Building the Agile Enterprise. With Capabilities, Collaborations and Values

418 Pages·2016·4.36 MB·English

by  Fred A. Cummins

Building the Agile Enterprise
Building the Agile Enterprise
With Capabilities, Collaborations and Values
Second Edition
Fred A. Cummins
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VDMLFigures:2.10,2.11,9.5,10.1(adapted)
BPMNFigure:4.2
CMMNFigures:4.6,4.7
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List of Figures
FIG.1.1 Transitionfrompoint-to-pointintegrationtoEAImiddlewareintegration.(A)Point-to-pointintegration 8
and(B)EAIhubandspokeintegration.
FIG.1.2 TheInternetastheglobalcommunicationhub. 10
FIG.1.3 Webservicesvision. 11
FIG.1.4 Businessdesignhierarchy. 14
FIG.1.5 Characterizationofacapabilitymap. 16
FIG.1.6 Capabilitiesofconventionalbusinessunitsilos. 17
FIG.1.7 CBAnetworkofcapabilityservices. 18
FIG.2.1 OverviewofVDMLconceptsandrelationships. 37
FIG.2.2 Capabilityofferlinks. 41
FIG.2.3 Asimpleactivitynetwork. 43
FIG.2.4 Activitywithvaluecontribution. 44
FIG.2.5 Businessitemsondeliverableflows. 46
FIG.2.6 Activityinputfromastore. 46
FIG.2.7 Activitydelegation. 48
FIG.2.8 Valueaggregationexample. 51
FIG.2.9 Examplevalueproposition. 52
FIG.2.10 SamplingofVDMLgraphicalelements. 56
FIG.2.11 Collaborationtypeicons. 57
FIG.2.12 Arolecollaborationdiagram. 58
FIG.2.13 Anactivitynetwork. 58
FIG.2.14 Collaborationstructurediagram. 59
FIG.2.15 Capabilitymanagementdiagram. 60
FIG.3.1 Capabilityunitanditscapabilitymethods. 67
FIG.3.2 Conventionalvaluechainmodels. 72
FIG.3.3 eTOMtelecommunicationsframework. 74
FIG.3.4 eTOMoperations,level2processes. 76
FIG.3.5 Adelegationtreeshowingvaluestream. 77
FIG.3.6 Anexampleforactivitydatacapture. 79
FIG.3.7 Examplewithsharableservice. 81
FIG.3.8 Synchronousandasynchronousflows. 83
FIG.3.9 Examplevaluepropositionexchange. 90
FIG.3.10 Serviceunitinterfaces. 94
FIG.3.11 SOAelectronicinfrastructure. 105
FIG.4.1 ExampleSellerprocess. 122
FIG.4.2 BPMNgraphicalelements(abbreviated). 123
FIG.4.3 Simplechoreographyfragment. 128
FIG.4.4 AnexampleBPMNcollaboration. 130
FIG.4.5 AsimpleBPMNconversation. 130
FIG.4.6 PrimaryCMMNgraphicalelements. 133
FIG.4.7 CMMNgraphicaldecorations. 134
FIG.4.8 VDMLactivitynetworkfragment. 143
FIG.4.9 BPMNtransformationofVDMLfragment. 144
FIG.4.10 Medicaldiagnosisexample. 145
xiii
xiv List of Figures
FIG.5.1 Productionrulesengine. 159
FIG.5.2 TypicalDMNtable. 166
FIG.6.1 Datamanagementarchitectureoverview. 184
FIG.6.2 Aclassmodel. 204
FIG.7.1 Publickeyencryption. 220
FIG.7.2 Accessauthorization. 231
FIG.7.3 XACMLexamplepolicysetstructure. 233
FIG.8.1 Brokerednotification. 254
FIG.8.2 Networkednotification. 254
FIG.9.1 Businesschangemanagementframework. 262
FIG.9.2 Changepropagation. 266
FIG.9.3 Thebusinessmotivationmodel(BMM). 273
FIG.9.4 Strategicplanningfortheagileenterprise. 275
FIG.9.5 TransformationmanagementprocesswithVDML. 280
FIG.9.6 Exampleproductlife-cyclevaluechain. 282
FIG.10.1 Anexample,extendedorganizationdiagram. 303
FIG.10.2 Serviceunitinterfaces. 307
FIG.10.3 Topmanagementorganizationstructure. 317
FIG.11.1 Senseandrespondprocess. 337
FIG.11.2 Levelsofleadership. 342
FIG.11.3 Valuedeliverymaturitymodelstages. 351
FIG.A.1 Valuedeliverymaturitymodel. 370
FIG.B.1 Preliminaryconceptdiagramforculture. 380
Preface
Thefirsteditionofthisbookwasfocusedonservice-orientedarchitecture(SOA),businesspro-
cessmanagement(BPM),andmodel-basedmanagement(MBM).Atthattime,Iwasafellowat
EDSandwasengagedinadvancingtechnologyforbetterbusinesssolutions,improvingappli-
cation development methods, and developing industry standards related to SOA, BPM,
andMBM.
Thefirsteditionwastheculminationofamanyyearsoftechnicalandbusinessconsultingalong
withworkonindustrystandardsastheEDSrepresentativetotheObjectManagementGroup
(OMG).Throughoutmycareer,Ihavehadtheopportunitytobeontheforefrontofemerging
technologiesandparticipatedinapplyingthetechnologytobusinesssolutions.Myexperience
andinsightsgrewfurtherthroughcollaborationwithindustryleadersinmyroleascochairofthe
OMGtask force that iscurrently the BusinessModeling and Integration DomainTask Force
(afterseveralnamechangesasithasevolvedoverthelast17years).
WhenIundertookwritingofthefirstedition,itwascleartomethatSOAcouldhelpbetteralign
information technology to business needs for business systems since businesses have used
shared services for accounting, purchasing, human resource management, and other shared
capabilitiesformanyyearsbeforecomputers—itisabasicbusinesspattern.Iparticipatedin
thedevelopmentofSoaML,amodelinglanguageforspecificationofcomputer-basedservices
andcomponent-orienteddesignofbusinesssystems.Duringthistime,Ialsoparticipatedina
jointeffortofEDSandOracletodevelopaSOAmaturitymodelthatdefinedthetypicalfive
levels of maturity for business and technology to implement a service-oriented business/
enterprisearchitecture.
Duringthesameyears,BPMhadbecomeanestablishedbusinesspracticethatwasbecoming
stronglyinfluencedbybusinessprocessmanagementsystems(BPMS).Thiswasimportantfor
puttingbusinesspeoplemoredirectlyinchargeoftheirbusinessprocesses,whereasearliersys-
tems embedded business processes in large applications where only computer programmers
could understand and adapt the processes to business needs and changes. I participated in
thedevelopmentofearlyspecificationsforautomationofworkflowmanagementandlaterspec-
ificationsformodelingbusinessprocesses.TheendresultwastheOMGspecification,BPMN
(businessprocessmodelandnotation)thatbroughttogetherbusinessprocessmodelingefforts
ofOMG,andbusinessprocessmodelinggraphicsoftheBusinessProcessManagementInitia-
tive(BPMI)afterBPMImergedwithOMG.
Finally,modelingtoolsemergedtoassistbusinessleadersinsupportofstrategicplanning(the
OMGbusinessmotivationmodel—BMM)andthecaptureofbusinessrulesalongwithassoci-
atedterminologyandsemantics(semanticsofbusinessvocabularyandrules—SBVR).BMM
xv
xvi Preface
cametoOMGasadraftspecificationdevelopedbycollaborationofanumberofconsultants
whohadsupportedstrategicplanningandhaddevelopedasharedframework.SBVRwasdevel-
opedthroughtheOMGprocessinvolvingadiversegroupofconsultants,academics,andindus-
tryexpertsdrivenbyadesiretoprovidebusinesspeopleandconsultantswitharobustcapability
tocaptureandexpressbusinessruleswithconsistent,well-definedbusinessconcepts.
Mygoalwiththefirsteditionwastobringtogetherbusinesspeopleandinformationtechnology
peoplewithanunderstandingofhowinformationtechnologyshouldservebusinessandhowa
number of information technology standards can come together to meet business needs.
Ibelieveitreflectedthethencurrentstateofbusinessandtechnology.
Irecentlyundertookwritingofthissecondeditiontoreflectmorerecentadvances.Iexpectedto
makesomerefinementstosomeofthechaptersandaddtheimpactofCMMN(casemanage-
mentmodelandnotation)andVDML(valuedeliverymodelinglanguage).However,asIgot
into the detail, I realized the full significance of these new standards and other industry
advances,andthissecondeditionwasalotmoreworkthanIanticipated.
Essentially, the current potential for enterprise agility has evolved. Beyond the advances in
modeling, smart phones have connected hand-held computers and personal interactions to
the Internet. Social media have engaged people everywhere, driven changes in awareness
andattitudes,andextendedthereachandexposureofbusinessinformationsystems.TheInter-
netisbeingconnectedtoawiderangeofsensors,devices,appliances,andvehicles—theInter-
netofThings.Cloudcomputingisgainingtractionsasacomputingandcommunicationsutility,
and distributed computing developed for Internet searches and the cloud have enabled mas-
sivelyparallel,distributedcomputingappliedto“bigdata”for“analytics,”theanalysisofcor-
relations,events,andemergingtrends.
InChapter1,Iexpandontheevolutionoftechnology,wherewehavebeenandwhereweare
todaywithanintroductiontoanewwayofthinkingabouthowtheenterpriseshouldwork.
InChapter2,IintroduceVDMLasamodelinglanguagetobridgethegapbetweenstrategic
plans,businessrequirements, thetransformationofbusinessoperations,anddesignofopera-
tionalsystemsofanagileenterprise.VDMLbringsafocusoncreationofvalueintheenterprise
as a networkof collaborations applying capabilitiesto create value anddelivery of values in
customervaluepropositions.VDMLprovidesanabstractionofthebusinessthatismoresuit-
ableforconsiderationbybusinessleadersandanalysisofoperatingperformancefromanenter-
priseperspective.
InChapter3,Idescribeabusinessarchitecturecomposedofcapabilitybuildingblocksandpre-
sentsometechniquesforanalysisofanexistingenterprisetodiscovertheinherentcapability
building blocks. The building blocks can be configured to consolidate capabilities shared by
multiplevaluestreamsthatdeliverdifferentproductsandvaluepropositionstodifferentmarket
Preface xvii
segmentsaswellasinternalconsumers.Thesharingofcapabilitiesdrivesinformationtechnol-
ogyinfrastructurerequirementsaswellasorganizationalchange,discussedlater.VDMLpro-
videsthemodelingstructuretoconfigure,analyze,andoptimizetheimplementationsofshared
capabilitiesfromanenterpriseperspective.Thechapterthenexpandsonrequirementsforser-
viceunits(introducedinthefirstedition)thataretheoperationalimplementationofsharable
capabilities.
InChapter4,Igodeeperintobusinessdesignwithafocusonbusinessprocesses.Itprovidesan
overviewofBPMNandCMMNmodelinglanguages.Inthefirstedition,thebusinessprocess
focuswasonprescriptive,repeatableprocessesofBPMN.CMMNbringsautomationsupport
foradaptiveprocessesthataredefinedandadjustedbytheparticipatingknowledgeworkersas
thesituationevolves,anditsupportscollaboration,coordination,andadaptationthatwerenot
automatedwhenthebusinessprocesseswerepredefinedbyBPMN.CMMNbringsthepotential
forautomationsupporttotheworkofknowledgeworkersandmanagerstosupportcollabora-
tion,coordination,andtimelyresponsetochangingcircumstances.Inthischapter,weproposea
disciplinethatgoesbeyondcurrentBPMpracticestoaddresstheintegrationandsupportofthe
networkofcollaborationsbywhichtheenterpriseactuallyworks.
InChapter5,Ifocusonbusinessrules.Rulesdefinerequiredrelationships,actions,andcon-
straintsandareofparticularconcernwheretheyimplementpoliciesthatmayexpressmanage-
mentintentorgovernmentregulations.Rulesarealsoimportanttosupportdecisionmakingand
analysis, including rule-based systems that may support complex planning, configuration,
search,anddiagnosis.
In Chapter 6, I describe a data management architecture to support the agile enterprise. The
chapterbeginswithsomegeneralpatternsandprinciplesandthendiscussesthearchitectural
components that include the distributed management of master data (the enterprise records),
thecaptureofperformancedata,thecaptureandmanagementofbusinessknowledge,thecoor-
dinationofdataupdates,andsupportofbusinessintelligenceandanalytics.Thechaptercon-
cludes with an overview of data modeling and highlights of implementation of the data
managementarchitectureinthecontextoftheValueDeliveryMaturityModelofAppendixA.
In Chapter 7, I discuss information security issues and technology. Information security is
essentiallyaboutmitigationofrisk.Exposureofdataandsystemsisamajorconcernforbusi-
nessleadersbothwithglobalexposurethroughtheInternet,andtheintegrationofcapabilitiesof
the agile enterprise that requires increased accessibility across organizational and enterprise
boundaries.Thischapterbeginswithperspectivesontherisksofinformationsecurityandthen
providesanintroductiontokeysecuritytechnologiesandmanagementofauthorization.
Chapter8isaboutidentificationandresponsetoeventsthatdrivetheoperationoftheenterprise.
Theseareidentifiedasexceptionsorcontrolsinformalbusinessprocesses,changesofbusiness
state that are relevant to oversight or corrective action, and other less predictable and more
xviii Preface
disruptiveeventsthatmaycauseoperationalfailures.Thechapterdiscussesthevariousforms,
sources,consequencesofevents,andmitigationoffailuresanddescribestherequirednotifica-
tionserviceoftheinformationinfrastructure.
InChapter9,Ifocusonsensingandrespondingtoeventsandcircumstancesthatmayrequire
changestotheenterprise.Anagileenterprisemustrecognizeandrespondtorelevantevents,
particularly events in the ecosystem as well as internal insights or innovations. These events
areprimarilyrecognizedinbusinessintelligenceandanalytics,orbyobservationsofindivid-
uals.Thechapterproposesasenseandresponddirectorytorecordevents,resolveduplicationof
alerts,alertappropriateresponders,andtrackeffortsforresolution.Italsorecommendsesca-
lationofresponsesbasedonthescopeandseverityofimpact.Thechapterthenturnstocon-
sideration of transformation planning and management and product lifecycle management
that are driven by strategic planning and supported by services for business development
andtransformation.
InChapter10,Ifocusonamanagementhierarchyfortheagileenterprise.Thisbeginswiththe
generaldesignrequirementsofserviceunits—theoperationalequivalentofsharablecapabili-
tiesandtheorganizationalgroupingandmanagementhierarchyformanagementofsharedser-
vices. Next, we consider governing board support services, executive staff services,
administrativesupportservices,andbusinessoperationsservicesthataredividedbetweenline
ofbusinesscapabilitiesandsharedcapabilities.Thechaptercloseswithabriefdiscussionofthe
organizationaltransitionasitincreasesinlevelsofmaturity(AppendixA).
Chapter11concludesthebookwithafocusonenterpriseleadership.Itstartswithconsideration
ofthesupportsthatshouldbeavailabletobusinessleaders.Itthenexaminesleadershiprolesin
fourcategories:thegoverningboard,topmanagement,capabilitymanagement,andknowledge
workers.
Thereareseveral themes.Thegoverningboardshouldbemoreinvolvedinensuringthatthe
enterprise is doing the right thing and doing it well from an investor’s perspective, it should
ensureobjectiveriskassessmentandanacceptablelevelofrisk,anditshouldmonitorperfor-
manceforbusinesstransformationandcustomerexpectationsofvalues.Thetopmanagement
mustprovideindustryleadership,conductcontinuousstrategicplanning,drive thesharingof
capabilitiesthatareoptimizedfromanenterpriseperspective,andprovidetheculturalenviron-
ment that inspires and empowers employees to contribute beyond routine responsibilities—a
conceptual model of culture is discussed in Appendix B. The capability managers, within
the scope of their responsibility, must contribute to risk assessment and mitigation, optimize
capability performance, manage and protect enterprise master data, and enable and provide
incentives to empower and inspire knowledge workers. Knowledge workers should be a key
source of alerts and solutions for sense and respond, they should contribute to optimization
of their capability units, and they should contribute to innovations and collaborations across
organizationalboundariestobringsolutionsandnewideas,bottom-up.
Preface xix
Thechapterthenturnstothechallengeofmakingtheenterpriseanindustryleaderthroughstra-
tegic initiatives, industry advances, influencing government regulations, and development of
industrystandards.Alistofpotentialindustrystandardsisoutlinedasopportunitiestofurther
improvebusinessagilityaswellasefficiencyandcustomervalue.
Thisbookisnotaproductofresearch,perse,becauseitisabouthowthingscouldbedone,not
howtheyaredone.Itistheproductofmanyyearsofsystemsdevelopment,technologytransfer,
business and technology consulting, and collaboration on industry standards that change the
stateoftheart.Therewillbenewideas,buttheinherentconceptualmodelofthisbookisbased
onindustrystandards,successfulbusinesspracticesaswellaschallengesandopportunitiesthat
callforbothabetterunderstandingofthewaytheenterpriseactuallyworks,andthemeansto
formulate and implement better solutions. I hope it will help business leaders appreciate the
potential of the technology and the value of industry standards, and encourage participation
in the development of future industry standards as well as government regulations to bring
greatervaluetocustomersandopportunitiesfortheenterprise.