An Ontology-Based Dynamic Enterprise Model: A Proposal with Application for Planning Sustained Compliance with the Sarbanes-Oxley Act

In this paper we propose an ontology-based dynamic enterprise model with application for enterprise planning. We use the resource-event-agent (REA) framework as an enterprise domain ontology from which we develop a systems dynamics model of enterprise processes. Such a model may have broad application for enterprise planning, but we specifically describe how the model can be used to plan ongoing compliance with section 404 of the Sarbanes-Oxley Act. We use a systems dynamics approach to describe generic procedural elements of the REA ontology. We thus make two contributions to the design science literature. First, the existing REA literature provides no clear guidance about how to model the procedural elements of business processes. Geerts and McCarthy (2000b, 2002) and Dunn et al. (2005) describe task level modeling as part of the REA ontology, but they do not provide any systematic guidance for developing procedural (task level) models. Our approach does provide a systematic method for converting REA models to procedural models. Second, systems dynamics have been extensively applied to business problems, but there is little evidence that any systems dynamic models of enterprise processes have been based on established ontologies. Our approach employs an established ontology, i.e., the REA framework, which facilitates reuse of and learning from these models in a variety of business contexts.