# EPM glossary

> The language of Economic Process Modelling: Economic Value Profile, value drags, unrealised value, the five lenses of value, the four component types and more.

Source: https://thinklikelinq.com/epm-glossary/

# EPM glossary: the language of _process value_

The terms used in Economic Process Modelling, and what they mean.

-   [The discipline](#the-discipline)
-   [The four component types](#the-four-component-types)
-   [The five lenses of value](#the-five-lenses-of-value)
-   [What a diagnosis finds](#what-a-diagnosis-finds)
-   [The method](#the-method)

Compare the methods: [EPM vs BPM vs activity-based costing](https://thinklikelinq.com/epm-vs-bpm-vs-activity-based-costing/)

## The discipline

Economic Process Modelling (EPM)

The discipline of decomposing a business process into its constituent information, actions, systems and people, then attributing their contributions to revenue, cost, risk, optionality and information value. [How EPM works →](https://thinklikelinq.com/economic-process-modelling/)

Economic Value Profile

The output of EPM: a process rendered as a landscape of value. Bars above the line create value, bars below destroy it, and a hatched cap shows value produced but never collected. A ledger, not a flowchart.

Infonomics

The practice of monetising, managing and measuring information as an economic asset, set out by Doug Laney in his 2018 book of the same name. EPM extends it: if information has value, so do the processes that create, use and discard it. [About Infonomics →](https://thinklikelinq.com/infonomics/)

Digital twin of the organisation

A model of how an organisation actually works: its people, systems, actions and information and how they connect, used to analyse the current state and test change before committing to it.

## The four component types

Information

Data that enables a decision, or is produced by one. Its quality and timeliness shape everything downstream.

Action

A human or automated decision that moves work forward. The question is whether its value lies in speed or in judgement.

System

Technology that extends capacity. Its value must exceed its total cost plus any judgement it displaces.

People

Judgement at the point of work. Where the judgement premium is high, people are irreplaceable.

## The five lenses of value

Revenue

Whether a component helps earn value from a customer or market.

Cost and friction

What a component consumes, or slows without benefit.

Risk

Whether a component creates economic risk, or protects against loss.

Option value

Whether a component keeps future choices open, or closes them off.

Information value

The reusable, decision-relevant data a component produces, degrades or destroys.

## What a diagnosis finds

Value drag

A step that costs more than it contributes. Invisible if you only measure throughput.

Unrealised value

Value a process creates but never collects. Usually data being thrown away.

Misaligned component

The wrong resource doing the work: a person doing a system’s job, or the reverse.

Judgement premium

The value a person adds through judgement at the point of work. Where it is high, automating the step can make the process worth less.

## The method

Select

Choose a process where real economic value is at stake.

Decompose

Map the information, actions, systems and people, workarounds included.

Attribute

Score each part against the value lenses that apply.

Diagnose

Chart where the process creates value and where it destroys it.

Redesign

Substitute, amplify, eliminate or resequence components so the process is worth more.

Current state and future state

The process as it works today, and a proposed version of it. LINQ compares the two side by side so the impact of change is known before budget is committed.

## See what your processes are _actually worth_

Bring one process that matters and we will score it with you, or start modelling for free with up to 150 nodes.

[Not ready to sign up? Walk through a real LINQ model ](https://my.thinklikelinq.com/#/introduction)

[Score one of your processes](https://thinklikelinq.com/economic-process-modelling/#assessment) [Start modelling for free](https://my.thinklikelinq.com/#/register)