A Systems Approach
Business Engineering is such a diverse and complex subject area that one needs a formal engineering approach to ensure that one delivers the required results within the time frame that is allowed.
The following diagram illustrates all the components that are required of the approach and is discussed to illustrate the context and relevance of each.
Make Business Problems Go Away
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Eight Goals of DISCON's Business Engineering Methodology - 'four line and four support functions'
The diagram represents a generic
business problem-solving recipe. This diagram only
depicts a sequence for discussion, NOT a sequence of
execution!
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Overview Definition of the Current Business
When one is called upon to conduct Business Engineering for a large organisation one is faced with a real problem in that not a single person in that organisation understands exactly what everything is that the business is involved with to its required level of detail. Even if we ask twenty different people to explain to us exactly how a certain process area of the business works one is likely to get twenty different answers. What we really require here is one consolidated, mutually agreed upon definition.
This makes it virtually impossible to understand what one is letting oneself in for. The first thing one should consider doing is to develop a high level definition of the existing business. This would enable a better understanding of a number of things:
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The diversity of the business.
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The complexity of the business.
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The scope of the business.
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The current burning issues in the business.
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A severity status of the business.
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The current priorities with which rectification actions
are prioritised.
The high level definition must span all three architectural levels of the business and at least the entire organisation, if not a bigger component of the value chain within which it participates. It represents a ‘pencil cut’ of the current business.
This knowledge can enable the project team to scope, plan and organise the first phases of the project.
Future External & Target Environment
While the previous ‘as-is’ analysis is taking place one could compile a profile of what the external- and target environments for this particular organisation is going to look like at a point in time in the future.
Ideal Business
At this point, due to the exposure one has already had on what the current business does, as well as what the world around it is going to look like, one is ready to design a more ideal business. This definition will span all three architectural levels.
From this example it is clear that we simply cannot wait that long to compile our version of an ‘ideal design’ as the window of change opportunity is getting exponentially smaller for organisations. This is due to the exponential increase in change rate of the external- and target environments of the businesses. We are forced to deliver an overview design of all three architectural levels, just enough to put us in control of architecture.
Thus, from an overview definition of each architectural level we will be able to extrapolate a plan for each entire architectural level. It is important that each architectural level has to be viewed in its entirety at an overview level before planning the individual components at a particular level. This enables one to understand the context of an individual building block in terms of its own architectural level.
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This function is performed to ensure that as Business Engineers we don’t optimise a number of individual business processes that together do not represent an optimised business solution.
Even if we put the best brains in the organisation together for a period of time to attempt to deliver the design of the ideal business one would not be able to absolutely guarantee the design. For this reason we refer to this design as a ‘perceived ideal’ business design.
As Business Engineering project generally have an extremely high failure ratio I would not bet on this design if I were the CEO of the particular organisation.
Measure Perceived Ideal Business
We can measure this ‘percieved ideal’ design against the definition of the future external- and target environments of the business. If they are misaligned there exists mechanisms within a component of the methodology that one would apply to adjust the ‘perceived ideal’ design of the business to become a guarantee-able ‘ideal design’ of the business, relative to the definition of the external- and target environments of the future.
Ideal Design (Colour Photograph)
This ‘ideal design’ of the business is now the ‘colour photograph’
GAP Analysis
If we take the two ‘pencil cut’ designs of the business, the ‘as-is’ and the ‘to-be’, and we compare the two to one another it would be
relatively easy to confirm the size of the gap between the two. There will typically be a different gap per architectural level.
If we understand the size of the gaps between the three architectural layers we can start to estimate the resources that will be required to bridge the gap.
This is one of five influences / drivers of the Master Business Plan, or migration plan between the current business and the ideal business.
Vertical & Horizontal Alignment
Components of the methodology will ensure that the design of the ‘ideal’ business will not have vertical and horizontal gaps resident within it.
Prioritisation
The business is measured in terms of current performance ability relative to the ideal. This provides one with a mathematically derivable prioritisation mechanism for addressing problems of the current business to become the ideal.
This is one of five influences / drivers of the Master Business Plan, or migration plan between the current business and the ideal business.
If one were to purely re-align the business according to this prioritisation mechanism alone one has huge potential of establishing temporary solutions that contain a huge throwaway component.
Business prioritisation as the only driver of a business plan results in immediate business benefit with a large throwaway component.
Architectural Definition
From the ‘ideal design’ of the business we mathematically derive a definition of the architectural components of the business. They are of true component nature, which enables a plug-out plug-in capability in the process of change. This architectural definition also reflects the true architecture in terms of the correct permutation of components, each with the correct scope, content and context. The architecture is derived from a model that represents the business rules in terms of mathematical associations.
Architectural Priorities
Architecture dictates the preferred sequence of construction of the components. This implies that there could initially be little benefit with an exponential rollout of benefit as time progresses. The problem with purely basing a business re-alignment plan on this approach is that the organisation could already be out of business by the time that the required business benefit is delivered.
This is one of five influences / drivers of the Master Business Plan, or migration plan between the current business and the ideal business.
In every case where we have been involved with the Business Priorities contradict the Architectural Priorities.
The architectural components of a solution dictate the preferred establishment order.
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Accommodate Business Priorities
We have to deploy a mechanism as part of the methodology that will enable us to serve the business priority but not compromise the architectural priority. In other words we want to deliver the business change according to the business priorities which is what the business man wants, we cannot afford to neglect the architectural priorities as this ensures longevity of the solution components and reduces the throwaway components.
This is one of five influences / drivers of the Master Business Plan, or migration plan between the current business and the ideal business.
One must remember that incremental improvement is better than delayed perfection.
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By accommodating the business priority into the architectural priority we can succeed in
delivering immediate business benefit without any, or by absolutely limiting the throwaway
components.
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Resource GAP & Fix-It Priorities
With the ‘ideal design’ of a business we can measure the resources available in the current business relative to the ideal. This will enable us to quantify the resource gaps per resource, per architectural component. We could address the resource gaps according to a priority based purely on the size of a resource gap. This is typically not what is required. Resource gaps have to be addressed according to a prioritisation mechanism that will ensure that we deliver the
most business benefit.
This is one of five influences / drivers of the Master Business Plan, or migration plan between the current business and the ideal business.
This can again be clearly illustrated from an example discussed previously.
Master Business Plan Drivers
All five the influences / drivers of the Master Business Plan have now been delivered. One must realise that the drivers are not the plan. Neither are the specifications that we built to derive the plan from the plan. The drivers are purely utilised as influencing factors of the plan. The actual specifications we have compiled up to this point actually formed part of Establish New Solutions. The plans that we have to deliver now is the complete set of plans required to change the existing business to become the ideal business of which we have delivered the ‘pencil cut’ of the architecture.
Master Business Plan
The Master Business Plan will consist of sub-plans for all the architectural components of the business, and these sub-plans must be integrated and not contradict one another. Keep in mind that the Master Business Plan dictates the change strategy as well as the methodology that will be utilised to effect the change with.
Establish New Solution
In establishing the required solutions one needs to analyse, design, prototype, test, develop, implement, handover and switch on the actual processes and systems. The resources to execute the new solutions with have to be established as well.
In order to establish new solutions one could utilise any permutation of approaches, buy them, build them from scratch, change existing ones or any combination of the previous.
Establishing new solutions involve an exercise, which actually widens the ‘pencil cut’ that was produced as a first parse design. It becomes a logical business specification, then a physical specification of business processes and systems and then ultimately implemented solutions that are the complete pyramid.
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What it ultimately means is that the work done in each architectural level within each system component has to be expanded to the full. On the diagram it means developing the seven-sided cylinder into the seven-sided pyramid.
Ensure Correct Usage
Once the solutions are implemented we still don’t have solutions unless we can make sure that they solutions are utilised accordingly. If we do not ensure that the solutions are utilised correctly we have only succeeded in equipping the business with better tools, to create a better mess with sooner.
The correct utilisation of the solutions can be ensured by training the resources that will be responsible for executing them, and allocating the correct people to the correct responsibilities that are associated with the process solutions.
Management Control Systems
Processes also need to be spanned by management control mechanisms that ensure that the execution is coordinated, well executed and that resources are utilised optimally during execution.
The concept of budgeting is actually intended to anticipate the required funding to execute the business, allocate it correctly across the financial period, ensure that the funds are available when required, ensure that the funds are optimally utilised and that the spend is accounted for.
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This is a prime example of a management control mechanism. Others like inventory management and headcount budgeting are also required. The intention of inventory management is to ensure the lowest possible stock investment to still ensure that we meet the market required service level in terms of lead-time and price. If you walk into a PC shop and expect to take your PC home to your specification within five minutes it implies that the vendor will have to carry a lot more stock, and you must expect to pay more for it than when you place your order and wait a day for it, but pay less. The lead-time is played of against the price component of the deal. This implies that we need to anticipate the demand, based on actual and anticipated demand, acquire the stock and ensure availability when it is needed within the parameters of the lead-time, ensure that the correct quantities of item are in progress and ensure that the correct quantities are represented within out-bound logistics. Basically it ensures the optimal quantities of stock, raw material and finished product, are represented across the value chain.
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Without these kinds of management control mechanisms a business will simply not function.
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All four of the main components of the Business Engineering approach; Compile the Master Business Plan, Establish New Solutions, Ensure Correct Usage and Establish the Management Control Mechanisms have to be enabled by four support functions; Programme and Project Management, Quality Assurance of the Result, Human Engineering and Utilisation of Business Knowledge.
Programme & Project Management
Is management of a Business Engineering project different from general management, or other project management? Yes, vastly, due to the following unique influences:
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Planning based on Strategic Repositioning of the business. This has a drastic effect on the prioritisation.
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Business Architecture influencing the plan. The deployment sequence of deliverables and the scope, content and context of sub-projects are mathematically determined.
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Changes in Business Scenarios affect the direction, timing and prioritisation of these projects.
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Human Engineering as one of three key project disciplines. The participation and behaviour of the business workforce is exposed to elements not found in other projects. Business Engineering projects in particular enforce a particular structure on the workforce. ‘Structure enforces behaviour.’ It is possible to predict the behaviour of project participants and clients, due to the very specific threats, uncertainties, constraints, change on the project parameters and rate of change in the business to which they are exposed.
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Project Budgeting. These projects generally cost a lot of money to execute over a long period of time. This emphasises a tighter control mechanism and more accurate estimation from very little information, up-front.
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Duration of the project. Longer projects are more exposed to changes on requirements. In Business Engineering projects the project has to adapt continuously to changes within the external- and target environments of the business.
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The intended Business Benefit coupled to the Scope of the Business Problem that is being addressed. When a Business Process Re-engineering project is being undertaken the point of departure is the existing business and the scope is a single process. The objective here is to provide significant business benefit in a relatively short period of time. One understands that there could be a potentially big throwaway component due to the lack of integration of this deliverable with surrounding business areas.
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When a Business Engineering project is executed for an organisation that is being established one should follow an Architectural approach to delivering the sub-areas of the business.
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When a Business Engineering project is undertaken there is the danger of delivering the required benefit too late. It is then required to simultaneously execute Business Process Re-engineering projects within the framework of the Business Engineering project. One succeeds in delivering short-term benefit with longer-term investment in mind. This implies that several sub-projects are executed concurrently and that these projects will have to be preceded by an overview Architectural sub-project.
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When we Business Engineer an organisation we determine what the future business scenarios will entail, whether they are positive or even extremely threatening. The new scenario, which has a high probability of realisation, will actually prescribe what our new business should look like in the future.
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The size and severity of the Gap between where the organisation currently is vs. where it is required to be in terms of its Strategic Position in the future, in the context of the new scenario.
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The discrepancies in terms of the current resources that is available to execute the business process with, vs. the required resources to execute the new business processes with.
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What is unique is the confluence of these issues in running an efficient and evolving Business Engineering Project.
These factors imply, for Business Engineering Project Managers in particular, that an integrated technique set with that of the Business Engineer/ Architect is vital for success.
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The plan from Business Engineering Programme and Project Management is different to Master Business Planning. The plan from the programme and or project is how are we going to utilise what kinds of resources to do certain things to ensure delivery of a specific solution. The Master Business Plan is a true business plan, which includes business objectives and business performance parameters.
Finally, we operate in a treacherous unforgiving business environment. A business solution is the end result of a multitude of multi-disciplinary tasks; doing 999 of 1000 of them right does not guarantee a 99,9% success in the Business Engineering environment. The project manager has to ensure 100% success in the execution of his tasks.
Quality Assurance of Results
We need to make sure that the deliverables we put in place are of the required quality (Correct things in the correct way / Quality Assure the deliverables by measuring against things like the metrics of the solutions) Can you imagine what would happen if we produced an incorrect Master Business Plan? Or, what would happen if we implemented the wrong set of ‘solutions’?
Human Engineering / Change Management
Human Engineering is required as a lot of resistance to change can be expected. Whenever prioritisation takes place, like in the Master Business Plan, people experience it as a major threat to their careers.
Utilize Business Knowledge
Similar to this example Business Engineering requires knowledge of the business to execute.
This implies a Business Encyclopaedia.