Modern information systems

Architecting modern
information systems
Module 2
Business architecture

A. Samarin

Terminology (1)

• organisation, noun
– group of persons associated by some common tie or occupation
(for the purpose of administering something) and regarded as an
entity
– Etymology: The word is derived from the Greek a word oργανον
meaning “tool”.

• enterprise, noun
– collection of organisations that share a common set of goals and
objectives
– Remark 1: An enterprise can be, for example, a business unit or
department, an entire corporation, a government agency or a
collection of businesses joined together in a partnership.
– Remark 2: An enterprise can be considered as a system whose
parts are people, processes, information and technology.
© A. Samarin 2012 Architecting modern information systems - Module 2 2

Terminology (2)

• enterprise business system, noun
– top level view of an enterprise as a system for conducting the
business
– Remark 1: This top level view may concentrate on how the
business is structured, what it does and what it needs to do to
meet its goals.
– Remark 2: The issues of greatest importance for enterprise
business systems are the following:
– the core end-to-end business processes (also known as value
streams);
– the governance structures;
– the core business information (semantics);
– the communication with the core business partners.


Terminology (3)

• business architecture, noun
– that part of enterprise architecture concentrating on the
conceptualisation and evolution of the form and structure of the
enterprise business system

• stakeholder, noun
– person, group or organisation who affects and can be affected by
an enterprise‟s actions


General approach

• Is this a complex dynamic self-evolving system of
systems?
• What is the boundary of this system?
• What is its environment?
• What are the parts of the system (artefacts) and
relationships between them?
• What are the principles of evolution of this system?
• What are the current goals of evolution of this system?
• What are the changes to be done to achieve these goals?
• How to carry out these changes and measure their effect?


More terms

• An enterprise creates a result which has value to a
customer who pays for this result.
• The enterprise acts as a provider (supply-side) and the
customer acts as a consumer (demand-side).
• There is a (business) transaction between the provider
and the consumer.
• From the point of view of the consumer (the outside-in
view) the transaction is bounded by the pair “request and
result”. Request is an external business event.
• From the point of view of the provider (the inside-out
view) the transaction is a set of several distinct activities
(or units of work) which function together in a logical and
coordinated manner to satisfy / delight the consumer.

Business functions (1)

• Functions deliver identifiable changes to assets
• Abstract and self-contained grouping of activities that
collectively satisfy a specific operational purpose (e.g.
management of relationships with partners)
• A business function typically has the suffix „management‟
in its name (e.g. „Customer Relationship
Management‟), but it can also be a noun (e.g.
„Marketing‟); usually, function name specifies something
that is performed continuously.


Example: component business model
from IBM


Business functions (2)

• Functions are unique within the enterprise and should not
be repeated
• Functional view has a hierarchical structure
• This structure is very static (with a low rate of change).
• The functional view emphasizes WHAT the whole
enterprise does to deliver value to the customer (without
the organizational, application, and process constraints).
• Some organisational units can span several functions.
Furthermore, organization charts (organigrammes) may
change while the function does not.


Value-stream (1)

• Value-stream is an end-to-end collection of those
activities (both value-added and non-value-added)
currently required by an enterprise to create a result for a
customer.
• Value-streams are named according to an initiating event
and its result.
– Prospect-to-Customer
– Order-to-Cash (order fulfilment process)
– Manufacturing-to-Distribution (manufacturing process)
– Request-to-Service
– Design-to-Build
– Build-to-Order


Value-stream (2)

• Value-streams are directly linked to desired results, goals
and objectives, i.e. WHY
• Ideally, each value-stream should align with at least one
long-range objective and its business performance metrics
[key performance indicators (KPIs)].
• For example, one objective of the success of the “Order-
to-Cash” value-stream may be measured as “96% of
orders delivered within 3 days”.
• If this value-stream‟s actual performance is delivering
only “90% of orders within 3 days” then a corrective
action should be taken (e.g. a new strategic initiative is
developed and its priority determined).


Value-stream (3)

• Value-stream is an explicit HOW the desired results are
achieved


Value-stream (4)
from www.enterprisebusinessarchitecture.com

The enterprise and related external partners The enterprise as a set of aggregations of
selected value-streams

Strategic visioning, Custom-centric, Business-enabling and People-caring


Value-stream (5)


Value-chain

• An enterprise consists of a collection of value-streams. Its
value-streams are interdependent; a value-stream may
rely on the results of other value-streams.
• Value-chain of an enterprise is a network of strategically
relevant components of value-streams of the enterprise.
• Value-chain is important
to obtain competitive advantage.
This is the principal end-to-end
view of the enterprise.


Linking WHY, WHAT and HOW

• WHY + WHAT of the whole enterprise should be used to
define WHY + WHAT of each activity. The glue between
them is HOW.


Value & Expenses Basin (1)

This is a flow of performance metrics


Value & Expenses Basin (2)

• It represents a dynamic, actual and contextual
contribution of different activities to the value and
expenses associated with a particular result.
• The business can be attentive to different “tributaries”
which are
– the most value-adding,
– the most wasteful,
– doing worse than defined by WHY, and
– doing better than defined by WHY.


Managing the complexity (1)

• A service is a consumer-facing formal representation of a
self-contained provider‟s repeatable set of activities which
creates a result for the consumer.
• It is considered that there are internal (even within an
enterprise) providers and consumers. Some functions are
wrapped as services. A service may wrap several
functions.
• Service is an operationally-independent functional block –
its internal functioning is hidden from its consumers
• A “proper” service can be relatively easily outsourced.
• Services are expressed in terms of expected
products, characteristics and delivery options
(cost, quality, speed, capacity, geographic location, etc.)


• Complex services are created by means of the
coordination of more simple services and/or activities
• In the same way that an orchestra is a coordination of
individuals and their actions
• In this sense, an enterprise is
a mega-service composed
of a network of nano-services



• Performance of one request to the service vs performance
of all requests to the service during a given period of
time.
• Somebody should:
– know/estimate the demand-side needs (the service may have
many different consumers who will be using it with different
frequencies), and
– design/organise/create in advance the supply-side capabilities to
ensure those needs are satisfied.


Capability

• Capability is the proven possession of characteristics
required to perform a particular service (to produce a
particular result, which may include the required
performance) and the functions which are wrapped by this
service.
• Capability needs to “understand” the mechanics of
delivering that service. The mechanics include the
resources, skills, policies, powers/authorities, systems,
information, other services, etc., as well as the
coordination of work within the service. Capability is
named after the expected result/performance, e.g. “2CV”.


Ensure the required characteristics?

• There are three control options:
1. by contract (“re-active” approach) – acquire a service with the
required characteristics, use it, check that its performance is
acceptable and replace it if something is wrong with it;
2. by measurement (“active” approach) – implement a service, use
it, measure it, improve or re-build it, etc.;
3. by design (“pro-active” approach) – build a service model, run a
simulation test, improve the model, build the service, use
it, measure it, improve it, etc.
• The first option can work with some support services
• The second option can work with lead services
• The third option should be used for core business
services.

Coordination between activities (1)

• An enterprise may have several value-streams running in
parallel.
• Some activities can be shared between different value-
streams and some value-streams may compete for limited
resources.
• An activity from one value-stream can obtain some assets
(business objects) which belong to another value-
stream. This is pull-like coordination.
• An activity from one value-stream can send some assets
to another value-stream. The latter interprets appearing
of the assets as an event to be treated. This is push-like
coordination.



• Interdependencies between activities must be managed
• Coordination can be:
– Implicit vs explicit
– Human vs automated
– Centralised vs decentralised
– Imperative vs declarative
– Strong vs weak
• May change over the time (e.g. a crisis situation)



• Flow of pages
• Integration of services
• Human workflow
• Business-to-business


The explicit coordination brings several
advantages
• It allows planning and simulation of the behaviour of a
service to evaluate its performance. If that service uses
other services, then the demand-side needs for those
services can also be evaluated.
• It can be made to be executable, thus guiding how work
is done.
• It allows control that the actual behaviour of the service
matches its intended behaviour, thus pro-actively
detecting potential problematic situations.
• It allows the measurement within a service of the
dynamics of different characteristics, e.g.
valuing, costing, risk, etc.


Explicit coordination techniques

• template-based (or token-based)
• event-based (or business-events-based)
• data-based (or business-objects-based)
• rule-based (or business-rules-based)
• role-based (or business-roles-based)
• intelligence-based (or business-intelligence-based)
• community-based
• etc.


Business architecture artefacts (1)

• Business Strategy Artefacts
– Vision statement - outlines what the organization wants to be
– and related “ends” chain: desired result, goals, and objectives.

– Mission statement - is a brief description of a company's
fundamental purpose. A mission statement answers the
question, "Why do we exist?"
– and related “means” chain: course of
action, strategy, tactic/projects.



• Structure & Governance Artefacts
– Organizational Structure
– Organizational Governance
– Governance RACI matrix
– Supplier, providers, customers,
and other partners



• Business Function Artefacts
– Business Function Model

• Business Process Artefacts
– Business Process Model

• Business Information Artefacts
• Value artefacts



• Business performance artefacts


Address the complexity via system-
thinking way
• Principles:
– All artefacts must have formally described
– All artefacts must be versionable throughout their lifecycle
– All relationships between these artefacts are modelled explicitly
– All models are made to be executable

• Use the model:
– collect artefacts
– find and formalise relationships between them
Note: some artefacts are relationships
– run the simulation of that model
– change (iteratively) the model to get the desired effect
– implement validated improvements

Homework 2

• Define capabilities of a consulting company

• Define capabilities of “Faculté des Sciences Economiques
et de Gestion de Nabeul”


The context for the architecture (1)

• Permanent improvement of enterprise efficiency and
effectiveness is mandatory
– increasing agility & durability of an enterprise
– managing cost, risk and quality of changes



• Carry out improvements
by small steps
– evolution via a
feed-back loop



• To choose the best possible improvement, it is necessary
to have good information and knowledge about the
functioning of the enterprise



• To implement a selected improvement, it is necessary to
be sure that modifications are feasible


The context for the architecture (1 - 4)

Permanent
improvement
of enterprise
efficiency and • Small
effectiveness is steps
mandatory

• Good
• Feasible information and
knowledge

Different types of improvement

• Operational
• Tactical
• Strategic
• Competitiveness


Feedback improvement loop

• An enterprise is a complex, dynamic and adaptive
system; one can improve it by:
– measuring
– observing
– deciding
– implementing
2

3

4 1


The Deming cycle, PDCA

• PLAN Establish the objectives and processes necessary to
deliver results in accordance with the specifications
• DO Implement the processes
• CHECK Monitor and evaluate the processes and results
against objectives and report the outcome
• ACT Apply actions to the outcome for necessary
improvement. This means reviewing all steps and
modifying the process to improve it before its next
implementation (next iteration?)


Toyota production system

• Long-term philosophy

• The right process will produce the right results

• Add value to the organisation by developing your people
and partners

• Continuously solving root problems drives organisational
learning


Waste in processes

• Waiting, Defects, Extra processing, Inventory, Excessive
motion, Transportation, Underutilised
people, Overproducing


Lean production is an example of
optimisation in industry
• See the whole picture
• Learn constantly
• Decide as late as possible
• Deliver as fast as possible
• Eliminate waste
• Empower the team
• Build in integrity
• Avoid sub-optimisation


6 Sigma

• An example of perfection to minimize variations, but
necessary at the enterprise level
• Used to realize cost savings using the traditional DMAIC
[define, measure, analyse, improve, control]
• Often it is departmental piecemeal thinking
• Best suited for problems which are “hard to find and easy
to fix”
• In theory, 6 Sigma is based on business process principles


ISO 9001 quality management system

• Process-centric approach (since year 2000)
• It is not a “system based only on documents” even if they
contain diagrams of business processes
• It is a “system for an organisation to manage its business
processes”
– maintenance of the quality management system documentation is
only one of the needs


Quality management system
documentation
• Quality policy: Defines commitment by top management
to comply with requirements and to improve continually
the effectiveness of the quality management system
• Quality manual: Defines the scope of the quality
management system and the documented procedures;
describes the interactions between the processes
• Documented procedures required by ISO 9001
• Documents needed for planning, operation and control of
the organisation‟s processes
• Records (evidence): Results of the use of the system


Quality management system
documentation
Business processes “In” quality Business Records
manual procedures
Quality management 1 ~5 ~100
Sales 1 ~10 ~10 000
Customer services 1 ~10 ~10 000
Production 1 ~10 ~100 000

Covered by traditional applications for quality management
Covered by various business applications, paper and manual work
Having these documents is not enough; are they traceable, secure and
correctly managed throughout their life cycle?


Process improvement disciplines


Services and processes (1)

• Services are considered to be explicitly-defined and
operationally-independent units of functionality
– Formal description
– Operational independence
– Invisible implementation


Services and processes (2)

• Processes are considered to be an explicitly-defined
coordination of services to create a particular outcome
– Formal description
– Coordination


Process-oriented view of an enterprise
(before BPM)


Business Process Management (BPM) is a
tool for improving business performance
A natural evolution of
BPR, Lean, ISO 9001, 6 A multitude of tools
Sigma “handle” processes
The theory The tools
BPM as a discipline BPM as software:
The aim is to have a single
(use processes to business
description of BPM suite (BPMS)
manage an
processes:
enterprise)
- model in design
- input for project
planning and execution An enterprise portfolio
- executable program for of the business
coordination of work processes as well as
- documentation for all the practices and tools
staff members for governing the
- basis for management design, execution and
decisions evolution of this
The practice portfolio
Any process-centric enterprise has some BPM, but
how can we industrialise this BPM?

Business processes are complex
relationships between artefacts
• Who (roles) is doing What (business objects), When
(coordination of activities), Why (business rules), How
(business activities) and with Which Results (performance
indicators)
• Make these relationships explicit and executable

What you model is
what you execute


Process anatomy (1)

• The business is driven by events
• For each event there is a process to be executed
• Process coordinates execution of activities
• The execution is carried out in accordance with business
rules


Process anatomy (2)

• Each business activity operates with some business
objects
• A group of staff member (business role) is responsible
for the execution of each activity
• The execution of business processes produces audit
trails
• Audit trails (which are very detailed) are also used for the
calculation of Key Performance Indicators (KPIs)


Different enterprise artefacts

• Business artefacts
– Events
Human
– Processes “workflow”
Data structures
– Activities Roles

– Roles Documents
Events
– Rules Rules
Processes
– Data & documents Services

Audit trails
– Audit trails
KPIs
– Performance indicators
– Services

• Organisational and technical artefacts …


Be ready for common
(mis-)understanding


Different types of process

• Core-mission processes
• Leading / controlling processes
• Supporting processes


BPM as a management discipline (1)

• BPM as a management discipline about how to use
processes to manage the enterprise
– to model, automate, execute, control, measure and optimise the
flow of business activities that span the enterprise‟s
systems, employees, customers and partners within and beyond
the enterprise boundaries

• Model means to make known, to describe or to
communicate a plan of how to carry out future actions to
obtain a desired outcome
– To plan
– To simulate


BPM as a management discipline (2)

• Automate means to instrument the proposed plan of
work by some existing or new tools.
– To instrument

• Optimise means to introduce formally justified changes
– To reflect
– To refactor
– To improve

• Those 6 BPM functions are applied iteratively and
continuously


Process-oriented view of an enterprise
(with BPM)


Process templates and instances

• Process template – a formal description of the process

Templates Instances
and their
• Process instance – versions
enactment of a process
template

• Different variations of
relationship between
template and instance


Variant 1 – classic (one template is used
for many instances)


Variant 2 – tailoring (a template is
adjusted for each instance)


Variant 3 – reactive (no initial template
and next activity is selected based on
the current situation)


Variant 4 – proactive planning (similar
to variant 3, but a few next activities
[fragment] are executed together)


Variant 5 – scenario-based (similar to
variant 4, but a few scenarios are
considered)

Process fragments are used; those may be patterns


Homework 3

• Give real-life examples for all scenarios

• Invent the scenario 6

• More examples of core-business, leading and supporting
processes


Modern information systems

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (17)

Similar to Modern information systems

Similar to Modern information systems (20)

More from Alexander SAMARIN

More from Alexander SAMARIN (20)

Recently uploaded

Recently uploaded (20)

Modern information systems