… between people, between systems, between people and systems …

Background

When asked about my work and what I do, I sometimes answer …

I work at the interface between business people and IT people because business people don’t understand IT people, and IT people don’t understand business people

I usually follow that with the quip “and I don’t expect to be out of a job in my lifetime!”

Now, I am one of the leaders of Interface Associates where we seek to cultivate the capability within organisations to more effectively manage a range of interfaces without having a reliance on organisations and people like Interface and our Associates.

Interfaces

There are, of course, a range of external interfaces that any organisation needs to manage (even a sole-trader organisation). Some of these are shown in the following diagram.

There are also internal interfaces the organisations need to establish and manage, including those shown in the following diagram.

Role

In this role, there are a number of different approaches that have proven helpful, including acting as:

• Babelfish
• Conceptualiser
• Simplifier
• Animator

Babelfish

In this role, picking up the concept from Hitchhiker’s Guide to the Galaxy, the babelfish acts as interpreter and translator, helping people understand the different language and terminologies in use, often the different languages and dialects used by different professional backgrounds. The most significant role entails identifying and resolving situations where the same word is being used, but different meanings are intended (but usually not conveyed).

Conceptualiser

Organisations and the ecosystems in which they operate are often quite complicated, making them difficult to understand. In the role of conceptualiser, we develop conceptual models that provide a simpler and clearer representation that is easier to understand. There is also a much lower cost in changing a conceptual model to better reflect shared understanding or to explore future options, whether that be the business model or operating model for an organisation or organisational entity.

Simplifier

The role of simplifier extends beyond developing conceptual models to providing other models or abstractions of the system being considered. This may involve four different modes:

• composition / decomposition
• inclusion / exclusion
• generalisation / specialisation
• ideation / realisation

These different modes are chosen to assist stakeholders to focus on the area requiring greater (or lesser) attention and presenting some challenges in developing shared understanding.

Animator

Last, and certainly not least, is the role in helping stakeholders to distinguish between the animate and inanimate elements of the entity being considered, enabling stakeholders to form views as to where:

• consistency and efficiency is best supported by inanimate systems
• flexibility, creativity and variability is best supported by animate systems (people and teams)
• the interface between the animate and inanimate to establish the most effective outcomes

Value provided

Some of the underlying capabilities that we bring to these roles derive from:

• the wide range of patterns and experiences gleaned across different industries and organisations
• appreciation for the balancing and shifting of the interface (boundary) between social systems and technology systems
• our experience in evaluating relative merits of different positions / options
• the discipline, integrity and assurance that are brought through governance processes

Offer

We offer our service through a variety of different engagement models, based on the preferences, convenience and suitability as determined by our clients. The models and associated service offerings include:

• Learning through webinars, masterclasses, self-paced learning resources
• Coaching and mentoring associated with a variety of executive, management, project and change roles
• On-demand demand services where there is a more significant capability gap or insufficient need to warrant an internal position, offering roles such as on-demand COO, CIO, IT Manager, Program Manager, Project Manager, Business Analyst, Change Manager
• Research activities where clients and Associate jointly contribute to gathering of evidence to better inform evaluation of efficacy of approaches to transformation, change, capability cultivation and leadership mastery.

Enterprise modeling (or enterprise architecture) started off in the technology world, with the CIO and others needing to make sound investment decisions about enterprise wide infrastructure (such as mainframes, networks, etc).  These decisions involved resources which would support multiple change initiatives and where it would be “unfair” and “unjustifiable” for the initiating project to bear the full cost of the resource.  Equally, there was a need to ensure that these enterprise wide and longer-term investments would prove to be sustainable investments in situations where future project requirements were not well defined or understood.  Hence, the strong technical focus during the “childhood” years of enterprise architecture.

In its adolescent years, enterprise models incorporated business models AND technical models, such that the technical investments were informed by business considerations and were more “business aligned” or “business driven”.

In the early adult years (now), greater attention is being given to modeling business capabilities over technical capabilities.  Further, business architects are being more strongly valued and technical architects are being found  to be deficient in meeting the enterprise modeling needs in rapidly changing times, where businesses need to be able to respond to market disruptions in much shorter timeframes than was previously the case.

In such an environment, questions are starting to arise as to the balance of effort between modeling the business capabilities versus modeling the technical capabilities.   I recently indicated that I expected the demands for technical modeling would reduce due to greater use of “cloud services”, and then was given cause to provide the following explanation for why I thought so.

With the increasing alignment between business and technical capabilities, there will be less need to architect the technical capabilities. These will progressively become tightly defined capabilities which can be easily and effectively used by business capabilities.

Business agility will come through the flexibility to mix and match business and technical capabilities to meet changing market needs. Put a different way – agile businesses will become plug-and-play business capabilities with the supporting technical capabilities being enablers rather than barriers – architecture is needed moreso when there is poor alignment.

What do you think?

One of the most useful patterns (models) in enterprise modeling can be summarised as SICOCUO.

For those who are familiar with IDEF0, you will be familiar with IPO – input, process, output

For those who are familiar with Six Sigma, you will be familiar with SIPOC – supplier, input, process, output, customer

SICOCUO is a further extension of this thinking, firstly be extending beyond customer to include use, outcome

An important element in the design and delivery of an output is an understanding of its prospective use by the customer and the outcomes realised through this use.  The simplest way to describe this is in terms of an car manufacturer and a purchaser of a car. The intended use by the customer – whether to transport a family, to participate in a car rally, or to distribute bales of hay to livestock, dictates a range of the features and characteristics which need to be designed into the car and which influence the processes (and capabilities) required to deliver cars which will be valued (and hence purchased) by prospective customers.

Hence, the extension of SIPOC to SIPOCUO.

SICOCUO is a variant to SIPOCUO in as much as it treats the focus as a capability rather than a process.  By focusing on a capability, appropriate attention to be given to all elements required for the effective performance of the capability and hence the organisation deploying this capability.

Hence, the final formulation:

• Supplier
• Input
• Capability
• Output
• Customer
• Use
• Outcome

This pattern can be used at any level of an organisation.   It is quite valuable in distinguishing the responsibility of CXO and LOB Execs to realise the benefits from using a system versus the responsibility of the CIO to deliver a quality system.  It is equally valuable in positioning the current operation of an enterprise, its overall outputs (products or services) and the outcomes sought by its chosen customer segments.

It seems that there are a wide range of Board members (directors of companies, government enterprises and not-for-profit entities) who are unable to conceive / appreciate the nature of the disruption that is likely to / will inevitably occur in their market place – disruptions caused by innovative adoption of IT by others. This is not about knowing more about IT. It is about being able to picture and imagine a different operating model in their marketplace.

In a completely different context, my Church Council was discussing future directions. One Council member suggested that we pose the following question to members of our faith community – what are your hopes and dreams for how this faith community might make a difference in people’s lives in 10/15 years’ time. Another member who makes some of the most valuable contributions to the thinking of our Council responded to say she could not think that way. She could not conceive of what life might be like in 15 years time and then work back to the implications for now. Having said that, she was one of the first to “get” the fact that the world has changed and our community has not changed, but needs to respond to the changing world. She can work forward incrementally and deal with the necessary change in that fashion, but cannot use her imagination to jump forward 15 years. Some can, some can’t. It is not a reflection of an inappropriateness or unsuitability for governance. It is the different ways in which our minds work.

In a different space, exploring IT enabled innovation, I have become alert to one of the key issues facing Boards and Governments being that IT enabled innovation is disrupting businesses and marketplaces all over the world.

Yet there is an amazing inability of some people, even some for whom one might have the highest regard, to conceive of the nature of the disruption that will occur and the impact for their organisation. This is not about technology or technical knowledge. It is about the ability to imagine and conceive of completely different operating models being adopted by competitors which will radically change marketplace dynamics. It is an inability to observe patterns in other marketplaces and to conceive of the implications for the marketplaces in which they operate.We need to find ways to activate the collective imagination of Boards and Governments to better perceive changes which will inevitably occur in the markets in which they operate (whether commercial or non-commercial markets).

What better way than to model the markets in which we operate and regard them as the enterprise.  In that way, we will identify capabilities needed by the market and the opportunities to position our enterprises to meet changing market operating models and their associated market demands.

Understanding the value of enterprise modeling is best achieved through practical examples.

Here is an approach to applying enterprise modeling and governance thinking to an important national challenge in Australia – the Murray Darling Basin, a significant river system upon which a significant segment of our nation is dependent for positive economic, social and environmental outcomes.

What is apparent to me and I assume to some but not to others is:

1. The Murray Darling basin is a significant area of economic, social and environmental activity in the life of our nation. I don’t have the statistics at hand, but it does contribute a recognisable amount to our GDP and it does support a significant population. It is a significant environmental asset. These figures have been quoted and are readily available.
2. There are other significant communities beyond the bounds of the basin that rely on the continued viable operation of this river system. Typically this is a reliance on water supplies.
3. If the communities that exist within this geographical area and those outside the area continue to behave as they currently are (and have for the last x decades), it is evident that the river system will collapse and all the communities will suffer. Hence, change is mandatory – there is no choice.
4. There are many communities who are unwilling to make the currently proposed changes. They claim that the proposed changes will impact on them economically and socially, and reject the changes on this basis. Yet, if no change occurs then all will suffer economically and socially. So, the choices are between no change (unacceptable), insufficient change (unacceptable), some change (necessary but not yet acceptable). It appears that there is insufficient recognition of the degree of change needed, especially when that change impacts local communities – yet the local communities will be impacted even more by no change or insufficient change.
5. It is in this context, that we need new thinking models to enable appropriate decisions to be made, lest we make no decision and all suffer the consequences.

One thinking model which might help to approach the problem from a different angle, entails the following:

1. The Murrary Darling Basin is a signficant national asset
2. The MDB needs to be more appropriately “governed” – the current model of partnership between State Governments is clearly not working – it is evidence of failed governance.
3. A new governance arrangement would benefit from taking a “portfolio management” approach to this valuable national asset. That is, to manage the asset in a way which generates the greatest value to the asset owners, operators and those that rely on this asset. Portfolio management simply applies the governance concept to the defined resources involved in the portfolio.
4. A little known fact (as I understand it) is that our national Constitution which creates a Federation of states (and territories) is designed in such a way that it makes it very difficult to reduce or remove any states. (This comes from thinking and reviewing our three levels of government, and asking whether we could remove the second level – the answer is that it is virtually impossible to do). However, it is designed in a way that makes it relatively easy to add more states.
5. What if Australia was to create the new Murray Darling State? This state would have a geographical boundary that aligns with the Basin perimeter ie the primary area that is the source for the river system, and the communities that are within this boundary. The new state would involve excising these areas from Qld, NSW, Vic and SA. I imagine that ACT would remain a separate territory.
6. Under these new arrangements, the Murray Darling State would establish a Parliament and Government to attend to the long-term sustainability of the state, and all those within the state who are dependent socially, economically and environmentally on the viable operation of the state and one of its most valuable assets.
7. The MDS would have full rights to manage its assets, and would establish appropriate contracts with other states for the provision of products and services. Normal state trading arrangements would be established and operate.
8. States reliant on products and services from MDS would need to adjust their thinking and their behaviour as a result of becoming a customer of the MDS and negotiate in good faith, consistent with the Constitution. Disputes would be referred to the High Court.
9. MDS would have representation in the national Parliament, consistent with its composition and place in the nation, based on the normal rules for representation – population based for House of Reps and standard numbers for Senate. Future decisions might well still require an Authority which brings the States and the Australian Government together to make appropriate joint decisions.

This, to me, offers a new thinking model (and even perhaps a new operational model if it were decided to be implemented). It allows the problem to be tackled in a more holistic fashion, using conventional decision making tools and instruments. It allows the nation to come at this problem in a different manner, without all parties coming from the position of “everybody else needs to change but I won’t because it will be the death of me”.

Even if not implemented, I believe the thinking model allows for a different approach to the problem – and I would hope a more successful one in making the necessary decisions.

I am interested in comments on either of:

1. the merits of this as an alternate approach to a major national problem
2. the merits of finding alternative thinking models to intractable problems facing our Boards

Enterprise modeling, as described in previous items, provides decision support to enterprise improvement investment decisions.

Given that some of these decisions are in the province of corporate governance, it becomes evident that enterprise modeling, if used effectively, can contribute to and enhance corporate governance activities.

Of course, enterprise modeling is not exclusively applicable to corporate governance.  It supports a range of business improvement investment decisions, typically in the context of taking a portfolio management approach to a defined set of resources / assets to the benefit of overall improved organisational performance.

Hence, enterprise modeling is intrinsically related to and supports more effective approaches to the practices of governance, strategy and portfolio management.

Beyond the purpose of enterprise modeling, the question arises as to what value it offers and whether the value offered outweighs the cost of undertaking the modeling.

Value derived speaks to outcomes – how is enterprise modeling used; what are the outcomes sought in using it?

Based around the previous item which posits that the purpose is to enhance understanding of how an enterprise operates or could operate, the value and outcomes sought in achieving enhanced understanding could be:

• assessing the impact of changes to the enterprise
• evaluating the benefits of changing the enterprise
• being more readily able to estimate the cost of changing the enterprise
• identifying the outputs of any initiative aimed at improving enterprise performance

In effect, the products of enterprise modeling seek to better inform investment decisions associated with capability improvement for improved enterprise performance.

The assessment of the value and ROI of enterprise modeling are then related to the relative cost of making an investment decision, with or without the use of enterprise modeling and the likelihood or achievement of enhanced enterprise performance beyond that which would have been realised without the use of enterprise modeling.

This speaks to the fact that simple enterprises with simple improvement initiatives are unlikely to warrant or justify the use of enterprise modeling.  The larger and more complex the enterprise, the more likely that enterprise modeling with deliver value and deliver it in a timely fashion.

More about how to do that later!

It’s probably worth defining enterprise modeling in the context that it is being used here, as well as describing the purpose for which it is used.

Definition

Enterprise modeling – the science, art and practice of creating models of enterprises, whether of an existing enterprise or of an enterprise being imagined and envisioned

Here, enterprise and modeling are intended as per the earlier post about the power of enterprise modeling on this blog.

Purpose

The purpose of enterprise modeling in the context of enterprise-modeling.org is to create models which enable the participants in an enterprise to better understand how the enterprise:

• operates
• should operate (ie is intended to operate)
• could operate (eg. with particular changes or improvements)

Typically, the purpose revolves around a desire to improve the performance of the enterprise, to express the proposed model(s) of operation which it could pursue, to select the most effective, implementable model and to support the investment decision making process which identifies the cost of making the changes to the enterprise and the outcomes and benefits of making the change.

There are a number of interesting facets to enterprise modeling that make it a powerful, value adding tool.  These can be explained by considering the name – enterprise-modeling.

Enterprise

This is a powerful term in its own right, because it enables the users to determine the scope of the enterprise they wish to model.  An enterprise could be:

• A defined subset of an organisation
• A complete line of business in an organisation
• A complete organisation
• A collaboration or partnership between two or more organisations
• An industry or industry sector
• A nation

In effect, it can be any “endeavour”, “mutual undertaking” or “enterprise” that a group of people or participants choose to embark upon.

Models

This, too, is a powerful term.  We all have mental models – the constructs in our brains of the world we observe and live in.  All that we have learned is represented in “models”.  Each experience offers us the opportunity to change, adjust, improve our mental models.

When we work together in an enterprise, we find that it is helpful to be working within certain structures and guidelines.  These may be expressed explicitly or perhaps simply adopted implicitly.  When we want to achieve improved performance, we find ways to adjust and enhance the organisational capabilities, and in doing so change the model of operation, and oftentimes, make more explicit aspects of our agreed, consistent, underlying model of operation.  In making our models more explicit, we enable each participant to modify their mental model of how we work together and hence to gain greater alignment in mental models, and therefore hopefully, in shared behaviours, leading to improved enterprise performance.

Many of us have had exposure to the use of models to represent things.  Hence, it is not a foreign concept to use and see the value in developing and using models to express how our enterprise does work, should work or could work.

Lastly, a key factor motivating the use of this expression in favour of enterprise architecture derives from:

• modeling is likely to be more readily understood and accepted
• modeling reflects a key part of what is done – creating maps of how organisations work or should work – helping others who “design” the new, improved models of operation – and, thereby, not confusing or challenging roles wherein others in an organisation continue to design the enterprise, but now in a more informed manner through a shared and improved understanding arising from use of models

Modeling

And lastly, the wonder of the English language.  Not only can we use modeling to mean “the making of models”, we can also use it to mean “the demonstrating of models”, so it brings with it the sense of modeling the intended behaviour of an enterprise, bringing into play aspects of behaviour and culture, which are essential perspectives to consider when seeking to improve enterprise performance.