The Next Big Thing
Posts about next generation technologies and their effect on business.

Enterprise Architecture adoption leads to agility and business efficiency

Enterprise ArchitectureI came across an interview article by Dana Gardner, president and principal analyst at Interarbor Solutions, with Jeanne Ross, Director and Principal Research Scientist at the MIT Center for Information Systems Research

 

I thoroughly enjoyed the book Enterprise Architecture As Strategy: Creating a Foundation for Business Execution, which she co-authored.  It’s a recommended read for Enterprise Architects.

 

In the interview Jeanne Ross shares how Enterprise Architecture and Enterprise Architects can help lead the way to successful business transformation.

 

Some key points from the interview:

 

“high performers in our sample of 102 companies, in fact, had greater architecture maturity.”

 

“there’s a cultural shift that takes place in an organization, when it commits to doing business in a new way, and that cultural shift starts with abandoning a culture of heroes and accepting a culture of discipline.”

 

“One thing you can’t get by spending more money is discipline, and architecture is very tightly related to discipline.”

 

“companies who were best at adopting architecture and implementing it effectively had cost pressures.”  Cost pressures force a company to make tough decisions.

 

“companies are struggling more than we realized with using their platforms well.”

 

A message for Architects is you need to understand how effectively are people in your company adopt the capabilities and leverage them effectively?  “the value add of the architecture is diminished by the fact that people don’t get it.”  “It requires persistent coaching.”

 

“The best architects are listening very hard to who is asking for what kind of capability. When they see real demand and real leadership around certain enterprise capabilities, they focus their attention on addressing those, in the context of what they realize will be a bigger picture over time.”

 

Companies need to ensure their enterprise architecture does not constrain them but instead enables them.  Effective Enterprise Architects can usually see the big picture even when the overall vision is not yet clear.

 

“What ends up happening instead is architects recognize key business leaders who understand the need for, reused standardization, process discipline, whatever it is.”

 

She’ll be sharing more insights at The Open Group conference in San Diego later this month.

Social Innovation – Outcome and Style

The concept of social innovation is not new.  Case in point, look to one of the U.S. founding fathers, Ben Franklin.  An exemplar of pragmatic innovation, he dedicated himself to the improvement of everyday life for everyday people in many disciplines, from education, medicine, and science to even a governing model for a fledgling nation.


Typically, the term social in this context of social innovation is viewed from the perspective of its outcome, its purpose. It answers the question, "Why am I doing this innovation?" That is, this type of innovation is focused on the welfare of human beings as members of society.


Now, fast forward from Ben to current times. In a recent article in the U.S., "The White House is encouraging federal agencies to use challenges and prizes to crowdsource new approaches to open government, innovation,,,". Again these innovations are focused on improving our lot as members of the U.S. society.


Certainly, this is not a U.S. phenomenon. Ireland created a global innovation challenge, "Your country Your call," to collect and implement ideas to stimulate and improve its economy. Clearly the expected outcome is an improvement in the welfare of the citizenry of Ireland. Perhaps we can learn from this approach to solve some of our U.S. economic woes?


And yet there is another dimension of the term social in social innovation. This deals with the style or method of innovation, the way we form cooperative and interdependent relationships with others in our community. No longer is Thomas Edison, the world record holder of 1093 patents, trudging down to the Patent Office with his invention prototype that he built typically by himself.


Today, the way we interact with others affects the way we innovate. That is, we collaborate with others to innovate. So leveraging social media such as social networking, blogs, Twitter, Facebook, and YouTube become a primary source of ideas, which are the fuel for innovation. Cisco launched a contest, I-Prize, to identify the next billion dollar business ideas. The winners of the contest were a team from Germany and Russia who collaborated for the winning idea. It was so successful Cisco is launching a second contest.


If you have any doubts that the way we socially interact affects the way we innovate, see this YouTube example. One snippet states that 34% of bloggers post opinions on products and services. What are they saying about yours?

Business Process Outsourcing (BPO) as a Competitive Necessity

A recent article announced: World Business Process Outsourcing Market to Reach $975 Billion by 2012, According to a New Report by Global Industry Analysts.  Gartner has a more conservative estimate of $188 Billion by 2012 with 6% annual growth-still a big number.  This growth of BPO is currently fuelled by cost savings, but in the long term it will be driven by competitive necessity.


BPO is not about moving business functions to other countries.  In some cases, this may involve the use of lower-income personnel in other countries, but this is not the primary purpose of BPO.


BPO is not about the IT, it is about business functions that are not core to the business of the client enterprise.  It's letting somebody who can do it better take care of those functions where there is no competitive advantage to doing it yourself.  Hewlett-Packard is in the BPO business.  For examples of BPO services, see HP BPO service offerings.  Additional offerings are under development.


BPO can provide the following benefits:



  • Scalability. A successful BPO provider will serve many clients so it should be able to easily accommodate changes in the scale of particular clients.

  • Economies of scale. The BPO provider spreads fixed costs and optimizes resource utilization over many clients thus reducing the cost for each client.

  • Expertise. The BPO provider can develop and maintain specialized expertise and invest in innovative solutions as a result of its scale.

  • Management of complexity. Global operations and regulations of multiple governments have made some basic business functions very complex. A BPO provider can monitor and address these concerns for many clients and relieve clients of this burden.

  • Technology independence. BPO services should be accessed through well-defined interfaces that remove technology as a client concern and enable the BPO provider to optimize the utilization and upgrades of technology to remain competitive.


These benefits are not new, but the potential value has increased.  The Internet has made services globally accessible and minimized the cost and risk of accessing services.  Service oriented architecture (SOA) has provided a framework and infrastructure for incorporating shared services into the enterprise architecture.  Global operations and markets have increased business complexity as a result of dealing with multiple languages, cultures and governments.


The result is that clients can rely on the expertise of BPO providers and focus their attention on their core business.  Enterprises will become virtual enterprises where multiple corporate entities participate in the operation of a business and many of these entities will be engaged in multiple virtual enterprises as BPO providers.


The reduction in cost and complexity for clients will become sufficiently significant to be a competitive necessity.  In June, 2008, I wrote Why SOA Is a Competitive Necessity.  SOA supports the consolidation of capabilities to be shared by multiple lines of business.  BPO takes this a step further by providing economies of scale from sharing across many enterprises.


Enterprises that don't outsource will be burdened with higher operating costs, a greater management burden and barriers to scaling up or down in response to market demands and economic trends.  At the same time, new entries into their market will be able to focus on their core business without developing all the supporting business functions.  They will be able to immediately operate internationally and scale up in rapid response to business growth. Barriers to entry of new competitors will be significantly reduced.


I recently wrote, BPM is the Beginning of the End of ERP.  ERP functions will be transformed by BPM, and BPO will replace client-operated ERP systems.  Instead of purchasing large scale applications and adapting them to their requirements, clients will integrate outsourced services.  The BPO services should be finer grained than ERP systems for more distinct business functions to enable flexibility and to enable clients to replace these services if competitors offer better value. 


Of course there are risks.  Contracts must be designed to define clear performance requirements and provide appropriate incentives for continuous improvement.  BPO providers must maintain security that exceeds that provided by clients on their own, and ensures separation of the intellectual property and confidential data of multiple clients. Failure of a BPO provider could endanger the business of all of its clients. These concerns should be addressed through due diligence when selecting a BPO provider, through performance monitoring and through periodic audits. 


Hewlett-Packard offers the following BPO advantages:



  • Global reach. HP has business operations around the globe and is doing business in more than 170 countries.

  • Industry expertise. HP, along with resources obtained from EDS, has expertise in all major industries and government operations.

  • Optimized technology stack. As the world's largest technology company, HP can provide a full stack of leading edge computing technology to deliver high quality and performance.

  • Established customer service operations. HP provides around the clock, customer service/help desk services for a variety of clients in a variety of languages.

  • Scale. HP is already one of the world's largest BPO providers.

  • Automation expertise. HP already makes extensive use of automation and will continue to enhance performance and quality of services based on experiences with large-scale operations in both its BPO and IT services and experience with clients in multiple industries.


The age of virtual enterprises is emerging.  For traditional enterprises, it will be a major transformation over many years, while their start-up competitors will rapidly integrate and grow.  It's time to start the transformation.

Integration of Business Models as Viewpoints on an Enterprise Architecture

Existing business models provide useful abstractions of the design and operation of an enterprise.  However, optimization of the enterprise requires multiple viewpoints, and these viewpoints must reflect a consistent underlying design.  Integrated models are essential to management of continuous change and optimization at an enterprise level.


When each viewpoint represents the current state of the enterprise, then the enterprise itself determines the consistency of the viewpoints.  However, when we consider a future state of the enterprise, there is a need for a unified representation of the future state to ensure that the viewpoints are consistent.  This is essential for a full understanding of the implications of changes since changes from one viewpoint will likely have effects in other viewpoints. 


In the Object Management Group (OMG) we have developed and continue to develop specifications for business modeling viewpoints.  These define models that are useful as stand-alone abstractions of the business, and support the development of viable software products.  However, there is increasing concern that these models should be integrated-that they should be viewpoints on a more comprehensive model of the enterprise architecture.


The OMG recently chartered an Architecture Ecosystem special interest group to consider approaches to integration of models.  Preferably the solution would support integration of not only models defined by OMG, but other models as well.  So the solution should not require changes to existing modeling specifications, but should provide a means to integrate heterogeneous modeling technologies.


Integration of these models involves aligning the representation of the same concepts that occur in different models.  Sometimes the same concept will have different names, and sometimes the same name will be used for different concepts.  Sometimes the same business entity appears differently in different viewpoints.  Consequently, the reconciliation of model elements becomes an issue of semantics-their meanings.  If elements from two viewpoints represent the same thing, then they should be represented once in the integrated, enterprise architecture model.


There has been a lot of discussion about semantics.  Should OMG specifications be represented in RDF (Resource Description Framework)?  Should the integrated enterprise model be a semantic model?  How do the OMG SBVR (Semantics of Business Vocabulary and Rules) and the ODM (Ontology Definition Metamodel) specifications fit into this picture.  How big would a semantic model be?  Does it only represent concepts that appear in viewpoints, or does it require the representation of related concepts in order to properly qualify the concepts of interest. 


I think we need to back up a bit and consider the problem we are trying to solve.  Ultimately we want a model of the enterprise that supports multiple viewpoints, stored in a database to be accessed and updated from multiple viewpoints.  So let's think about this as a database problem.


There's nothing new about views of a database.  A view defines a subset of the database that supports a certain purpose.  So each modeling viewpoint needs to have a view of the database to store or display that model. 


But first we will need a data model for the enterprise model database.  The database must store a union of the sets of data elements that make up the viewpoint models.  The challenge is to reconcile the elements that represent the same concepts in different viewpoints.  For that we need semantics.  We can consider if that means we need to create a semantic model or just a mapping of data elements performed by humans.


The other problem we must solve is the integration of updates.  If two or more modelers are working on different viewpoints that include some of the same business elements, what happens when they put their models back into the database?  Again this is not a new problem.  That's what locking is for.  When a viewpoint is retrieved, the elements are locked so that they can't be changed until the changed viewpoint is stored.  However, simple locking may prevent other modelers from doing their work, and changes to elements in one viewpoint may have implications to related elements in other viewpoints, so an update could make the enterprise model inconsistent. 


Consequently, there must be a discipline and supporting technology for updates that not only prevents conflicting updates, but provides a mechanism for reconciliation of changes that goes beyond the scope of changes made by a viewpoint.  This is similar to the problem of managing the development of engineering designs for complex products.


So I see these as two distinct problems: (1) defining the unified data model and mapping the viewpoints to it, and (2) reconciliation of updates.  I don't have the solutions, but I think this is a useful perspective for development of solutions.

What Do Organization Structures Really Look Like?

Traditional organization charts typically depict the management hierarchy and maybe some committees and dotted line reporting relationships.  This is inadequate for today's organizations.  Today there are many more roles and relationships by which business actually gets done.  In general, we don't know what our business organization structures really look like.


I reported in August on a new specification proposed in response to the Organization Structure Metamodel RFP (Request for Proposals) issued by the OMG (Object Management Group).  The RFP seeks proposals for an organization structure modeling language.  This new proposal challenges traditional ways of representing organization structures.  Organization models typically focus on the management hierarchy of "business units" with annotations of some exceptions.  The new specification recognizes that these divisions, departments, groups, teams, etc., represent only one general type of relationship in an enterprise.  The following are additional types of relationships that should be considered.



  • Matrixed product development teams

  • Committees, task forces, work groups

  • Project teams, strategic initiative teams

  • Participants in business processes or choreographies

  • Business partner relationships, liaisons, contracts

  • Ad hoc collaborative relationships

  • Exchanges of materials, work products, business transactions


Each enterprise should consider the types of relationships of interest in an organization model and the amount of update activity this will require to keep the model current.


Each of these relationships has people involved in specific roles.  The relationships and the roles outline how work actually gets done.  Some of these relationships are relatively stable, and some are quite dynamic.  Most of them are not new, but have not been viewed as aspects of an organizational structure.  In a recent BP Trends article, "The Process Managed Org Chart: The End of Management and the Rise of Bioteams," Peter Fingar describes some radically different organizational structures that may involve additional types of relationships.


In the past it was necessary to make announcements or draw diagrams on paper and distribute copies in order to provide this information.  Today this information can be maintained by computer to be readily available to everyone who has a need to know.  We shouldn't need to keep track of who is doing what in our heads or send out email queries to find out from people we think may be informed.  Computers can manage the complexity of a model with many types of relationships, they can perform timely update and distribution of this information, and they can provide the selective display of information to meet particular needs.  A more robust model will provide better definition of responsibilities, and provide a more complete representation of the organization for planning, coordination and business transformation.


A modern enterprise should have an on-line, real-time organization model that is updated as the organization changes and reflects the relationships by which work is getting done.  Some updates may be accomplished by manual input as relationships are established.  Most updates should come from the systems that support these relationships such as business process management systems, project management systems and contract management systems.  This real-time model will not only provide information for people, but should support the operation of systems for reporting, exercise of control and coordination of activities.  Capture of this information in an integrated model will reduce administrative overhead and ensure consistency among different systems.  In addition, such an organization model may retain historical information on roles and relationships to help identify people with insights or experience from past relationships.


Enterprises need this information now.  It will become increasingly important as organizations continually change to meet new business challenges and establish relationships outside the traditional management hierarchy with shared services, outsourcing and virtual enterprises.

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About the Author(s)
  • Steve Simske is an HP Fellow and Director in the Printing and Content Delivery Lab in Hewlett-Packard Labs, and is the Director and Chief Technologist for the HP Labs Security Printing and Imaging program.
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