Why model anything?
There are many types of models with many types of usages, such as physical, scientific, mathematical, computer, concrete, communication, etc. The overall purpose is to define, support analysis and decisions, and to communicate or validate a system or perspective.
Models can also be used to help speed things up or slow things down if needed or enable integration and collaboration. Holistic data models are used to understand how systems influence each other. Models can help with realizing economic and operational benefits for an organization. These perspectives are sometimes separated.
Models have scope and detail. The scope defines one or different types of elements in the model. For example, a model can be created that only shows one type of a thing, such as a door, the scope of the model is doors, but if I add floors, windows, and other things related to a house, I have increased the scope of the model. Each item in the scope should be unique, required for the intent, manageable, and subject to change control. Model detail is data related to the individual scope of each item for clarity of the capability of the item.
Service models can be used to understand logically how a service is delivered and supported. These models usually consist of the service’s definition as it is delivered to an internal or external customer, sometimes called the business service. This may include services that are packaged together for delivery that cannot be separated by the customer for the purchase. For example, most people who have cable service in their households have to buy the basic service package and cannot pick only a few of the channels that are included in this package. Services can be sold individually if the company decides to do so, but in most cases, individual channels are considered as add on to the primary service or as an enhancing service or premium service.
The service model has underpinning relationships built based on how the service should be managed. The next level in a service model is the IT service/application that supports the higher-level business service delivered to the customer. After that, the levels may follow a typical cloud model detailing additional interconnected services or products, the infrastructures, and the platforms used for the service.
Service models can be created or viewed from the business service, IT service, or any perspective needed for the consumer of the model’s data to make a decision.
Financial models normally show a summary of a company’s expenses and earnings, but there are various types of financial models for gaining insight into the company’s finances from different perspectives for making specific decisions. Accounting, budgeting, and charging are key outcomes from some financial models.
One-way financial models are used is to understand the cost of service versus prices of service. Organizations want to make sure that they are not losing money on any service or product produced by the company. The return on investment (ROI) and the total cost of ownership (TCO) must be considered. Not understanding this can result in the company producing a product or service that has no economic value, which can ultimately lead to bankruptcy.
An important factor that is left out of many financial models is the service perspective. Within financial models, the data and insights from the service model are usually not apparent. Accounting for an IT service from end-to-end, understanding the cost and the price can be a challenge. Financial insight into business and IT services or products for decisions can be very challenging without understanding the service model.
Enterprise data models
Leveraging financial models holistically with service models can have a great benefit to the organization. Finance can understand better how to charge for services and products based on the total cost of ownership. Finance can simplify charging by focusing on one higher aspect of the service instead of all the components once they understand the cost deviations. For example, in a service such as onboarding a new employee, the employee receives the equipment, applications, etc., depending on their function in the organization. Finance can set one internal cost for onboarding, saving time, making them more effective, efficient, and economical overall for the organization.
Today with data everywhere, in the cloud, on-premises, on personal devices, connecting and leveraging data related to services and products becomes a daunting task without the proper enterprise technology solutions to help. Actian DataConnect makes it easy to connect operational data from any data source and transform it to facilitate effective data modeling and analysis.
Service data related to the service model then consumed by finance can provide intelligent insights into the real cost of delivering and supporting a service or product. Organizations can better understand which service or product delivers the highest return on investment (ROI), the real total cost of ownership, and insights into continuous improvement for value to the customer and the organization. Learn more about how DataConnect makes it easy for data-driven enterprises to design, deploy, and model data flows across on-premises, cloud, and hybrid environments.