Developing coding schemes

 This article includes the following:

1. Purpose of coding schemes

2. Nine steps /activities for developing coding schemes

3.    Illustrations of coding schemes-Business entities

4. Illustrations of coding schemes-Business Objects

5. Way forward

6. 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 schemes

Companies 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 include

Business Entities include:

·      Vendors

·      Customers

·      Employees

·      Shareholders

·      Statutory bodies

and so on

Business 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 2^nd activity.

·      Number of digits

·      Structure as alpha-numeric or and numeric or and alpha

4. Based on the 3^rdactivity, develop a coding scheme and assign Codes to each of the aspects listed.

5. As an alternative to the 4^th activity, provide a solution for generating random code numbers through the computer for assigning codes. 

6. Incorporate the codes assigned in the 5^th 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 package

8. 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 

4. Illustrations for  Coding scheme- “Objects ” from my handbook 

5.Way forward

The 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 organization

and 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 organisation

Handbook 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/blog

The handbook of the author titled” ETHICS in the real estate and hospitality industry, Volume 1- Architectural, Interior design, and MEP services