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Building organizational agility into large scale software-reliant environments

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The tempo at which an enterprise creates new uses for its systems is different from that of its acquisition or systems development processes. The military continues to confront the issue of how fielded systems can support the agility needed by its deployed forces. This problem of diverging tempos applies to a variety of large-scale, software-reliant enterprisessuch as those found in healthcare and digital communications. This paper posits four realities underpinning an approach to this problem space: the governance-demand double challenge, edge-driven perspective, stratification, and demand cohesion. It uses a particular case example to show how these concepts support the modeling and analysis of the enterprise as a socio-technical system of systems. The paper argues that analyses based on this approach are necessary for making this problem space tractable.

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Building organizational agility into large scale software-reliant environments

  1. 1. Building Organizational Agility into Large-Scale Software-Reliant Environments Philip Boxer March 25th 2009 Copyright © Philip Boxer 2009 1
  2. 2. Agenda The divergence of acquisition & demand tempos (3) The need for three modeling perspectives (2) Four issues arising in building agility (4) Valuing flexibility of component systems (5) Copyright © Philip Boxer 2009 2
  3. 3. Speech by Secretary Gates: There are two paradigms that must coexist The need for state of the art systems – particularly longer range capabilities – will never go away… We also need specialized, often relatively low-tech equipment for stability and counter-insurgency missions. – How do we institutionalize rapid procurement and fielding of such capabilities? – Why do we currently have to go outside the normal bureaucratic process? Our conventional modernization programs seek a 99% solution in years. Stability and counter-insurgency missions require 75% solutions in months. – The challenge is whether in our bureaucracy and in our minds these two different paradigms can be made to coexist. Extracted from speech delivered by Secretary of Defense Robert M. Gates, National Defense University, Washington, D.C. September 29, 2008 http://www.defenselink.mil/speeches/speech.aspx?speechid=1279 Copyright © Philip Boxer 2009 3
  4. 4. The three tempos: analyzing the impact of the client’s relation to customers’ changing demands Client (defense) Enterprise users usersSupplier 1 Supplier 2 supports supports The customer’s demand/threat The client enterprise aligns to the demand/threat of the customer The rate at which new forms of demand/threat need to be satisfactorily addressed Demand/ Threat Tempo The rate at which the defense enterprise is able to support new forms of mission capability Readiness Tempo Customers of the Client Enterprise Supplier Client (defense) Enterprise The ‘beyond’ of the Client (defense) Enterprise 1 2 3 4 5 6 orchestration Syn- chron- ization Demand/ Threat Acquisition Tempo The rate at which new requirements can be met The supplier responds to the client enterprise aligning to the demand of the customer Copyright © Philip Boxer 2009 4
  5. 5. And So… • The two paradigms are about diverging acquisition and demand/threat tempos – Their coexistence depends on managing the readiness tempo in its own right • To do this, the defense enterprise must: – sustain multiple collaborations able to address concurrent types of demand/threat – build organizational agility into large-scale software-reliant environments, based on the flexibility of individual capabilities • In support, the supplier has to be able to price flexibility of component systems – By valuing its impact on the overall agility of the defense enterprise Copyright © Philip Boxer 2009 5
  6. 6. Agenda The divergence of acquisition & demand tempos (3) The need for three modeling perspectives (2) Four issues arising in building agility (4) Valuing flexibility of component systems (5) Copyright © Philip Boxer 2009 6
  7. 7. The Supplier’s perspective on the client enterprise: the focus is on the SoS A defined value-creating relationships enables the other two vertices to be approached from the infrastructure perspective Value proposition in response to Demand Governance Value-creating (threat- reducing) relationship CollaborationSocio-Technical Governance of the infrastructure Supporting Infrastructure Demand for value-creating (threat-reducing) relationship Behaviors supporting the collaboration Copyright © Philip Boxer 2009 7
  8. 8. The need for three modeling perspectives: making the demand-side perspective explicit Demand for value-creating (threat-reducing) relationships CollaborationsSocio-Technical Value propositions in response to Demand Behaviors supporting the value propositions Governance of the infrastructure The (supply-side) infrastructure perspective on the behavior of systems of systems The demand-side perspective on the value- creating relationships to demand Multiple CollaborationsSupporting Infrastructure Governance Value-creating (threat- reducing) relationships Complex systems of systems: all three modeling perspectives become necessary Copyright © Philip Boxer 2009 8
  9. 9. Agenda The divergence of acquisition & demand tempos (3) The need for three modeling perspectives (2) Four issues arising in building agility (4) Valuing flexibility of component systems (5) Copyright © Philip Boxer 2009 9
  10. 10. 1: The Double ‘V’ presents a Double Challenge Requirement Solution System components Design decomposition System integration Multiple Collaborations supported by Collaborative SoS This cycle must drive the client (defense) enterprise. 1 2 3 4 5 6 Military Effects Composite Capabilities Mission Command Force Structure and Composite Capabilities Scenarios and Campaign Plans demand-side supply-side Boxer, P.J. (2007) Managing the SoS Value Cycle, January 2007, http://www.asymmetricdesign.com/archives/85 Operational Capability plus DOTMLPF = Capability gap minus DOTMLPF* = * Doctrine Organization Training Materiel Leadership Personnel Facilities Copyright © Philip Boxer 2009 10
  11. 11. demand-side supply-side 2: Alignment to demand has to be stratified * Framework Architectures, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, June 2008 6Decisive Points Effects Campaign (Demand) Tempo 4 5Mission Command Force Structure Operational Capabilities Composite Capabilities Synchronization Readiness Tempo 1 2 3Operational Capabilities Fielded Equipment Equipment Equipment Fielded Equipment Acquisition Tempo Copyright © Philip Boxer 2009 11
  12. 12. 0 1 2 3 4 5 0 1 2 3 4 5 Materiel & technology Doctrine & operational concepts Facilities & infrastructure Leadership & education Driven from ‘center’ of the Client Enterprise Edge organization Force composition & collective learning Situational understanding Personnel & culture Driven from the ‘edge’ of the Client Enterprise where it meets demands needed planned execution 3: Alignment processes have to be edge-driven Copyright © Philip Boxer 2009 12
  13. 13. 4: Force cohesion depends on analyzing the relationships between all three perspectives Demand for value- creating relationships CollaborationsSocio-Technical Value propositions in response to Demand Behaviors supporting the value proposition Governance of the infrastructure Shape granularity/modularity and alignment of supporting behaviors Multiple Collaborations Constrains possible value propositions of collaborations Supporting Infrastructure Analysis of model needs to examine the way all three modeling perspectives constrain each other Analysis of model needs to examine the way all three modeling perspectives constrain each other Analysis of model needs to examine the way all three modeling perspectives constrain each other Copyright © Philip Boxer 2009 13
  14. 14. Agenda The divergence of acquisition & demand tempos (3) The need for three modeling perspectives (2) Four issues arising in building agility (4) Valuing flexibility of component systems (5) Copyright © Philip Boxer 2009 14
  15. 15. The defense enterprise: its ‘revenue’ comes from the state Suppliers of Capability The Defense Enterprise Lower ‘V’ Flexibility here Suppliers Client Enterprise Campaigns in Theatre Upper ‘’ Agility here Customers of the Client Enterprise Capability Costs Funds Flow Acquisition costs of the Defense Enterprise Defense Expenditure Revenue to the Defense Enterprise Client(defense) Enterprise users usersSupplier 1 Supplier 2 supports supports orchestration Syn- chron- ization Demand/ Threat 1 2 3 4 5 6 Copyright © Philip Boxer 2009 15
  16. 16. ‘Real Option’ analysis: valuing the impact of changes in component system flexibility on force agility The value of an incremental investment in some new capability is its impact on both the tradespace and the spread/variance in expenditure Probability Levels of defense expenditure on Campaigns The cost of operational approach ‘b’ across the variety of scenarios b a The cost of operational approach ‘a’ across the variety of scenarios Benefit 1: Reduction in average level of expenditure through impact on tradespace. Benefit:2: Change in spread/variance in levels of expenditure Benefit 2: Change in spread/variance in levels of expenditure Copyright © Philip Boxer 2009 16
  17. 17. Two kinds of benefit: impact on the tradespace, and change in spread/variability in defense expenditure Suppliers of Capability The Defense Enterprise Campaigns in Theatre Defense Expenditure Capability CostsFunds Flow Funds Flow deltas Substitution Cost delta Saving from substitution Lower ‘V’ Flexibility here Upper ‘’ Agility here Customers of the Client Enterprise Suppliers Socio-technical Client Enterprise Saving from reduction in variability of expenditures + value of impact on variability Probability Levels of defense expenditure on Campaigns b a Saving from doing more with same (or less) Copyright © Philip Boxer 2009 17
  18. 18. Modeling socio-technical SoS of multiple collaborations Analyzing alignment of strata to demand 5-6col1x5 unitorderborder_isr_cell unitorderborder_reaper_strike_cell unitorderborder_sf_cell unitorderafghan_border_strike unitorderborder_caoc_atc_sync unitorderborder_hale_bm unitorderborder_male_bm traceventborder_male_outputs traceventborder_hale_on_station traceventborder_male_on_station traceventborder_male_strike traceventafghan_report traceventborder_sf_on_station traceventindividual_in_afghan-pakistan_border channelborder_hale_bm channelborder_male_bm channelborder_isr_cell channelborder_reaper_strike_cell channelborder_sf_cell c_sitnindividual_in_afghan-pakistan_border orchnafghan_border_strike 1 1 1 1 1 1 1 1 1 1 1 outcomeborder_hale_on_station 1 1 1 1 1 1 outcomeborder_male_on_station 1 1 1 1 1 1 outcomeborder_male_strike 1 1 1 1 1 1 outcomeborder_sf_on_station 1 1 1 1 khowborder_sf 1 1 1 1 1 1 khowborder_male_strike 1 1 1 1 1 1 1 khowborder_hale_global_hawk 1 1 1 designborder_hale_global_hawk 1 1 designborder_male_operator 1 1 1 1 1 1 1 capyborder_hale_global_hawk 1 1 capyborder_male_reaper 1 1 1 1 1 capyborder_sf 1 1 1 1 1 systemborder_hale_global_hawk 1 1 systemborder_male_reaper 1 1 1 1 1 1 systemborder_sf 1 1 processborder_hale_global_hawk 1 1 processborder_male_reaper 1 1 1 1 1 processborder_sf 1 1 1 1 1 dprocessborder_hale_global_hawk 1 dprocessborder_male_reaper 1 1 1 1 Costing Cohesion of Mission Capabilities Defence Expenditure Scenario 1 Alternative Large Scale Small Scale enduring Scenario 2 Scenario 3 Medium Scale enduring Small Scale enduring Small Scale one-off Medium Scale enduring Small Scale limited Small Scale one-off Monte Carlo analysis of impact of variations in demand on spread of possible defense expenditure 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0 75 150 225 300 375 450 525 600 675 750 825 900 975 1050 1125 1200 1275 1350 1425 Scaled Cost1 Scaled Cost2 Scaled Difference Real Option Valuation of impact on expenditure spread Value for Defense: Impact on Capability Tradespace + Economies of Alignment Valuing adaptability: the value of creating economies of alignment for the defense enterprise What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, September 2008 Copyright © Philip Boxer 2009 18
  19. 19. Conclusion The diverging tempos change the nature of the problem space – Involves modeling demand-side as well as supply-side perspectives – Raises four issues in building agility: • the double ‘V’, stratification, edge-driven perspective, and force cohesion Building agility into large-scale software-reliant environments depends on: – Costing the way force cohesion is created around particular demands – Establishing the impact on agility of new flexibilities in component systems – Identifying the value of that impact To manage both paradigms, the defense enterprise needs to be able to value impact on tradespace and on the spread/variance in expenditure Copyright © Philip Boxer 2009 19
  20. 20. END Copyright © Philip Boxer 2009 20
  21. 21. Socio-Technical Modeling the ‘beyond’ of the Client Enterprise: three modeling perspectives Demand for value-creating (threat-reducing) relationships Collaborations Value propositions in response to Demand Behaviors supporting the value propositions Socio-technical Multiple Collaborations Supporting Infrastructure (accountability, synchronization, situational data fusion) (demand organization, customer situations and drivers) (structure-function, trace/state) Copyright © Philip Boxer 2009 21
  22. 22. Complex systems of systems: socio-technical Structure-function view – design dependencies Copyright © Philip Boxer 2009 22
  23. 23. Complex systems of systems: socio-technical State/trace view – state variables and controls Copyright © Philip Boxer 2009 23
  24. 24. Complex systems of systems: collaborations Hierarchy view – vertical accountabilities Copyright © Philip Boxer 2009 24
  25. 25. horizontal synchronization/ data fusion view – cross- cutting processes Complex systems of systems: collaborations Copyright © Philip Boxer 2009 25
  26. 26. Effects/Demand view – horizontal accountabilities Complex systems of systems: demands Copyright © Philip Boxer 2009 26
  27. 27. Complex systems of systems: all three modeling perspectives become necessary Full analysis = Socio-technical: Structure-function + Data/Trace Collaborations: Hierarchy + Fusion/ Synchronization Demand: + Demand/Effects These perspectives and their relationships generate a knowledge base, the properties of which can be analyzed Copyright © Philip Boxer 2009 27

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