The 21st Century Business Tools


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published February 2, 2005

Unless you take the time to fix your slice, no matter how much you practice your handicap will never improve. Similarly today’s axiom “Fire, Ready, Aim” is indicative of the business world’s obsession for action. We term this the Nike psyche – “Just does it”!

This incessant call for results is strongly driven by wall streets sometimes whimsical demands but is also a manifestation of our “can do” culture, which has historically yielded great returns. However, as a famous pop bard said “the times they are a changing” and as we hurtle into the 21 century, it is time to reconsider how we plan and operate business.

21st Century (21C) commerce will be very different to the past. The major characteristics will be:

  • Hyper-competition
  • Massive complexity
  • Huge geographic (global) footprints
  • Multinationalism
  • New and very different markets
  • Radically different sales channels
  • Next generation workforce

Welcome to tomorrow!

So the central challenge is; how do we grapple with and understand an ever increasingly complex business environment?

We need an easy to understand snapshot of business operations, in order to conceptualize what is being done, where problems lurk, and how to capitalize on opportunities. Sounds simple enough, but in the past doing this was nigh on impossible. Why?

Over the last several decades the business community accumulated a hodgepodge of business depiction methods. Initially, text was the predominant way of defining business processes. Text as a definitional approach is fundamentally flawed. The process was lengthy, informal, ambiguous, could not adequately represent complexity, frequently reflected the author’s bias on the subject, and was very difficult to use.

A step-up were Rummler-Braiche swim lanes using some drawing tool like Visio. While an improved approach that graphically depicted processes, this method was more art than science, proved to be very time consuming, difficult to use and resulted in level mixing (i.e.: high level business activities were mixed up with detailed tasks). This approach not only lacks any formal rule basis but completely misses key elements of the business and further attempts to “dumb down” complexity.

Figure 1 : Swimlane Example

Let’s face it – 20th century ‘tools’ were okay for 20th century business. But just like automobiles transformed transportation at the beginning in the 1900’s, so too xBML (the eXtended Business Modeling Language) is going to transform business today. How?\

A New Way to Plan, Describe and Improve Business

Firstly we need to come to the realization that today’s approaches to describing business are nothing short of “junk science”, lacking rigor, not rule based, at best only two dimensional, and provide little or no opportunity for reuse. Perhaps one of the reasons for the industries over simplification of business depiction methods is indeed the Hammer and Champy, definition of a business process; “A collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.”

We, at BusinessGenetics, have challenged this definition. We have redefined the very foundation of a business. Firstly, we believe we need to go beyond simple processes and move to an era of multi-dimensional business definition, to ensure we have a complete picture of the business. We refer to this as a “Business Model” rather than a “process” and have defined a Business Model as a “Repeatable, rule based, business facing, multidimensional synoptic representation of a business (domain) that can be leveraged across the enterprise to support quantifiable business improvement.” – Tyler & Baker 2003. This is clearly a quantum leap over prior definitions.

Further, our 21C business definition/depiction “tools” must:
produce a graphical depiction of the business

  • be able to reproduce similar results regardless of the author (repeatable result)
  • be based on “rules”
  • be usable with all business audiences, but sophisticated enough to represent
  • complex business processes
  • reduce or eliminate level mixing
  • be complete, i.e.: it must reflect all five business dimensions – what, who, where, when and which
  • enable relentless reuse throughout the organization
  • clearly identify and enable return on investment, and
  • be able to consolidate all business dimensions into one simple picture

We call this innovative approach xBML – eXtended Business Modeling Language.

Figure 2 : BusinessGenetics xBML Framework

Document Co-Formulation (DCF)

Another extremely frustrating element in today’s way of defining business processes is simply this – it takes too long! Clearly a breakthrough was needed in this area as well.

The solution proved to be simple.

Since xBML is rule based, it is possible to take all forms of business knowledge, albeit in the form of Word documents, PowerPoint slides, Excel spreadsheets etc., and coformulate this into the five business dimensions, before even placing one foot in the client’s doorway.

This approach has proven to greatly accelerate the business gathering process by orders of magnitude. Why?

Because it is always faster and much easier for a subject matter expert to review what they do with strawman business models in front of them versus the expectation to recall all that they know of a specific business domain starting from scratch!

Got the Models, So What?

Creating xBML models is not an end to itself, but only the beginning. There are many ways in which one could leverage these current ‘pictures’ of the business. For example:

  • Business improvement initiatives
  • Technology enablement
  • Regulatory compliance etc.

Business Improvement – Having a snapshot of the way business operations are currently performed can significantly aid business improvement initiatives, for example, Six Sigma, Lean, or BPR. BusinessGenetics have further developed various analytical tools that enable cycle time reduction, cause and effect diagramming, activity based costing etc.

Technology Enablement – Having completely and accurately modeled business operations, it is now possible to consistently, automatically and formally generate business requirements for IT that can be used to perform COTS (commercial off the shelf) software selections or custom development. The generation of business requirements for IT development purposes is now as simple as pushing a button in the xBML tool as well as providing seamless connectivity to XML and UML.

Regulatory Compliance – With efforts such as Sarbanes-Oxley underway, it is now possible to define such regulatory requirements, and then produce graphical business maps of where business is not in compliance.

Yes welcome to the new way of defining business operations – one that not only affords a CXO the opportunity to aim before firing, but to also identify the most suitable target.

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.