EPM glossary: the language of process value

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

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 →
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 →
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.

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.

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.

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.

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.

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