Developing coding schemes
This article includes the following:1. Purpose of coding schemes2. Nine steps /activities for developing coding schemes3. Illustrations of coding schemes-Business entities4. Illustrations of coding schemes-Business Objects5. Way forward6. Future references The concepts proposed in this article can be used in any Industry, though examples in this article mostly pertain to real estate & hospitality industry in line with proposals in my handbook 1. Purpose of coding schemesCompanies acquire and use ERP or customized software solutions for the efficient execution of business processes and the implementation of best practices. For digitization, robust coding schemes must be designed and implemented In any business, there are many entities and objects as listed below: Entities: Vendors, Customers, Employees, Shareholders, and so on. Objects: Materials, Finished products, business documents like purchase orders, invoices, accounting documents and so on.Coding schemes enable the accomplishment of the following objectives.· Providing a standardized and structured way of identifying and categorizing different entities and objects.· Enable efficient way of accessing the entities or objects from digitization perspectives.· Help efficient storage and retrieval of data by digitization· Organise and classify business data as useful information· Efficient management of business operations· Help in maintaining records and tracking these.Developing coding schemes can be a complex process. There are different types of coding schemes, such as below· Numeric…..These are simple an easy to use but limited in capacity· Alphanumeric….These provide more flexibility.· Hierarchical …These involve a series of numbers or letters that indicate the level of detail in the code. Organizations, of course at their absolute discretion, can develop their existing coding scheme.Coding schemes are usually embedded in the ERP/software solutions used by them. Few more examples of Business entities and objects includeBusiness Entities include:· Vendors· Customers· Employees· Shareholders· Statutory bodiesand so onBusiness Objects include:· Materials which can be BOQ-Bill of quantities or BOM-Bill of materials· Assets -all types like buildings, Plant & Machinery, Furniture, Vehicles etc.· Function and sub-function· Core processes and Core activities· Number range of documents· Statutory processes and Core activities· Core Documents and Statutory documents· Manuals (functional, statutory, and similar type)· Configuration tables· Processes and activities for developing Configuration tables· Master data tables· Processes and activities for developing Master data tables· Fields to be used in core and statutory documents, configuration tables, and master data tables· Risk assessment processes· Access rights-related processes· Authorisation Profiles· Developing Supporting Processes 2. Nine steps /Activities for developing the coding scheme common for both categories)1. Form a cross-functional team comprising professionals from Finance and accounts, IT/systems, and concerned functional team for:· Determining what all needs to be coded for digitization perspective.· Deciding name of “Coding agency or Organisation level Coordinator” who would be responsible for initial allocation of codes and maintaining subsequent changes to coding schemes vis-à-vis each or all design functions· Broad design of coding schemes (numeric or alpha or alphanumeric, size/number of digits in the coding system, and so on)2. Nominate one functional coordinator for providing to “coding agency or organization level coordinator” lists of all processes, activities, tables, fields, supporting processes and activities, materials, employees, vendors, customers, business associates, etc. vis-à-vis own function (Designing of Architect, Interior designing and MEP Services)3. In consultation with ERP/IT team, decide the following vis-a-vis each aspect listed in the 2nd activity.· Number of digits· Structure as alpha-numeric or and numeric or and alpha4. Based on the 3rdactivity, develop a coding scheme and assign Codes to each of the aspects listed.5. As an alternative to the 4th activity, provide a solution for generating random code numbers through the computer for assigning codes. 6. Incorporate the codes assigned in the 5th activity in the respective ERP application package at pre-implementation of chosen ERP package/solutions.7. Decide the following:· The processes, activities, and documents for requisitioning future incremental “additions to codes.· Function wise levels, positions, and names of designers for requisitioning, approving, and communicating codes to concerned three functions and their implementation in respective ERP application package8. Review and redesign /enhance coding schemes considering future requirements/expansions.9. Implement the codes so allocated above after testing and providing training to the relevant users of such codes 3. Illustrations for Coding scheme- “Entities” from my handbook EntityCategories for classificationScheme proposed by authorno of digitsIllustration VendorsFor different categories respectivelySupplier (domestic)Consultant (domestic) Contractor (domestic) Service provider (domestic) Supplier (overseas)5 VA001VB001VC001VD001VE001Shareholders/investorsFor different categories respectivelyShareholders-localShareholders-overseasBankers/FI/investors localBanker/FI/Investors-overseas6 IA0001IB0001IC0001ID0001EmployeesFor different categories respectivelyEmployees (local/residents) Employees (foreigners)Employees (temporary)6 EA00001EB00001EC00001Customers For different categories respectivelyProject Customer - End customersProject Customer - Real estate agentProject Customer – UnderwriterProject Customer - Institute customersProject Customer - Overseas customers6 CG00001CH00001CI00001CJ00001Govt/statutory bodiesFor different categories respectivelyGovt./statutory Bodies (local) Govt./statutory Bodies (Overseas) 5 GA001GB0014. Illustrations for Coding scheme- “Objects ” from my handbook ObjectsCategories for classificationScheme proposed by authorno of digitsIllustration BOQ-MaterialsFor different types of materials used in works like Structure, Civil, others, consumables, etc respectively and range from 00001-99999 in each type and so on 7QA00001, QB00001QT00001, QU00001Assets/capitalItemsFor land, building, plant, machinery, etc respectivelyand range from 0001-9999 in each type 5AA 0001.AB0001.AC0001.FunctionsFunction, sub-function, and employee code 6PR 02 T01Core processAbbreviation for core process and continuous number 5C 1151Core activitiesAbbreviation for core activity and continuous number 5A2601Statutory processAbbreviation for core process and continuous number 5SU 301Statutory activityAbbreviation for core activity and continuous number 6AU 1201Core documentsAbbreviation for core document type and continuous number. Number range say 5 digits 00001-99999 Each fin. year number to start from 00001 5D 1201Statutory documentsAbbreviation for statutory document type and continuous number Number range say 3 digits 001-999 Each fin. year number to start from 00001 5E1201FieldsAbbreviation for “Field” and continuous number 4F 001Configuration tableAbbreviation for configuration table and continuous number 5CT 211Master data tableAbbreviation for master data table and continuous number 5MT 106Risk assessment processAbbreviation for risk assessment process - organization level, core process level, activity level, and continuous number 5RA 227, RA252, RA277Risk assessment activityAs above but for activity 4TA01Risk assessment processAs above, but for the statutory process level and continuous number 5RB152, RB177Risk assessment activityAs above but for statutory activity level 4TB01Risk assessment processAs above but for the Configuration table and continuous number 5RC152, RC177Risk assessment activityAs above but for Field choice level and continuous number 4TC01Risk assessment processAs above but for the Master data table and continuous number 5RD152, RD177Risk assessment activityAs above but for Field level and continuous number 4TD01Authorization ProfilesFor accessing core processes and associated activities 7PC02001Authorization ProfilesFor accessing statutory processes and associated activities 7PS00001Authorization ProfilesFor accessing field choices in configuration tables 7PT01001Authorization ProfilesFor accessing fields in Master data tables 7PM00501And so on 5.Way forwardThe above-proposed coding schemes are for the conceptual understanding of the Designers /other employees/users.These can be designed/altered at the absolute discretion of the organizationand can be 100% alphabetic or 100% numeric or hierarchical as felt appropriate and as per the required number of digits. In the scheme proposed by the author, the number of digits can be appropriately increased or decreased for higher or lower volumes of business activities, respectively.Usually, coding schemes are driven by the software solution and ERP solution used by the organisation.Irrespective of the design of the coding scheme chosen, the following must be ensured before the coding schemes are implemented.· Well-documented responsibility for designing, approving, requisitioning, and communicating the coding scheme· Providing training to users of the coding scheme before implementing· Compatibility of coding scheme with the software /ERP used in the organisationHandbook of the author A template illustrating the list of business activities to be performed for developing coding schemes is included in chapter 9 in my handbook and in annex 33B, uploaded to my website https://www.ethicalprocesses.com/blogThe handbook of the author titled” ETHICS in the real estate and hospitality industry, Volume 1- Architectural, Interior design, and MEP services
