and improved. BPM complements BFM by detailing the workflows within each business function.
  • Value Chain Analysis: Explaining the process of identifying and understanding the series of activities that create value for customers, closely related to identifying and organizing business functions in a BFM.
  • Strategic Planning: Discussing the organizational management activity used to set priorities, focus energy and resources, strengthen operations, and ensure employees and other stakeholders work toward common goals aligned with the business function model.
  • Business Analysis: Covering the practice of enabling change in an organizational context by defining needs and recommending solutions that deliver value to stakeholders, for which BFM is a crucial analytical tool.
  • Information Systems Planning: Explaining the process of identifying all information systems needs of an organization and producing a detailed plan and a high-level model of those systems, including how they interact with business functions.
  • Operational Efficiency: Discussing the capability of a business to deliver products or services to its customers in the most cost-effective manner without sacrificing quality, which can be optimized by analyzing and improving the business function model.
  • Change Management: Covering the methods and manners in which a company describes and implements change within both its internal and external processes, supported by insights derived from BFMs.
  • Customer Relationship Management (CRM): Discussing strategies and technologies companies use to manage their interactions with current and potential customers, which can be informed by a clear understanding of business functions related to customer service and support.
  • Supply Chain Management (SCM): Explaining the management of the flow of goods and services, including the movement and storage of raw materials, work-in-process inventory, and finished goods, which involves several business functions modeled in BFM.
  • Risk Management: Discussing the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact, informed by an understanding of the business functions and their potential vulnerabilities.
  • Data Governance: Covering the overall management of the availability, usability, integrity, and security of the data employed in an organization, including governance practices related to data generated and used by different business functions.