Ea S Presentation Mc D 20090824

Doug McDavid [email_address] International Conference and Workshop on: Enterprises *as* Systems Architecting the Social Enterprise: the Making of CC 24 August, 2009 – Northern Illinois University

Introductory remarks Objective: To review a number of dimensions of business architecture and illustrate with a real-world story The example is a social networking and value capture system It is based on a number of factors converging at this time (economics, services industries, globalization, and social networking technologies) The key idea is to provide the ability for local and virtual communities to value the work of their members with their own local currencies The story may not have a happy ending (yet), but is useful This presentation assumes that enterprises (such as businesses and agencies) are human social systems As human social systems we assume that they are autopoietic

Key factors and trends form the background for our example (CC) Increasingly globalized economy Proliferation of human and ecological problems - local to global Long-wave economics sees that we’re on the threshold of points to long-term wealth-creation based on increasing incorporation of IT into the fabric of society Era of service-based industries and economies Enterprises increasingly fragmented, and reintegrating in the form of ecosystems of specialized firms Widespread financialization of the global monetary production economy Projection of self in everyday life - personal branding On-line marketplaces, like EBAY, for previously undervalued assets Mash-up world of Internet technologies Near-ubiquity communication networks and continuous connectivity

Basics of the CC example Everywhere you look there are networks of human relationships, as well as formal organizations. Capitalizing Communities (CC) establishes a special type of community -- one that supplies its own internal currency. By "currency", think of things like frequent flier miles, that have value within a defined sphere, and even beyond. CC deals with communities of people with complementary skills and interests A community member is able to bid on interesting work within projects Through negotiation people decide how this work will be rewarded by shares of the community When project is completed, members are issued shares of the community, denominated in their own accounting unit (as a form of currency)

The business of designing and implementing information systems isn't exactly rocket science … Proton Sirius www.ilslaunch.com

… it's brain surgery! Most pictures from: The History of Psychosurgery, Renato M.E. Sabbatini, PhD http://www.epub.org.br/cm/n02/historia/psicocirg_i.htm

One challenge of transformation is to make sense of business … June 2005 | IBM Confidential | This is what a business looks like Business is largely a human social system that is intangible and invisible. © Copyright Doug McDavid 2009 Enterprises *as* Systems This is what software looks like Software is also intrinsically complex, malleable, abstract and invisible. … while the other transformation challenge is to link business to IT. Non-functional requirements Security User interfaces Data Hardware Software Applications Functional components Operating systems Servers Objects Networks Databases Middleware Information technology can be a jumbled mess, but architectures and patterns can help make sense of it. Motivations Attitudes Beliefs Purpose Objectives Goals Products Results Value Experiences Commitments Roles Capabilities Accounts Resources Events Services Processes Work practices Decisions Brands Communications Organizations Messaging Culture Functions Locations Situations Values Business can be a jumbled mess too, but architectures and patterns can help make sense of it as well Our focus is on how these architectural viewpoints come together. Motivations Attitudes Beliefs Purpose Objectives Goals Products Results Value Experiences Commitments Roles Capabilities Accounts Resources Events Services Processes Work practices Decisions Brands Communications Organizations Messaging Culture Functions Locations Situations Values Non-functional requirements Security User interfaces Data Hardware Software Applications Functional components Operating systems Servers Objects Networks Databases Middleware Business architect role

A broad view of architecture Can be applied to virtually any complex subject “architecture of the human mind” “architecture of politics” “architecture of belief” “cognitive architecture of humor” Can applied as guidance for building something Can be applied to better understanding something Can be intrinsic to or representation of something * Oxford English Dictionary Architecture is: “Construction or structure generally; both abstract and concrete.” *

IT architecture is a subset of business architecture An Enterprise Intelligence gathering Direction setting Chain of command Culture Operations Recursive organization Resources Technology Talent Knowledge Information Data Energy Locations IT Finances Products Transactions IT architecture Business architecture Business situation Image Investment Environmental factors Services Regulations Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise

Architectural views that help understand, articulate, design and nurture the human social system aspects of enterprises Enterprise ecosystems Architecture of business intent Organization structures Power architecture Roles and accountabilities Decision architecture Processes and procedures Practices Boundary architecture Social networks Institutional architecture Brand architecture Cultural architecture Social bonds Emotional architecture Semantic architecture And, of course, there are IT architectures, as well

Enterprise ecosystems Enterprise ecosystems – Multiple enterprises interact with each other in a marketplace environment. Increasingly partnerships of supply chains are competing against another partnerships of supply chains to gain market share. It is more difficult these days to distinguish the internal complexity of an organization fro the relationships across the ecosystem. Elements: enterprise, business relationship, relationship types Sociality: To get to social aspects we need to drive deeper into the relationships that constitute ecosystem view Example: CC expects to spawn an ecosystem that includes the communities themselves, the clients of communities, merchants who take communities to be new markets, and various software developers who will write add-ons and plug-ins according to CC’s specification of an interaction protocol List

Emergence of the semi-conductor industry ecosystem Created by Denis Mathias, BCS partner. 1985 Distributor Distributor Semiconductor Manufacturer Capital Equipment Manufacturer Indirect Supplier Technology Reseller Component Manufacturer Raw Material Supplier System OEM End User 2003 Service Provider Foundry Assembly & Test Contract Manufacturer Fabless Design/ IP House System Design House

Value flows stimulated by CC (a multi-sided enterprise) Community member CLUs Community member Services CLUs Merchant CLUs CLUs Goods Exchange $$s CLUs Investor Performance arena CLUs Assets Client $$$s LC maker CLUs $$$s Assets Assets CLUs CLUs Results LCs Community CLUs & $$s CLUs LCs CLUs LCs CLUs $$s CLUs LCs $$$s CLUs Community CLU bank CLUs CLU -- Community Liquidity Unit LC – Liquid Contract LEGEND

Architecture of business intent Business intent – Covers the range from the overall business model of the enterprise (how we make money) to operational goals and objectives. The other aspects of the business (including IT), need to be evaluated against the appropriately related intent. Elements: desires, opportunities, decisions, goals, objectives, communications Sociality: Intent is a human attribute, and in enterprises it is a manifestation of a social interaction Example: CC has the intent to provide communities of interest and practice with the alternative currency-based tools, methods and expertise to harness the energy of social networks into wealth-creating enterprises. List

Organization structures Organization structures – One of the most common ways of thinking about the architecture of enterprise is the organization chart. Everyone is interested in the “org chart” because it lays out many of the important functional specializations and power relationships in the enterprise. This tends not to be a stable architecture, because in most enterprises the chart itself, as well as incumbent responsibilities of groups and individuals, is in a constant state of flux. Organizational structures included hierarchy, matrix, M-corp, etc. Elements: Organization, manager, reporting relationship Sociality: The social aspects of the organization chart are limited to a power reporting structure Example: The CC development required attention to two sets of organization structures – the structures of communities and of the company itself List

Organization structure reporting relationship reporting relationship Organization Manager Organization Manager Organization Manager Organization Manager Organization Manager Organization Manager

A well-known generic organizational framework is Stafford Beer’s Viable Systems Model. Environment Present Future Intelligence Coordination Control Policy Op Unit 1 Op Unit 2 Op Unit 3 From: Rudolf Kulhavy, From Banks to Banking: Architecting Business Performance Transformation, 2005

Power architecture Power architecture – The basic relationship in most enterprises is that of employer and employee, extended through limited power sharing to that of boss and subordinate. Manifestations of power include responsibility, accountability, authority, autonomy, etc. Elements: Role-player, demand, constraint, reward, sanction Sociality: Power is kind of the dark side of sociality, and not often explicitly described aside from the formal organization chart. But “everyone knows” the power of the boss’s secretary, the superstar developer, etc. whose power is incommensurate with their formal role. Example: CC recognizes that communities need some form of leadership, for the primary purpose of setting up the specific form of the community. In most respects CC aspires to self-employment and self-governance, as opposed to strong power relationships. List

Roles and accountabilities Roles and accountabilities – A design pattern where organizational roles are populated by individuals who are accountable for delivering negotiated outcomes to other roles. Negotiated terms and conditions (funding, authority, resources, etc.) can be associated with the primary deliverables. (Haeckel, 2008) Elements: role, role-player, negotiated accountability, outcomes (effects), conditions of satisfaction Sociality: This pattern is prescriptive, and in effect it creates a form of bounded sociality where a few simple rules of engagement give rise to organizations with maximum adaptability in the face of changing environments Example: From a CC point of view there are a few key roles inside communities and inside CC itself that provide negotiable patterns of accountability. List

R&A model for CC - incomplete Member Performer Recipient Leadership Visualizer Community External Party Merchant Community Investor Tool Developer Organization Designer CC Community Intelligence Provider Best practices > Close fit to situation < Permission to use this story Economy protocol > Meets desires < Co-optimization Community data > Timely, accurate, meaningful < Clear specifications Valuable performance > Meets desire < Fair valuation Community design > Viable < Feedback Opportunity description > Appropriate domain > Doable > Value estimate(s) < Refinement CC Investor Ecosystem partner CC functionality > Conformant < Standards support Analytics > Relevant < Clear specs SW ideas > Fresh < Architecture ROI > Within specified time < Team membership

Decision architecture Decision architecture – Enterprises encounter steady streams of decisions in the course of doing business. These range from simple front-line decisions with customers or clients to complex and far-ranging strategic decisions, such as a corporate merger or acquisition. The key here is that reduction of uncertainty in the decision-making process depends on the information that reduces uncertainty to the level where a decision can be made with confidence. Elements: Decision, role-player, institution, domain element, information Sociality: Decisions can be made collectively, which is clearly a social process. Example: CC has put quite a bit of effort into thinking about the flows of decisions within communities, as well as within the company. A whole set of key decisions will be made by community leadership that set the parameters and structure for community operations, enabled by selected software modules List

Decision: Which community to join Example of a decision pattern from CC Roles: Member Information: Asset needs Performances Market standing Institutions: Community standards Currency affordances Reward structure

Processes and procedures Processes and procedures – Process is linked with procedure to signify the organized activities of the operational side of the enterprise, where processes are relatively deterministic and repeatable. This is an area where business has focused massive attention, on the assumption that ICT can be used most effectively, to enforce procedures, to support repetition, and to take over from people various behaviors that can be completely codified. This is also an area where the architectural view has spawned a number of tools to help the practitioner. Elements: activities, roles, role-players, outcomes, inputs, resources, flows, triggering events Sociality: Even the most robotic process has a human recipient, though in such cases the sociality is greatly reduced and intermediated by technology that stands between human participants Example: CC is fundamentally an accounting system, so there would be high-volume, simple transaction processes, as well as the normal processes of running a business List

Practices Practices – The idea of work practice is specifically juxtaposed against the process or procedural viewpoint. At the heart of this view is the recognition that practitioners have various skills and know-how that are brought to bear when called upon. Practitioners form communities based on learning and improvement of their knowledge and skills. This includes specific types of role-players, such as mentor and legitimate peripheral participant. (Lave, 1991) This sets up specific kinds of relationships between master and apprentice, or similar senior-junior practitioner complementary role-playing. Practices deal in both skills and lore. Practices have processes, and they participate in processes that invoke various practices. Elements: Practitioners, communities, knowledge, skills, lore, role-players, tools, specialized language, relationship to processes Sociality: Since practices are practiced by human groups (not automation) they are intrinsically sociable Example: CC is focused on the value-creation ability of community practices by focusing and rewarding practices developed within the network of communities. List

Boundary architecture Boundary architecture – T his reflects how boundaries are created and bridged among communities of practice by boundary objects. Star and Griesemer identify four types of boundary object: Repositories of modular, indexed collections of objects that people from different worlds can draw on without direct negotiation with each other; ideal types as commonly understood abstractions; coincident boundaries as concepts that have common scope for participating communities, but that have different internal contents in each; and standardized forms that capture data from various viewpoints of discipline and practice. An example of boundary objects are method-based work products, which span specialized practices that work together to produce software. Elements: distinguishable social entity, trading zones, standardized methods, representations that link theory and practice, objects that define boundaries, power positions, boundary objects (repositories, abstractions, shared scope, standardized forms) Sociality: This technique provides a viewpoint into an important social aspect of enterprise that is often overlooked by standard ideas of business architecture Example: This method of understanding how teams and disciplines work together can be a key service offering by CC on behalf of its network of communities List

A simple example shows various types of boundary objects that span business language communities. Template definition Personnel management Employee Personnel hotline agent Call tracking system HR professionalism Hotline group Benefits department Employee database COBRA benefits Paper notes Procedures Procedures Escalation From: Cherbakov and McDavid, Boundary Objects to Bridge the Gap, PLTE, 2005 (RBV080) -- Based on: Mark S. Ackerman and Christine Halverson, “Organizational Memory: Processes, Boundary Objects, and Trajectories,” Proceedings of the Thirty-second Annual Hawaii International Conference on System Sciences, IEEE, 1998.

Social networks Social networks – In addition to any formal organizational structure, a lot of what is accomplished in organizations is done informally, in spite of the standard systems. A discipline has grown up around studying patterns of informal interaction, and forms the basis for this architectural view. Tools and applications address social networking to enable communities of interest and practice. (Granovetter, 1973) Elements: role-players, organizations, ties, strength of tie, information transfer Sociality: By definition social networks are social. This is a wild card kind of sociality that managers and organization designers ignore at their peril. Example: CC intends to leverage social networks as described here, and enable them to become value-producing, collaborating communities List

The SmallBlue tool generates a social network architecture Mechanisms to locate skills and affinity groups Capture tacit knowledge without requiring user to proactively enter data in a separate repository Bring transparent and secure information sharing to Notes and Sametime

Bee Hive (a corporate Facebook) provides virtual office walls Shared pictures of company events, families and friends, and “What I did on my vacation” Jokes, philosophies, experience reports Well-planned and ad hoc events convened electronically

Institutional architecture Institutional architecture – Organizational elements that shape enterprise behavior based on established custom or law (e.g. “the institution of marriage”), as used by institutional economists. ( North, 2005). Organizational design is largely about the selection of institutional elements to be applied. A key design point is how to enforce or constrain institutional forms through technology. Elements: rules, domain elements, role-players , technology Sociality: The institutional architecture as described here is a whole collection of mechanisms for bounding and encouraging social interaction. One of the reasons they are important for this discussion is that these institutions form the basis of much of the encoding that is supported by ICT. Examples: General – guidelines, mandates, laws, rulings, corporate forms (corporation, partnership, franchise); legal (tort, intellectual property, contract, election); property (title, escrow, equity, investment); market (exchange, auction); transaction (offering, acceptance, consideration, charity); payment (fee for service, pay per use, gift, credit, billing); evaluation (ratings, peer review, reputation); rehearsal; research protocols; friendship; etc. CC – Corporation. partnership, franchise, auction, fee for service, pay per use, contract, ratings, indexes (e.g. AAA), informal networking, esthetics, IP (USPTO, Creative Commons, etc.), peer review, reputation, rehearsal, banking, credit, exchange, billing. research protocols. market, title, escrow, equity, investment, Gift List

Brand architecture Brand architecture – There is a branch of marketing devoted to study of brands. People in that discipline use the term “brand architecture”. This “reflects the extent to which the brand spans product categories, subcategories, and markets,” ( Aaker, 2004) and addresses the scope of a given brand in relation to other company brands, as well as its relation to competitor brands and portfolios. Technology can project the brand, to make the business system visible. Elements: portfolio, brands, messages, sub-brands, product-market offerings, co-brands, other firms, portfolio role ( Strategic Brand, Branded Energizer, etc.), relationship of brands within the portfolio ( Brand Groupings, Hierarchies , and Network Models .) Sociality: A brand is intended to attract individuals to interact with the enterprise. This is a complex social form, mediated by products and services in the marketplace. Example: Part of the service offered by CC would eventually be guidance on branding for communities in the network List

Cultural architecture Cultural architecture – Sometimes referred to as “corporate culture”. Hard-nosed business people take culture very seriously. “In all of my business career, I would have always said that culture is one of the five or six things you worry about if you're a leader. You worry about markets, and competitors, and financial assets and strategy. And somewhere on the list is culture. What I learned at IBM is that culture isn’t part of the game. It is the game.” (Gerstner, 2002) Elements: norms, guidelines, styles, founding stories (myths), personality of the founders, internal branding, ceremonies, manner of working Sociality: The social interactions of the enterprise are largely shaped by cultural factors. This is a major dimension that is often overlooked in the haste to apply ICT innovations. Example: CC expects to offer services to communities based on understanding of cultural issues. On the other hand, CC (the company) is composed of a mix of academic, business, and technical cultures, which has been a challenge to its ability to move forward in a coordinated fashion List

Social bonds Social bonds – Intrinsic to understanding enterprise sociality is an architecture from the viewpoint of social bonds themselves. The most acknowledged in business is the power relationship, which has its own viewpoint. In the regime of enterprising sociality we expect to see more emphasis on other types of social bonds, such as friendship, collegiality, sexual, dependence . Elements: bond, role-players, emotion, desire, purpose, preferences (utilitarian, aesthetic, ethical), image of self, image of other, attraction, trust, characteristics, experience, capabilities Sociality: This is the heart of sociality. Example: This aspect remains to be adequately explored in the creation of CC List

Emotional architecture Emotional architecture – Ties in to branding and other aspects of business. It is not easy to represent this, or even to discern it, but this is a major influence on buying behavior, employee productivity, customer relations, etc. Emotions of interest include attraction, desire, repulsion, expectation, excitement, enthusiasm, anger, outrage, joy, sorrow, altruism, fear, greed, etc. Elements: Role-player, situation, emotions Sociality: Influenced by, and giving rise to, social behavior Example: The idea of wealth-creating communities is designed to appeal to emotional commitment to collaborative work List

Semantic architecture Semantic architecture - Cuts across these other architectures. It is a way of exploring what people really talk about and worry about within the context of their shared enterprising. These issues call for a separation of concepts from the language that is used to express the concepts. This is a very tricky matter, and is the key issue for effective analysis and positive intervention in the affairs of communities seeking improved communication, coordination, or collaboration. Elements: concepts, conceptual relationships, terms, definitions, lexical relationships, logic Sociality: The architecture of enterprise meaning is fundamental to understanding issues of sociality. Everything expressed within the enterprise is expressed in language. The lack of commonly understood languages is a well-understood limitation to effective enterprise sociality. Example: folksonomies, tagging, ontology language, database, glossary. CC has the opportunity to offer services to communities that highlight the semantics of what they know and what they do, List

Ontologies create semantic bridges among business entities Conversations Commitments Contracts Transactions Corpus of business content Lexicon Explicit Ontology Upper Ontology

A semantic architecture disambiguates meaning between business terminology and IT manifestations

A high-level view of a semantic architecture Business Situation Business Purpose Business Commitment Business Outcome Business Role-player Business Function Business Resource Business Behavior Business Location constrains motivates defines alters senses supports fulfills mandates negotiates governs produces incorporates performs manipulates facilitates houses Is assigned as Invokes and sequences Based on: "A Standard for Business Architecture Description" D. W. McDavid, IBM Systems Journal, v. 38, no. 1, 1999. http://www.research.ibm.com/journal/sj/381/mcdavid.html enacted by

Some IT architectural considerations List

ICT is structurally coupled to the enterprise Structural coupling definitions: “ Structural coupling is the term for structure-determined (and structure-determining) engagement of a given unity with either its environment or another unity. The process of engagement which effects a ...history or recurrent interactions leading to the structural congruence between two (or more) systems". (Maturana, 1987) It is “...a historical process leading to the spatio-temporal coincidence between the changes of state” (Maturana, 1975) in the participants. As such, structural coupling has connotations of both coordination and co-evolution. (Thellefsen, on-line) Niklas Luhmann describes structurally coupled systems as being in a state of mutual irritation and resonance. “Structural coupling is a state in which two systems shape the environment of the other in such a way that both depend on the other for continuing their autopoiesis and increasing their structural complexity.” (Moeller, 2006) Enterprises and technologies are rapidly co-evolving Technology is not an inert enabler, but through an ecosystem of technological specialists is itself composed of an accountable set of human enterprises. Sociable technologies are coupled to the functions of enterprises that project the self of individuals and organizations into a globally open market of services and collaboration. The generation coming into the workforce expects to find such technology in the workplace.

Basics Store and retrieve File service and document sharing Versioning Tracking interactions Hits Click-throughs Cookies Content types Textual, graphical, and audio Still vs. active. Accessibility Search Tagging Ontologies and controlled vocabularies T ext analytic Boundaries Zones of availability on a various scales. Intranet Extranet Internet Access control Links Threading Text chat Voice Video ICT architecture functions for sociable technology Communication modalities Broadcast Narrowcast Pointcast Peer-to-peer Publish and subscribe Interactions Real-time or asynchronous Two-way or multiple participants Complex ICT services Calendar Work allocation, Groups Automated message origination Decision-making. Opinions Rating Ranking Rewards Reputation Visual design Commerce Advertisements Purchasing software Openness to integration

SOA Foundation Reference Architecture Business Services Supports enterprise business process and goals through businesses functional service Enterprise Service Bus Interaction Services Enables collaboration between people, processes & information Process Services Orchestrate and automate business processes Information Services Manages diverse data and content in a unified manner Development Services Integrated environment for design and creation of solution assets Partner Services Connect with trading partners Business App Services Build on a robust, scaleable, and secure services environment Access Services Facilitate interactions with existing information and application assets Management Services Manage and secure services, applications & resources Infrastructure Services Optimizes throughput, availability and utilization Apps & Info Assets Service Registry

Design points for a HUD for CC’s Community Consultants Copyright 2009 Stephan H. Haeckel SENSE INTERPRET DECIDE ACT Community Consultant Constraints Role is advisory only Time limitations Learning curve for a domain Valuation models Community eval Asset profile model Org health model simulation model Teach Guide Feed back What interventions to make in the community practice Network statistics Currency valuations Current community’s assets and performances Cultural observation Purpose Guide communities towards economic health

Open source software development Social networking Defense, medical, corporate, entertainment Collaboration, training, distance learning, marketing Virtual world technology offerings are proliferating

Manner of use Artifacts Utilitarian or aesthetic Past, present or future Real world renderings or fanciful creations Activities Performance Simulation Collaboration Simple meetings Conferences Joint development of intellectual content Focus of use Mode of engagement Uses -- VW is used in conjunction with other activities Within -- VW is the place to conduct business About -- Virtual space is the business opportunity Issues addressed Collaboration Meetings Marketing Design Etc, Taxonomy of usage of virtual world technology

Doug chose to live in a place that has interesting neighbors! Features of this location in the Yurim sim Near Jnana software Art Orientation trail Meeting space Professor from GWU SL Herald managing editor Space for the pirate ship …

The virtual world converged with the real world as well-known RL and SL artist visits IBM Research

Doug giving a presentation in second life

The enterprise in the clouds is the platform for 21 st century innovation Features and characteristics Cloud computing SOA-based Platinum rule of services People as source of value Standard processes Buying and selling as two sides of the same coin Continuous close

Ea S Presentation Mc D 20090824

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