"Ontologically-Driven Standards Development for Business Process Systems Bill McCarthy, Michigan State University An accounting systems teacher An IT practitioner.

"Ontologically-Driven Standards Development for Business Process Systems“Bill McCarthy, Michigan State University

• An accounting systems teacher

• An IT practitioner and standards wonk

• An accounting scholar ??

• An enterprise ontologist and computer scientist??

• An accounting practitioner ??

1

Warning Label

– The version of accounting you are about to hear is not the “received view”

– The REA (resource-event-agent) accounting model is based on modeling of the economic primitives of a business process (exchange or conversion)

– The ALOE (assets = liabilities + owners equity) accounting model is based on accounting reporting structures (double entry)

2

The REA ontology – Theory & Standards Use• ontology = categories of interest in a domain and the

relationships among them• REA is a business enterprise (economic & accounting)

ontology with:– Exchanges (in green)– Policies (in yellow)– Plans (in purple)

• REA is both a positive (descriptive) and normative (prescriptive) accounting theory

• For interoperability, REA is used:– in ISO Open-edi (ISO 15944-4) – UN/CEFACT – as specialization module for the UMM

• For enterprise system, see Workday model• Standards use follows academic work of Geerts and

McCarthy• Interoperability use needs to move up the Obrst scale,

but frame-based semantics enable collaboration state machine

3

M2 Level -- Elementary REA model

Economic Event

Economic Agent

stockflow

duality

Economic Resource

participation

4

Cookie-Monster (the customer) and Elmo (the entrepreneur) meet in the (real or virtual) marketplace, thus setting the

stage for an Economic Exchange

5

Cookie-Monster (the customer) and Elmo (the entrepreneur) engage in a

SHIPMENT (transfer of Cookie Inventory)

6

Initiating

Terminating

Economic Resource

provide

receive

stock-flow

Economic Event

Economic Agent

Economic Agent

Economic Agent

Economic Agent

Economic Resource

duality

Economic Event

stock-flowprovide

receive

M1 Level -- Elementary REA model for exchange process 7

Cookie-Monster (the customer) and Elmo (the entrepreneur) engage in

a PAYMENT (transfer of Cash)

8

Initiating

Terminating

Economic Resource

provide

receive

stock-flow

Economic Event

Economic Agent

Economic Agent

Economic Agent

Economic Agent

Economic Resource

duality

Economic Event

stock-flowprovide

receive

M1 Level -- Elementary REA model for exchange process 9

Product#

Description

Price

QOH

P-1 Chocolate Chip

1.05 200

P-2 Chocolate .95 205

P-3 Peanut Butter

1.00 97

P-4 Pecan 1.10 257

Invoice#

Payment Timestam

p

Amount Applied

I-1 2JUL0830 14.75

I-2 3JUL0800 2.00

I-2 5JUL0800 18.00

I-3 8JUL1145 9.90

I-4 8JUL1145 9.20

C-999E-12363JUL9.90I-3

C-999E-12375JUL9.20I-4

C-888E-12352JUL20.00I-2

C-987E-12341JUL14.75I-1

Customer #

Entrepreneur

#

Date

Dollar Amoun

t

Invoice#

Product# Invoice# Quantity

P-2 I-1 5

P-3 I-1 10

P-3 I-2 20

P-4 I-3 9

P-1 I-4 4

P-3 I-4 5

COOKIES

SHIPMENT

COOKIES-stockflow-SHIPMENT

SHIPMENT-duality-PAYMENT

Story of why this invoice amount to $14.75 ??

M0 Level – (partial) REA model for exchange process 10

• Who ? taxonomy• What ? taxonomy• When ?

The REA Model (ISO Open-edi accounting & economic ontology) is a pattern for a business process

11

Subtypes (possible) for ECONOMIC RESOURCE

Economic Resource

compositionEconomic Resource

Typetypifystructure

Services Rights Goods

Intellectual Product

(IPR)

Real Estate

Regulatory Service

Transport-ation

Services

Materials Human Services

Funds Right of Way

Warranty Insurance

12

Subtypes of Economic Agent for an Exchange

Economic Agent

Mediator Guarantor NotaryEscrow

Third PartyRegulatorPartner

SellerBuyer

Economic Agent Type

typify

13

• Who ?• What ?• When ?

• Over what time period ?– Past and near present

– Policy future

– Scheduled future


14

What actually occurred

What could be or should be

Rtype Etype Atype

Resource Event Agent

Color-coded time expansion 15

R

Operational Level– What Actually Happens; What is --

Policy Level-- What Should, Could or Must be --

Integration

E A

T G

ENTERPRISE SYSTEMSINPUT OUTPUT

Observation

Planning &Control

Inference, Validation,

Discrepancy Analysis

Policy-Level Specifications in REA Enterprise Systems

ExtendedEnterprise Model

Facts

Knowledge-Intensive Descriptions,

Validation Rules, and Target Descriptions

(Standards & Budgets)

16

type images for business process components

• Typification is a conceptual abstraction of a business process component (REA) that indicates its ideal or grouped properties

• the Archetypal Essence of a business object

17

Economic Resource

EconomicEvent

Economic Agent

stock-flow participation

Economic Resource

Type

Economic Event Type

Economic Agent Typepolicy

typify typify typify

policy

M2 Level -- REA model of Exchanges & Policies 18

meronymic

0..*1..1

PK

receive

duality

provide

0..*

stockflow

{incomplete, disjoint}

«EventType»ExpeditionType

- expeditionTypeName PK- expedExpectedTimeLength- standardUndiscountedSlotFee- expeditionTypeCapacity

«EconomicResource» SupplyItem

- supplyItemTypeNumber PK- supplyItemPrice- supplyItemQOH-

«EconomicResourceType»

SupplyItemCategory- supplyItemCategoryName PK- monthlySaleAmountOfSIC

«EconomicAgentType»

EmployeeType- employeeType PK

- startingWageForEmpType- countOfEmployeesForType

«EconomicEvent»

Expedition- expeditionNumber PK- slotsFilledForScheduleExped- actualDuration- scheduledExpeditionDate

«EconomicEvent» ExpeditionTicket

- ticketNumber PK- discountedSlotCharge- total$AmountOfSupplyItems- countOfSlotsOnThisTicket

«EconomicResourceType»

AircraftType

- aircraftTypeName PK- aircraftSeatingCapacity- aircraftFuelCapacity

«EconomicResource» Aircraft

- aircraftEngineNumber PK- dateAircraftManufactured- aircraftName CK-

«EconomicAgent» Employee

- employeeNumber PK- employeeName

«EconomicAgent» ExpeditionWork

er- employeeNumber PK

«EconomicAgent»

Guide- employeeNumber PK- dateQualifiedAsAGuide

«EconomicAgent» BookingAgent

- employeeNumber PK- bookingAgentCommRate

«EconomicAgent»

Pilot- employeeNumber PK- dateOfInitialPilotLicense

«EconomicAgentGroup»

People

- peopleName PK- approximatePopulation

«EconomicAgent»

Client- clientNumber PK- clientName

«EconomicEvent» Payment

- remittanceAdvceNum PK- $AmountOfRemitAdvice- clientCheckNumber

«BusinessLocation»

Location- locationName PK- locationMapCoords CK

distance

- distanceBetween policy-sequence

- sequenceOfLocationOnTour

policy- qualifies

- hoursFlown

stockFlow

- quantityOfItemOnThisTicket

policy-count

- countOfEmployeeType

«EconomicResource» Cash

- cashAccountNumber PK- cashAccountBalancereceive

provide

participatestockflow

participate

participate

policy

policy

typify

typify

typify

0..*

0..*

0..*

site

0..*

0..*

0..*

0..*

0..*0..*

0..*

0..*

0..*

1..1

0..*

0..*0..*

0..*

0..*

0..*

0..*

0..*

0..*

0..*

0..*

0..*

1..*

1..*

1..*

0..*

0..*

0..*

0..*

0..*

1..1

1..1

0..1

1..1

1..1

1..1

1..1

0..10..*

0..*

lead

groupgroup

0..* 0..*

0..1 0..1

0..*

typify

0..1

start finish

M1 Level – Typed REA model for NAAE revenue process 19

What actually occurred

What could be or should be

Rtype Etype Atype

Resource Event Agent

Color-coded time expansion

What is planned or scheduled

Commit Event

Rtype

Etype

Atype

20

commitment reciprocal

fulfills

commitment

fulfills

economic event

duality economic event

M2 Level -- REA model of Scheduled Exchanges 21

Commitment

specifies

Resource Type

specifies Event Type

specifies

Agent Type

Abstract Specification of Commitments22

Economic Event

Economic Resource

Economic Agent

stockflow provide

receive

Economic Commitment

reciprocal

fulfills

duality

Resource Type

typifiesspecifies

Event Type

Agent Typespecifies

specifies

typifies

typifies

participate

policy

policy

policy

1. Green – “What has occurred” – REA, duality, stockflow {consume, produce}, participation {provide, receive}

2. Yellow – What could be or should be – TYPES, typify, policy

3. Purple – What is planned or scheduled – COMMITMENTS, specify, fulfill, reciprocal, triggers

M2 Level – Extended REA model (simple & symmetric) 23

- manufacturingRunNumber PK- actualTotalT&MCost- toDateRunLaborCost- toDateRunMaterialCost- actualQuantityProduced

«EconomicEvent»Manufacturing Run

-operationTypeName PK

-standardSequence

«EventType»Operation Type

-employeeTypeName PK-startingWage

«AgentType»Employee Type

- scheduledOperationNumber PK

- scheduledSequence

«EconomicCommitment»Scheduled Manufacturing Operation

quantityOfRawMaterialPerUnit

policyBM

-scheduledMinutes

specify1

-minutesparticipate

-minutesUsed

used

-laborMinutesPerUnit

policyOL

-standardUnitCost-qOH

«EconomicResourceType»Raw Material Type

-rawMaterialCatalogNumber PK

-minutesNeededPerUnit

policyTM

-dateAcquired

«EconomicResource»Raw Material

-rawMaterialTagNumber PK

-quantityOwned

«EconomicResourceType»Tool-Machine Type

-toolMachineTypeDescription PK

-standardUnitCost

-qOH

«EconomicResourceType»Medical Equipment Type

-medicalEquipmentCatalogNumber PK

-standardGramWeight

-dateAcquired

«EconomicResource»Tool-Machine

-toolMachineNumber PK

-totalMinUsedSinceAcquis

-scheduledMinutes

specify

-scheduledQuantity

specify

- productionOrderNumber PK -budgetedTotalLaborCost-budgetedTotalMaterialCost

- projectedQuantityProduced

«EconomicCommitment»Scheduled Manufacturing Run

- budgetedTotalTool&MachineCost

-quantityUsed

used

-minutesparticipate

-minutesparticipate

- initiationTimestamp PK

- actualDuration

«EconomicEvent»Manufacturing Operation

- actualSequence

duality

participate

specify

produce

participate

typify

policyBM

fulfill

1..1

1..*

-medicalEquipTagNumber PK-actualGramWeight

«EconomicResource»Medical Equipment

-employeeNumber PK-employeeName

«EconomicAgent»Employee

-wage-dateHired

-employeeNumber PK

«EconomicAgent»Machinist

-employeeNumber PK

«EconomicAgent»Assembler

-employeeNumber PK

«EconomicAgent»Electrician

-employeeNumber PK

«EconomicAgent»Scheduler

-employeeNumber PK

«EconomicAgent»Supervisor

reciprocal

fulfill

typify

typify

typify

consume

participate

specifyspecify

1..1

1..1

1..1

1..1

1..1

0..*

0..*

0..*0..*

0..*

0..*

0..*

0..*

0..* 0..*

0..*

0..1

0..1

0..1

0..1

0..10..1

1..*

1..*

1..*1..*

1..*

1..*

1..*

{complete, disjoint}

0..*

0..*

0..*

0..*

0..*

0..*

0..*

1..1

1..1

1..1

1..1

1..*

1..*

1..*

0..*

0..*

0..*

0..*

0..*1..1

1..1

0..*

1..*

1..*

typify

1..1

0..*

M1 Level – Scheduled REA model

for MME manufacturing process

24

Bilateral Transaction

governed

Economic Event

Economic Resource Person

resource-flowfrom

to

Economic Contract

Economic Commitment

reciprocal

fulfillment

economic bundle

duality

Economic Resource

Type

typification

economic specification

Economic Event Type

Economic Role

Partner Third Party

Mediated Transaction

Business Transaction

participates

Economic Agreement

Regulator

typification

typification

economic specification

economic

specification

participates

participates

25Extended REA model for ISO 15944-4

• Who ?• What ?• When ? • Over what time period?• Why? (duality + sf = value chain)


26

A business process takes one or more kinds of input and creates an output that is of greater value to the

customer .

Conversion Process

labor

cookie ingredient

s

Acquisition Process

cash

cookies Revenue Process

cash

A value chain is a purposeful network of conversions and exchanges aimed at assembling the individual components of a final product (i.e., its portfolio of attributes) of value to

the customer

27

• Who ?• What ?• When ? • Over what time period?


• How? (through a series of small events that move business processes through to completion)

• Why? (duality + sf = value chain)

28

A business process takes one or more kinds of input and creates an output that is of greater value to the

customer .

Conversion Process

labor

cookie ingredient

s

Acquisition Process

cash

cookies Revenue Process

cash

A value chain is a purposeful network of conversions and exchanges aimed at assembling the individual components of a final product (i.e., its portfolio of attributes) of value to

the customer

• publish catalog

• make sales contact

• negotiate customer order

• ship goods (ee)

• send invoice

• accept payment (ee)

Workflow is a series of business events that progress a business

process through its phases, leading to eventual completion (ordering is determined by state machine

mechanics). 29

• Planning: In the Planning Phase, both the buyer and seller are engaged in activities to decide what action to take for acquiring or selling a good, service, and/or right.

• Identification: The Identification Phase pertains to all those actions or events whereby data is interchanged among potential buyers and sellers in order to establish a one-to-one linkage.

• Negotiation: The Negotiation Phase pertains to all those actions and events involving the exchange of information following the Identification Phase where a potential buyer and seller have (1) identified the nature of good(s) and/or service(s) to be provided; and, (2) identified each other at a level of certainty. The process of negotiation is directed at achieving an explicit, mutually understood, and agreed upon goal of a business collaboration and associated terms and conditions. This may include such things as the detailed specification of the good, service, and/or right, quantity, pricing, after sales servicing, delivery requirements, financing, use of agents and/or third parties, etc.

• Actualization: The Actualization Phase pertains to all activities or events necessary for the execution of the results of the negotiation for an actual business transaction. Normally the seller produces or assembles the goods, starts providing the services, prepares and completes the delivery of good, service, and/or right, etc., to the buyer as agreed according to the terms and conditions agreed upon at the termination of the Negotiation Phase. Likewise, the buyer begins the transfer of acceptable equivalent value, usually in money, to the seller providing the good, service, and/or right.

• Post-Actualization: The Post-Actualization Phase includes all of the activities or events and associated exchanges of information that occur between the buyer and the seller after the agreed upon good, service, and/or right is deemed to have been delivered. These can be activities pertaining to warranty coverage, service after sales, post-sales financing such as monthly payments or other financial arrangements, consumer complaint handling and redress or some general post-actualization relationships between buyer and seller.

SOURCE: ISO FDIS 15944-1 – Operational Aspects of Open-edi for implementation ISO Open-edi Phases of a Business Process 30

Negotiation

Identification

Planning

Post-Actualization

Actualization

Extended Business Process Model (ISO 15944-1

Accounting Model

Whole Business

Process Model

31

BT Phase Example Business Event

Planning Seller publishes Catalog

Buyer sends CatalogRequest to Seller

Seller sends Catalog to Prospective Buyer

Identification Buyer sends AvailabilityandPriceRequest to Seller

Seller returns AvailabilityandPriceResult to Buyer

Negotiation Buyer sends Offer to Seller

Seller sends CounterOffer to Buyer

Buyer accepts details of CounterOffer on Shipment and proposes PaymentSchedule

Seller accepts PaymentSchedule, completing Contract specification (alternatively, another CounterOffer would loop or a NonAcceptance would suspend or abandon the Business Transaction)

Actualization Seller sends an AdvanceShippingNotice when goods are prepared for shipping

Buyer sends ReceivingReport to Seller when inspected goods are accepted

Seller sends an Invoice to Buyer after parts are shipped

Buyer sends RemittanceAdvice to Seller with information about payment of the Invoice

Post-Actualization

Buyer sends WarrantyInvocation to Seller

An Example Business Process with Business Events Grouped in ISO 15944-1 Phases

32

Economic Event

Economic Resource

Economic Agent

stock-flow inside

outside

Economic Agreement

Economic Commitment

Economic Claim

materializes

settles

fulfills

establish

duality

Economic Resource

Type

typifyspecifies

Economic Event Type

Economic Agent Type

specifies

specifies

typify

typify

reciprocal

Business Processgoverns

Business Event

Business Process Phases

workflowValue Chain

networked

aggregate

33

UMM – the Meta Facts (Huemer & Liegl)

• Graphical process modeling technique for inter-organizational (B2B) business processes

• Concentrates on business semantics – is implementation neutral

• Provides a procedure similar to a software development process

• from requirements elicitation to process design

• UMM is defined as a UML profile on top of UML 2.1.1

34

UMM Package Structure (Huemer & Liegl)

Foundation

BusinessRequirementsView

BusinessDomainView

CollaborationRealizationView

BusinessPartnerView

BusinessEntityView

BusinessChoreographyView

BusinessTransactionView

BusinessCollaborationView

BusinessInformationView

35

UMM Business Entity View –

Business Process Activity Model

(Huemer & Liegl)

36

:Importer:Exporter :ImportAuthority:ExportAuthority

«SharedBusinessEntityState»:WasteTransport

[announced]


[arrived]

«BusinessProcessActivity»Pre-inform on waste transport

«BusinessProcessActivity»Pre-inform on waste transport

«BusinessProcessActivity»Inform on waste receipt

«BusinessProcessActivity»Inform on waste receipt


[accepted]


[rejected]

«BusinessProcessActivity»Inform on waste transport

acceptance


acceptance


rejection


rejection

«bEState»accepted

«bEState»announced

«bEState»arrived

«bEState»rejected

Final

36

EconomicResourceType

Candidate<<BusinessEvent>>

publishCatalogPlanned

<<BusinessEvent>>

sendAvail&PriceRequest

Proposed <<BusinessEvent>>

sendOffer

Identified

<<BusinessEvent>>

returnAvailabilityAndPriceResult

<<BusinessEvent>>

acceptOffer

Specified <<BusinessEvent>>

sendReceivingReport

Actualized

State Machine Diagram for Economic Resource Type37

BUYER SELLER

<Business Event>

publishCatalog

<SharedBusinessEntityState>

:PlanningPhase

[InService]

<Business Event>

sendCatalog


:EconomicResourceType

[Candidate]


:PlanningPhase

[WaitingStart]

<Business Event>

generateResourceNeeds

<Business Event>

sendCatalogRequest


:EconomicAgent

[Candidate]

<Business Event>

receiveCatalog


:PlanningPhase

[Complete]

38

BusinessProcess

BusinessProcess

BusinessProcess

Enterprise #1

BusinessProcess

BusinessProcess

BusinessProcess

Enterprise #3

Enterprise #2

BusinessProcess

BusinessProcess

BusinessProcess

Collaboration Perspective: Trading Partner vs. Independent

Independent view of Inter-enterprise events

Trading Partner view of Inter-enterprise events (upstream vendors and downstream customers)

Dotted arrows represent flow of goods, services, and cash between different companies; solid arrows represent flows within companies

Japan expert contribution to 15944-4, 22 Oct 2001, Victoria BC , 39

Where is REA headed ??

One must still have chaos in oneself to be able to give birth to a dancing star.

Friedrich Nietzsche

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the

world to himself. Therefore, all progress depends on the unreasonable man.

George Bernard Shaw

40

REA can be used to model and design the accounting components of software systems. It has also been used to model external business processes or business collaborations for ebXML and TMWG of UN/CEFACT. It has also been used to model inter-firm phenomena such as supply chains and to analyze the efficacy of a variety of enterprise software systems. Moreover, this documentation can be expressed at multiple levels of granularity, ranging from high level value chains and supply chains all the way down to the level of workflow tasks. The original model covered both inter- and intra-enterprise transactions, but its use can be specialized for either case.

Can it be used to solve a variety of different sorts of problems or as a starting point to construct multiple sorts of applications?

The original paper was published in the top accounting journal in the world (The Accounting Review) in 1982. No substantive criticisms of its features have been published in the intervening 20 years.

Is it stable?

The REA primitives may be used to model any of the economic dealings of an enterprise. The actual chain of entrepreneurial logic might itself be hard to explicate in a minority of cases (why for instance do firms support public charities or why is training important for employees ?), but once those links are made at some level of granularity, REA primitives are able to document them.

Is the language used expressive enough for people to say what they want to say?

The three leading textbooks on accounting systems analysis and design all use REA extensively to define system primitives and to explain modeling of accounting phenomena.

Do people use it as a reference of precisely defined terms?

The original paper and all extensions since have been published in high quality refereed journals (The Accounting Review, IEEE Intelligent Systems, etc.) where its components are open to constant review and criticism. In 1996, the original paper was given the first Seminal Contribution to the Accounting Information Systems Literature Award by the American Accounting Association. The work was most recently awarded the 2003 Innovations in Accounting Education Award by the AAA.

Does it express the consensus knowledge of a community of people?

REA ExplanationFunctional Criteria

SOURCE: Gomez-Perez & ISO 15944-4 41

Positioning and Formalizing the REA Enterprise Ontology-- Frederik Gailly, Wim Laurier, and Geert

Poels 42

weak semanticsweak semantics

strong semanticsstrong semantics

Is Disjoint Subclass of with transitivity property

Modal Logic

Logical Theory

Thesaurus Has Narrower Meaning Than

TaxonomyIs Sub-Classification of

Conceptual Model Is Subclass of

DB Schemas, XML Schema

UML

First Order Logic

RelationalModel, XML

ER

Extended ER

Description LogicDAML+OIL, OWL

RDF/SXTM

Ontology Spectrum: One View (Leo Obrst)

Syntactic Interoperability

Structural Interoperability

Semantic Interoperability

43

• At this stage we can conclude that the REA ontology can be considered as a semantically rich business domain ontology that needs to be further formalized to make more of the inherent semantics explicit.

• The bulk of REA design science research to date (see e.g. David et al. (2002)), with some exceptions mentioned in the paper, was aimed at improving REA’s content and theoretical background, but has to a considerable extent ignored representational, formalization and operationalization issues. Although we don’t question nor criticize the relevance and significance of this work, we believe that equal attention should be paid to ontology engineering aspects that aim at improving the explicitness, preciseness, completeness and formality of REA’s specification

Positioning and Formalizing the REA Enterprise Ontology-- Frederik Gailly, Wim Laurier, and Geert

Poels

Where is REA headed ??

44

Where is REA headed ??• Basic ontology theory to be revised and submitted to

accounting literature• Standards projects:

– ISO – done for now– UN/CEFACT – a lot of work needed

• Formalization initiative – Some being completed by others– Move to common logic

• Workflow component must be formalized• Accounting issues on back burner:

– Claims, adjustments, macro-level aggregation and duality, materialization and use of services, internal control specification, other accounting definition issues

• Others ??

45

“REA-Scruffie” “REA-Neat”The world consists of: 1. Classes or objects that are

• particulars--universals;

• occurrents--continuants;

• concrete--abstract;

2. associations between these entities/objects that are of the form• <particular , universal> e.g. is-instance-of, classification

• <particular , particular> e.g. is-part-of (also u-u), aggregation

• <universal , universal> e.g. isa (is-subtype-of), generalization

3. declarations, procedures, and constraints

Need progress towards formal logic that enhances frame semantics with completeness, decidability, etc.

46

The Financial Interoperability Summit – May 12-13 2008

• Sponsored by the National Science Foundation (Frank Olken)• Looked at formal issues associated with accounting and financial

interoperability at both the reporting level and the transaction level• Three main exemplars:

– XBRL-FR and XBRL-GL– REA – SDMX

• “REA needs to move up the semantic expressiveness scale & integrate with XBRL”

• Wiki (Thanks to Brand Niemann):– http://nsfaccountingontology.wik.is/Workshop– See especially group research issues and individual positions– Summary paper coming by Debreceny and McCarthy

• The big issue: Tradeoffs between semantic expressiveness, time to implement, and benefits (next slide)– “The enemy of the good is the perfect” ??

47

http://nsfaccountingontology.wik.is/Workshop

A

Time Horizon

Ont

olog

ical

Exp

ress

ivity

Low

Hig

h

Yr 0 Yr 10

B

C

1. First Dimension – Ontological Expressivity (following Leo Obrst): -Low ontological expressivity (syntactic interoperability) with term-based thesauri and taxonomies; - Medium ontological expressivity (structural interoperability) with semantic conceptual models

(such as E-R models and UML class diagrams); and - High ontological expressivity (semantic interoperability) with description logic based

theories.2. Second Dimension – Time Horizon for Implementation : The implementation horizon for adoption of higher expressivity

and more useful interoperability standards can range over multiple years. For the purposes of the workshop, we are limiting ourselves to an immediate – long-range spectrum of one to ten years (readily conceding that these are only present estimates).

3. Third Dimension – Benefits Accruing to Implementation : Implementation of ontological solutions to business problems occurs because of a suite of perceived benefits to be gained. These benefits can be estimated in a range from low to medium to high, and they may flow from some combination of improved interoperability with other standards and systems, lower transaction costs, and improved functionality for consumers of information. (SIZE of CIRCLE)

Benefits measured by size of

circle

Different implementation scenarios for financial interoperability standards

48

SMAPPIE says “Any questions??”

49

"Ontologically-Driven Standards Development for Business Process Systems Bill McCarthy, Michigan State University An accounting systems teacher An IT practitioner.

Documents

economic exchange

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subtypes of economic

rea resourceevent

agent accounting model

business process component

business process exchange

purple rea