Enterprise Transformation

by Andrey Milchman
IT has been manufacturing the Enterprise (building systems) for 70 years or so... but the Enterprise was never engineered. Therefore, IT has not been manufacturing the Enterprise... they have been manufacturing PARTS of the Enterprise ... and the parts don’t fit together (they are not “integrated”).
- John A. Zachman -

Enterprises around the world have been transforming themselves into tomorrow's innovative leaders by taking advantage of the rapid technology growth and the increasing power of social media. Competitive advantage goes to those who are agile, transparent, adaptive, and more importantly, capable of quickly processing large volumes of various spatio-temporally distributed information at a high speed. Many companies drive business transformation using enterprise architecture as a means to confront complexity and resulting fragmentation, thereby achieving coherence and integration. However, instead of simplifying enterprise structures and streamlining information flows, modern enterprise architecture frameworks focus on the architecture process, not the substance of enterprise design, thus creating unnecessary problems and complications.

The enterprise engineering framework (EEF)—a novel approach to enterprise architecture—provides a simple and comprehensive blueprint for transforming your organization into a world class digital enterprise.

Figure 1.1. Enterprise 3.0 as a network of units.

Key Enterprise Trends

Several current technology trends contribute to our understanding and awareness of the need for enterprise transformation:

Enterprise transformation is a four-phase process that begins with the social transformation, followed by systemic transformation and technological transformation. Once enterprise level transformation is completed, units transform themselves at their own pace.

Phases of Enterprise Transformation
Figure 1.2. Four phases of enterprise transformation.

Social Transformation

Social transformation establishes human architecture of the enterprise by decomposing it into a network of units. Two modular structures—the enterprise as a network of units and the unit as a network of individual agents—are the core of a simple and elegant strategy for dealing with the complexity of the enterprise and its environment.

Social Transformation
Figure 1.3. Social transformation: no human agents at the enterprise level.

The main challenge of the social transformation phase is the elimination of individual human agents from the enterprise-level structure and their encapsulation within executive units, because individual agents are no longer capable of

Social transformation creates an enterprise-level structure that consists of composite agents (units) capable of effectively and efficiently processing enterprise information.

Once the human architecture has been completed, one can move on to defining digital architecture of the enterprise, which begins with the formalization of unit boundaries.

Systemic Transformation

Systemic transformation aligns human and digital architecture of the enterprise by establishing formal digital boundaries between enterprise units. "Good fences make good neighbors," the poet Robert Frost once said.  

In The Phenomenon of Life: Nature of Order, architect, town planner, and academic, Christopher Alexander, better known as the father of design patterns, introduced the concept of fifteen fundamental structural properties that generate life and wholeness from a system of centers. These properties include (1) levels of scale, (2) strong centers, and (3) boundaries, among others. The author describes the role of boundaries as follows:

The purpose of the boundary which surrounds a center is two-fold. First, it focuses attention on the center and thus helps to produce the center. It does this by forming the field of force which creates and intensifies the center which is bounded. Second, it unites the center which is being bounded with the world beyond the boundary. For this to happen, the boundary must at the same time be distinct from the center being bounded, must keep the center distinct and separate from the world beyond it, and yet also have the capacity of uniting that center with the world beyond the boundary. Then the boundary both unites and separates. In both ways, the center that is bounded becomes more intense.
Christopher Alexander, The Phenomenon of Life: Nature of Order

The EEF views the enterprise as a network of strong centers—units. A unit's boundary is a set of interfaces that together represent a formal contract between the unit and its environment. Boundaries both separate and connect units to the environment, thus protecting them from negative effects and, at the same time, enabling mutually beneficial interactions with the environment.

Systemic transformation hides people, processes, technology, and data within enterprise units, thereby substantially reducing the enterprise-level information flow.

Technological Transformation

Once units' boundaries have been established, it is time to turn your attention to enabling flexible coordination and communication both between the units and between the units and the environment. The EEF offers a novel approach to enterprise coordination—Worknet Management, which relies on event driven architecture to support enterprise communication.  

The traditional command-and-control coordination mechanism—business process—realized in modern Business Process Management software is still suitable for highly optimized production workflows, well-defined case management and straight through processing scenarios, and administrative workflows. It became obvious, however, that business process has not been the right coordination mechanism for highly uncertain work—the work that requires tacit knowledge and human expertise, the work that is performed by modern knowledge and relationship workers.

Technological transformation creates flexible linkages between enterprise units, thereby optimizing work streams, minimizing friction, and reducing dependencies between units at the enterprise level.

The EEF introduces a new operation type—worknet—as the only coordination mechanism implemented at the enterprise level. Worknets can be used along with processes at the unit level.

Whereas social transformation assigns (business) responsibilities to enterprise units, and systemic transformation formalizes their runtime behavior, technological transformation enables expectation-based coordination and event-driven communication between the units.

Unit Transformation

Units are main—and essentially the only—enterprise-level building blocks. Architecting the enterprise as a network of units creates improvisational theater-like environment, where each actor plays multiple roles without use of an already prepared, written script.

In addition to running day-to-day operations, units subscribe to and receive information about events that occur in both other units and the external environment, adapt that information to their contexts, and may or may not take further action and, in turn, publish information (event) about that action.

A unit is defined by its Purpose, Function, Process, Structure, and Culture.

Unit transformation creates digital structures that align a unit's purpose, function, process, structure, and culture.