Key BDL Propositions

These propositions (‘rules’) – based on irrefutable facts, rock-solid logic and just good old common sense – form the ‘grammar’ of the Business Description Language. BDL ‘vocabulary’ is formed by BDL components covered in the next section of this book.

BDL is based on the following 18 key propositions (‘maxims’):

1. Every business entity (or any organization, for that matter) is essentially a system (network) of objects – external (suppliers, clients, partners, etc.) and internal (employees, assets, documents, etc.)
   
   
2. Business processes represent a special category of corporate objects and are described using slightly different methodology and tools (e.g., visual diagrams) as the other objects; therefore, in the following rules the term ‘object’ will include both corporate objects proper and corporate processes
   
   
3. Corporate objects can be divided into two categories – simple (employee, client, product, etc.) and composite (those that include other objects) – business units, regional branches, computer networks, etc. Composite objects that include objects of the same category are called portfolios (e.g brands portfolio, products portfolio, etc.)
   
   
4. Every corporate object must have one and only one object manager assigned to this object and solely responsible for maximizing its performance
   
   
5. Every corporate object has the right to exist in your business system only if it – one way or the other – generates financial value for the stakeholders of your company; in addition, it is supposed to also generate functional and emotional value for its stakeholders
   
   
6. This ‘one way or another’ must be described in a mandatory object IRACORACI statement which must describe in sufficient detail how the object in question Increases Revenues or allows to Avoid Costs, Optimize Risks or Avoid Capital Increase (which determine financial value in the DCF formula)
   
   
7. The IRACORACI statement must be accompanied by the FEV statement which must describe in sufficient detail how the object in question generates functional and emotional value for its stakeholders
   
   
8. Performance, financial and aggregate value of a business system are defined by (1) performance of each corporate object and (b) a ‘quality-of-match’ (synergy) between corporate objects (both inside and outside of object portfolios)
   
   
9. Performance of every corporate object and the synergy between objects are measured by a system of object-related key performance indicators (KPI); these performance and synergy are maximized when the values of KPI are optimized
   
10. There are two complementary ways (meaning that you must do both) to analyze object performance: (1) using KPI values and object KPI Scorecard (KPIS) to analyze historic and current object-related KPI values – benchmark, planned and actual; and (2) using object-related questions from CBAQ (CBA Questionnaire) listed on object-related Aggregate Performance Scorecard (APS)
    
    
11. Analysis of historic and current KPI values (mostly the relationship between planned and actual values) determine the performance score (PS) for each object-related KPI
    
    
12. Weighted (by KPI importance) average of KPI performance scores yield Aggregate Performance Index (KPI) or API_KPI measured on a scale of 0 to 10 (or 0% to 100%)
    
    
13. Answers to object-related CBA Questions Aggregate Performance Index (CBAQ) or API_CBAQ measured on a scale of 0 to 10 (or 0% to 100%)
    
    
14. Simple average of API_KPI and API_CBAQ produces the value for object-related API
    
15. API for a composite object (e.g. a business unit) or a portfolio of objects (e.g. products portfolio) is calculated as weighted (by object performance) average of objects ‘contained’ in the composite object (or portfolio)
       
16. API for your business system is calculated as weighted (by object performance) average of simple objects, composite objects and object portfolios in your company
    
    
17. Answers to CBA questions and KPI values determine the ‘ACRC’ – Analysis of aggregate performance of the object in question (including synergy with other objects); Conclusions derived from this analysis; and Recommendations to maximize the performance of this object supported by the necessary Comments and all relevant corporate documents
    
    
18. ACRC determine financial and operational plans for object performance maximization (transition from ‘AS IS‘ to ‘TO BE’) supported by the business plan for this transition and all relevant corporate documents