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Tool Support for Fractal Enterprise Modeling

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Conference Paper
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Managing organisational change is becoming increasingly important in an ever-changing world. A novel "lightweight" enterprise modelling technique called Fractal Enterprise Model (FEM) can be helpful in this effort. This technique is formally established, but the range of application areas for it is not yet fully explored. This paper aims to fill the gap, at least partially. This goal is being achieved by using FEM in an industrial project in which a water utility company wants to digitalise its business operations and external communication. The paper follows the Action Design Research paradigm, which combines theory generation with solving organisational problems. The project was structured along a generic Business Analysis process and contained elements from a number of fields, such as requirements engineering, information systems engineering, enterprise architecture management, and business process management. The paper describes 11 different generic problems that were solved with the help of FEM, the project-specific constraints and how FEM was applied in the process. As the same person carried out both the research and the practical work, the usefulness of FEM is examined via reflecting on the experience and generalising the knowledge. FEM supported the business analysis activities by enabling quick and systematic information gathering and comprehensible communication with various internal stakeholders. These insights can be used as a guideline for future practitioners planning to use FEM and for conducting further research regarding the applicability of FEM.
Chapter
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The concept of structural coupling, which comes from the biological cybernetics, has been found useful for organizational decision making on the higher level, such as management of organizational identity and strategy development. However, currently, there is no systematic procedure for finding all elements (other organizations, markets, etc.) of the environment to which a given organization is structurally coupled, or will be coupled after redesign. The paper tries to fill the gap by employing enterprise modeling to identify structural couplings. More specifically, an extended Fractal Enterprise Model (FEM) is used for this end. FEM connects enterprise processes with assets that are used in and are managed by these processes. The extended FEM adds concepts to represent external elements and their connections to the enterprise. The paper drafts rules for identifying structural couplings in the model by analyzing FEMs that represent different phases of the development of a company which the author co-founded and worked for over 20 years.
Chapter
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Regularly changing the business model of an enterprise becomes a necessity for surviving and prospering in the dynamic business world of today. To cope with this task enterprises need tools for Business Model Innovation (BMI). One of such tools can be a library of patterns. While there are attempts to build libraries of patterns of business models, they concern the patterns of to-be models. This paper focuses on the transformational patterns that show how to create a new model based on the current one. It considers a real example of a business model transformation in progress and designs a pattern based on this transformation. The main idea of this pattern can be formulated as “transforming from a manufacturing business to becoming a provider of software services that can predict the needs for maintenance of equipment used in manufacturing lines”. For building the pattern enterprise models before and after transformation have been built and then compared. The modeling has been done using a so-called Fractal Enterprise Model (FEM). FEM ties various enterprise business processes together and connects them to enterprise assets (resources) that are used and/or are managed by the processes. The proposed pattern is also expressed using FEM syntax, but in difference from the concrete models, it is depicted on a much higher abstract level.
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The paper presents an experience of evaluating the usefulness of a particular modeling technique called Fractal Enterprise Model (FEM). FEM connects enterprise processes with assets that are used in and are managed by these processes. The evaluation has been conducted in a somewhat unusual manner. A model that covers an essential part of an enterprise's activities has been built without any practical goal in mind, e.g. finding a cause of a problem, designing or completing a transformational change, etc. Then, it was presented to and dis-cussed with the stakeholders that helped to build it. During the discussions, the stakeholders were asked to elaborate on the potential usages of the model in the practice of the enterprise. The result was a comprehensive list of possible usage of the model.
Chapter
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The pace of changes in the business environment in which a modern enterprise operates requires the enterprise to constantly review its business models in order to survive and prosper in the dynamic world. This exploratory study investigates how to help the enterprise to innovate their business models based on the concepts of fractal enterprise model and transformational patterns. The paper suggests an approach to Business Model Innovation (BMI) where the focus is on transformational patterns. It discusses the structure of such patterns, and based on examples, it presents an approach on how such patterns can be derived from cases of completed business transformations.
Conference Paper
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In their previous work, the authors have developed a new kind of enterprise model, called fractal enterprise model, that connects enterprise processes via assets used for running these processes. One of the possible usages of this model is facilitating innovation, more exactly, changing or extending a business model used in the enterprise. This research-in-progress paper presents the idea of how such facilitation could be arranged, and lists the problems that need to be solved in order to convert the idea into a practical methodology. The discussion is based on a hypothetical example.
Article
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Paper is in open access: http://bit.ly/2c3RI8P This paper suggests a new type of enterprise models called fractal enterprise models (FEM), with accompanying methodological support for their design. FEM shows interconnections between the business processes in an enterprise by connecting them to the assets they use and manage. Assets considered in the model could be tangible (buildings, heavy machinery, etc.) and intangible (employees, business process definitions, etc.). A FEM model is built by using two types of patterns called archetypes: a process-assets archetype that connects a process with assets used in it, and an asset-processes archetype that connects an asset with processes aimed to manage this asset (e.g., hiring people, or servicing machinery). Alternating these patterns creates a fractal structure that makes relationships between various parts of the enterprise explicit. FEM can be used for different purposes, including finding a majority of the processes in an enterprise and planning business change or radical transformation. Besides discussing FEM and areas of its usage, the paper presents results from a completed project in order to test the practical usefulness of FEM and its related methodological support.
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This chapter discusses why business leaders should take EA more seriously as a truly strategic discipline. The author argues that to manage a complex enterprise you must understand how it functions, and to understand it an adequate model designed for the purpose is needed. Also, you must have the right information on which to base decisions, and for the organization to provide that information reliably, an adequate model of the organization as a system is necessary to make any sensible judgment about the informational needs of strategic decision making.
Conference Paper
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This paper looks at the traditional approach in VSM practice of defining the identity of systems by ascribing purpose, looks at some of the conceptual and practical issues this raises and questions where this approach is helpful and where it creates problems for the modeller, especially given the in-built capacity with VSM for modelling systems with multiple purposes.. We go on to set out an alternative methodological approach to defining identity based on the work of Maturana on structural coupling. The paper concludes with some of the practical and theoretical implications of such an approach .
Conference Paper
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When an organization has not adopted a uniform and standardized way of producing and storing process documentation, keeping track of and maintaining process documents can be a real challenge. In this paper we suggest a framework for organizing process documentation which is created in different notations, for different purposes, and stored in different formats. We show how this framework has been applied in a real case in an organization where such problems are present. We discuss advantages and disadvantages of the framework and suggest further development and testing of the framework to improve its usability.
Article
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Purpose – The purpose of this paper is to find out what exactly the term business model innovation encompasses and what type yields the best results. Design/methodology/approach – IBM Consulting researchers first identified the main types of business model innovation, which can be used alone or in combination. They then compared these three types of business model innovation across 35 best practice cases. Findings – The study found that all new business models can be classified into three types: innovations in industry models; in revenue models and in enterprise models. A key finding was that each type of business model innovation, with the right strategy and strong execution can generate success. Practical implications – Researchers found that while network plays are being used by diverse companies in different industries and regions and of varying age, size and other characteristics, this tactic has been a particularly useful strategy for older companies. Originality/value – The study found that best business model innovation strategies provide a strong fit between the competitive landscape for a particular industry and the organization's strengths, shortcomings and characteristics such as age and size.
Book
Patterns of Strategy is a revolutionary approach to developing business strategy that shows how the strategic fit between organisations drives their strategic direction. It is essential reading for those who wish to understand how to manoeuvre their organisation to change its strategic fit and play it to their advantage. Although traditional approaches to strategy have required organisations to assess the environment around them, they have ignored the dynamic nature of this relationship. Patrick Hoverstadt and Lucy Loh describe strategy as an emergent process that influences and is influenced by the wider system to which an organisation belongs. It is a systemic approach to strategy that focuses on the relationship between organisations, rather than just the organisation in its own right. As well as a new language of strategy and an explanation of what drives emergent strategy, the authors offer 80 'patterns’ of strategy which organizations can use to understand the relationship that their business and their strategy have to the actors around it. These patterns provide a toolkit for designing different ways to collaborate, and also offer alternative types and approaches of competition. A practical and authoritative guide, this book can be used to plan and navigate your way to the future.
Chapter
The Viable System Model (VSM) is a conceptual model which is built from the axioms, principles, and laws of viable organisation. It is concerned with the dynamic structure that determines the adaptive connectivity of the parts of the organisation or organism; what it is that enables it to adapt and survive in a changing environment. It can be used as a comparison against an actual organisation in order to identify weaknesses, mismatches or missing elements in diagnosing a problem and then as a framework for organisation design to resolve a diagnosed problem. Also it can be used for purposes of design from a clean-sheet. At the foundation of the model is the concept of variety, the number of possible activities of the parts and the necessity to limit these to those required for survival. The breakthrough in developing the model was the understanding that this could only be achieved with a fractal (recursive) layered structure. Furthermore at each level the pattern of the regulation of the variety of possible activities must be fractal. The chapter takes the reader through the development of the model and shows how the VSM supports autonomy and adaptablility. This chapter, written by a highly experienced practitioner, Patrick Hoverstadt, describes the model and its elements from a practitioner perspective supported by practical advice and helpful recommendations on its use.