Conceptual modeling is the process of developing an abstract model or graphical representation using real-world concepts or ideas. During conceptual modeling, various assumptions are made regarding how the system functions. Conceptual models also illustrate the dominant processes in a system and how they are linked. These processes may include factors known to drive change in the system, or they may encompass the consequences of change in the factors themselves.
To understand and manage complex natural systems, simplifying assumptions must sometimes be made. This is achieved by portraying the system as a conceptual model based on the collective knowledge, experience, and perspectives of each.
In business, conceptual modeling is used to document definitions and communicate the precise meaning of terms to stakeholders. The process can best be described as a semantic representation of the nouns that are important for an organization or domain. This makes conceptual modeling especially useful in knowledge-intensive projects where subtle distinctions need to be made during communications. Indeed, conceptual models are devoid of technical biases and data models and should represent the language of an organization.
Conceptual models also help stakeholders better understand a situation and are used as a starting point in participatory or collaborative modeling. In this case, various stakeholder groups establish a common language that encourages innovative planning, evaluation, and collaborative decision-making.
Due to an increasingly broad and complex spectrum of abstract concepts, conceptual modeling can be used for many different projects across a similarly diverse number of fields. In software development, conceptual modeling tends to be used as a form of data modeling to represent abstract business entities and their relationships. The approach is also used in visual design, rapid application development, hotel reservation systems, online shopping applications, information systems development, and enterprise resource planning (ERP) systems.
Common conceptual modeling techniques
Below are some of the most commonly used conceptual modeling techniques:
Data flow modeling (DFM) – a basic technique where the elements of a system are graphically represented by data flow. Instead of illustrating complex system details, DFM gives context to major system functions.
Event-driven process chain (EPC) – a technique primarily used to improve business process flows. An EPC is comprised of events that define what state a process is in or the rules by which it operates. To progress through events, a function or active event must be executed. This technique is commonly seen in resource planning, logistics, and process improvement.
Entity relationship modeling (ERM) – this modeling technique is typically seen in software systems. Here, database models and information systems are represented by entity-relationship diagrams, with entities denoting functions, objects, or events.
Petri nets – a conceptual modeling technique for the description of distributed systems using exact mathematical definitions of execution semantics. Petri nets offer a graphical notation for stepwise processes that include iteration, choice, and concurrent execution.
Limitations of conceptual modeling
Conceptual modeling is based on abstract conceptual models that are only as useful as the business makes them.
With that in mind, here are a few caveats to conceptual modeling:
Time-intensive – improper modeling of entities or relationships can cause time wastage and potential sunk costs. This usually occurs when development and planning have lost sight of the original problem or objective.
System clashes – there is always the potential to create clashes between the various components of an abstract system. In the context of conceptual modeling, this may occur when design and coding assumptions clash after deployment.
Scaling challenges – while conceptual modeling can certainly be used for larger applications, there are risks associated with developing and maintaining conceptual models in complex projects. This is because the number of potential clashes grows exponentially as the size of the system increases.
Key takeaways:
Conceptual modeling is the process of developing an abstract model or graphical representation using real-world concepts or ideas. The approach is used in visual design, hotel reservation systems, online shopping applications, and enterprise resource planning (ERP) systems, among many other applications.
Conceptual modeling techniques include data flow modeling, event-driven process chains, entity relationship modeling, and Petri nets.
Conceptual modeling does have some limitations. For one, the improper modeling of entities and relationships can result in sunk costs. There is also the constant threat of system clashes, particularly as the size and complexity of the system increases.
Product development, known as the new product development process comprises a set of steps that go from idea generation to post-launch review, which help companies analyze the various aspects of launching new products and bringing them to market. It comprises idea generation, screening, testing; business case analysis, product development, test marketing, commercialization, and post-launch review.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful businessproduct portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived by whether the market is new or existing, and the product is new or existing.
The term “user experience” was coined by researcher Dr. Donald Norman who said that “no product is an island. A product is more than the product. It is a cohesive, integrated set of experiences. Think through all of the stages of a product or service – from initial intentions through final reflections, from first usage to help, service, and maintenance. Make them all work together seamlessly.” User experience design is a process that design teams use to create products that are useful and relevant to consumers.
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a costanalysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.
Empathy mapping is a visual representation of knowledge regarding user behavior and attitudes. An empathy map can be built by defining the scope, purpose to gain user insights, and for each action, add a sticky note, summarize the findings. Expand the plan and revise.
Perceptual mapping is the visual representation of consumer perceptions of brands, products, services, and organizations as a whole. Indeed, perceptual mapping asks consumers to place competing products relative to one another on a graph to assess how they perform with respect to each other in terms of perception.
Value stream mapping uses flowcharts to analyze and then improve on the delivery of products and services. Value stream mapping (VSM) is based on the concept of value streams – which are a series of sequential steps that explain how a product or service is delivered to consumers.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
