Chapter 2
Accountants as
Business Analysts
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Learning Objectives
1. Describe the roles of the accounting/finance function in business and why
those roles require knowledge of technology and business processes
2. Understand the importance of business process documentation
3. Recognize the value of business models
4. Articulate the characteristics of activity models
5. Understand and apply the building blocks for BPMN (activity) diagrams
6. Use pools and lanes to identify process participants
7. Apply message flows to show interactions between pools
8. Understand and apply flow object types
9. Recognize and model repeating activities
10. Understand and apply data objects and stores to model data created, updated,
transferred and deleted in a process
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2-2
LO# 1
Changing Roles of Accountants in Business
• In the past accountants focused on
– Stewardship and reporting functions
– Preparing financial reports
– Auditing
• Now accountants also take active role in
– Helping enterprises optimize processes
– Achieving competitive advantage
– Maximizing shareholder value
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2-3
LO# 1
Changing Roles of Accountants in Business
• Rapid changes in technology increase availability of data
– Business intelligence systems
– ERP systems
• Information produced by systems must support the information
requirements of the enterprise’s decision makers
• Accountants involved in supporting evidence-based decision
making
– Strategic planning
– Process improvement
– Compliance management
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2-4
LO# 1
Roles of Accountants in Business
Stewardship and Reporting
Accounting/Finance Operations
Business Management Support
Regulatory compliance
Finance and accounting processes
Management information
Tax returns
Financial close
Planning budgeting and forecasting
Stakeholder assurance
Financial reporting and analysis
Performance measurement
Investor relations
Providing management information
Performance management
Raising capital and loans
People management
Risk management – from strategic to
operational including fraud risk
Board reports
Using IT to make finance and
accounting processes more efficient
and effective
Investment appraisal
Statutory reporting
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Cost management
Supply chain management
2-5
LO# 1
Changing Roles of Accountants in Business
• To prepare for their changing roles accountants must:
– Understand the business and how it collects summarizes and
communicates business information
– Understand how the business delivers value to its customers
– Understand the risks that the business faces and the internal controls
in place to mitigate those risks
– Understand how accounting information systems collect summarize
and report business process information
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2-6
LO# 2
Definitions
• Business Process: a defined sequence of business activities that
use resources to transform specific inputs into specific outputs to
achieve a business goal.
• Business Analysis: the process of defining business process
requirements and evaluating potential improvements.
• Business Model: a simple abstract representation of one or more
business processes.
• Documentation: explains how business processes and business
systems work; a tool for information transmission and
communication
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2-7
LO# 2
Importance of Business Process Documentation
• Documentation includes:
– Business process models
– Business rules
– User manuals training manuals
– Product specifications
– Software manuals
– Schedules
– Organization charts
– Strategic plans
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2-8
LO# 2
Importance of Business Process Documentation
• Sarbanes-Oxley Act of 2002
– Made documentation essential for businesses
– Requires managers to assess and attest to the business’s internal
control structure and procedures
– Requires external auditors to audit management’s assessment of the
effectiveness of internal controls and express an opinion on the
company’s internal control over financial reporting
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2-9
LO# 2
Importance of Business Process Documentation
• Documentation supports the following:
– Employee training
– Internal and external audit requirements
– Accountability
– Standardized communication within the enterprise
– Standardized communication between the enterprise and its
customers, suppliers, and other stakeholders
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2-10
LO# 2
Importance of Business Process Documentation
• Facilitates process improvement
– Effectiveness – are the outputs obtained as expected?
– Efficiency – can outputs be produced with fewer inputs?
– Internal control – are controls working?
– Compliance – does the process comply with constantly changing
local, state, federal, and international laws and regulations
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2-11
LO# 3
Value of Business Models
• How many words would it take to
provide the same information as
this map of San Diego?
• Similarly, business processes and
systems can also be difficult to
describe concisely using words
alone.
• Business models – like this map allow us to depict the important
features of business processes and
systems clearly and concisely.
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12
LO# 3
Value of Business Models
• Organizational changes, including mergers, acquisitions, outsourcing, offshoring,
product innovation, and continuous process improvement, and other business
transformations are common.
• Change, however, can be expensive and risky. Careful planning is necessary to
implement change in a way that minimizes those costs and risks.
• Business models create value by providing communication, training, analysis and
persuasion tools.
–
–
–
–
–
–
Presenting information more concisely and clearly than a written description
Managing complexity by incorporating only the essential elements
Eliciting requirements when used to interview involved parties
Reconciling viewpoints by providing an integrated view
Simulating potential changes
Specifying requirements for the actual business process
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2-13
LO# 3
Types of Business Models
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2-14
LO# 4
Activity Models
• Used to analyze business processes and design changes since
well before 1920
• Describe the sequence of workflow in a business process
• Represent the sequential flow and control logic of a set of
related activities
• Tools for planning, documenting, discussing, and implementing
systems
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2-15
LO# 4
Activity Models
• Variety of activity models – changing as technology changes
– Flowcharts
– Data flow diagrams
– Business process maps
– IDEF0 functional models
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2-16
LO# 4
Activity Models - Must be Able to Describe
1.
2.
3.
4.
5.
Events that start, change, or stop flow in the process
Activities and tasks within the process
The sequence of flow between tasks
Decision points that affect the flow
Division of activity depending on organizational roles
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2-17
LO# 5
BPMN for Activity Diagrams
• BPMN stands for business process modeling notation
• The Object Management Group maintains the BPMN
specification
• First specification issued in 2004 widely adopted
• Specifically designed for process modeling
• Designed to be understood by business people
• Software available to support modeling and subsequent
process simulation
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2-18
LO# 5
“Good” BPMN Models
• They are correct; they do not violate BPMN standards.
• They are clear; they describe the logic of the business process.
• They are complete; they show all the important elements of
the process.
• They are consistent; the process logic should always result in a
similar model.
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19
LO# 5
BPMN Basic Building Blocks - Events
• Events include start, intermediate, and end events.
Intermediate events affect the flow of a process, but do not
start or end the process.
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2-20
LO# 5
BPMN Building Blocks - Activities
• Activities represent specific steps in the business process. Basic
activities are modeled as rounded rectangles
• Each activity is described with a short verb phrase
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2-21
LO# 5
BPMN Building Blocks – Sequence Flows
• Represented by arrows to indicate the progression of activity
within the process
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2-22
LO# 5
BPMN Building Blocks – Gateways
• Show process branching and merging as the result of decisions
• Usually gateways appear as pairs on the diagram. The first
gateway shows the branching and the second gateway shows
merging of the process branches.
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2-23
LO# 5
BPMN Example
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2-24
LO# 5
BPMN Pools and Swimlanes
• Identify participants in a business process
• Pools identify organizations
• Lanes identify departments or individuals within the
organizations
• Tasks/activities are assigned to one participant to show
responsibility
• Each pool must include one start and at least one end
• The sequence flow must not break between the start and end
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2-25
LO# 5
BPMN Pools and Swimlanes - Example
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2-26
LO# 5
BPMN Pools and Message Flows
• Exchanges between two participants (pools) in the same
process are represented as message flows
• Message flows are shown as dashed lines with an arrow on the
destination end and a small circle on the source end
• Message flow content should be described with text
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27
LO# 5
BPMN Pools and Message Flows - Example
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2-28
LO# 6, 7
BPMN Pools and Message Flows - Example
Usually, modelers are not very interested in activities in the external pool. Yet, we remain concerned about the
message flows between the pools. So, we can make the patient’s pool opaque, hiding the activities, but still
showing the message flows. Note that the message flows now attach to the edge of the patient pool.
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29
LO# 8
The Token Concept
• A start event generates a token.
• That theoretical token must be able to flow through the
process – along every potential path - until it reaches an end
event.
• Tokens only travel along sequence flows and pass through
process flow objects.
• Tokens do not traverse message flows.
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30
LO# 8
Flow Object Types
• Flow objects include events, activities, and gateways.
• Sequence flows only connect to flow objects.
• Each flow object can be further characterized by type by
adding a type icon to the specific flow object symbol.
• For example, a “timer” event would show the event with a
clock face icon inside, and a “message” event would show the
event with an envelope icon inside.
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31
LO# 8
Gateway Types
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32
LO# 8
Exclusive Gateway
The Trip Involves Air Travel or Car Travel but not Both
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33
LO# 8
Inclusive Gateway
The Trip may involve either Air Travel, Car Travel, or Both
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34
Parallel Gateway
The Trip involves Air Travel, Car Travel, and Hotel Stays
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35
LO# 8
Event Types
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36
LO# 8
Message Events Example
The process starts with a start message events that receives (catches) the “Request” message from the
external participant. The process proceeds to the “Evaluate Request” task, and then the intermediate
message event sends (throws) the “Evaluation” message flow to the external participant. The process flow
continues to the next intermediate message event where it waits (the token stops) until the external
participant responds with the “Confirm” message flow. When the event catches the message, the
sequence flow continues to the “Do Something” task and then the process ends. The end message event
throws a message to the external participant that the process is done.
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37
LO# 8
Timer and Boundary Events
The start timer begins the process two weeks before the birthday to be celebrated. The “Plan Party” task
has an intermediate error event attached to its boundary (a boundary event). Specifically, this is an example
of an interrupting boundary event that affects process flow when an error occurs in the Plan Party task. If an
error occurs, then the process flows to the “Cancel Party” task and then ends. However, if the Plan Party
task completes successfully, the process flows to the intermediate timer event and then waits two weeks
(the token waits to proceed). After two weeks, the process continues to the “Hold Party” task and then
ends.
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38
LO# 9
Subprocesses and Repeating Activities
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39
LO# 10
Data Objects, Data Stores, and Associations
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40
LO# 10
Data Objects Example
The process starts and the actor buys concert tickets. The
tickets data object is created. Time passes until the date of the
concert and then the actor attends the concert where the
tickets data object is used.
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41
LO# 5
BPMN Modeling – Best Practices
•
•
•
•
Focus on one business process at a time.
Clearly identify the events that start and end the process.
Include essential elements, but avoid distracting detail.
Think about a token flowing from the start event through the
process to the end event; the flow of the token should be clear for
all paths through the process.
• Label activities clearly with a verb and an object, e.g., pay invoice.
• Model iteratively, getting feedback to improve accuracy and clarity.
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2-42
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