Standard Operating Procedure For A Company

1 ) Works of Finance Department

Finance Departments are big and powerful beasts. If you asked a non-finance person what
Finance Departments do, they would probably guess that they collect cash and pay bills. But
would we really need so many people just to do that?
Continuing the thought experiment for a moment, let's assume that we operated in a world of a
hundred percent trust and zero percent error. The work of the finance department would fall
away: the friction of checking whether purchase and sales invoices were correct would cease
and customers would trust suppliers to take the right money by variable direct debit.
Perhaps only quoted companies would need a Finance Department to comply with corporate
governance codes which state, in broad terms, that the Board must exercise a certain level of
budgetary and financial control. But imagine, if each executive Board Director ran one cost
centre, there would be no more than a dozen cost centres flowing through into the published
Profit and Loss Account and Balance Sheet.
To cope with that work you would need no more than one person per cost centre, a dozen
people. So what else do the hundreds of employees in a Finance Department do? Perhaps,
since we don't operate in a world of perfect trust and zero mistakes, we'd expect some to be
involved in checking invoices for accuracy, arranging and collecting payments and resolving
disputes or errors. But that still leaves hundreds unaccounted for.
What they are actually doing is trying to cope with the results of complexity. For instance,
instead of a dozen cost centres, modern Enterprise Resource Planning (ERP) systems allow for
hundreds, all of which are contained in a hierarchy of data. So clerks in Accounts Payable or
Receivable are gathering data in order to record in what part of the hierarchy the information
should be gathered. Too much time is spent creating and releasing accruals which have limited
value, let's face it, accrual is only account speak for 'guess'. Ultimately, all this complicated
activity, with its expensive software all too often, becomes an end in itself.
But the real purpose of this information harvesting and organising is to provide financial
information for other people to take decisions. Occasionally the Finance Director joins in with
those decisions, but in essence, the primary purpose is to know the financial impact of things
that have happened in the past, take decisions and then check the impact of those decisions.
Those who know finance departments and their work are likely to tell you that companies are
under investing time and energy in Business Intelligence, whilst over investing in General
Ledger. But the way I see it, the key issue is under investment in accurately gathering data from
the thousands of financial transactions that take place each day. The real beauty and added
value that a Finance Department contributes to a business is in it's clarity of purpose, to supply
the right numbers and to supply them accurately.

In order to achieve that, it's important to use the strategy of the business as a starting point and
think ahead to decide what information needs to be gathered now so that in one or two years
time, there's a set of data that the organisation can use to inform the decisions that it will have
to take. To judge every piece of information gathering, particularly financial information against
likely decisions will increase quality, reduce quantity and ultimately improve cost efficiency.

2) Works of Marketing Department

The marketing department must act as a guide and lead the company's other departments in developing,
producing, fulfilling, and servicing products or services for their customers. Communication is vital. The
marketing department typically has a better understanding of the market and customer needs, but should
not act independently of product development or customer service. Marketing should be involved, and
there should be a meeting of the minds, whenever discussions are held regarding new product
development or any customer-related function of the company.
Don't get the idea that marketing should make these plans and recommendations alone. It is very
important that the marketing department get input from many people within the company. Not only does
providing input help the rest of the company understand and support the marketing efforts, it also
provides some invaluable insights into what customers want and new ideas that may have slipped past
the rest of the company. For example, your service technicians and your customer service reps will have

great insights into customer opinions and needs. Get everyone involved and you'll have a more cohesive
effort.
Because the goals and guidelines set by the marketing department should, by design, be in line with the
vision and mission of the company, upper management should be involved in and endorse cooperation by
all departments in following and implementing the plan and integrating a consistent message into all
communication channels. If this isn't the case, the efforts to market the company's products will fail. It's
that simple.
Reinforce the idea among your employees that marketing is a team effort. Individuals may have their own
goals and priorities, but if they don't also consider the goals and greater need of the company, they may
hinder efforts and make your carefully planned marketing efforts fail.
To illustrate this, assume a company has implemented a direct mail program and has placed key codes
on the mailing labels to track the source of the mailing lists from which customers who place orders are
coming. If the employees who take the orders don't ask for and record those codes, then the marketing
department has no way of knowing which lists are working and which lists are bombing. Cooperation
among departments and support of upper management to enforce necessary procedures is often critical.
So, the marketing department studies the market and the customers, determines the best way to reach
those customers, and works with the rest of the company to help determine the new product needs of the
market and represent the company in a consistent voice.
Next, we'll begin going over the steps for putting together your marketing plan. This process involves four
stages of action:
1.

Researching and analyzing your business and the market

2.

Planning and writing the plan

3.

Implementing the plan

4.

Evaluating the results

Marketing has been defined as "the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, good and services, to create exchanges that satisfy
individual and organization objectives." The marketing major studies how products and services
are developed, priced, promoted, distributed and sold. The process requires an understanding of
buyer and seller behavior within the context of the overall market environment. Added emphasis
is given to the important area of global markets with their own special challenges and
opportunities.
Marketing is an essential part of every business. Not-for-profit organizations also have to market
their products/services, and the marketing discipline addresses the special needs of such
organizations.
It is well recognized in the business world that "nothing happens until somebody sells
something." In most companies the sales function is the engine that generates the revenue that
enables the company or organization to operate. Sales professionals account for nearly 10

percent of U.S. employment and many of the jobs available to marketing majors upon graduation
are in sales related positions.

3 ) Works of Human Resource Department

The Office of Human Resources has primary staff responsibility for planning,
developing, and implementing policies, programs, standards, and systems for
effective acquisition, utilization, development, and management of human
resources to accomplish the overall mission of the Department; for evaluating
effectiveness of the Department's personnel management program; and for the
analysis of position structures. The Office has Departmental responsibility for the
Office of Management and Budget, Office of Personnel Management, Merit Systems
Protection Board, and Federal Labor Relations Authority directives and is the liaison
with these organizations and other agencies concerning human resources
management. The Office interprets laws, executive orders, rules and regulations,
and provides technical and professional assistance, advice and guidance to the
Secretariat and the bureaus.
The Division has primary responsibility for position classification, position
management, classification standards programs, consistency reviews, adjudication
of classification appeals, pay, and compensation programs. The Division analyzes
and reviews position structures in bureaus and offices and recommends appropriate
action; designs position structures and requirements to achieve maximum cost
effectiveness and contribution to program goals; provides advice and assistance to
management in these program areas; and administers the classification appeals
program for the Department. Reviews proposed organizational revisions and makes
recommendations regarding position management and other personnel
implications. Provides classification advice and assistance to the bureaus and
generally oversees the effectiveness of the classification program throughout the
Department. Compensation and Pay aspects include merit and premium pay, hourly
wage rates, General Schedule pay setting, special rates, FEPCA, FLSA, pay
determinations, pay appeals, backpay, and wage surveys .

Step 1: Establish the Corporate Model Environment. We first need to define and build the
corporate model. To get an idea of its structure look at Figure 2.
It obviously contains various entities like Product, Sales and Customer. It also has this unusual
object called Party. A Party can be a customer or bank or employee. It is any person or legal
entity for whom we track unique identifiers such as address and phone. Thus, if one of our
customers who is also our banker has an address change, we change that address in only one
place. The corporate model is simply an ERD of the whole company.

Now how do you introduce this model into your company? Ive found that its best to plant a
seed. By a seed I mean a common data model or template based on the premise that all
businesses are the same. Every enterprise has, for example, a human resource, accounting
and facilities function. Every enterprise has a product and a customer. I think its safe to assume
that the data behind most business functions is approximately 70 percent the same for all
companies.
Now lets place that picture of the corporate model in a bigger picture, shown in Figure 3. There
youll see weve labeled the steps for building the whole infrastructure. Step 1, of course, is the
corporate model design itself. Step 2, our next effort, deals with adjusting that model to your
specific business structure.
Step 2: Tailor the Model. We now need to identify those entities in the generic model that
comprise the 30 percent of entities that dont match your business. One very common candidate
for change is the entity Product. Usually every enterprise has a product, but the product is
unique to each company. General Motors makes cars, General Mills makes bread and General
Electric makes power appliances. So ask yourself what your product is. Id like to propose a
hypothetical company called We-Haul Trucking. We-Haul has a slightly different type of product
than the ones we are used to. Their product is a service; they move things around the country.
So while the generic model had a Product with customer number, color and size as attributes,
We-Haul will have to transform this generic Product into their specific product of hauling other
peoples products. Thus, note in Figure 2 how Step 2 shows our replacing Product with WeHauls Service.

Basically you must tailor your template and discover new, unique attributes for Product. How do
you do this? Id suggest that you look around for those aspects of the product that impact the
companys bottom line. There are three aspects for We- Haul: the number of hauling trips, the
weight of the cargo and the distance of each trip. As each of these increases, We-Haul charges
the customer more and thus the revenue increases. So these can become important attributes
of Product in our corporate model (along with a primary key and other more basic product
information
So much for tailoring. Now we must derive some value from our template. Next, wouldnt it be
nice, for example, if we could take an attribute such as Address or Product Type and find all the
places in our applications where it is represented? To do this we must load into this same
repository a picture of our legacy system tables so we can point to real occurrences of our
companys data.

Step 3: Load Legacy System Meta Data. Its usually best to start this task by cataloging all of
the relational databases in your company. I chose this route because most tools today will
reengineer relational databases rather than older style databases. Use any CASE tool that does
reverse engineering (such as ERwin, Designer/2000 or S-Designor) attached to each legacy
system. Such tools pull the schemas (DDL) from databases into flat files. Import these schemas
into your selected CASE tool repository. For the older, nonrelational systems such as ISAM,
VSAM or flat files, you may have to build on existing data models or manually create these
schemas and file layouts in the CASE tool environment. Note Figure 3 shows a spreadsheet as
a feed to Step 3. By simply reporting your meta data from the CASE tool to a spreadsheet, you
can feed this into Step 3 as shown in the picture.
Now that weve built our initial structure of logical and physical models, we need to have a way
to keep this model fresh. Hence, our next step.
Step 4: Map the Logical to the Physical. At this point you now have the logical corporate
model that you tailored (Step 2) and the physical model of your legacy systems that you
imported. Now you must map each logical attribute to each column or field which that attribute
represents. (Oracle provides a linkage in Designer/2000 that handles this mapping.) Note also
that We-Hauls Shipmententity contains an attribute Shipment ID. This attribute is mapped to the
columns ship_id, shipmnt_no, and ship_num in various applications. Note in Figure 4 that the
analysts asked to see all columns containing the string "ship," and then checked boxes
representing column candidates for mapping to the attribute Shipment ID. By arranging the
screen in this fashion and doing appropriate sorting, a person can map from one to 100 or more
columns in one transaction! (I have found that it is more efficient not to map entities but only to
map attributes. The entity-table mapping will then fall in place).
This process of mapping may seem overwhelming and somewhat intimidating at first. But the
good news is, on average, you only need to map about 30 percent of the tables or files. This is
because somewhere between 60 and 70 percent of tables created by most system developers
are non-business tables. This means they are intended as working or transitory tables,
summary tables and physical control files (managing screen output, security, etc.). We are only
interested in the business tables, those containing data that has real commercial meaning.
Furthermore, the exact pieces of that have true strategic value (the data that you really wish to
load in the model) may be only comprise 20 percent of your total corporate data. So the job is
not necessarily overwhelming.
Step 5: Query the repository. Finally, you can add other queries against your corporate model
repository to check for special patterns and trends in your companys data. Just use your
favorite relational database query tool there are a lot on the market and thats it. Were ready
to use and enjoy the benefits of our corporate model. What are these benefits? If information is
an asset, then you would want to manage it as well as you manage your retirement portfolio or
your familys safety. The corporate model lets you know where your data is located, what data is
repeated and what applications specialize in that data.
Lets consider the following scenarios that could happen in any business in any industry. What
would it take to answer these questions?

What tables or files have date information that would be affected by the Year 2000?

If I change the ZIP code from five characters to nine characters, what fields will be
affected?

We need to update the holiday schedule in our company. In what databases and on what
servers is there a holiday reference?

Data warehouse star schemas deal with dimensions and facts. What dimensions are of
interest across the enterprise? What facts have shared use across the whole
corporation?

Project A is planning to build some customer sales information. Does that exist
somewhere already?

The marketing department wishes to build a data mart on revenues? Where is the
authoritative source of revenue data?

Our company sells automotive parts and has just merged with the X corporation. I need
to compare X corporations customer and parts and customer databases with ours for
eventual merger of data and common reporting.

Now weve looked at the structure, building process and benefits of a corporate model. To finish
lets answer our original question: what does all this have to do with the Beatles and Lucy? The
answer is that theyre all are irrational, indispensable and inevitable.
First, theyre irrational. Lucy in the bakery or the Beatles on Ed Sullivan provide us a happy fix.
No study or analysis would ever have invented them. In like manner the corporate model is not
something intuitive. It takes hard work and appears at first impractical and inefficient. One
usually stumbles across it in an unplanned fashion and might only see its value much later.
Secondly theyre indispensable. Try as we may, we cannot escape Lucy or Ringo; we see Lucy
on motel TV and hear Ringo and John in elevator music. We thought we could put corporate
modeling aside in deference to a bias for action. But like our retro entertainment heroes, the
need for a picture of data resurrects its itself in our face. Corporate data isnt just a thing from
the "good old days."
Finally they are all inevitable. It seems that the Ricardos and the boys from Liverpool filled a
void in our life that we never forget. Similarly the corporate data model is needed more than
ever as we wade through legacy systems spaghetti and hunger for data warehouse meta data.
At first glance we feel that our company cant coexist with the corporate model, but after a
period of growth and maturity we find the company cant exist without it.