Using a Business Classification Scheme (BCS)

Executive summary

As a result of the move to full electronic document and records management (EDRM) functionality in the NT Government, the Records Policy Unit of DCDD (the Records Service under the Information Act 2002) recommends that agencies change the method of classifying records from thesaurus based classification to the use of a business classification scheme (BCS) in the corporate records management system, TRM.

In an electronic environment the move to BCS classification is more user-friendly and intuitive, requires less effort for individual users who are unfamiliar with standard records management principles and practices, and facilitates better use of the disposal scheduling process.


A business classification scheme, as the name implies, is derived from an analysis of the business being conducted. Records Standard 3 – Discovery endorses a functional approach to managing records, where records are classified and arranged according to the business they document. The functions identified as a result of the business analysis become the keywords used to describe relevant records in the classification scheme.

The NT Government has an all of government business classification scheme based on the NSW State Records Authority Keyword AAA model. This scheme is implemented in the form of agency thesauruses loaded into TRM which are used to title records. The same system of classification is used to describe disposal classes in records disposal schedules. The classifications documented in both corporate and functional records retention schedules are the only classifications approved for the disposal of NT Government records.

Classifying records based on an analysis of the unique business functions and activities of the organisation, independent of the organisation's administrative structure, is accepted as industry best practice nationally and internationally.(1)

This approach is organisation-neutral as it does not change when government functions are rearranged between departments. It offers a number of other benefits including:

  • explicitly linking records to their business context
  • the ability to link classifications to disposal, retention, access and security decisions
  • promoting consistency across business units and agencies to support discovery, FOI, and change management processes within an agency and between agencies during administrative change
  • accuracy and ease of retrieval over time through consistent use of language.

A business classification scheme is a primary tool in achieving these outcomes. The principal function of classification is to assist in the management of the records, with improvements in information retrieval a secondary benefit flowing from this central purpose.


To provide advice to public sector organisations on how to develop and manage a functional business classification scheme. This will support the processes of creation, discovery, security, and disposal of records through the consistent use of language in the description of corporate records and place the records into their business context.


This Guideline is issued by the Department of Corporate and Information Services (NT Records Service).

Legal and regulatory framework

The regulatory basis for this guideline is defined in:


Australian Standards applicable to this guideline:

  • Australian Standard AS ISO 15489: 2002 - Records Management
  • Australian Standard handbook HB 5031: 2011 - Records Classification.


The Records Service wishes to acknowledge material produced by Queensland State Archives, State Records Authority NSW, State Records Office of Western Australia, State Records of South Australia, and the NT Archives Service.

Records classification, based on functional analysis, is a key tool used in the management of records. When records are classified the management of their retention and disposal, and their security and access, is greatly improved. Classifications mark groups of records with a label, the classification, which conveys meaning to both users and records managers over time. Improved retrieval of records is a secondary benefit.

Business classification schemes and thesauruses use a controlled vocabulary as a tool to support effective records management. These tools keep information of like kind, or with shared attributes, together. They can be linked directly to disposal and security access regimes.

Functional analysis is used to identify business functions and to break these down into their constituent activities and transactions.(2) Analysis is top-down with the broad goals and objectives of the organisation first being identified. The business functions which deliver these objectives are then identified, with these in turn being broken-down into their constituent activities and transactions.

Business Classification Scheme (BCS)

A business classification scheme is derived from a detailed analysis of the unique business processes of an organisation.

It is a hierarchical classification with:

  • the top level representing the business function (not the unit name)
  • the second level representing the activities that make up the function
  • the third level the transactions that take place within each activity.

Business classification schemes should not describe the form a record takes, for example: email; file note; final report etc. Nor should they describe the business unit performing the action. This type of information can be captured in metadata about the record.

The classification should be based on the purpose or business use of the record, not the form it takes or the entity performing the action.

A BCS is a hierarchical classification scheme in which the available classifications are developed and laid out in advance, with the user selecting a classification from a list of the existing options.


A thesaurus, as used in the records management industry, is a hierarchical classification scheme based on function. It uses the same terms as a business classification scheme. However, all the classifications in the scheme have not been enumerated and listed out in full. The “titling” or classification of documents is flexible and can be made up, at the time of the record's capture, using the classification terms available and the rules of thesaurus use. These rules prohibit the linking of certain terms and indicate which terms should be or should not be used together.

There are three types of thesauruses:

  1. agency specific (functional)
  2. general administrative
  3. merged (1. and 2. combined).

An agency specific (functional) thesaurus addresses records that are only created by that agency and are 'operational' or 'business specific' to that particular agency.

There are currently two types of general administrative thesauruses used in the Northern Territory.

  • The NT Government has adopted Keyword AAA developed by the State Records Authority of New South Wales, which provides a controlled set of terms for use by organisations in the classification of common administrative terms, e.g. financial management, personnel and property management.
  • Keyword for Councils, also developed by the State Records Authority of New South Wales, is designed for use in classifying, titling and indexing council records. This is able to be adopted by NT local authorities for classifying records.

A merged thesaurus combines terms from both the functional and the general administrative thesauruses into a single merged thesaurus of terms in alphabetical order.

Transposing Thesaurus Terms into a BCS format

As the thesaurus is a hierarchal classification scheme based on functional analysis, it can be transposed into the BCS format. The keyword becomes the top level of the classification; activities become the next level; with subjects forming the third level.

Existing thesaurus terms are a good base for the development of a BCS. When transposing terms into the BCS format, it is essential to analyse which thesaurus titles are in frequent use. Analysis of the current usage of thesaurus terms in the titling of records will aid in mapping out key classifications.

A BCS should not be created which merely works through the possible combinations and permutations of the existing thesaurus as this will generate many classifications which are unlikely ever to be used. The NTG has been using thesaurus classifications in TRIM for more than a decade and consequently there is much precedent to work with when transferring the terms into a BCS. Consultation with business unit staff that will be using the classifications is essential in creating a usable scheme.

Business Classification System versus Thesaurus

Both the BCS and thesaurus are hierarchical classification schemes based on the analysis of business functions. The BCS requires more work at the design and implementation stage as possible classes of records which require a specific classification are identified and enumerated. New classifications can be added later if needed, however the BCS should be implemented in as "complete" a state as possible.

For the end user the BCS requires less effort to classify a record than a thesaurus. With a BCS, a user need only select from a predefined list of options, rather than “synthesise” a classification each time from the available thesaurus terms (though once a precedent has been set with a thesaurus this is typically re-used to maintain consistency).

In TRM the BCS has the ability to have a disposal schedule attached directly to a particular classification ie. in the general set-up options of the classification, one value can be assigned to each classification as a default disposal class. The TRM set-ups for ISO thesaurus titling do not allow for this option, requiring the disposal class to be assigned to the record as a separate step.

This extra functionality of the BCS in TRM is an advantage over the thesaurus and a key reason for its increased use. However, if BCS classifications are not based on a functional approach i.e. using the pre-existing thesaurus terms, the ability to map a disposal class to the classification may not be possible. A BCS classification should be based on a functional approach, with each classification able to be mapped directly to a disposal class.

Classifications which are too broad, refer to an organisational unit, or indicate a document type will not usually map cleanly to a disposal class and should be avoided.

Limitations of thesauruses

The thesaurus option in TRM allows the controlled titling of records. It includes provision to flag non-preferred terms and provide links to the preferred term (which a BCS does not do). Thesaurus titling is open to interpretation by end users as titles are selected and developed at the time of registration - unexpected use of terminology is possible.

A term at the second level of the hierarchy can have many broader terms, and many narrower terms, but not all these broader terms make sense when put together with the narrower terms.

For example:

  • A local council is responsible for managing their fleet of vehicles.
  • They are also responsible for controlling the local dog population under the Dog Act.
  • They apply for licenses for their vehicles, and the vehicles have licence plates.
  • They grant licenses to dog owners, and give the owners tags to affix to their dogs.

The following is the hierarchy as it would appear in the thesaurus structure providing a number of options, not all of them correct:

Table showing the limitations of classifying using a thesaurus structure; at the top level are the terms Fleet Management and Dog Management; at the second level is the term Licensing; at the third level are the terms Licence Plates and Dog Tags

Using the thesaurus these are the options presented for classification:

Broader Term: Dog Management, Fleet Management
Narrower Term: Dog tags Licence plates

What titles are allowed under the thesaurus?

  • Fleet Management - Licensing - Licence Plates
  • Dog Management - Licensing - Dog Tags
  • Fleet Management - Licensing - Dog Tags
  • Dog Management - Licensing - Licence plates

In the above example, the last two titles are invalid, however their creation is possible with the use of a thesaurus. A business classification scheme would not have the invalid classifications available for selection and the inadvertent use of these would not be possible.

The only options allowed would be as follows:

Table showing how the deficiencies using a thesaurus structure cannot happen in a business classification scheme; the top line links the three terms Fleet Management, Licensing and Licence Plates; the bottom line links the three terms Dog Management, Licensing and Dog Tags; there is no possible cross-over between the terms to create confusion.

The BCS removes the option for end users to select classifications that do not make sense, setting-out clearly and unambiguously the available options.

In addition to this, a BCS classification structure allows the allocation of disposal schedule classes in a way that is not automatically possible in a thesaurus (see 9. Align Classification with Disposal).


For the above reasons the NT Records Policy Unit recommends the use of a business classification scheme to classify records rather than use a thesaurus.

The preparation of a business classification tool requires the project team, or dedicated resource, to identify and collect a range of information that will be central to establishing an understanding of the agency's functions and activities.

The following steps should be used to achieve this result:

Identify existing records

Analysis of the frequency of use of thesaurus terms in the creation of agency records is a good method of identifying important classes. Examination of business unit work procedures and interviews with staff will identify and confirm classes.

Conducting a records survey would be part of a comprehensive approach to the identification of all records held by the agency. A survey would include records held in records management systems, business systems and databases.

It is important to collect as much information as possible about the records, in all formats, to assist in enumerating completely the information resource of the organisation and in the identification of control methods.

Research source documents

A primary source of information about the organisation and its functions is agency documentation.

Recommended source documents, for identification and analysis, are listed below:

  • Records disposal schedules
  • Administrative Arrangements Orders
  • Annual reports
  • Strategic plans
  • Corporate business plans
  • Work procedures
  • Corporate policies
  • Enabling and controlling legislation
  • NTG Corporate Thesaurus
  • Export of current thesaurus terms from TRIM database
  • Corporate website and/or intranet site
  • Standards and codes of best practice.

An analysis of this corporate and industry sector literature provides information useful in defining the business functions and associated activities.

Examples of the type of information derived from these sources are:

  • Records disposal schedules - functional analysis performed for the development of a disposal schedule is of great benefit in the development of a business classification (or vice versa). Check the record class description forms for more information.
  • Administrative arrangements orders - clearly defines legislation and functional responsibilities of NTG agencies.
  • Enabling and controlling legislation - core business processes and record creation requirements, and record retention and access requirements.
  • Annual reports - some detail of the major functions of the agency and their component activities, past achievements, planned future development and functions, and information regarding statutory or other establishing documentation.
  • Strategic plans - an indication of the planned future direction of the agency and some summary information about the activities about to be undertaken to achieve stated goals.
  • Corporate business plans - objectives that the agency has identified as priorities (these can be used for potential keywords or initial scope notes).
  • Corporate website and/or intranet site - agency structure and division of tasks and responsibilities, functions and activities of the agency.
  • Corporate policy and procedures - these documents are useful in identifying agency activities and transactions.

Research business information systems used in the organisation

It is important to be aware of the entirety of business information systems used in the organisation. Discrete business systems need to be identified and viewed as components of a whole system. These include those that are viewed as separate entities because of the medium in which they are managed, for example:

  • eCommerce and web-based transaction systems
  • electronic document management systems
  • line-of-business systems- including discrete databases managed in a variety of business areas.

Interview selected managers and staff

Interviewing key staff and stakeholders is essential in the development of any business classification. People who understand the organisation's business are able to describe, in a relevant language, the essential components and elements of their operation. Interviews aid in identifying the records produced, the systems and processes used, and assists in the process of identifying and accessing relevant documents. Contacts and relationships established become useful when seeking comment and endorsement of the final product.

It is recommended that staff to be interviewed should have:

  • positions that cover a range of functions and activities to provide a 'big picture' of the organisations' business and accountability requirements (including audit and legal specialists)
  • operational staff and action officers responsible for specific business processes that involve the initial transaction
  • quality assurance managers
  • systems administrators.

Questions to ask

  • What business processes are performed by your area?
  • What information is collected to conduct your business?
  • How do you break these broad areas down?
  • Do you work with other areas?
  • What terms do you use to describe your business?
  • What type of transactions do you process?
  • What documentation do you create?
  • What legislation do you operate under?
  • What are your reporting requirements?

The analysis of information gained through interviews and source documents can now be used to produce a draft classification that identifies the functions, activities and transactions of the agency.

Once the relevant terms, functions, activities and transactions are identified they are placed in a hierarchy to form the business classification scheme that should:

  • include all the business functions and activities being performed
  • be linked to functions and activities, not organisational units
  • be described using unambiguous terminology, including the use of scope notes
  • be hierarchical (moving from the broad {function} to the specific {transaction})
  • be specific to the organisation
  • be devised in consultation with users
  • be maintained to reflect changing business needs.

Each level of the classification should be described by a scope note which defines the function, activity or transaction included in the classification.

Confirm draft business classification scheme

It is essential that relevant draft extracts of the business classification scheme are circulated and confirmed with staff of the agency that have had intellectual input during the development phase.

Confirmation sought should ensure the draft scheme:

  • accurately describes the business functions, activities and transactions
  • is comprehensive and usable
  • is understood by the business unit.

Scope notes should be used to describe classifications in the same manner as terms are described in a thesaurus.

Please note: It may be necessary to amend, revise or update the draft as a result of the consultative process. If substantial changes are deemed necessary, a revised draft will need to be re-circulated. Staff involved in the project must be kept informed of any revisions or updates.

Industry accepted classification schemes

Classification schemes which have been developed and commonly accepted as national or international standards in particular industry sectors may be used where appropriate.

Industry classifications are more likely to be applied at a document level for the management of work processes or for indexing purposes (see s 11 below). The basis of industry classifications is not typically the business function, but based on subject or other attributes relevant to the industry.

Industry classification schemes need to be confirmed by relevant business unit staff for useability and be approved by the business unit.

All classification schemes should be approved by respective business unit managers and the agency CIO. Approval should include mapping of the classification to security and disposal classes if these have been included in the scope of the project.

The only approved classifications for disposal purposes are those in corporate and functional disposal schedules. These schedules have been authorised through the protocols required under the Information Act 2002 and NT Records Management Standards.(4)

In a well designed business classification scheme, individual classifications should be aligned to specific record disposal classes within an approved disposal schedule. Mapping of BCS classifications directly to record disposal classes is enabled in TRM as a general set-up parameter, allowing a disposal class to be assigned as a default to any record using the BCS classification.

Security and access controls on records can be assigned as a property of the BCS classification. In effect, security and access controls are mapped to the business classifications. As access and security status can alter over time, these will need to be monitored and the classification tool amended accordingly.

For an outline of the recommended NTG security model please refer to Records Management Advice number 9 - Recommended records security model.

TRM allows the setting-up of default security and access controls on each BCS class. Careful planning is required when setting-up the implementation of security. Inheritance of security and access controls from the BCS classification upon creation of the record may not be a valid approach (however it is an available option).

At the document level classifications (which are not aligned to a disposal class) may be used for work process purposes. Examples of these document level work process classifications are those used for the management of Ministerials and for the management of Iron Mountain service orders.

Documents titled with work process classifications should in turn be contained onto a “file” which has the appropriate disposal class mapped.

Organisations are dynamic entities, so any classification tool must be responsive to change and remain relevant.

For example:

  • an organisation may gain or lose functions as its responsibilities change
  • language and terminology used will also evolve over time.
  1. See AS ISO 15489.1, Records Management, Clause 9.5
  2. Australian Standard AS 5090-2003, Work process analysis for recordkeeping, ss 7.2 and 9.2
  3. See the Background research section of the Guideline for the development of a functional records disposal schedule
  4. See The approval process section of the Guideline for the development of a functional records disposal schedule for a description of the process

Last updated: 27 October 2020

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