Seeing the forest for the trees

An office within the Agriculture Department's Forest Service is trying to improve its ability to translate complex and sometimes conflicting regulatory dictates into cost- efficient systems and procedures by using a new technique called business modeling.

Officials at the Forest Service's Inventory and Monitoring Institute believe that business modeling can provide many government offices with savings in operational and computer costs that would far outweigh the cost to hire the consultant who teaches how to use the model.

In this case, for example, Forest Service officials realized they lacked the resources needed to meet the data collection requirements of a proposed regulation. In such a situation, the software helps an organization's staff identify problems so they can either change the requirement, if possible, as happened with the Forest Service, or at least figure out the nature of the problem.

"There are places in industry and other government agencies that found that 75 percent of the information they were collecting was unnecessary," said Thomas Hoekstra, director of the Inventory and Monitoring Institute, which provides technical assistance to agencies that manage the national forests. "You can imagine the costs associated with collecting, managing and storing this information. [Business modeling] winnows out all the unnecessary information. It makes the business activities far more efficient."

Last year, the institute hired a business-modeling consultant, BusinessGenetics in Denver, to help it extract and understand the requirements of a new planning rule that guides the Forest Service when carrying out the terms of the National Forest Management Act of 1976.

And last month, the institute signed a follow-on contract with Business.Genetics to take the technique one step further: using business modeling not only to interpret existing regulations, but also to help formulate new ones. "They are basically helping us construct new regulations by showing us all the ins and outs of the business process," Hoekstra said. "The new regulations are going to be much more efficient and effective."

So what is business modeling and how does it work? The first step is to assemble teams of people to build the models. The teams usually consist of consultants trained in the modeling methodology and people who work in the target organization and understand its processes — the so-called subject matter experts.

Typically, the teams use the methodology to create two kinds of models of an operation, both captured and illustrated in graphical representations. The "as is" model defines an operation or business process as it currently exists by answering several key questions (see box). This model can lead to a better understanding of the process and expose inefficiencies and other problems.

That knowledge can then be used to create a "to be" or "should be" model, which can describe an alternative — and ideally more efficient — approach to the process. Also, specific cost values for personnel, processes and information systems can be assigned to components of each model, providing a fairly accurate idea of the cost to get the job done.

In the case of BusinessGenetics, the teams build the models using the company's eXtended Business Modeling Language (xBML). More than just an analytical tool, the xBML-based models can serve as the basis for design specifications for computer programs and databases or as a comparison for the features of commercial off-the-shelf software packages in order to pick the most appropriate one.

Until recently, the biggest users of business-modeling techniques have been private-sector companies. In fact, when Hoekstra asked BusinessGenetics if its methodology could be used to translate government regulations into real-world procedures, the consulting firm's president, Cedric Tyler, wasn't sure it could. "I said I didn't know, but we'd give it a try," Tyler said.

As part of the modeling project, Forest Service employees and Business.Genetics consultants analyzed the regulations proposed in the new planning rule and separated the so-called noise words and soft language from discernible business activities and new legal obligations.

"As a result, they were able to identify that the resources at their disposal would not be adequate to fulfill the requirements called for by the new regulation," Tyler said. The rule was subsequently shelved, and a new one can be formulated, which is being done with the help of business modeling, Hoekstra said.

This kind of analytical exercise is expected to become more popular in the coming years, particularly in the private sector. William Rosser, a vice president and research director with Gartner Inc., wrote last year that "the use of business process modeling will surge during the next five years and create a round of economic-performance advances far beyond today's performance levels in productivity, speed and cost."

Of course, to some observers, business modeling sounds strikingly similar to business process re-engineering, a buzzword from the early 1990s that was rife with promise but never took off in practice. Tyler said that part of the problem with re-engineering was that it became synonymous with corporate downsizing. More importantly, however, business managers at the time "were urged to re-engineer, but they lacked the tools to actually do it effectively," he said.Dissecting an operation

BusinessGenetics' eXtended Business Modeling Language helps people understand their organization and its processes by dissecting the operation into separate dimensions. Once defined using xBML, these individual elements are reintegrated to create a representative model of the entire business.