Kudryavtsev, D., & Grigoriev, L. (2011). Systemic approach towards enterprise functional decomposition. The proceedings of the Workshop “Convergence of Business Architecture, Business Process Architecture, Enterprise Architecture and Service Oriented Architecture” within the 13-th IEEE Conference on Commerce and Enterprise Computing (CEC), September 5-7, 2011, Luxemborg. P. 310-317.

1. Systemic Approach Towards Enterprise Functional Decomposition Dmitry Kudryavtsev, Lev Grigoriev 20 11 Workshop “Convergence of Business Architecture, Business Process Architecture, Enterprise Architecture and Service Oriented Architecture”

4. What is “enterprise functional decomposition”?

6. Functional decomposition role in enterprise engineering Purpose Structure Principles and rules IT-architecture, Technical architecture, People, Organizational structure Mission, Vision, Goals, Strategies, CSF, KPI Value chain, functions, business processes, activities Functional decomposition Function

9. ISO 9004:2009 harmonization

10. Value-based management harmonization

13. The framework: main principles Strategy & Policy Design & Improvement Operational planning Measure-ment, Analysis, Control Management Enabling systems Value creation Functional system’s pattern Natural resources Finance People in the organization Infrastructure Environment Knowledge Information technologies

14. The framework: main principles

15. Alignment of functional system pattern with purposes and goals Stakeholder’s concerns Goals of the functional system Goals of value creation elements Goals of managerial and enabling behavior help achieve help achieve provide Purposes Functional system

16. All the pattern components are harmonized with ISO 9004:2009

17. Value-based management (VBM) harmonization Functional system Corporate level Business level Functional area level Features Corporate system Business system (Functional area-level) Functional system Beneficiary Shareholders, Investors Customer Superior system, Internal client Purpose area (value type) Corporate value Customer value + Profit Value for superior system, Value for internal clients Key performance indicators Economic Value Added (EVA), Value Creation Index (VCI) EBITDA, Return-on-Assets (ROA), Free Cash Flow (FCF) Depend on the functional area. Value creation elements Business system, Corporate governance, Environmental health, safety and social responsibility management. Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, Service. Depend on functional area.

18. Corporate system pattern Legend:

19. Business system Legend:

20. (Functional area-level) Functional system Legend:

21. Pattern-based enterprise functional decomposition Corporate system Business system Functional systems Functional subsystem Business- lines Corporate strategy / goals Business strategies / goals Functional strategies / goals

24. IT support - The ORG-Master business architecture engineering tool Ontology-based enterprise model editor Ontology-based enterprise model Reporting and query module Documents Diagrams ORG-MASTER ® Modeling process wizard Integration wizard Diagram editor Query results Semi - structured data OWL

25. Knowledge Process Creation and Acquisition Formalization Distribution Use Knowledge acquisition forms Analytical reports Structured Administrative documents Y Query answering Internal Representation Structured Administrative documents Х Local knowledge acquisition organizational models The ORG-Master business architecture engineering tool Ontology-based organizational model

26. Knowledge Process Creation and Acquisition Formalization Distribution Use Text X Tables Y Text Y Graphics Y Internal Representation Tables X Graphics X Pseudo-Graphics The ORG-Master business architecture engineering tool Ontology-based organizational model

32. Framework benefits (1/3) Recursive decomposition using single activities pattern Similar structure of activities at different level of detail and in different functional areas Causal links between activity elements (in addition to hierarchy) Rapid management maturity growth Ease communications between managers Reuse of company’s internal knowledge Corporate standards Better organizational design

33. Framework benefits (2/3) Purposeful decomposition “ Do right things” Realize strategy quicker with less resources Clear priorities in decision-making Set causal links between activity elements

34. Framework benefits (3/3) ISO 9004:2009 Harmonization Reuse managerial best-practice Guarantee for sustainable growth Ease the certification process VBM Harmonization Better satisfy key stakeholders Corporate value growth

35. The END Questions? 20 11 [email_address] , [email_address]