In this KnowledgeKnugget™ you will learn what a business data model is and why you need one. Missing or incorrect Informational Requirements is one of the major causes of IT project failure. This KK will show you why Information Modeling is becoming one of the most important skills for today’s business analyst.

Analyzing Business Data Using Business Data Models

Business data is any information that an organization needs to operate. Every business process within an organization consumes data and creates new data. For instance, the process “Sell Product” consumes inventory data (you have fewer items in stock) and adds financial data (you have more money in your register). Data modeling identifies essential base data and defines the context within which your organization uses and maintains the data independent of your Information Technology (IT) architecture. Base data is any data that comes from the environment, meaning it cannot be calculated or otherwise derived. Its corollary is derivable data. For example, your birth date is base data whereas your age is derivable; all the computer needs is a date of birth and today’s date to calculate your age.

Missing or Redundant Data is a Major Contributor to IT Project Budget Overruns

Missing base data is one of the most costly errors you can make on IT projects. It is relatively easy to add derivable data if the necessary base data is available. It is also relatively simple to add a missing process if the base data that the process needs is available. Adding base data always impacts a minimum of two separate processes, the process capturing it and the process or processes that consume it. Redundant base data – identical base data stored in different locations – is nearly as bad. If you have customer addresses stored in two separate locations, keeping both version current requires extensive discipline or finely tuned automated programs. What happens if they get out of sync? Which version of the address is then correct? Finding data errors late in the project is a major contributor to IT project budget overruns and cancelled IT projects.

A business data model:

• creates a picture of the base data that your business needs
• helps you identify missing and redundant base data
• establishes a baseline for communication across functional boundaries within your organization
• provides a basis for defining business rules
• makes it cheaper, easier, and faster to upgrade your IT solutions

When Should You Model Business Data?

You should create a model of your business data independent of any IT projects. This business data model is one of the simplest steps to avoiding missing and redundant data before your project starts. At the latest, create the model before you make any information technology decisions. It is important to recognize that this model does not depict databases or files, but logical, business data entities, which are things someone needs to know something about to do their job. By definition, a data entity is something for which you need to track base data over some time span (hours, days, months, years, etc.).

What Does the Business Data Model Do for You?

To make this clearer, I am going to use a very simple example.

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