Ontolog Presentation Nov 2003 Bill Mc Carthy 20031102a


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  • Ontolog Presentation Nov 2003 Bill Mc Carthy 20031102a

    1. 1. <ul><li>Much of the content of these slides comes from co-authored papers and my own standards group work with ebXML, the UN-CEFACT BP group, and the ISO Open-edi group, so the ideas are due to many people besides myself. These include Guido Geerts, Julie David, Bob Haugen, John Yunker, Jim Clark, Brian Hayes, Paul Levine, Jamie Clark, Dave Welsh, Karsten Riemer, Nita Sharma, Colin Clark, Nenad Ivezic, K atsuhiro Morita, Jake Knoppers, David Clemis, Hannu Pelkonen, Steve Mathews, and many others too numerous to mention. </li></ul><ul><li>These slides may be reproduced, but please do not change the contents or attributions. </li></ul>The REA Accounting and Economic Ontology and Its Use in E-commerce Standards William E. McCarthy – Michigan State University PHONE: 517-432-2913 EMAIL: [email_address]
    2. 2. R E A <ul><li>See Accounting Review article (July 1982) </li></ul><ul><li>See Issues in Accounting Education article (NOV 2003) </li></ul>Economic Event Economic Agent Economic Resource duality
    3. 3. INITIATING RESPONDING ELMO SHIPMENT COOKIES CASH PAYMENT ELMO duality cookie monster cookie monster business process Economic Event Economic Agent Economic Agent Economic Resource Economic Event Economic Agent Economic Agent Economic Resource
    4. 4. Pattern: A prototypical constellation of objects <ul><li>REA is an business process pattern </li></ul><ul><li>Can we standardize the world of ERP business objects and business object connections with a library of BP patterns ? </li></ul><ul><li>Can we standardize collaboration space with collaboration patterns ? </li></ul>
    5. 5. Evolutionary Tree – Enterprise Information Systems
    6. 6. A business process is a set of activities that takes one or more kinds of input and creates an output that is of greater value to the customer (Hammer) A value chain is a purposeful network of business processes aimed at assembling the individual components of a final product (i.e., its portfolio of attributes) of value to the customer (Porter) Definitions of Business Process and Value Chain cookies Conversion Cycle labor cookie ingredients Acquisition Cycle Revenue Cycle cash cash business process value chain business process business process
    7. 7. delivered raw materials delivered manufactured goods $$ Example Value Chain (source, make, deliver) ______ ______ _______ $$ $$ $$ manufactured goods payment sale Cash payment Cash payment logistical operation shipment labor payment labor acquire labor labor facilities, services & technology payment service acquire manufacture job material issue manufacture operation $$ $$ service contract service operation product services labor raw materials purchase payment $$
    8. 8. Buyer Seller Third Party Collaboration Space Value Exchange Concept of a Business Collaboration Source: ISO Open-edi
    9. 9. event stream fail to pay pay pay pay pay deliver deliver deliver deliver 1-to-n n-to-1 1-to-1 deliver return return fail to deliver pay pay delivery penalty payment penalty SELLER BUYER
    10. 10. Type & Commitment Extensions
    11. 11. Economic Agents Operational Level Knowledge Level Source: Geerts and McCarthy, type paper Harry Jane Named Set of Objects Tom Dick Ashley Typification Salespeople Tom Dick Ashley Abstraction Harry Jane Named Set of Objects with Labeled Clusters Group & Name Clusters Cashiers Named Set of Groups Cashiers Salespeople Economic Agent Type
    12. 12. payment duality Contract as a Bundle of Commitments Source: Geerts and McCarthy, ontology paper delivery commitment to deliver Economic Contract commitment to pay reciprocal fulfills fulfills
    13. 13. Business Role Economic Commitment Resource Type Event Type specifies specifies specifies Source: Geerts and McCarthy, ontology paper
    14. 14. Exchange with Commitments and Types Source: Geerts and McCarthy, ontology paper Economic Event Economic Resource Economic Agent stockflow from to fulfills duality Economic Resource Type typifies specifies Economic Event Type Role typifies Economic Commitment reciprocal specifies specifies typifies
    15. 15. ISO Open-edi Ontology Collaboration Model Bilateral Collaboration governs Economic Event Economic Resource Economic Agent stockflow from to Economic Commitment fulfills establish duality typifies specifies Business Role specifies specifies typifies qualifies reserves involves Third Party Mediated Collaboration participates requires Agreement Regulator constrains Economic Contract reciprocal Economic Resource Type Economic Event Type Partner Business Transaction
    16. 16. Business Object State Machine Example skip
    17. 17. Business State Alignment <ul><li>Means both trading partners must agree on the state of each Business Object at the end of each Business Event . </li></ul><ul><li>For example, the Order is not accepted until both partners agree explicitly that it is accepted. </li></ul><ul><li>The Business Transaction protocol must insure that both partners transition to the new Business State - or neither does. </li></ul><ul><li>Think “ electronic handshake ”. </li></ul>Source: ebXML BCP&MC
    18. 18. <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>  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. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>SOURCE: ISO FDIS 15944-1 – Operational Aspects of Open-edi for implementation </li></ul>ISO Open-edi Phases of a Business Transaction
    19. 19. Phases of a Business Transaction and Object States for Completion Business Transaction Planning Identification Negotiation Actualization Post Actualization Economic Resource Type Identified Corresponding Partners Identified Economic Contract Complete Requiting Economic Event Complete Invoked Warranty Component Complete
    20. 20. <ul><li>Seller sends Catalog to Prospective Buyer </li></ul><ul><li>Buyer sends AvailabilityandPriceRequest to Supplier </li></ul><ul><li>Supplier returns AvailabilityandPriceResult to Buyer </li></ul><ul><li>Supplier sends OrderRequest to Buyer </li></ul><ul><li>Buyer sends Offer to Supplier </li></ul><ul><li>Supplier sends CounterOffer to Buyer </li></ul><ul><li>Buyer sends an OrderAcceptance to Supplier for parts </li></ul><ul><li>Seller sends an AdvanceShippingNotice when goods are prepared for shipping </li></ul><ul><li>Buyer sends ReceivingReport to Seller when inspected goods are accepted </li></ul><ul><li>Seller sends an Invoice to Buyer after parts are shipped </li></ul><ul><li>Buyer sends RemittanceAdvice to Seller with information about payment of the Invoice </li></ul><ul><li>Buyer sends WarrantyInvocation to Seller </li></ul>Identification Negotiation Actualization Business Events in an Example Business Transaction Planning Post-Actualization
    21. 21. State Model of Business Collaboration: Economic Event Economic Resource resourceflow site from to Economic Claim Economic Contract Economic Commitment settles fulfills establish duality Agreement Economic Resource Type Location Type typifies typifies specifies specifies Economic Event Type Partner Type specifies specifies typifies typifies Business Transaction governs regulate reciprocal identified identified negotiation complete specified specified specified specified in-force in-force started materialized complete settled transferred identification pending identification complete negotiation pending actualization pending actualization complete fully-specified planning complete started complete planned In-Service aborted suspended COMPLETED designated realized warranty used post-actualization complete fulfilled Seller sends Catalog to Prospective Buyer Buyer sends AvailabilityandPriceRequest to Supplier Supplier returns AvailabilityandPriceResult to Buyer Buyer sends Offer to Supplier with proposed details of resource, location, event, & partner Supplier sends counter-offer, acccepting resource and location and countering on event and partner Buyer accepts details of counter-offer on shipment and proposes payment schedule 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 Buyer sends WarrantyInvocation to Seller Seller accepts payment schedule, completing contract specification proposed Partner Location Business Event
    22. 22. Source: UN/CEFACT BETL
    23. 23. Issues & Problems <ul><li>Formalization </li></ul><ul><li>Domain specific paper </li></ul><ul><ul><li>Enterprise ontology </li></ul></ul><ul><ul><li>Collaboration space ontology </li></ul></ul><ul><li>Extensions </li></ul><ul><ul><li>Mediated collaborations ( = 2 ?) </li></ul></ul><ul><ul><li>Workflow & business events </li></ul></ul><ul><ul><li>States of objects </li></ul></ul><ul><ul><li>Controls & policies </li></ul></ul><ul><ul><li>Aggregate accounting and economic objects </li></ul></ul>
    24. 24. A Customer B ProductSupplier C LogisticsVendor D Bank FreightOrder AA ShippingDocument AdvanceShipNotice RA FundTransferAdvice AA ReceivingAdvice RA FundTransferAdvice AA FundsTransferNotice RA FundsTransferNotice RA Source: David, Geerts and McCarthy PO RA AA AdvanceShipNotice RA AdvanceShipNotice AA
    25. 25. Mediated Collaborations IS THE ANSWER ALWAYS = 2 ?? - economically ? - accounting ? - legally ? - technically ?
    26. 26. Sample States for Business Objects Sample Business Object Example States for Business Object Business Transaction <ul><li>Waiting-Start </li></ul><ul><li>In-Service </li></ul><ul><li>Completed </li></ul><ul><li>Aborted </li></ul><ul><li>Suspended </li></ul>Economic Claim <ul><li>Materialized </li></ul><ul><li>Settled </li></ul>Economic Resource Type <ul><li>Planned </li></ul><ul><li>Identified </li></ul><ul><li>Proposed </li></ul><ul><li>Specified </li></ul><ul><li>Substituted </li></ul>Business Transaction Phase <ul><li>Pending </li></ul><ul><li>In-Service </li></ul><ul><li>Complete </li></ul>
    27. 27. QUESTIONS ??
    28. 28. REA use in different standards
    29. 29. E-Commerce Collaboration Standards <ul><li>ebXML– United Nations CEFACT (BP, catalog) </li></ul><ul><li>UN CEFACT (UMM), BOTL, BCP&MC, UBAC </li></ul><ul><li>ISO Open-edi </li></ul><ul><li>European Commission (ECIMF) </li></ul><ul><li>OAG ?? </li></ul><ul><li>Others – OMG, etc. ?? </li></ul>
    30. 30. Business Domain View (BDV) Business Requirements View (BRV) Business Transaction View (BTV) Business Service View (BSV) UMM metamodel Process Area Business Process Business Transaction Business Collaboration (binary or multiparty) Requesting Business Activity Responding Business Activity Business Messages Requesting Service Transaction Responding Service Transaction Agreement Economic Event Network Component Authorizing Roles Partner Economic Resources Business Documents Business Area REA ONTOLOGY Source: ebXML TMWG
    31. 31. <ul><li>Reporting Taxonomy : </li></ul><ul><li>Purchases – xx AccPay- xx </li></ul><ul><li>Reporting Taxonomy : </li></ul><ul><li>AccRec – xx Saies -- xx </li></ul><ul><li>COGS – zz FinGood– zz </li></ul>Company-neutral (but strictly-typed with REA) view of a business collaboration. For example: -Order -Fulfillment -Settlement  XBRL   ebXML   XBRL  G/L -ERP -SCM -etc. G/L Cash – xx AccRec -- xx AccPay – xx Cash -- xx REA contract/commitment (no account) REA initiator Economic Event REA responding Economic Event continuous without A=L+OE External Report External Report External Report Source: J. David, G. Geerts & W. McCarthy REA State Machine COMPANY E Business Service Interface (BSI) Business Service Interface (BSI) COMPANY C G/L XBRL G/L