Publications

Postings of previous publications, sometimes updated somewhat, and carved into web-friendly pieces and links.

Business and systems planning: building a new alliance -- Database Programming and Design, October 1992

This article was published in Database Programming and Design -- a monthly magazine published at the time by Miller Freeman.  This was the first publication that talked about using rigorous modeling techniques to model businesses.  This started me down the trail to business architecture and eventually enterprisology;

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Business Language Analysis for Object-Oriented Information Systems - IBM Systems Journal, 1996

This is an article published in IBM Systems Journal, in which I tried to make the case for the importance of semantics, and an approach to effectively capture semantics for business information systems.  This was the era of object technology, which is reflected in the title. reinforced by the fact that this article was published in a special issue of the Journal devoted to object technology.

A full version of the pre-publication draft can be downloaded here.

The published version is available here, by paying a fee to IBM.

Abstract

Business language analysis grows out of a philosophy that treats business organizations as living systems.  Individual applications are giving way to enterprise-wide nervous systems.  A key concern is the meaning of business information that provides adaptive survival advantage and strategic leverage.  Accurate and timely understanding of information needs is a prerequisite for effective enterprise-wide information systems, whether ob-ject-based or procedure-data applications.

Popular object-oriented methodologies correctly recognize the need to identify business objects by analyzing the problem domain.  The approach described in this article fills in the details that are implied, but not specified, by other methods.  It builds a business language model that clarifies both the content and structure of the terminology actually used in the business.   With this content and structural foundation, business process modeling, system performance budgeting and the various other techniques for creating an information system can proceed with confidence, and information systems can be co-evolved with the business.

Business language analysis identifies domain specific business terms from documents and conversations.  It draws on pre-defined patterns of generic business concepts to classify and link business terms into a semantic net-work.  This network of terms then provides the basis for object modeling, user interface design, persistent data management design, and test case generation.  The reader will gain an appreciation of business language analysis work products, activities and techniques through simple examples of business language analyses.  For those wanting deeper insight, lexical semantic and category theory is discussed, and the notion of business language patterns is proposed.  The latter may become the generalized foundation that enables meaningful reuse of business objects.

1. Introduction

Information is an essential dimension of any business.  In fact, “... organisations, themselves are information systems”.   Communication of information within and among organizations comes in the form of conversations, commitments, contracts, and transactions.  Industries and professions often communicate in a jargon that is incomprehensible to outsiders.  The challenge for informa-tion systems is to facilitate organizational communication, sometimes translating from one group's jargon into terms that are meaningful to others.  The information systems profession will only be successful in this endeavor to the extent that it builds systems based on a fundamental appreciation for the meaning of business language.

Business language analysis produces models of the information that is used and exchanged among business organizations.  It follows in an engineering tradition of separating analysis from design and using models to create shared understanding across teams of people working on a technical problem.

It is always important to understand the purpose and intended audience of any model or modeling activity. Various aspects of the business domain can be modeled.  Requirements models treat es-sential, or logical aspects of data and data processing systems.  Design models explore physical aspects of information systems.  There are also models of objective reality, including business process models, organization charts, charts of accounts and plant layouts.  And, finally, there are models of the information representation of things important to the business.    Business lan-guage analysis creates models of this latter type.  It is a method for analyzing business semantics:  the meaning of business information.  It treats information of all types, from inventories to goals, from processes to rules and procedures, whether accessed by computers, bound up in documents, or present in human brains.

This article will discuss the limitations of a purely engineering paradigm for understanding busi-ness information needs.  It will explore an alternative way of thinking about business information systems using concepts from general systems theory that view the information system as the mind of a living system.  It will present object orientation as the most hopeful approach to realizing an architecture based on cooperating mental agents.  It will propose business language analysis as the conceptual framework for information system construction.  It will show how business language analysis identifies terms in actual use in the business, and then classifies and links those terms using a set of generic business concepts.  It will recommend specific activities and work products, which will produce a model of business language.  It will suggest usage of the language model by various information systems development activities.

This article will present preliminary findings from the author’s experience.  Business language analysis is exploratory, and invites participation and feedback.  The article will conclude with suggestions of the areas where future work should proceed.

2. Architecture, engineering and understanding

Successful methodologies have been built around the notions of architecture  and engineering , as applied to information systems.  These metaphors have been useful, and lessons from those en-deavors have helped the information systems profession make great strides over the last decades.

An engineering perspective will always be critical to the success of information systems with re-spect to performance requirements of hardware and network components.  On the other hand, when architecture and engineering are taken to be sufficient models for what information systems are all about, a fundamental conceptual confusion results.  The following quote presents the nature of this confusion:

“When applied to an information system, the word architecture is a metaphor that compares the construction of a computer system to the construction of a house. …  Enterprise or business model[s are analogous to] … the architect’s drawings that depict the final building from the perspective of the owner, who will have to live with it in the daily routines of business.  They correspond to the enterprise (business) model, which constitutes the design of the business and shows the business entities and processes and how they interact .”  

In this passage, a computer information system is made analogous to a building (a house or a business structure).  It is stated that an enterprise model is both a model of an artifact (building) and the business served by that artifact.  This is like equating a house with the family that will live in the house.  Clearly a house and a family are not the same, and cannot be described by the same model.  A model of a family, including the number of members, interests and hobbies, ages and expected growth patterns, would be very useful input into the design of a home.  In the same way, a model of the business provides very useful input into the design of its information systems.  The point is, they are different models.

Understanding user requirements is widely acknowledged as a critical success factor for information systems.  Many methods, even when they address business issues, do so from the perspective of a particular system development effort, looking outward (see Figure 1).  The very words  “requirements" and "user" reveal the perspective from inside some (proposed) information system.  All we need to do is ask "Requirements for what?" and "Users of what?" to see that perspective.  The answer must be “Requirements and/or users of some information system”. 

 
Figure 1

In contrast, the perspective that underpins business language analysis (Figure 2) is from outside the enterprise, looking in at the human systems, and the information systems that compose that enterprise.  This perspective forces examination of the information needs of the enterprise as a whole.  It can even embrace an extended enterprise, which reaches out to incorporate external enterprises as part of a larger human system.

 
Figure 2
A human-centered approach to information management provides the underpinning for business language analysis.  The perspective of business language analysis is less on engineering, and more on understanding.  It recognizes that it is a losing proposition to try to engineer human communication.  It aspires to understand the meaning of communication within the human activ-ity system so as to support the evolution of the business, along with its information systems capability.

3. An alternative view of information systems

Business language analysis is a bottom-up approach to articulating the information needs of business enterprises.  It is based on an alternative, systemic view of information systems as the minds and nervous systems of living organizations.

3.1 Motivation

There are several motivations for taking an alternative view of information systems.  One motivation is the trend toward ever-increasing amounts of information being held and manipulated by automated data processing systems.  Hardware has become a commodity, as have many basic software components.  As more technical issues are resolved, and as information technology penetrates deeper into business enterprises, we are better able to focus attention on  the use of business information as a strategic resource in an increasingly competitive environment. 

Increasing business complexity, competitiveness, and speed is part of the motivation.  Stephan Haeckel and Richard Nolan present an analogy for today's fast-moving business climate in the notion of managing by wire.  “Flying by wire” means flying an aircraft by controlling an information representation of the aircraft through the use of heads-up displays and electronic controls;  the computer actually manipulates the aircraft control surfaces and powerplant controls.  Success-ful companies are able to sense and respond to rapidly changing customer needs.  “The ideal manage-by-wire implementation uses an enterprise model to represent the operations of an entire business.  Based on this model, expert systems, databases, software objects, and other technical components are integrated to do the equivalent of flying by wire.”

However, the problem is actually more complex than this analogy would suggest.  Managing a business involves social and personal dimensions, as well as physical forces.  This is critical to the challenge of building systems that support information needs.  Tom Davenport proposes an ecology of business information.  He claims that the information technology community is in a mid-life crisis, brought about by failure to deliver anticipated value to its constituency.  It been dominated by the engineering design and architecture model - the technological plumbing.  "Information management must begin by thinking about how people use information - not with how people use machines. ... A human-centered approach assumes information is complex, ever-expanding and impossible to control completely.  The natural world is a more apt metaphor for the information age than architecture."

This alternative view is also motivated by the shifting, insatiable nature of information systems requirements.  Experience has demonstrated that the more application functionality is provided, the more users demand.  We need to get out in front of this requirements gap, by anticipating user needs before they materialize.  How is it possible to anticipate user needs?  The only way is by understanding common patterns of behavior and semantic structure, which arise because of the true nature of organizations and the information systems that serve them.  At the most basic level, we need to recognize that both businesses and information systems are indeed systems, to be understood by applying lessons from general systems theory.

3.2 Systems thinking

General systems theory is a branch of science that has emerged in the 20th century as a counter-point to the successful, but sometimes limited, reductionist approach to science.  The “systems paradigm is concerned with wholes and their properties.”   It is based on the recognition that a system has properties that emerge from, but transcend, the sum of its individual parts.  Systems can be both hierarchical and interpenetrating. There is a hierarchy of systems from simple thermostats to the space  shuttle, and from cells, to organs, to organisms, to organizations.  A human being (a system) plays roles in many different social systems (families, corporations, organizations).  A hospital is a component of both the health care system and the economic sys-tem.

There is a general systems principle that when one system exists to serve another (System A serves System B) the serving system must be understood in terms of the served system (System A must be understood in terms of System B).  Information systems exist to serve human activity systems, and, therefore, “information systems design must stem from a model of the activity system served.” 

The systems approach has had notable success in the creation of large, complex engineering artifacts.  Lessons learned from this systems approach can be applied to business information sys-tems where the problems are mechanical in nature.   More problematic in many ways are the so-called “soft” systems. “‘Hard’ systems thinking is goal-directed, in the sense that [it] begins with the definition of the desirable goal to be achieved.”  The essence of hard systems is design engineering of a well-known solution to a well-understood problem, where the effort is to choose the best among several alternative approaches.  By contrast, soft systems are “management problems … in social systems where the goals are often obscure.”

Critical to soft systems thinking is to avoid the trap of treating human systems as equivalent to more deterministic mechanical systems.  There is temptation to reduce information system projects to hard system problems.  In some cases this may be appropriate, if the requirements are simple, clear and well articulated.  However, this is increasingly the exception, rather than the rule in enterprise class information systems.

3.3 Living organizations

If we are to understand information systems in terms of the human activity systems they serve, it behooves us to examine the nature of human activity systems (organizations) more closely.  There is a long tradition that supports thinking of organizations as living entities.

One of the earliest applications of general systems theory to human activity systems, is the living systems model .  This model abstracts a common set of functions and subsystems at several lev-els of recursion, from a single living cell, up through very high levels of human organization.  These recurring subsystems include material and energy subsystems (ingestor, converter, motor, storage, producer, etc.) and information processing subsystems (memory, encoder, decoder, decider, channel and net, etc.).  This model can be used to discover the role or purpose that is served by a particular organization within the larger system it is part of (e.g., the phone company plays the role of channel and net in society), and it can be used to understand the functions within the system of interest. Both the phone company and a toy manufacturer will have all of the infor-mation processing subsystems, in one form or another, created and maintained by information systems professionals.

The viable systems model is another view of organizations, from bee colonies to nations .  Every organization (viable system) exists within some environment and has a management function that is accomplished according to some mental model.  Operating units are responsible for producing the primary results (products and services) of the organization.  There is a function responsible for coordinating the set of mental management models and another that uses a direct command channel to give orders to the operating elements.  Another important function is responsible for looking outward into the environment as a whole, and into the future.  There is a function that mediates between the current and future needs of the organization, ideally consisting of the most senior management.  Each of these omnipresent subsystems gives rise to specific information requirements within any organization.

More recently, the concept of the learning organization has emerged from the tradition of systems thinking.  Peter Senge provides powerful underlying systemic processes that can drive or inhibit business success.   Gareth Morgan proposes several ways of viewing organizations as living things, including organisms, cultures, political systems, and even brains.  “Whereas in traditional theories of organization, attention has been devoted to the way communication links are established between different elements of an organization, the brain metaphor helps us appreciate that an organization can itself be regarded as a cognitive system, embodying a structure of thought as well as a pattern of action”.  

Michael Rothschild has proposed a radical biological, information centered view of the economy and business.  “Orthodox economists still envision the economy as a predictable clockwork mechanism where historical change is irrelevant because all movement is cyclical ... After DNA was discovered ... [and] bolstered by stunning breakthroughs in cellular biology, molecular biol-ogy, paleontology and ecology ... it was possible to completely rethink economics ... as an evolv-ing ecosystem. ... Genetic and technologic information, despite manifest differences in the branching patterns of their evolutionary histories, are nonetheless members of the same class of natural phenomena.  Both are living, evolving information systems”.

Kevin Kelly goes even further.  He surveys the fields of robotics, artificial life, natural and artifi-cial ecologies, computer games and art, the internet, forecasting, and cybernetics, and makes the case for a biology and ecology that includes organisms, organizations and technology.  “The realm of the born - all that is in nature - and the realm of the made - all that is humanly con-structed - are becoming one. ... The challenge is simply stated:  Extend the company’s internal network outward to include all those with whom the company interacts in the marketplace. Spin a grand web to include employees, suppliers, regulators, and customers; they all become part of your company’s collective being. ... The metaphor of IBM as an organism needs overhauling.  IBM is an ecosystem”.

This sample of systems literature demonstrates that there is value in considering the human activ-ity systems of business as living, thinking systems.  That view leads effortlessly to the notion of the human mind as a model for a malleable learning mechanism that can enable competitive business adaptation.

3.4 The mind

The notion of mind as the seat of human cognition has long been a source of debate among scientists and philosophers.  Only recently, with advances in detailed understanding of the functions of the brain, are we beginning to articulate a coherent explanation of the mind and its workings.  The distilled essence of this work provides direction to our thinking about the role of information systems in business.

In a survey of the current state of knowledge about the mind, David Taylor raises several interesting issues.  He notes that the key functions of the human mind are perceiving, imagining, remembering, thinking, feeling, and controlling action.  Contrary to popular belief, a memory is not housed in a single place in the brain, but rather is a distributed function.  The most interesting dimension of the mind is its provision of the quality of consciousness.  The external sharing of consciousness through communication is the force that drives the newest form of evolution, cultural evolution.   We might argue whether businesses exhibit consciousness, and it might be interesting to consider what imagining and feeling are for an organization.  At a minimum, how-ever, it is clear that organizations must sense, or perceive changes in their environment, and they must think, or make decisions that affect their course of action, based on external stimuli and corporate memory.

If memory is a distributed process in the mind, how is it (and other mental functions) accomplished?  Marvin Minsky presents an architecture of very simple mental agents, each of which is far from intelligent, but which work together in increasingly complex ways to form the society of mind.  It is necessary that each agent, from the most primitive sensing mechanisms on up, per-form its specialized work correctly.  It is equally necessary that the relationships among these agents be maintained and continue to evolve in the learning process.

Arnold Trehub proposes a possible architecture of the physical brain, to account for basic human cognitive capabilities.  Starting from the physiology of the neuron, with synaptic junctions among axons and dendrites, a mechanism is proposed that can perform tasks that range from parsing any arbitrary object as part of a scene, learning and recalling names for various entities, generating sequences and related inferences, planning, executing and learning sequences of actions that satisfy motivational needs.  The components include synaptic matrices, simple input preprocessors, clock rings, size and rotation transformers, a semantic network, and various high-level executive processes, such as registers for plans and actions.  This physical architecture sheds light on the kinds of primitive capability that are required by organizational information systems.  

One of the interesting aspects of the study of cognition is how much the attempt to simulate intelligence with machines has shed light on the nature of human cognition, and vice versa.  Out of that convergence toward a unified theory of cognition, Allen Newell proposes the following useful definition that can apply equally to businesses, computing devices, or human beings:  “intelligence [is] ... a description of adequacy over the joint range of two complex domains, the system’s goals and the system’s knowledge.”   This highlights two general issues that must be present in any adequate account of organizational information system requirements:  organizational goals and organizational knowledge.

This excursion through the literature has not been provided simply for entertainment value.  It is meant to lay the groundwork for thinking about business information systems in a different way.  The key to this new way of thinking is the recognition of the importance of concepts and meaning in the life of the organization, and acceptance of the validity of the study of meaning for those who would undertake to create or modify the systems that embody this meaning.  The issue now becomes, how can this new approach to information systems be applied in practice?  How can we take the lessons of systems, living systems, and minds, and use it productively in the service of business?  Part of the answer is found in the venerable (on a software timescale) approach of ob-ject orientation.

3.5 Object Orientation

Object orientation has been around for a long time.  It has its origins in the simulation of complex systems, and so is based on the systems thinking paradigm.  It holds out the promise of addressing the software productivity gap that gives rise to the insatiable demand for increased information system functionality that we noted in Section 3.1. 

The term object-orientation is actually something of a misnomer.  In non-technical use, the term “object” can refer to almost anything, and in general tends to conjure up something inert and nondescript, like a stone, or a clod.  If someone were to ask, “What is that object over there?” we wouldn’t expect to see a person, a cow, a Camaro, or a tricycle as the referent of  the word object.  In general use, object is pretty boring.

Software objects are much more interesting than clods or stones.  They have life.  They have the potential to be the cooperating mental agents of Minsky’s architecture.  Perhaps a better term than object-oriented programming might be organic programming. 

Object design can benefit from methods of analysis based on a living, organic paradigm such as we have just explored. Business language analysis is fundamentally grounded in this paradigm.

A principle of object-orientation is that there is a narrow semantic gap between domain understanding and object implementations.  Analysis of business language directly supports the injection of business meaning into artifacts built using object technology.

4. Business language

All object-oriented methodologies call for identifying business objects from the problem domain.  They generally give a few guidelines, such as finding nouns in the requirements statement(s):   “Lists of key nouns, gathered from representative documentation and/or use cases, become  potential classes.”   “The objects can be found as naturally occurring entities in the application domain.  An object becomes typically a noun which exists in the domain.”    “Begin by listing candidate object classes found in the written description of the problem.  Don’t be too selective; write down every class that comes to mind.  Classes often correspond to nouns.”   “As a first approximation one can scrutinize the requirements document, if there is one, and consider the nouns, or better yet, the noun phrases.”   “As you read, consider the nouns in the written mate-rial; these words will often give you a clue about potential Objects in the system.”   “Roughly speaking nouns are candidate objects, and verbs are candidate operations.” 

Some methods go a step farther by introducing several methods of classification, and recognizing that abstraction is a process of discovery in analysis and invention in design.  Object oriented practitioners have used a number of techniques for finding and classifying objects, such as classical categorization, behavior analysis, domain analysis, use-case analysis, class responsibility collaboration cards, informal English description, and structured analysis.

Business language analysis starts from where these other methods leave off, by focusing attention on how to make the most of the rich language resources that are available within any business environment.  These resources, if studied carefully, will provide guidance as to exactly what information system support needs to be provided.

4.1 Terms and concepts

Two things are needed for a complete model of business meaning.  These two basic dimensions are the lexicon of terms actually in use by the business, and an ontology of concepts that help sort out the meaning of the terms that are discovered by language analysis.

A business lexicon is the set of actual terms used within a particular human activity system, where a term can be a word or a set of words.  A term, along with its meaning, constitutes a lexical unit.  See Sidebar 1 for a summary of some of the semantic relationships that can be used to understand one lexical unit with respect to others in the same body of language.

Sidebar 1

There can be many types of semantic relationships among lexical units.  These include (but are by no means limited to):

  • Congruence
    • Synonymy ¬– The meaning of two terms is identical.
    • Hyponymy – The meaning of one term fully includes the meaning of another term.  
    • Compatibility – The meaning of two terms is overlapping, but not identical.
    • Incompatibility – The meaning of two terms is completely disjoint.
  • Opposites
    • Complementaries ¬– Two terms divide some conceptual domain into mutually exclusive compartments
    • Antonyms ¬– Two terms are on opposite ends of a gradable range.
    • Directional opposition ¬– Two terms indicating opposite potential paths of a body in motion.
  • Configurations
    • Proportional series ¬– Sets of terms that share common traits.
    • Hierarchies
      • Branching  – Hierarchies with possibly multiple nodes at each level.
        • Taxonomies – Classification based on a single rule of differentiation at each level of the hierarchy.
        • Meronomies – Assemblies of components
          • Part/whole – Things that are naturally divisible into expected parts
          • Piece/whole – Things that can be divided randomly into pieces
      • Non-branching – Hierarchies with only one node at each level.

End of sidebar 1

The semantic relationships listed above, along with the basic definition of lexical unit, come from the field of lexical semantics.   This list is not exhaustive, but it does indicate that, within the study of business terminology, there is a much richer set of relationships than simply homonyms, synonyms, and hierarchical relationships.  In particular, it is interesting to note that taxonomy is a very specialized type of relationship, and that a well-formed taxonomy is much rarer than most analysts would generally imagine.

As opposed to the terms that are found in common use within any environment, including a business environment, an ontology is a set of abstract concepts that defines the areas of common interest within a particular community.  In a philosophical sense an ontology is “a theory of what the world is, or contains”.    The scope of an ontology can be:
     • Global – Concepts common to all human beings, or all members of a culture.  Examples include Roget's Thesaurus and the Dewey Decimal System.
     • Business – Concepts that are common to the world of commerce and enterprise interaction generally.
     • Domain-specific – Concepts specific to a particular industry, profession, company, or work group.

These concepts may be taken for granted, and essentially invisible to the people who harbor them.  It is the task of the business language analyst to articulate this largely-unspoken ontology, and to ensure that the information systems reflect the important concepts of the business users.  In Side-bar 2 there is a discussion of how human beings form mental categories, and how this process extends into business concepts.

Sidebar 2

Categories are basic to human cognition.  George Lakoff  provides a valuable and entertaining survey of empirical and theoretical studies in the field of category theory.  Cross-cultural evi-dence points to common mechanisms for forming categories, and expanding the set of categories to accommodate more complex situations.  Base-level categories (e.g. the genus level in the bio-logical taxonomy) are the most intuitive for people to discriminate.  It is easier to differentiate a cow from a fish than it is to group a cow and a whale together as mammals.  Similarly different species of whale or different varieties of pig may be difficult for the non-expert to distinguish.

Categories have prototypical members and peripheral members.  The peripheral members start to edge off into conceptual areas that eventually require the formation of new categories.  Idealized conceptual models (ICMs), are patterns of concepts that define a particular category.  Through various methods of extension, radial categories are formed.  These radial categories share fewer and fewer of the patterns of concepts that the prototypical pattern exhibits.
 

End of Sidebar 2

As an example of a business-oriented ICM, consider the category product.  If we were to define the fundamental concepts that surround the prototypical idea of product, they would probably include:
     • A typical product is the output of an industrial process.
     • It is composed of discrete, physical units.
     • It is sold for money.
     • It is consumable.
     • It has a producer
     • It has a specific target set of consumers.
In the following ICM, the canonical idea of product is extended in various directions.

We could argue whether the central category that represents “product” for us is more prototypically a car or a box of cereal.  There's no question, however, that the radial categories have something in common with the basic concept, while departing from it in various significant ways.  Is a service a product?  What about a leased 56KB line?  What about a monthly fixed-rate pricing scheme for a 56KB communications circuit? Is documentation a product in its own right?  Or information in the form of a financial derivative?

The following set of concepts arises from consideration of the kinds of things with which any business needs to concern itself:

     • People - including both individuals and organizations
     • Resources - material, energy, skills, money, and information
     • Processes - events, end-to-end processes, functions and discrete actions,
     • Results - the products and services that are the reason to be in business
     • Locations - physical geography, and logical points such as accounts and network addresses
     • Time periods - the standard concept of time

This is just one of many possible ways of dividing the conceptual space at a high level.  Another published scheme divides the business world into resources, processes, and organizations.   Still another scheme has the following top-level set of divisions:  Party, contract or agreement, prod-uct, resource, event, location, and account.

There is no absolute best way to make this kind of classification.  Concerns that appear at the top of one list are bound to appear elsewhere on someone else’s.  For example, in our scheme, one type of resource is an information resource, while a type of information resource is a relationship, of which there are many that a business has to manage.  One particular kind of relationship is a role, which brings together individuals or organizations on one side and some function or set of functions on the other.  This puts the concept of role three levels down from the top of our scheme, while in another scheme, role might be at the very top of the conceptual taxonomy, be-cause it is such a powerful concept.  Another type of complex relationship is a situation, which is an identifiable state of affairs that demands resolution.  There is actually an academic discipline called situation theory, which forms the basis of its own logic system.   Clearly a case could be made that situation should be a first-order concept.  The point is that information is immune to the law of gravity.  The top is somewhat arbitrary.

Business concepts do not stand alone.  Instead, they link together in naturally occurring patterns.  These patterns appear in organizations of all kinds, across industry boundaries.  Concept patterns form a semantic network  of interrelationships.  Here are examples of typical concept relation-ships:  Resources are transformed by processes that are triggered by events and invoke functions, discrete actions, and flows of material and information.  People and organizations play various roles that are responsible for various functions.  Processes create results, which in turn may be-come resources.  Figure 3 is an example of one fragment of the overall semantic net of generic business concepts:

 
Figure 3

The article does not present an exhaustive catalog of business concepts and their interrelation-ships.  This is partly due to space limitations, and partly because, as noted above, there is more than one way to divide the conceptual space.  More importantly, it is impossible to be exhaustive.  As soon as we move into a more specific industry or enterprise environment it becomes necessary to extend the generic concepts to account for the information that is most important in that context.  The top level of Figure 4 shows a generic concept network extended by a more specific network.

The main purpose for articulating the patterns of a business ontology is to provide a set of templates for organizing the specific terms that we encounter in the jargon of work groups and professional specialties.  Through this linkage into templates, or patterns of conceptual relationships, the business terms themselves begin to form patterns of meaning and relationships that are unique to a specific business situation and community of communicators within a human activity system. 

 
Figure 4
The set of terminology patterns forms a model of meaning that can be linked to various technical artifacts from the solution domain of information systems.  This provides traceability from im-plementation back to business meaning, and from unique domain language back to powerful generic templates.  This complete set of linkages is shown in Figure 4.

4.2 Activities and work products

 

Business language analysis produces several modeling components and formal documentation to make these modeling components accessible.  The work products range from documents and graphic pattern depictions to complex multi-dimensional semantic networks in appropriate repository technology.

Because business language is essentially a bottom-up analysis of an existing corpus of specific business language, the work is very detail-oriented.  It starts with a large mass of language mate-rial that is provided or found in the environment.  By determining definitions, applying existing patterns, and filling in new patterns of abstraction, we add detail to a higher level framework to clarify and reduce the ambiguity of domain-specific language.

The following section describes the activities of business language analysis and their related work products.  It employs a small sample of language from a hypothetical insurance company to illus-trate some of the steps and results of a typical business language analysis.

Gather language sources - There are several sources of business language from which we can derive the patterns of language.  Some can be proactively developed sources:  interviews, facili-tated sessions, and questionnaires.  The advantage of these techniques is that they involve people from the business, fostering discussion, raising issues, and moving the group toward consensus.  However, they make time demands on people who are already overworked, and they are limited by the memory and biases of a small group of individuals constrained by a time-box.

“Found” sources, on the other hand, are documents and other materials produced by the business for its own use.  They range from public pronouncements to proprietary items, and from formal to  ad hoc documents.  Examples include:  requirements documents, business plans, product specifi-cations, catalogs, training materials, regulatory filings, methods & procedures, process models, forms, charts of accounts, business plans, organization charts, QIT and BPR models, contracts, and mission or vision statements.  Often existing business documents prove to be the best sources of raw material for models because in many cases, the material is not raw at all;  it is already quite refined.  Some existing, information sources are well on their way to being models, worked over by many business minds in an attempt to reach consensus.

The example below is a single document fragment from an insurance policy, scanned and transformed via OCR, from a paper copy of an insurance policy form.  It is a section of the policy informing the policyholder of certain conditions of the contract related to designating and changing beneficiaries:

_____

You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any as-signee of whom we know.
When a beneficiary is designated. any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise:
1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in equal shares.
4. If none survives the insured, we will pay in one sum to the Insured's estate.
Before we make a payment, we have the right to decide what proof we need of the identity, age or any other fact about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.

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Extract business  terms - The next step after obtaining the sources of language is to identify the business terms they contain.  Recognition of a business term becomes a matter of intuitive feel for business language analysts.  The search through the files and documents produces a list of terms.  A fragment of such a list is shown in Table 1.

 

Table 1

 

As we extract terms from the original source document, we can eat up the file by replacing found terms with surrogates, such as “**”.  What we end up with looks like the skeletal remains below:

 

 

<!--EndFragment-->

 

At this stage it is still possible to identify terms that may have been previously missed.  In the stripped down text above, we can identify at least two interesting terms that hadn’t yet found their way into our list: “apply to” and  “terms”. 

Build glossary - After alphabetizing and removing duplicate terms from the list, we can create a glossary with definitions.  While building the glossary, it is particularly important to involve busi-ness experts - those who actually know how terms are used, and can identify and differentiate among different uses of the same word.  Often glossaries that provide the raw material for the language analysis already exist in source documents.  The following is a sample of glossary en-tries:

Beneficiary -- A person or other entity designated to receive benefits from an insurance policy upon the death of the insured.
Proceeds -- The total amount paid out of an insurance policy upon termination of the agreement.
Assignee -- A person or other party to whom benefits from an insurance policy are contractually assigned.
Interest -- The type and quantity of benefit from a policy that are allocated to a particular party, as in “beneficiary’s interest”.

Classify terms - Classification of terms begins to determine the basic shape of the information requirements that will need to be met by information systems.  Areas of key importance will ex-hibit long lists of terms.  This is a business-oriented demonstration of the Whorfian principle that the language shapes the thinking of its users.  The concepts that are provided by a generic busi-ness ontology form the basis of this classification, but they will most likely need to be extended by concepts that are relevant and possibly unique to the particular business domain.  An analyst can take a first cut at classifying terms, but business experts need to validate this work.  The fol-lowing is a set of terms extracted from the sample document above, classified by a very generic business ontology.

 

Table 2

Link terms - Linkage among business terms sets up the meaning structures that help to build business object models (class hierarchies, object composition, variables, collaborations among objects). There is a set of relationships that can be articulated for business terms including linkage of terms to business concepts, linkage of terms to each other via semantic relationships, and link-age of terms to sources in which they were found.

The following set of figures provide an indication of how semantic linkage evolves in our think-ing about a set of terms from a business source.  It suggests the types of questions to be asked about each term that will allow us to understand the patterns of meaning in the business.

Figure 5 is a generic conceptual pattern.  It says there is such a thing as an external role that we may expect to find.  Any external role is likely to be either a source or a recipient, may be formal or informal, is played by an individual or organization, is involved in situations, and generates events.


Figure 5

In Figure 6, we have filled the slot in the center of the pattern with one of the terms that we found in our analysis of the document fragment.  This directs attention to a set of questions, based on the fact that we have classified “beneficiary” as an “external role”.  These questions cause us to go back to our term list to see if we can find terms to fill the refinement, subtype, individual/organization, situation, and event slots that are indicated by the question marks in the figure.


Figure 6

Figure 7 shows the slots in the template filled in.  Among the terms, there are clear-cut subtypes of beneficiaries, called “class 1 beneficiary” and “class 2 beneficiary”, and a refinement, “previous”.  The beneficiary role can be played by a person or by an estate.  A term “request” may fill the event slot in this pattern, but we’re going to go out on a limb and suggest that maybe it is a “claim request”.  We have also invented a term “death claim” to represent a situation that a beneficiary would be involved in.  These suggestions by the analyst will need to be validated by the business user, and may lead us to additional terminology that we haven’t discovered in the document.

 
Figure 7

Ideally, every term would be diagrammed to create semantic patterns like the one above.  Realistically it is most important to create these diagrams for certain key terms that provide high leverage for understanding the domain of interest.

Load semantic database - It is easy to see from the small sample outlined above, that analysis of business language leads to a complex, multidimensional network of terms, concepts, and mean-ing.  Every way we try to portray this on two dimensional paper seems somehow inadequate.  In the original text, terms can be easily overlooked.  A simple list of terms is just a start.  A glossary is more helpful, but suffers from the circularity of definitions, and the restriction of considering only one term at a time.  Graphic linkages, according to predefined patterns help give more of a sense of the overall language, and appeal to the visually oriented.  They, however, are laborious to create, and, in a large vocabulary, become overwhelming by their sheer numbers.

A highly linked database can overcome most of these paper-oriented limitations by representing  the terms, definitions, sources, linkage to concepts, and linkage to each other.  There are many products or technologies that can support this requirement, including object-oriented databases, hypertext, or proprietary flat-file access methods.  There is also a class of database management system that specializes in capturing and maintaining multidimensional semantic networks.   Once in the database format, a multidimensional browsing tool mirrors the multidimensional data structure, so that all links from a specific term can be followed and displayed at the same time. 

A repository of business terms, business concepts, definitions, sources, inter-term linkages, concept-to-term linkages, and linkages between terms and design artifacts (object classes, database tables, etc.) can all be maintained dynamically as the models evolve.  It is important to establish a data administration function to make sure that updates, backups, and data consistency matters are attended to.

Overall documentation of results -- Throughout the process of creation and maintenance of the business language model, there are periodic points where it is useful to report results.  A number of documents that can serve this reporting requirement.  Issues lists are working documents for the team that is performing the business language analysis.  A team member should be assigned to each issue, so that there is responsibility for its resolution.  A findings document is a simple listing of conclusions and implications that have emerged during the course of the analysis.  De-scriptive papers embed parts of the model in explanatory text.

4.3 Roles, Skills, Responsibilities

Broadly speaking, the people who do business language analysis are business modelers.  Data modeling is a good background, as are other disciplines that involve classification, such as biology and library science.  Academic background in linguistics, semantics, or systems theory would be ideal preparation.  Experience in building information systems, particularly object-oriented systems, provides the background to appreciate the benefits offered by business language analysis. 

A modeler may work alone with documents and other language sources from the domain, to pro-duce a model.  It is much more effective, however, if the analysis is done with a small team that searches sources for terms, writes definitions, classifies terms, writes documentation, and maintains the repository.  It is essential that the team or individual modeler works with domain experts from the business to validate the definitions, relationships, and conclusions that are developed in the course of the business language analysis. 

It is not the role of business language analysts to dictate language, but rather to understand all the ways terms are being used, and their implications for system requirements.

Business language analysis may be tied to a particular project, in a constrained time period.  However, it is more valuable if it becomes institutionalized as a permanent business function.  At a certain point the number of new terms being discovered will diminish, because the effort is achieving completeness of coverage.  This provides the opportunity to evaluate the completeness and adequacy of the enterprise-wide information system.

The language of the business will continue to evolve.  With a highly tuned sensing mechanism, the information systems organization can stay abreast of the evolution of the business, as re-flected in the evolution of its language.

5. Information systems use of business language analysis

The models of terminology produced by business language analysis have a central role in many key activities throughout the information systems development environment.  This starts with an understanding of the nature of the information systems development process itself.  Popular lifecycle descriptions (waterfall, spiral, etc.) give the impression that building enterprise class information systems is a downhill effort, somehow aided by gravity or some other natural force.  If business and business environments were static, this might be the case.  In fact, just the opposite is true - it is an uphill struggle against the forces of entropy.

A method that is grounded in the specific information access and communication needs of the human activity system, and is also informed by powerful concepts from general systems theory, linguistics, and cognitive science, provides some hope of winning this struggle.  This article recognizes information systems as serving systems for living organizations.  This point of view challenges the application-oriented and project-oriented approach to information systems, and affects many information systems functions.

Planning ¬– We can start with the planning function.  The living systems viewpoint lays the groundwork for a new perspective on planning the evolution of the nervous system of the organization.  The planning function will understand that it is not enough to provide disjoint inventory management,  order processing, billing, and accounting systems, with decision support systems coming along as an afterthought.  All of these must be present, and coordinated.  There must be visibility into information that is generated beyond the boundary of the enterprise itself.  The planning process should search for areas of isolated or missing information capability, and budget for work to address them.  It can use existing language models to determine the completeness of coverage, and may commission additional language modeling to fill in the gaps.

Architecture ¬– Architecture now also takes on a different meaning.  If the goal is to support the overall communication capability of the business as a living system, then architecture begins to look like putting an infrastructure in place that will support the organization’s needs for normative and long-term decision-making, and not just the standard operational and control functions.  By means of understanding the interactions among individuals and organizations performing roles within the domain, application architects can gain a better, more effective, understanding of the business functions to be supported.  An architecture based on cooperating agents will change the whole notion of business applications.  Detailed understanding of the language and concepts of the enterprise gives strong guidance to the types of software agents that need to put in place to realize its adaptive goals.

Project management ¬– Business language analysis must be managed as carefully as any other analysis effort, through continuing dialog between language analysts and project management.  It is often attractive to follow threads of language into areas that can expand the scope of projects in an uncontrolled manner.  On the other hand, language analysis can lead to expansion of scope that is appropriate, and may have been overlooked without this analysis.  A language model provides a means to reach agreement, in terms familiar to the user, on which functions, roles, and resources will be in or out of scope of a particular project.

Business language analysis provides strong support for the process of team building.  The focus on business language prepares the ground for many other development activities by unfreezing the techno-speak that many team members may use.  The process of analyzing business language helps to mediate among many different communities:  executive to line management, various functional organizations, supervisors to users, I.S. personnel to non-I.S. personnel, and even company to company, in the case of cooperative or consortium efforts.  It also lays a foundation for training in new procedures and system support.

Design¬ ¬– Business language analysis does not replace system design.  Business language analysis is a discovery activity that helps to understand information needs within the human activity sys-tem.  Design is a creative activity that uses language models as input.  “The simplistic approach is to say that object-oriented development is a process requiring no transformations, beginning with the construction of an object model and progressing seamlessly into object-oriented code. ... While superficially appealing, this approach is seriously flawed.  It should be clear to anyone that models of the world are completely different from models of software.  The world does not con-sist of objects sending each other messages, and we would be seriously mesmerised by object jargon to believe that it does.”

A domain object model is a design of the business objects within an implementation.  Business objects are generally distinguished from purely technical objects such as GUI frameworks and data broker middleware.  There are several techniques that guide designers in making the transition from modeled language to an object perspective:
     • The generic concept framework provides a first-cut set of classes, subclasses, and
          collaborations that can be assumed to exist in some form in almost any domain.
     • Terms that map to the same high-level ontological concept should be considered for
          possible subclassing, or parameterization of a generic class.
     • Terms that are made up of a basic term and modifiers can be considered for hierarchy or
          variable constructs, depending on whether the modifiers indicate strong typing or state
          changes.
     • Predominance of terms in one concept or another reveal or confirm the nature
          of the overall system to be built.  Predominance of resource-oriented terms reveals an
          inventory type of system, while predominance of role and process terms indicates a
          work-flow orientation.

The language model can also contribute to database design.  Database design issues are very similar to the set of concerns that leads to an effective domain object model.  In particular, if an object-oriented DBMS is to be used, these sets of concerns are highly convergent.  If relational technology is to be used, the techniques noted above will need to be mapped onto to an entity, attribute, foreign key paradigm.

Business language analysis has a special relationship with use case modeling.  Use cases have long been associated with the idea of a concept catalog or glossary.  This listing of terms and concepts from the business domain has been an important communication mechanism for project teams and the user community.  Business language analysis elaborates on the notion of a concept catalog, turning it into a model in its own right.  In return, the process of building use cases of how the system will be used in the new environment becomes a rich source of terms and concepts that may not have been previously discovered in documents.  Part of the reason for this is that these new terms may reflect a future scenario which has not otherwise been well documented by the business.

Clearly, other types of models beyond language models are required for effective systems design.  For example, event and traffic metrics feed the physical design of systems.

Development ¬– Given that information systems development is an ongoing effort to create a sys-temic capability, it is accomplished in stages, but always with an eye on the overarching needs of the organization as a whole.  Language analysis benefits each increment that is delivered, based on the ability to reuse term and concept patterns as powerful abstractions.  This results in stronger, previously tested code, and a shorter development life-cycle.  The benefit to the development process as a whole is traceability - establishment and maintenance of linkage between project artifacts and their business sources of justification.

A business language model provides key support for the development of user interfaces.  Terms from the natural domain language can be brought to the surface of the interface, where they provide a feeling of familiarity for system users.  Underlying code can be wrapped in alternative terminology for different communities of users, and can be evolved as the language of the busi-ness evolves. 

The information system to support an enterprise is never complete.  The application perspective regards this phenomenon as a problem that gives rise to a separate maintenance functions.  In contrast, the living systems viewpoint recognizes this as natural evolution.  Developers in the next incremental project have an established nucleus of defined and understood business terminology and meaning from which to expand seamlessly into new areas of the business.

Testing ¬– There are a number of issues involved testing software, including functionality, usabil-ity, accuracy, consistency, and efficiency.  A language model provides guidance to testing experts in the construction of meaningful test cases that assure provision of needed functionality.

Documentation ¬– Writers of both user’s manuals and on-line help can benefit from organized language that represents the roles, processes, events and resources of interest to the users of information systems.  Context-sensitive help can be driven directly from the terminology that is modeled and understood via business language analysis.  The key advantage is that documenta-tion and help is in the user’s language.

6. Conclusions to date

Business language analysis has been applied by the author to a number of situations in a variety of industries and organizations.  This experience has led to some interesting lessons and conclu-sions.

A common experience is that in any business domain we are likely to encounter a predominance of certain categories of information.  These dominant categories lead to addition of more specific concepts to the ontology in order to differentiate sets of terms that would otherwise form a long list under a single concept.  One such concept expansion was the result of an analysis of the budget office at a state university.  The budget office dealt almost exclusively with information in various forms.  The office collected information from other departments, performed various types of analysis, and created a variety of reports and information products for use by departments throughout the university.  This situation required a major expansion of the concepts related to information resources.

Information resource concepts were also added during analysis of language within the project management function in a consortium.  The emphasis on coordinating work among several par-ticipating companies and a large number of suppliers, and managing projects that spanned multi-ple years, presented a severe information management challenge.

Based on the two examples noted above, the concept of information resources was expanded to include the following concepts: identifiers, motivations (including values, opinions, purposes, conditions), proposals, decisions, rules (prescriptive, proscriptive, allowances, entitlements), descriptions, templates (including specifications, forms, models, checklists), characteristics, measurements (quantitative, qualitative, comparative), category sets, commitments, goals, history, relationships (including roles, situations, agreements (contractual and informal)), forecasts, and plans.  This set of concepts still may not be totally exhaustive.  However, once new concepts have been established within one domain, they become available in any subsequent domain where they might apply.

Another expansion and validation of the generic business concept structure came from an analysis of a customer relationship management project at a natural gas utility company.  It was not surprising that this domain forced an expansion of the concepts related to energy resources.  What was surprising was the need to greatly expand the granularity of concepts related to time-periods.  Over 1,200 terms were found in the analysis, and close to 20% had to do with discrete points and ranges of time.  Time itself was already included in the generic set, but this experience validated its value as a significant ontological concept.

Sometimes there are important business concepts that exist in a domain, but do not have explicit terminology that maps cleanly to them.  An example of this insight is found in the insurance in-dustry.  Analysis of insurance has led to the conclusion that the essence of the business is management of situations.  Actuarial analysis is largely about recognizing distinct situation types in which business and individuals can find themselves, and determining the likelihood of various outcomes resulting from types of situations.  Even though insurance people recognize this, and find it is a useful way to think about their business, there is a surprising lack of specific terminol-ogy that relates to client situations.

Language models can reveal the variable importance of the same concept from one domain to another.  Models from two different companies indicate the importance of contractual agreements in the insurance business.  In fact, many insurance terms are classified under both the concept of agreement and the concept of product.  This is because a policy, which is a contract, is actually the basic product of the insurance industry.  Without contracts, there is no business.  This is contrasted with a model done for a cellular telephone company, where there are very few terms that refer to contracts.  Contracts are rather casual pieces of paper that are signed upon commencement of service, and as many as 40% never make it from the retail distributor back to the appropriate corporate file.  Service, billing, and collections proceed unimpeded, so that contracts are truly not a major issue.  These diverging models provide strong indication of the types of objects needed by the respective industries.

A different kind of lesson from experience with business language analysis is the positive reaction that it evokes in business people.  There always seem to be significant insights, and great appreciation for this fresh view of language.  There is gratitude that information systems profes-sionals are willing to spend time to appreciate the unique meaning that infuses the language of the business.  There are also surprises for the domain experts at times.  A model prepared for an internal IBM group highlighted terminology from a mission statement that everyone had agreed to change but that was still present in source documents.  There was shock in the group when the model highlighted language that had become invisible to the participants in the business.

Information systems professionals who have been exposed to this approach are almost unanimous in their positive reaction.  The most common reaction is “If only we had followed this approach on my last project!  It would have saved untold misunderstanding and rework.”  They recognize that detailed understanding of language avoids a number of  common problems with information system development.  These problems include the cost of reworking inadequate requirements, the loss of credibility when delivered systems do match the needs of the business, the risk that projects will be so focused on the data processing “plumbing” that human communication and information needs will not be served, and the risk that analysts will drift off into a haze of abstractions that are too loosely coupled with the needs of the business.  The ultimate risk is that the form and operations of the business will be forced to conform to the resulting information system, instead of the other way around.

7. Outlook

There are several areas for further refinement and expansion of the usefulness of business lan-guage analysis. 

We have talked a lot about generic and industry-specific concept patterns.  These concept patterns form a meta-language of business concerns, which are proven to help understand specific bodies of language.  Coupled with robust repository technology, this ever-expanding semantic network of concepts and terminology can form a rich index into an asset-base of software components.  This helps to address the issue of visibility of design and code artifacts from earlier projects where it is often difficult to determine what an object does, and where local terminology is not embodied in objects whose genesis is elsewhere.

The subject of patterns is a very hot topic among object-oriented developers.  Design patterns have been the subject of internet discussions and a growing published literature.  These patterns were originally limited to technical design issues, such as structure, behavior, and creation of software objects.   This is in contrast to the types of patterns that emerge from business language analysis, which are patterns of meaning.  There is recently indication of possible areas of cross-pollination with work such as Peter Coad’s business object patterns  and Ward Cunningham’s CHECKS pattern language that validates domain-specific input. 

Another growing area of software development is the field of groupware and workflow software.  This field was pioneered by individuals for whom computers and cognition were quite compatible.   The field has expanded and become increasingly commercial, although it still has a long way to go realize the full-blown mirror worlds potential.   As software comes to draw increasingly on repositories of structured business language, sophisticated groupware applications will provide more transparency and appeal to users across the enterprise.

The software crisis is still with us.  There is increasing demand, and seemingly hopeless backlogs.  Object technology provides part of the promised solution.  As Tom Love envisioned, “These new environments for assembling powerful components will still require lots of creative programmers to build new and better components and make them available to the market.  Programmers will become software component providers; users will construct the final applications and systems based upon the available repertoire of components.”   If, in addition, these same sophisticated users have access to rich repositories of structured business meaning, software and language can begin to come together in intuitive and seamless support of business evolution.

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Cited References and Notes

1.         E. C. Plachy and P. A. Hausler, “Enterprise Solutions Structure”, this issue.
2.         Robert Youngs, et al, “A Standard for Architecture Description”, IBM Systems Journal, this issue
3.         P. T. L. Lloyd, et al, “Technical Reference Architectures”, IBM Systems Journal, this issue
4.         Lynn Margulis and Dorion Sagan, Microcosmos, Berkeley, CA, University of California Press, 1997.
5.         Michael Rothschild, Bionomics: Economy as Ecosystem, N.Y., Henry Holt & Co., 1990.
6.         Keith Devlin, Logic and Information, N.Y., Cambridge University Press, 1991.
7.         James Grier Miller, Living Systems, N.Y., McGraw Hill 1978.
8.         Barry Clemson, Cybernetics: A New Management Tool, Turnbridge Wells, Kent, Abacus Press, 1984.
9.         Arnold Trehub, The Cognitive Brain, Cambridge, MIT Press, 1991.
10.         Marvin Minsky, Society of Mind, N.Y., Simon & Schuster, 1985.
11.         Lloyd, et al, op cit.
12.         Deborah Leishman, “Approaches to Solution Customization,” IBM Systems Journal, this issue.
13.         Douglas McDavid, “Business Language Analysis for Object-Oriented Information Systems,” IBM Systems Journal, 35, No. 2, 128-150, 1997.
14.         Youngs, et al, op cit.

Acknowledgments

I would like to acknowledge the invaluable support and contributions made by the following colleagues, without whom this article would be much less than it is:  Rock An-gier, Carl Ballard, Nancy Boyd-Schimmelman, Ken Briskey, Dave Britton, Jane Conkey, Robert Coyne, Robert Griffith, Robert Gross, Ralph Hodgson, Steve Johnson, Chris King, Mark Langman, Jim Nerney, Steve Marcus, Rich Newbold, Jack Ring, Zach Shoher, Mike Straka, David Taylor, Anne Wheeler, Lynn Wheeler, and Kathy Yglesias.

Enterprise ontology - unpublished paper

This is a companion piece to an article entitled “Business Language Analysis for Object-Oriented Information Systems”, appearing in the second quarter 1996 issue of IBM Systems Journal.  The article provides examples of business concept patterns, in the context of a discussion of why and how to do business language analysis.  This paper expands on the article by laying out a relatively complete set of business concepts and the patterns of their semantic relationships to each other.

The full paper can be downloaded from here.

Introduction

The purpose of business concepts is to provide a set of categories, or buckets, to sort out the large lists of business terms discovered in the process of business language analysis.  Simply viewing the set of business terms as classified by concept is very revealing of the essential concerns and information needs within a particular organization, or human activity system.  Further relating the business terms to each other, by using the relationships indicated by concept patterns, turns business language into a model that provides a powerful basis for information system modeling and design.

Concept patterns form a seamless semantic network.  This is almost impossible to portray via any two-dimensional medium, such as this paper.  The best we can hope for is to provide an approximation of a multi-dimensional network.  The approximation used here is a set of subnets, each of which is focused on one concept.  Each subnet displays all of the relationships from a focal concept to all other relevant concepts in the scheme.  Each relationship is bi-directional, with a pair of names that is meaningful in both directions.  This means that if there is a relationship in one subnet from Concept 1 to Concept 2, there should be a subnet for Concept 2 that shows the relationship back to Concept 1.  These symmetrical relationships should be meaningful converses of each other, such as “requires” and “is required by”, or “produces” and “is produced by”.  In some cases there are important relationships that exist within the concept itself, and these are shown as recursive ovals.  There is an informal convention in the patterns that shows the main relationships to other concepts radiating off to the right of the focal concept.  Coming in from the left are relationships that refine the focal category, or that explore fundamental subtypes of the focal category.  In general, refinements of concepts and subtypes of concepts are not explored in detail in this paper.  Exceptions to this rule include subtypes of resources (material, energy, monetary, human and information resources) and subtypes of relationships (roles, systems, and agreements), and a few others that do have their own sections in this paper.

Figure 1 is a legend for the graphic conventions used in this paper.  It is important to keep in mind that this is an exploration of meaning, and an attempt to provide useful structure to the mass of business language discovered in language analysis.  What you are seeing is not a set of formalisms for building relational databases or object-oriented software.  These are not entity-relationship models or object models.  They are fragments of patterns that relate concepts together in a relatively informal, but hopefully useful and revealing way.

Legend

LEGEND

 
Figure 1

Organization

Organization is a concept that includes groups of people of all types.   An organization is a subtype of system (that is, a human activity system).  From the point of view of the human system of interest there are internal organizations and external organizations.  Within some context there are replicated organizations (field offices, project teams) and singular organizations (the Board of Directors).  An organization can be formal (a department), informal (a committee), or legally constituted (a corporation).

 
Figure 2

Two recursive relationships among organizations are shown.  A containment relationship says that one organization is part of another organization, as in the standard organization chart. It is also possible for an organization to report to another, without actually being a part of it as a larger entity (such as a project team that reports to a steering committee, without being contained by the steering committee).

Organizations can be parties to agreements.  An organization requires certain roles to perform its functions, which in turn are dictated by the role played by the organization itself.  An organization may be defined by a functional area of the enterprise.  It is involved in a number of definable business situations.  It is composed of individuals that are its members.  Like many other business concepts, organizations have discernible states.  Organizations control various types of resources in order to fulfill their roles in the enterprise.

 

Individual

An individual is a human being, and one type of legal entity (the other type of legal entity is a legally constituted organization).

 
Figure 3

Individuals embody the human resources (skills, abilities, attitudes, etc.) that are needed by the enterprise.  People are identified by a number of identifiers, including names, social security numbers, employee numbers, etc.  Individuals can have states, including health, training, etc.  They play any number of roles in relation to actions that are part of processes.  They are involved in an unlimited number of business situations.  They are described by various characteristics (over and above the human resource aspects they embody).    Individuals are members of organizations.  Individuals, as well as organizations, can be party to various agreements, including contractual agreements.

Role

A role is a special type of relationship between a function or action and the individual or organization responsible for it.  Roles may be formal (job title) or informal (committee membership).  There are distinct types of roles, including customer, employee, regulator, sales or distribution channel, and supplier, as well as more general types such as performers, managers, and recipients of various types of results.

 


Figure 4

A role may be characterized by human resources (skills, abilities, etc.), which enables it to be matched with individuals who have those characteristics.  A role may be played by an individual person, a device, or an organization.  Organizations require some set of roles to perform their functions.  A role is the point of responsibility for one or more specific functions.  Roles are involved in identifiable business situations.  Roles generate the events that drive business processes.  It is the responsibility of some roles to provide resources, and all roles require resources to perform their required actions.  Actions are atomic units of business activities that can be performed by some set of roles.

Result

The concept of result is a generalization of the concept of product.  Other types of results are services, by-products, and interim results that are produced in the course of business activity.

 
Figure 5

Results are produced by processes (generally major products and services, as well as incidental by-products) and by functions (generally interim types of results).  A result is generally produced on behalf of a recipient type of role, that expects to receive the result.  Results are composed of resources that have been transformed by processes and functions.  They may, in turn, become resources, to be consumed by other processes.  Results are transmitted via flows, and may be stored or located in specific locations before being received by their intended recipients.

Event

Events occur as external perturbations across the boundary of the enterprise, or are generated internally.  An event can occur as the result of timing or as the result of some condition becoming true.  Externally generated events can be solicited, and therefore expected, or predictable to an extent (e.g. sales, stimulated by marketing campaigns). Unexpected events are things like typhoons, stock market movements, or the appearance of new technology.  Though unexpected in the sense of being out of control of the enterprise, they can in many ways be anticipated and provided for with contingency plans.


Figure 6

An event initiates a flow of material, information, etc., and it takes an event to initiate an identifiable business situation.  An event is generated by a role being played by an individual or internal or external organization.  Events trigger processes within the enterprise.  A common feature of events is that they are time constrained, starting and stopping at discrete times, or ranges of times.  A key purpose of the information resource of the enterprise is to record the sensing of events as they occur.

Process

A process, as used in this ontology, is a complete sequence of business behavior that is triggered by an event and produces a meaningful business result.  Major subclasses of business processes are transactions, transformations, services, and maintenance.  Transactions can be primarily inward - bringing things into the enterprise (money, information, or other resources) or outward - sending things out (bills, products, by-products and waste).  Inward and outward transactions do not necessarily correspond to internal or external event types (e.g., a bill, going out, is triggered by an internal event).  Transformation (conversion) processes take resources as input (material and energy, or information) and transform them into other (value-added) states.  Service processes are less product-oriented and can be either passive from the customer viewpoint (haircut, restaurant meal, airline flight) or collaborative (consortium, information retrieval).

 
Figure 7

Processes are triggered by events.  Processes are composed of functions, invoked as needed.  Processes can be explicitly managed by individuals in the role of manager.  A process generally exists to produce a result, and may be evaluated by the effectiveness of producing the result, and the importance of the result to the enterprise.  Processes may be designed to alter situations, to resolve undesirable situations, or to maintain desirable situations.  As end-to-end sequences of functionality, processes intersect, or cut across the functional areas of the business (accounting, marketing, engineering, etc.)  A key purpose of the information resource of the business is to provide control for its processes.

Function

A function is a unit of business activity that is less complete than a process.  Functions can be active (initiating, transforming, conveying) or passive (storing and receiving).

 
Figure 8

Functions are accomplished by some number of discrete actions.  They are invoked in various orders, to form processes (which means the same function may appear in many processes).  Functions are performed by individuals and/or organizations in roles.  They are triggered, and in turn initiate, flows of resources and control.  Functions are governed by rules, which dictate how flows should be initiated and directed.  Functions produce identifiable results, but these tend to be interim results that contribute to the ultimate results of processes.  At the function level we can see the transformation of resources into interim and final results.

Action

An action is a very atomic unit of business activity.  There is a primary distinction between mental actions and physical actions.  Both require energy, but are distinguished by the types of resources and devices involved.  Physical actions perform transformations, while mental actions provide the logic that directs processes through various functions.  It is sometimes useful to distinguish between actions described at a business level, and those that are performed by information systems.

 
Figure 9

Atomic actions are the activities that accomplish functions.  An action is performed by a (set of) role(s). It is triggered by a flow of material, energy, information, etc. and in turn initiates such flows.  Actions use resources and devices, and action is where we see a trade-off between individuals and devices.  Actions are at the level where it is most reasonable to analyze time durations that aggregate together to allow us to simulate business processes.

Flow

Flow is not one of our topmost categories, and is not often named in business language, except according to things that travel along a flow.  We distinguish four types of flows in most enterprises:  flows of money, physical things, information (or data), and control.

 
Figure 10

Control flow tends to accompany, or direct the flow of other resources.  Flows begin and end at locations, which can be logical or physical, based on the type of resource traveling on the flow.  Flows trigger actions and functions, and are initiated by events, actions and functions, based on business rules.

Resource

The concept of resource represents all those things that are required by an enterprise to sustain its processes and create its results.  Resources break down into five general categories:  physical, energy, monetary, human, and information resources.  At this level we are concerned with general types of relationships that are common to all types of resources.  This will simplify the specific resource-type discussions, through the idea that this general pattern is inherited by each of the more specific types.

 
Figure 11

Resources are provided by individuals and organizations, acting in the role of supplier.  Resources can be located at particular physical or logical locations, and they move from one location to another via appropriate types of flows.  We can talk about the state of any resource.  Resources are the components and materials that are assembled into systems.  Manager roles are responsible for different types of resources within the enterprise. Resources are used by actions in the course of producing results.   At the function level we can see the transformation of resources into interim results, which in turn become resources.  All resources can be valued by the monetary resource; even monetary resources can be valued in terms of money, such as currency conversion, instrument comparison, time value of money, etc.  Resources are controlled by organizations, and can be involved in any number of business situations.

Physical resource

Physical resources represent tangible, molecular things that are used and consumed by the enterprise.  Two intersecting type structures help categorize physical resources.  Resources may be mass (sand, sugar, hydrochloric acid), countable (pencils, transistors), or identifiable (individually tracked and accounted for).  Resources may also be supplies, devices, components, or environmental resources.  These category sets influence each other.  Supplies are almost always either mass or countable type resources.  Environmental resources (land, water, trees) tend to be mass types, but may also be identifiable (a particular lake, a large oak around which a courtyard is constructed).  Components are either identifiable or countable, while devices (tools and machines) are usually identifiable.

 
Figure 12

Physical resources are always quantifiable, and almost always have additional physical characteristics (weight, dimensions, quality, color) that we are interested in.  Many physical resources (devices) require energy, while some are used for storing potential energy.  We need to be able track the life cycle of physical resources, for depreciation and inventory purposes.

Energy resource

Energy is a factor that should be considered more than it generally is in business models.  Energy is either kinetic (producing physical motion), thermal (expressed in terms of temperature measures), or potential (stored in a medium for future release).

 
Figure 13

Actions all require energy.  Physical resources store or contain energy (fuels, batteries) and device-type resources consume energy.

Human Resource

Traditional use of the term human resource refers to employees - human beings employed by the enterprise to do work.  Here we're encouraging the separation of concerns between actual human beings (who we're calling individuals) and the resource aspect of what the enterprise needs.  The resource side of this equation looks at skills, knowledge, attitudes, capabilities, and experience that are required to perform certain required actions, on the one hand, and that are embodied in individuals, on the other.

What this allows us to do is apply the general resource pattern to human resources, without putting individual people directly into these patterns and equations.  We can say things like "Three years of Visual Age experience is worth ...", and then negotiate with individuals, with that monetary valuation as one aspect of the negotiation.

 
 
Figure 14
Human resources, as defined here, are required by specific actions.  The types of human resource, as embodied in individual human beings, is matched against the needs that characterize various roles to be filled by individuals.

Monetary resource

Money produces one of the least interesting of our patterns, notwithstanding the relentless (and understandable) attention paid to it by enterprises of all types.

Money can be promised (to be available in the future) or actual.  In can be incoming (billings, receivables), outgoing (payments, liabilities), or static (balances).

 
Figure 15

Monetary resources are assigned to accounts (which are logical locations).  Money provides valuation for all types of resources used by the enterprise.

 

Information resource

Information resources represent the kinds of things that can be known by the individuals and organizations in the enterprise.  What does it mean for an organization to know something?  It means that it has stored data (physical or electronic), or that its member individuals know it.  This is the distinction between recorded and mental resources.

It is really at the subtype level that we can see how different categories of information resources are actually related to other patterns in this ontology.  This includes how information types are interrelated with each other in interesting ways.  The types shown here, while numerous, are not exhaustive, and information-intensive enterprises tend to expand on this pattern in interesting ways.  A few sample relationships from specific types of information resources to other concepts in the ontology are shown.  Again, this is illustrative, rather than exhaustive.

 
Figure 16
Primary functions of information resources are to record events and control processes.  Information resources are highly dependent on how they are structured by relationships.
 

Location

The concept of location must be present in any business ontology.  Two main types of location, physical and logical, are differentiated here.  They are so different that it may not be intuitive to think about them as part of the same category.  However, they do exhibit very similar semantic patterns, so it is interesting to show the commonality.

Physical locations have to do with space.  Space defined in three, two, one, or zero dimensions corresponds respectively to volumes, surfaces, lines, and points.  Points can be of two types: coordinate (x,y; latitude, longitude) or referential (on the fourth floor of the building; next to the car).  Logical locations include accounts, postal addresses, and network addresses (phone numbers; LAN ids, etc.).

 
Figure 17

We often say that the manager role manages locations; usually it is something at the location that is actually managed.  Locations locate resources and results.  Many locations can be spanned by the complex things we call systems.  They are both the source and destination of flows.  Any number of locations may be involved in a business situation.

Account

As we saw above, account is a type of logical location, which in turn is a type of location.  Some of the basic categories of account are noted (payable, receivable, ledger, personal).

Accounts are often one of the top-level categories in business thinking.  This point of view stems from the preeminence of the accounting discipline in the history of business, and of computing systems.  From the overall perspective of this business ontology, accounts are assigned a lesser position, as logical locations, or buckets, for monetary resources.

 
Figure 18
An account is updated by transactions, and is generally assigned to a manager role.  Many of the business terms that represent flows have to do with flows that access accounts.  As we’ve noted, accounts only exist so that monetary resources can be assigned to them for tracking purposes.

Time period

Time is one of the highest level concepts in our scheme, as in most ontologies.  Obvious order-of-magnitude levels of time granularity that are relevant in measuring business processes are shown.

In addition to activity measurement, we emphasize that events have temporal dimension.  Some of these are discrete, or finite (ATM transaction start time), while others are fairly indefinite (new product idea).

 
Figure 19

Time periods indicate the initiation and termination of business events.  They also determine the frequency of occurrence of events.  Actions are delimited by time periods, which forms the basis for the ability to simulate business processes.  Inventory management is enabled by relationships of time periods to physical resources.

Relationship

Relationship is a special type of information resource that brings a number of pattern concerns to the forefront.  Relationships can involve like things (in the same ontological category) or unlike things.

General types of relationship include containment, composition (both part/whole and piece/whole), and hierarchical.  Hierarchical relationships can be created by generalizing intuitive things to a less intuitive level (individuals and some organizations generalized to "legal entity") by specializing things to more technical level (organization specialized as "government organization").

Certain relationships take on an even more important character.  Agreements (including contractual relationships), roles, and systems are singled out elsewhere in this ontology as high-level concepts in their own right.

 
Figure 20

Key relationships can involve individuals and/or organizations, and can provide structure to physical and information resource types.

Agreement

An agreement is a specific type of business relationship.  Agreements can be contractual, or they can be more informal.

 
Figure 21
Agreements have parties to them, which can be individuals or organizations.  Agreements, especially contractual agreements, are identified by some kind of identifier, such as a contract number.

System

A system is a recognizable, differentiated complex of other things, that exists over time, and is thought to have identity beyond the sum of its parts.  As such, it is a complex type of relationship.  Certain key types of systems that we're concerned about in business include applications, networks, and organizations.  Organization is one of our topmost categories as well, so that it is an example of the same concept appearing at more than “level” in the ontology.  This is a demonstration of the inability of information to obey the law of gravity (there is no absolute “top” in this universe).

 
Figure 22

Systems are assembled from resources of all kinds.  They are differentiated things, and thus have identifiers.  A system spans locations, both logical and physical.

State

The concept of state is one of the most nebulous we have to deal with.  The idea of a finite state machine is well known to information systems professionals, but in the business domain states are not quite so "finite".  At the same time, we need to express ideas that have to do with transient characteristics of resources, individuals, and organizations.  States can describe discrete, step-function changes, or values on a range of continuous values.

 
Figure 23

In comparison to the idea of situation, covered below, state is more limited in scope.  It is descriptive of relatively singular things (resources, organizations, and individuals.)  States of large numbers of things, when viewed in the aggregate, create situations.

Situation

The idea of situation is a complex, and powerful one. A brief definition of a situation is "a structured part of reality that … the agent somehow manages to pick out."  One way to look this idea is as if the whole set of modeling constructs could be frozen at a point in time, and examined in terms of all the processes in progress and the states of all the components.  Situations can represent reality beyond the enterprise - a whole environment or industry - "the OOT marketplace".

Situations can be desirable, in which the enterprise will attempt to sustain them, or undesirable, in which case the enterprise will attempt to change them.   Situations can arise from natural causes, or in the case of business, quite commonly are the result of legal issues.

The concept of situation is actually the heart of most service businesses, which manage more or less complex situations on behalf of their clients.  A classic example is an insurance company, which exists by defining various situation types, analyzing the likelihood of various outcomes, and helping its clients manage the risk-ridden situations in their business and personal lives.

 
Figure 24
A specific situation may be traced back to an initiating event.  It can be resolved, altered by, or maintained by processes that are organized around this purpose.  Situations motivate organizations to establish goals to alter, resolve, or maintain situations.  One situation may involve any number of organizations, roles, individuals, resources, and locations, in their aggregate set of states.

Summary

The field of business ontology is a big subject, and is we have barely scratched the surface here.  The set of concept patterns presented here is changing constantly.  It will continue to change and evolve, based on application to more and different enterprises in different industries.

This whole framework of generic semantic patterns is meant to be used for structuring actual business terminology.  Terms found in use in specific businesses will challenge and extend the structure of these concepts.  At the same time, specific terms will not necessarily be found that match all the categories in this ontology.  Some of the higher-level categories (relationship, location, resource, etc.) exist more as mental placeholders, than as direct linkage to specific terminology.

If successful, this set of business concept patterns will prove useful in the endeavor to create meaningful business information systems.  It is presented in the spirit of exploration, and the reader is encouraged to modify, extend, and use it, and then share the results.

A Model for Living Enterprise Information Systems -- ISSS paper - 1999

This paper brought together a number of subjects, in an early, almost extended outline.  The sections of this paper provide starting positions for several subjects that will be further explored in enterprisography.

Full paper can be downloaded from here.

Abstract

This paper explores the subject of enterprise-wide information systems in terms of how they support business organizations as living, cognitive human social systems.  It questions whether the autopoietic definition of living systems truly applies to human social systems, and it proposes a formal definition of the human social system, incorporating the notion of the meme.  It further draws on the systemic concepts of the living systems model, the viable systems model, and a cognitive model of the human brain, to suggest a conceptual architecture of enterprise information systems. It incorporates the biological concept of symbiogenesis to provide an evolutionary perspective on how variety is introduced into organizations and selected for successful innovation.  Finally, this paper briefly considers how the current explosion of information technology is driving the evolution of business designs.

Keywords:  information systems, enterprise cognition, autopoiesis, meme, human social system, business design

Introduction

This paper is an abbreviated, exploratory discussion of a conceptual framework for considering enterprise information systems.

An increasingly popular point of view is that human social systems, including businesses and other enterprises, are living, learning systems. This viewpoint is based on a rich and growing literature, and it is supported by the author's experience with building and maintaining information systems that did seem to evolve and mature along with the organization. 

This paper can only begin to introduce the concepts that support a model of living enterprise information systems.  This introductory treatment begins the synthesis of a number of existing concepts, including autopoiesis, memetics, living systems, viable systems, cognitive architecture and evolution, as well as introducing a brief formal definition of the human social system. This is an extremely wide span of concern that can only be addressed  here in broad strokes.  But it is a span of issues that needs to be addressed in order to understand the technology-driven evolution of business today, and to be able to exert a positive influence on the direction of this evolution.
In the author’s personal experience, information systems are under constant pressure from organizations to extend and refine the information and behavior they can accommodate.  My intuition is that a kind of evolution and maturation process is going on, where information systems (composed of technology and people) are like the nervous systems of organizations.

My education in sociology, library science, and especially systems theory[1] was a preparation to thinking in terms of social systems and information systems.  My systems analysis of a library circulation system led to installation of a turn-key system, which immediately began to change in cooperation with the vendor.  I managed of a group with responsibility for data quality and information systems development at an international data communications provider, where we produced an enterprisewide database system that integrated network control, ordering, billing, asset management, network engineering, and telephone bill reconciliation.  This system became the focal point for continual negotiation among various work groups over definition and use of elements of the database.  My five years in the information systems planning organization of Pacific Bell led me to propose an alliance between business and information systems planners, with a common lingua franca of modeling.[2]  I later discovered support for this concept in the Harvard Business Review, under the rubric of “managing by wire”.[3]  My experiences as an employee of various companies, as an independent consultant, and as a principal in a small consulting company, have given me access to data and process models in many different types of enterprises.  These models exhibit distinct patterns of commonality and variability from one business to another, and across industries.  In recent years I have developed an analytical approach to business language as a way of understanding the complex, multi-dimensional semantics of business information systems.[4]

Pursuit of validation for my original intuition has led to joining forces with a community of compatible thinkers in the strategic studies team at IBM’s Advanced Business Institute where the emphasis is on businesses as adaptive systems.[5]  Adaptivity in a human social system is a function of its ability to:  perceive changes, draw conclusions, invent, decide, form relationships, propagate perceptions, conclusions, inventions, decisions and relationships, and forget outmoded information and break dysfunctional relationships.

Living Businesses, Learning Businesses

There is a substantial and growing literature that supports the notion of business enterprises as living systems.  One of the key voices in this discussion is that of Peter Senge.  His Fifth Discipline[6] brought the notion of the learning organization to a wide audience, and he applied principles of systems dynamics to the corporate world.  Senge’s work was greatly influenced by scenario-based planning at Royal Dutch Shell.  Arie de Geus, one of the originators of the approach, has documented lessons from this type of organizational learning.[7]

Concepts from chaos and complexity theory[8] have been applied to the study of business organizations.[9]  There is a theme that says businesses are complex, adaptive systems.

James Moore provides a very interesting treatment of enterprises as living systems.[10]  Moore takes an evolutionary view of business, claiming that business ecosystems undergo cycles of predictable stages, from pioneering, to expansion, followed by established communities, and then to either ecological renewal or collapse.
The concept of the learning organization has spawned another thread of literature, on knowledge management.  One of the most influential writers on this subject is Ikujiro Nonaka.[11]  Nonaka brings attention to Japanese knowledge management practices, which emphasize transforming tacit knowledge into explicit knowledge.  Chun Wei Choo surveys a broad range of literature and experience and distills it into a framework of sense making, knowledge creation, and decision-making.[12]  Choo draws on theoretical work exemplified by Karl Weick about how organizations make sense of themselves and events around them.[13]  This theme has spawned a number of works that survey practices of businesses and offer advice in the area of knowledge management.[14]

A key result of this emphasis on the way organizations learn has been an emphasis on the extent to which the value of a company can be measured by its knowledge.  An example is Skandia, a financial services company that includes an information resource balance sheet as part of its annual report.[15]  Recent trends in the stock markets have shown that investors are willing to value companies based on their intellectual assets as much, if not more, than their tangible assets.[16]

This literature from the field of business represents a growing trend to look at businesses and other human social systems as living and learning systems.  But are businesses really living systems?  Can we determine whether this is just an interesting metaphor, or a fundamental defining characteristic, carrying profound significance?

Are Human Social Systems Autopoietic?

To explore the appropriateness of the notion of living enterprises (or living human social systems) we turn to the theory of autopoiesis, as advanced by Humberto Maturana and Francisco Varela.  No discussion that claims to address living systems at any level can afford to ignore this bold attempt to define life itself, as declared by the following statement, “… the notion of autopoiesis is necessary and sufficient to characterize the organization of living systems.”[17]  This means, according to Maturana and Varela, that all living systems are autopoietic, and all autopoietic systems are living.

The formal definition of autopoiesis is:

An autopoietic machine is a machine organized (defined as a unity) as a network of processes of production (transformation and destruction) of components that produces the components which: (i) through their interactions and transformations continuously regenerate and realize the network of processes (relations) that produced them; and (ii) constitute it (the machine) as a concrete unity in the space in which they (the components) exist by specifying the topological domain of its realization as such a network.[18]

Some interesting and controversial assertions of autopoietic theory include:

  • Autopoietic systems are autonomous, and totally self-referential.
  • Autopoietic systems are not open systems in an environment.
  • Autopoietic systems do not have purpose, because purpose is referential, not self-referential.
  • The nervous system is a closed, self-referential system.
  • The nervous system gives rise to an observer (particularly in the case of human beings), which exists in a domain of descriptions.

If autopoietic systems have no input or output, and the nervous system is a closed system, there must be something else that is open, at least in the sense that overrides the second law of thermodynamics.[19]  Fritjof Capra points out the distinction that Maturana and Varela make between the pattern of organization and the structure of a system.  The former is the ”configuration of relationships that gives a system its essential characteristics,” while the latter “involves describing the system’s actual physical components”.[20] Autopoiesis is the self-referential, closed pattern of organization, while the structure of physical components of an actual living system provides the dissipative structure that is far from equilibrium.[21]

The question at issue is whether social organizations are autopoietic systems.  There seems to be a fair amount of literature that says they are[22] (even though Maturana and Varela themselves have been divided on this question).  Stafford Beer declares himself to be on the positive side of this question in his preface to the 1973 essay "Autopoiesis, The Organization of the Living" which constitutes the second half of the 1980 book Autopoiesis and Cognition.  In essence, the definition says that an autopoietic system produces the components that make up the system, and that the interactions of the components in turn constitute the system.  Is a human social system actually a system that creates its own components, and whose components in turn create it?  This question hinges on what the components of a social system actually are.

Components of the Human Social System

The first part of the formal definition of autopoiesis states that the system is continuously created by the interactions among a set of components.  So what are the components of a human social system?  The obvious intuitive answer is that a component of a human social system is a person.  Is this the case?

In the case of biological systems the cells are fully contained, completely dedicated components of an organism, while mitochondria are fully contained, completely dedicated components of a cell.  Maturana states:  “The society of bees … is an example of a third order self-referring system”[23].  Is this a model of a human social organization as a living system?  Not really.  Bees don’t divide their time among the hive, a job, the PTA, and the Rotary Club in the way a people hold memberships in multiple organizations at the same time.  This points to a fundamental discontinuity between physical, biological systems and human social systems.  This discontinuity suggests that complete individual human beings should not be regarded as the components of human social systems.

The other half of the formal definition of autopoiesis supports this conclusion.  It says that the autopoietic system creates its own components.  It is hard to make that case for human social systems, if we think the components of such systems are human beings.  It is relatively meaningful to say that the family, as a social system, might create the human beings that could be seen as its components.  But a corporation does not create human beings.  Nor does the church, the military, the government, the university, or any other human social system.

Clearly if we want to assert that human social systems are living, which is to say in some true sense autopoietic, we will have to look elsewhere for their components.  One thing we can do is turn to another voice.  In his book The Image, Kenneth Boulding proposes the following:  “An organization might almost be defined as a structure of roles tied together with lines of communication.  The cellular units of organization are not men, but, as it were, parts of men, men acting in a certain role.”[24]  This has the sound of an intuition that is in need of more formal specification.  Notice the words “might almost be,” and “as it were.”  Informal intuition as it might have been, this idea of roles as the components of human social systems is right on the mark.

A role implies a set of responsibilities, and is characterized by abilities that enable it to be matched with potential role-players who possess those characteristics.[25]  At the heart of the notion of a role is a relationship (commitment, agreement, contract, etc.) between one human being and other human beings, or between one social system and other social systems.  The fundamental kernel of a role, then, is something we could call a social “pact” among individuals.

We are going to take this assertion as the basis for developing a more formal definition of the human social system that corresponds to the terms of the definition of autopoiesis.  In order to do that, we need to introduce one further concept: the meme.
The meme is one of two kinds of replicators that execute the evolutionary algorithm of universal Darwinism (large numbers of replicators that, over time, produce more offspring than can survive, the survivors and reproducers being better adapted to the environment).[26]  Richard Dawkins first introduced the idea of the meme in his book The Selfish Gene.[27]  Dawkins’s thesis is that the gene is the basic unit of evolution, and the propagator of change and variation.  The successful gene is the one that has characteristics (fidelity, fecundity and longevity) that allow it to be successful in the competition to replicate.  Memes are ideas or behaviors that also have the ability to replicate themselves, to change over time and to reproduce the changed forms in a kind of cultural evolution.  Memes are based on the ability to imitate, which is nearly unique to human beings.[28]

In Figure 1 we bring together autopoietic and memetic ideas.  We see a dissipative system, far from equilibrium, which correspond to the structure of an actual living system (e.g., a human being) as an open system.  The closed, autopoietic, self-referential system provides the pattern of organization, which in turn gives rise to the observer.  The ability to express and imitate memes must be a function of the observer, because “anything said is said by an observer”[29].

 

Figure 1

Figure 1 introduces a particular kind of meme that we will call a “commeme”.  A commeme carries a unit of commitment on the part of one person to another person or to some human social system.  The commeme by itself is merely mental intent, or maybe even an illusion of commitment.  It is powerless unless it is externalized in some way: verbally, physically in the form of text, electronically in the form of computer records, or even as a meaningful glance or gesture.  Textual and electronic representations of commemes provide fidelity and longevity, which are two of the characteristics of successful replicators.

As the figure shows, when the commeme is externalized it is in the form of a “pactette”.  The pactette is the expression of an atomic unit of human social commitment.  It is a tiny agreement, one of the terms of a potential contract.  In short, it is a miniature pact, hence its name.

Examples of pactettes are a person asking a stranger for a favor, or the eye contact and subtle movement of head or hand that lets another motorist merge in traffic.  Other examples include individual terms and conditions of business contracts, verbal commitments, and clauses in laws and regulations.

Figure 1 also shows that this atomic unit of social organization always involves some part of the external world - that is, some “thing” of interest to the parties whose commemes participate in the pactette.  In other words, this thing would answer the question, "What is this commitment about?”  It’s your suitcase that I’ve committed to watch while you go get a cup of coffee in the airport, or the space in the flow of traffic that invite you to occupy in front of me.

The combination of some related meme(s) of commitment, mentally held by two or more human minds and externally expressed in relationship to some external thing(s) of interest, is the atomic version of a social integration unit (SIU).  The SIU is the component of the human social system that we’ve been looking for.  We will see how a collection of SIUs becomes, through their interaction, the autopoietic social organization.  We will also see how, through the replicating power of the meme and a certain essential architecture common to the cognitive enterprise, the human social system creates its components, the SIUs.

 

Figure 2

Pactettes as simple units of commitment, or agreement, naturally build up into complexes that are related in various ways.  Such a complex of externalized commitments might be called a “pactplex.”  A pactplex has the property of attracting or generating new pactettes.  This is driven by the replicating nature of memes, and in the case of commemes each additional increment of commitment reinforces and justifies the claim of the existing complex on the mindshare of the hosts of its corresponding commemes.  This is a set of commitments that forms a nucleus of a human social system.  Figure 2 shows a more complex SIU that is formed around a pactplex.  It is composed of the relationships among the SIUs corresponding to the participating pactettes.

Like pactettes, the pactplex generally forms around a thing or class of things in the world, like a pearl forms around the irritant particle.  Part number 3746 can instigate a pactplex that involves individuals playing design roles, engineering roles, etc.

When a pactplex exists between two individuals we think of it as a “relationship”.  This complex of agreements forms from all the incrementally adopted pactettes between these individuals: “I’m the one who takes out the garbage”.

A common business pactplex is the set of conditions of employment.  For example, the agreement might be that you can’t work here and simultaneously work for another company.  Or you can, but never for a competitor.  This particular meme has replicated throughout the corporate world, helping each host corporate SIU to more effectively assert itself over the entire employer/employee pactplex.

Figure 3 shows how these concepts help formalize the notion of a role.  From the point of view of the social entity (person or organization) the set of commemes that bind it to a pactplex constitutes a role for that entity.


Figure 3

Social integration units form the basis for autopoiesis of human social systems as the components of the system that are created by the system.  Once the commeme of an agreement exists, it increases its survival potential if it does two things:  1. brings additional parties into the agreement, and 2. expands the set of related agreements in the pactplex so as to dominate more of the attention of the parties to the agreement.  SIUs perpetuate themselves by spawning further agreements involving new participants and/or involving new conditions on existing participants.

What is the mechanism that causes this replication ability (the fecundity of the SIU)?  The foundation of any agreement is some human motivation, which can be a survival mechanism, coercion, pursuit of pleasure, etc.  Shared motivation forms the basis for agreements, from the pactette on up.  SIUs compete with each other for mindshare of their human hosts, which are subject to finite time and the whole variety of time demands on the human organism.

As a social integration unit becomes more complex, involving common commemes held by an increasing number of people, it eventually passes a threshold where it becomes a human social system.  Following the definition of autopoiesis, this threshold is passed when it becomes a recognizable “unity”, formed by the interrelationship among participating SIUs, which it continuously creates.

Figure 4 shows a full-blown, autopoietic human social system.  A number of interlocking SIUs have given rise to the level of interrelated components that can sustain itself in a self-referential manner indefinitely.  The SIUs create the organization, and the organization creates SIUs through the replication mechanism we’ve discussed.

The human social system follows the same pattern as the biological system. We see a dissipative system, far from equilibrium, which corresponds to the structure of an actual living system (e.g., a human being) as an open system.  The closed, autopoietic, self-referential system provides its the pattern of organization.


Figure 4

Full-fledged autopoietic human social systems can enter into agreements with each other.  This is a recursion of the commeme, pactette, pactplex, SIU structure at a higher level of organization and complexity.  When an SIU that involves two or more organizations reaches a level of density and complexity of interaction, it can hive off and become a human social system in its own right.  Families spawn businesses as a matter of course, for instance.  They do this by forming pactplexes with other entities around the issue of sustenance, and eventually a viable human social system beyond the family is formed.

This discussion has provided a meme-based mechanism whereby we can assert that human social systems indeed can be considered living systems, even by the exacting standards of the tests for autopoiesis.  We now turn to a consideration of the higher-level structure for these organizations as cognitive systems.

Organizational and Cognitive Frameworks

We have stated that a set of social integration units must reach a certain threshold of complexity and structure in order to become a living unity.  We will now consider three sources of a higher-level cognitive architecture that can apply to any human social system.  The three sources are the living systems model, the viable systems model, and a cognitive architecture of the human brain.  The synthesis of these models will allow us to explore the notion of enterprise cognition.

The first of these three frameworks is James Grier Miller’s living systems model[30].  This model is a pattern of nineteen functional subsystems that Miller applies recursively at various levels of complexity: a single living cell, an organism, a social organization, and others.  These domains of functionality are grouped into three higher level systemic areas:

  • Material and energy subsystems are the functions within the organization that process material, use energy, and produce products and byproducts: Ingestor, Converter, Motor, Distributor, Supporter, Matter and energy storage, Producer, and Extruder.
  • Information processing subsystems are the nervous systems of organisms and organizations:  Memory, Encoder, Decoder, Associator, Decider, Channel and net, Input transducer, Internal transducer, Output transducer.
  • Hybrid subsystems have both material and information management aspects:  Boundary, Reproducer.    

The living systems model sheds light on the role or purpose of an organization within society, which in turn has profound implications for its information systems.  For instance a telecommunications company, as part of the channel and net function of society, has much greater emphasis on protocols, transmission media, switching gear, and logical addressing structures than would a producer, such as a toy manufacturer.
A second conceptual framework to incorporate into the enterprise cognitive architecture is the viable systems model (VSM).[31]  The elements of the VSM are organizations, the environments within which they exist, their management function, and the implicit or explicit model that management uses to understand and manage the situation.  The VSM identifies five systemic components of the organization.
System 1 represents the set of operational units each consisting of one organization with its environment and its management structure.  System 2 is responsible for maintaining and coordinating the set of mental management models (including standard practices and forms) within the organization as a whole.  System 2 functions articulate and enforce organizational norms - "the way we do things around here".  System 3 uses a direct command channel to give orders to the operating units via their individual management structures and an audit channel to monitor the day-to-day activities of System 1. System 4 looks outward into the environment as a whole and into the future.  It is oriented toward learning and change.  System 4 and System 3 are somewhat adversarial - the difference between a future-oriented and a here-and-now perspective.  System 5 exists to mediate between Systems 3 and 4, in order to balance the current and future needs of the organization.

Like the living systems model, the viable systems model is a recursive, or fractal structure. Inside every operational element of the organization can be a recapitulation of the entire model, Systems 1 through 5, behaving at a more granular level.
The third framework that forms the basis for our cognitive architecture of human social systems is an architecture of the human brain as a cognitive system.  Marvin Minsky views the brain as an organization of simple mental agents, each of which has limited intelligence, but which form increasingly complex patterns of interaction[32].

Arnold Trehub proposes a possible architecture to account for the basic cognitive capabilities of the human brain[33].  Starting from the physiology of the neuron, with synaptic junctions among axons and dendrites, a mechanism is proposed that can perform various cognitive tasks.  Matrices of synapses work together to build up higher levels of functionality.  For instance, visual input is processed by a domain of imaging functionality, and a domain of detection that work together and report to higher levels of cognitive functionality.  From the time light enters the retina until logical inferences can be drawn, there are succeedingly higher levels of processing domains that are invoked.  The complete cognitive architecture includes synaptic matrices, simple input preprocessors, clock rings, size and rotation transformers, a semantic network, and various high-level executive processes, such as registers for plans and actions.

A Cognitive Architecture for Human Social Systems

Drawing on the three frameworks discussed above, we will now present a brief overview of the cognitive architecture for human social systems.[34]  Our main concern is to consider a generic business enterprise, so we will use the term “enterprise” in the discussion below.  Each of the domains of this architecture is a socio-technological subsystem, potentially containing both persons and computing technology.  The people in each of the domains are able to move in and out of roles, as the situation warrants.  These roles, represented formally in Figure 3, are the primitive components of all the subsystems in this higher-level cognitive architecture.

The first four functional domains we will mention, as depicted in Figure 5, are primitive, foundational ones. 

  • The perceiver senses occurrences of activity of interest to the enterprise.  Computers support human perception via user interfaces.  Machines maintain direct environmental perception via probes of various kinds. 
  • The expresser conveys information to entities inside and outside the enterprise in a form that is accessible to them. 
  • The transmitter moves information within the enterprise and between the enterprise and external entities using media such as airwaves, wires, or paper.  It transforms information from one form (language or protocol) to another and amplifies and filters information as required. 
  • The memory maintainer is a highly distributed function that maintains the stored memory of the enterprise.  It stores the values of information in various forms, including time-stamped records and groups of records in the databases of the enterprise, as well as scenarios and anecdotal memories of employees. It keeps memories of agreements, rules, roles, etc.  It provides the ability to compare information in stored memory with external conditions and other information, so as to maintain the quality of information used in business decisions.  It also needs to be able to forget.

Figure 5

Other generic functional areas include:

  • The locator provides the ability for the organization to locate physical entities in three-dimensional space or logical entities in arbitrary, cognitive space.
  • The producer provides direct cognitive support for the production of product and services of the enterprise.  It accepts assignments for work to perform and reports on results of work completed and in progress.  It directs and monitors the movement of physical resources, creation of parts and components from raw materials, creation of larger units from previously existing components, and it acts on numeric data from counts, measurements, and accessed from memory.
  • The resource maintainer has the responsibility of assuring that the enterprise is supplied appropriately.  It acquires and allocates resources, determines the value of required resources, rejects inadequate resources. It compensates suppliers of resources, and keeps track of the level and state of resources.
  • The business relationship maintainer cares for the relationships between the enterprise and various role-players, including consumers, suppliers, government, debtors, investors and lenders, employees,[35] internal organizations, partners, and agents.  It negotiates deals and performs transactions such as selling and delivering goods and services, billing customers, collecting payment due, ordering goods and services from suppliers, and paying suppliers.  It provides the ability to broadcast messages to audiences internal or external to the enterprise.  It also provides the ability to reproduce enterprises in the form of systems of social integration units.
  • The arbiter provides business norms of behavior - "how we do things around here".  It codifies specific rules of business behavior, defines roles, accepts rule definitions from external sources, such as laws and regulations, and rewards behavior that conforms to business norms, while punishing behavior that does not.
  • The commander is responsible for the accomplishment of goals created by the direction setter.  It assigns these goals to the producer as bottom-line, operational goals.  It creates specific work assignments for business units and watches over activities in progress.
  • The direction setter forms purposes, or intentions to pursue opportunities and/or avoid risk.  It recognizes large and small opportunities, from individual sales potential to whole new marketplaces.  It formulates new types of goods or services that will be provided by the enterprise within its marketplace.

All these cognitive  subsystems need to present to greater or lesser degree in any viable human social system.

Evolution of Human Social Systems

We have seen the minute structure of memetic replicators that provide the components for autopoietic human social systems.  We’ve explored a higher level architecture of the human social system as a cognitive system.  This framework is generic – a source of commonality across business enterprises and other organizations.  At the same time we know that there is vast and growing diversity among these human social systems.  In this section we briefly explore the mechanisms that drive evolutionary change and variety in the social domain.

Earlier we visited the notion of a universal Darwinian algorithm that works on a set of innovating replicators that compete for survival and reproduction.  To understand the proliferation of organizational forms, we turn again to the biological realm for a model.
Biological evolution is driven by information changes in DNA produced by one of three means: mutation, bacterial recombination, or symbiogenesis.  We’re not very interested in random mutation.  Bacterial recombination occurs as bacteria transform themselves in real time by incorporating bits of genetic material from other bacteria.  As Lynn Margulis puts it, "Genetically fluid bacteria are functionally immortal"[36].  
The isomorphic evolutionary mechanisms for human social systems are instructive.  Margulis refers to cells as “cellular corporations.”  The bacterial exchange of genetic information that immediately alters the receiving organism is an interesting analogy for what happens when a new person with a set of accumulated knowledge, joins an existing human social system.  This form of variety creation is even more dramatic when human social systems merge, such as an acquisition or takeover of one business by another.  Social systems too, can be “genetically fluid, and functionally immortal.”  Adaptation based on information exchange is the means of creating both variety and specialization in business.

Unlike bacteria, every plant cell and animal cell is a eukaryotic cell.  Margolis’s notion of symbiogenesis is based on the fact that eukaryotic cells contain components called mitochondria.  Mitochondria independently reproduce, and have their own DNA and RNA.  They appear to be descendants of long-ago bacteria that evolved from predator, to symbiotic association, to essential component structures.  An analog from the business world is a function that is absolutely common to all business, the accounting function.  The memes of accounting can give rise to SIUs and accounting firms that are autopoietic human social systems in their own right.  The same commeme-based SIUs can also be embedded, like mitochondria, in other organizations that exist for various purposes, where accounting is simply a supporting function.

This brings up the interesting question of purpose in the evolution of human social systems.  We cannot hope to fully explore it here, but a few words may be in order.  There is a constant struggle between the replicating memes and conscious purposefulness of human social systems.  As we know, some systems are living systems and some systems are designed.  Living systems include cells, organs, and organisms.  Designed systems include machines, buildings, and software.  Human social systems (unlike bee swarms, ant colonies, and slime molds) are both living and designed.  However, the design of human social systems is a matter of degree and is often elusive.  A common experience is that of the entrepreneur, who founds an enterprise for a specific purpose.  At a certain point the company becomes autopoietic, acquires its own version of the enterprise cognitive architecture, and escapes the direct control of the founder.

Business Design, Evolution and Technology

We have seen that human social systems, including enterprises, are living systems. We have also seen that they are designed.  The issue of business design is a major concern these days, especially in light of the proliferation, and even patenting of various forms of business model or design (priceline.com).


One of the best discussions of business designs is to be found in the work of Adrian Slywotzky.  In the Profit Zone he identifies twenty-two distinct profit-generating designs, which businesses use alone, or in combination.[37]  These business design are memetic, spreading and mutating throughout the marketplace.  Designs become symbiotic with each other, within and across corporations.  These merge and morph into new forms, through a process reminiscent of symbiogenesis.


Maturana and Varela’s notion of a “unity” is becoming more and more problematic in the business domain.  Downsizing, outsourcing, disintermediation, reintermediation, virtual organizations, cyber-organizations, supply chains, supply webs, industrial ecologies are all forms of human social systems that are constantly being invented and reinvented.  The permutations of Slywotzky’s profit patterns overlay the enterprise cognitive architecture in interesting and novel ways, and each new form is a socio-technological hybrid.


The evolution of business designs is largely driven by information technology.  The various technologies are themselves manifestations of powerful memes, which are also evolving at a very rapid rate.  This gives rise to the variations among socio-technological human systems that expand the possibilities of the enterprise cognitive architecture.  This is the mechanism of symbiogenesis in action, and it is accelerating.


Information technology has changed the rate of propagation of organizational structures and business designs.  It is giving rise to a whole new class of market-facing enterprises.[38]  Bradley and Nolan provide a number of examples of this new breed of networked organization based on innovative use of technology.[39]  Downes and Mui call the dynamic at work here the "law of disruption".[40]  This concept is that social and business changes are propelled by, but always lag behind, the furious changes brought about by the cumulative effect of Moore’s law (that predicts the rate of increase in computing power) and Metcalf’s Law (that predicts the rate of increase in the adoption of networking technologies).  For our purposes it is quite apparent that these rapid technological changes alone are capable of introducing plenty of variety into the ecology of human social systems, which can be operated on by the universal Darwinian algorithm.


With information technology we’re introducing something that is equivalent to some new kinds of neurons for the cognitive substrate of human social systems.  The technologies allow imitation and propagation of business memes at an increased rate (fecundity), and with the potential for perfect fidelity, but also with the potential for stronger variability through deliberate or inadvertent changes at each point of propagation.


The single biggest factor in the acceleration of this application of the universal Darwinian algorithm is the Internet.  The Internet is a manifestation of the network meme, which is at the heart of systems thinking.  It is quickly becoming the most powerful meme propagation engine yet, and it is propagating the meme of itself, the Internet.

There is a major implication for the information technology industry in all of this.  To the extent that there is intentionality or design in human social systems, it is the result of purpose and accountability.[41]  We sometimes think of technology as playing a role, or taking over responsibilities from human role-players.  This is role in the sense that we’ve defined it as the set of commemes linked to a pactplex.  But a machine cannot hold commemes or form social integration units.

Who, then, is accountable when technology takes the place of functions formerly performed by accountable human beings or introduces functional capability that was not even possible before?  The answer can only be that when technology is increasingly inserted into the fabric of our lives, there is an accountability that includes both the creator and the installer of the technology.  This linkage is not always understood as an explicit pactplex, and is a dangerous point of potential abdication of responsibility.  Clarifying and making explicit the accountabilities that are evolving at the combined rate of evolution of technology and human social systems will be a growing challenge as far as we can see into the future.

Footnotes

[1] Course taught by Bela H. Banathy, San Jose State University, 1971.
[2] McDavid (1992)
[3] Haeckel (1993)
[4] McDavid (1997)
[5] Haeckel (1999 – in press)
[6] Senge (1990)
[7] De Geus (1997)
[8] Cohen and Stewart (1994)
[9] Wheatley (1992), Stacey (1992), McMaster (1996), Brown and Eisenhardt (1998)
[10] Moore (1996)
[11] Nonaka and Takeuchi (1995)
[12] Choo (1998)
[13] Weick (1995)
[14] Davenport and Prusak (1997, 1998)
[15] Edvinsson and Malone (1995)
[16] Stewart (1997), Sveiby 1997)
[17] Maturana and Varela (1980), p. 82.
[18] Maturana and Varela (1980), p. 78
[19] von Bertalanffy (1968)
[20] Capra (1996), p. 158
[21] Prigogine and Stenders (1984)
[22] in ‘t Veld, et al (1991)
[23] Ibid, p. 11
[24] Boulding (1961)
[25] McDavid (1999)
[26] Dennett (1995)
[27] Dawkins (1989)
[28] Blackmore (1999)
[29] Maturana and Varela, op cit, p. 8
[30] Miller (1978)
[31]Clemson, 1984

[32]Minsky (1985)

[33]Trehub (1991)

[34] McDavid (1999)
[35] Ackoff (1981)
[36]Margulis & Sagan, 1997

[37] Slywotzky (1997)
[38] Papows (1998)
[39] Bradley and Nolan (1998)
[40] Downes and Mui  (1998)
[41] Haeckel (1999)

References

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Bradley, Stephen P. and Richard L. Nolan, eds., Sense & Respond: Capturing Value in the Network Era, Boston, Harvard Business School Press, 1998.
Brown, Shona L. and Kathleen M. Eisenhardt, Competing on the Edge: Strategy as Structured Chaos, Boston, Harvard Business School Press, 1998.
Capra, Fritjof, The Web of Life, N.Y., Doubleday, 1996
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Davenport, Thomas H. with Laurence Prusak, Information Ecology: Mastering the Information and Knowledge Environment, N.Y., Oxford University Press, 1997.
Davenport, Thomas H. and Laurence Prusak, Working Knowledge: How Organizations Manage What They Know, Boston, Harvard Business School Press, 1998.
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De Geus, Arie, The Living Company, Boston, Harvard Business School Press, 1997.
Dennett, Daniel, Darwin’s Dangerous Idea, London, Penguin, 1995.
Downes, Larry and Chunka Mui, Unleashing the Killer App:  Digital Strategies for Market Dominance, Boston, Harvard Business School Press, 1998.
Edvinson, Leif and Michael S. Malone, Intellectual Capital: Realizing Your Company’s True Value by Finding its Hidden Brainpower, N.Y., HarperBusiness, 1997.
Haeckel, Stephan H. and Richard L. Nolan, “Managing by wire”, Harvard Business Review, September-October, 1993, vol. 71, no. 5, pp. 122-132.
McDavid, Douglas W., “Business and systems planning: building a new alliance”, Database Programming & Design, October, 1992, vol. 5, no. 10, pp. 29-39.
McDavid, Douglas, “Business language analysis for object-oriented information systems,” IBM Systems Journal, 35, No. 2, 128-150, 1997.
McDavid, Douglas, “A standard for business architecture description,” IBM Systems Journal, 38, No. 1, 12-31, 1999.
McMaster, Michael D., The Intelligence Advantage: Organizing for Complexity, Boston, Butterworth-Heinemann, 1996.
Margulis, Lynn and Dorion Sagan, Microcosmos, Berkeley, CA, University of California Press, 1997.
Maturana, Humberto R. and Francisco J. Varela, Autopoiesis and Cognition, Dordrecht, Holland, D. Reidel Publishing Company, 1980.
Miller, James Grier, Living Systems, N.Y., McGraw Hill 1978.
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Nonaka, Ikujiro and Hirotaka Takeuchi, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation, N.Y., Oxford University Press, 1995.
Papows, Jeff, Enterprise.com: Market Leadership in the Information Age, Reading, Mass., Perseus Books, 1998.
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Systems Journal "A Standard for Business Architecture Description" - 1999

This is an experiment with deconstructing an existing article while reconstructing it in more of a linked-up web-like form.

 

The full pre-publication article is downloadable here.

The published version is available here for a fee to IBM.

Context of article

This article is one of a series published together in a special issue of the IBM Systems Journal. It focuses on the business concepts that underlie IT systems, as shown on the following roadmap for the series:

The full article is downloadable from here.

 

Abstract

A complete architectural specification of an IT system includes information about how it is partitioned and how the parts are interrelated. It also contains information about what it should do and the purpose it must serve in the business. This article provides a set of business concepts that partition the world of business meaning. It discusses the purpose of such an architectural view of business, and ways that it can be used. A set of generic concepts and their interrelationships organize business information content In terms of requirements on the business, the boundary of the business, and the business as a system for delivery of value. Methods are introduced to explore variations on the basic business concept patterns. These concepts are positioned to describe IT systems that support the business, and they are used to manage the work of IT system development and deployment.

Introduction

Business today is inextricably intertwined with information system technology.  From the smallest home office business supported by a shrink-wrap business suite, to the multinational corporation with multiple monolithic legacy applications, it is impossible to be in business today without confronting the issues of supporting the business with software.  The articles in this issue of IBM Systems Journal are based on the premise that a set of interlocking semantic frameworks are necessary in order to understand and create the software solutions for the enterprise of today and the future.
The Enterprise Solution Structure (ESS) project is IBM’s response to this challenge.  As indicated in the introductory article to this issue[1], ESS has provided substantial experience in real world engagements, based on lessons learned from a number of previous projects.  This has led to a refined set of technical reference architectures and solution customization techniques.  The success of this undertaking is based on standard architectural principles and semantics, starting with an understanding of how business issues drive information systems requirements, as shown in Figure 1.  The figure shows that a set of standard business concepts can organize the particular knowledge about a any given enterprise.  This organized business knowledge gives rise to requirements for enterprise information systems.  These requirements can be satisfied in two general ways: one by the traditional custom development approach, and the other by matching patterns of requirements to patterns of existing assets.  Both of these approaches lead to the development of enterprise solutions, but the ability to reuse existing assets provides major economies.

This article is a contribution to the discussion of appropriate business concepts for organizing enterprise knowledge.  It provides a set of standard business concepts, and guidance as to how to use them to instantiate organized knowledge about specific enterprises.  This is a high-level semantic framework which has been developed over a considerable length of time.  The concepts that are presented here have been abstracted from experience with many specific enterprise business models, various IBM generic industry reference models, and several years of experience in organizing business terminology for specific businesses.  The ESS project has produced several versions of a business meta-language, and this article represents the current state of this work.

Sections

This article is organized into the following sections:

  • Purpose of a business system architecture - This section discusses the purpose of an architectural view of business and how it is used.  It also defines what is meant by a business system architecture in the context of an overall architecture semantic framework, as well as criteria for inclusion of a concept in this particular document.
  • Business concepts - A set of generic concepts and their interrelationships organized into the following three sections.
    • Requirements on the business - The set of concepts that represent relationships of the business to the world at large, which impose requirements on it as a business system.
    • Boundary of the business - The set of concepts that deal with business boundaries and trans-boundary agreements
    • The business delivery system - The set of concepts that provide understanding of how the business delivers value by keeping its commitments.
  • Sources and representations of variability - A discussion of business terminology as the source of variations on basic business concepts for individual businesses, as well as an overview of methods for representing detailed business information in the form of models.
  • Relation to IT architecture - Points of intersection between concepts in the business architecture and concepts in the IT system architecture description standard.

Purpose of a Business System Architecture

A companion article[2] in this issue creates a meta-language of architecture for technology-based information systems.  This meta-language enables architects to communicate with a common set of concepts about how information systems can be designed in a modular way with commonly understood interfaces.  This article extends the idea of a meta-language to consider issues of the business to be supported by IT solutions.  Our concern is to understand how the domain of business can be understood according to some common generic concepts.

A dictionary definition of architecture is, “a unifying or coherent form or structure.”  This definition is appropriate for the kind of architecture that is addressed by the ESS project.  Such an architecture is used for two purposes:  to understand and to build.  In this article we are trying to understand the meaning of business knowledge by using an architecture of key business concepts.

A valid question may be raised as to why we should be concerned with an architecture of business concepts, in the context of building software systems.  After all, IT architects do not create businesses, they create technology-based information systems.  However, the systems that they create do have a fundamental impact on businesses.  In addition to purely technical issues, information systems architects need to be concerned with the content and usage of the systems that are built.

An analogy is often drawn between the architecture of buildings and the architecture of software systems.[3] One lesson from that analogy is that architects of buildings start with a fundamental understanding of the purposes to be served by those buildings.  Architects of suburban homes need to understand something about the behavior patterns of young, growing families.  Architects of manufacturing plants need to understand patterns of configurable assembly lines.  Architects of high-rise office towers and architects of mini-malls need to understand patterns of business behavior in core business districts and outlying areas respectively.  In a similar fashion, architects of enterprise systems need to understand patterns of business behavior and patterns of technology and how they work together to enable businesses to achieve their strategic and tactical goals.

The building analogy only goes so far in understanding business and its IT support.  Another perspective on business enterprises is to think of them as living systems, undergoing an ongoing process of evolution.  This analogy helps us to understand the relationship between businesses and information systems technology.  Evolution is the result of two basic conditions.  One is a source of novelty[4], and the other is an opportunity to expand into unoccupied environments[5].  Today the use of information technology is creating both the necessary source of novelty and the expansive environment that is driving rapid evolution of business.

We are in the midst of technology-driven and technology-enabled business evolution, as networks and information technology create new business eco-niches.  Examples of evolution taking place in this new marketplace ecosystem include:

  • A book store, a bank, and a car dealership that come into your home.
  • Insurance companies that think they're banks, and vice versa.
  • Companies outsourcing necessary functions to other companies, including the most intimate form of outsourcing, customer service.

Figure 2 below shows how this accelerating evolution is being fueled by technology.  Technological innovations give rise to increased opportunities:  new ways to do old things better, and whole new things to do (such as make and sell technology products).  These opportunities give rise to business innovations, and companies move in to take over new niches and sub-niches.  These changes in the way of doing business create new ideas and expectations of even better, more innovative performance on the part of technology.  This in turn puts pressure on technology providers to support still more new and innovative forms of business behavior.  An example of this cycle is that the technology innovation of the Internet has created new opportunities for companies to reach their customers (not to mention all the opportunities to provide Internet hardware and software).  The increased reach provided by the Internet has enabled business innovations such as on-line automobile shopping.  This increases the expectations that to be in business means to be able to provide Internet sales capability.  This, in turn, drives the need for increased security and payment processing, which drives technology providers to support increased expectations.


 
Figure 2

This mutually evolving relationship between business organizations and IT systems requires the ability to capture and portray business and technical information in a way that makes the two sets of information easy to interrelate.  The meta-language proposed here provides a semantic framework for speaking about common business concepts, and relate them clearly to concepts that describe IT systems.

The semantic framework must support two key architectural motivations that arise from the effort of building information systems.  One of these motivations is the need to clearly articulate the issues that most strongly drive requirements.  Our framework needs to zero in quickly on the most important things to be studied to get an effective understanding of the business, or type of business, to be supported by the IT solution.

The other key architectural motivations for our framework is that it needs to provide clear guidance as to how to organize work.  The work of building information systems is most effective if it is organized as a value-chain.  This means that teams of people work on building things that become part of, or support, other things being built by other teams.  We want our business architecture to help the partitioning and relationships of work effort.

In order to support the architectural objectives noted above, there are several principles that inform the creation of this business system architectural framework.  These principles are key to assuring the business system architecture effectively addresses the architectural objectives noted above.

  • Orthogonal - We want the set of chosen concepts to divide business information in a way that is non-overlapping.  This is aiming at two results: one is that we can divide the analysis space cleanly for purposes of understanding requirements and partitioning work.  The other result is that we can see interesting intersections of disjoint concepts.
  • Complete - We want a set of concepts that taken together cover the totality of business concerns, albeit at a necessarily very high level.
  • Memorable - We want a set of concepts that can easily be remembered as teams and individuals discuss the business opportunities being considered.  This means that they need to be small in number, and of a structure that makes them memorable.
  • Rich - We want the set of concepts to be able to produce interesting further classifications, thereby carving the business domain at its joints.  Ideally we should be able to create multiple levels of types, even, so that we can divide the generic business domain space, and then further analyze actual businesses.  This implies that our concepts should be semantically interesting in their own right, and not some overly abstract meta-meta construct, such as “thing-relationship-thing.”
  • Generic - Even though we want some richness and memorability in this framework, it will not do for it to be specific to any single business, or even any particular industry.
  • Appropriate - Finally, we want our concepts to be truly business concepts, and not information technology constructs in disguise.  This means that it should not be a database design or software model, as might be the case if we force-fit an entity-relationship paradigm or object modeling paradigm into this arena.

Business Concept Architecture

The concepts in the business architecture description provide a semantic framework for speaking about common business concerns.  At the level of building or deploying instances of information systems in actual businesses, this concept architecture provides a mechanism for organizing the complex, chaotic domain-specific language of the business.  For our purposes, this semantic structure provides a common set of concept patterns to be able to understand the types of content that needs to be supported in technology-based information systems.

Primary Business Concepts [Upper Ontology]

Figure 3 depicts the concepts of a meta-language for business systems.  Please note that these are not objects as would be found in an object-oriented model.  The principles of object modeling do not apply in this case, because we are talking about concepts, not software constructs. The arrows provide guidance as to the primary direction to read relationships.  The reader should assume all relationships can be many-to-many, with complementary verbs that read the other direction.


 
Figure 3

 

A key characteristic of this model is that it is designed to produce fractal patterns of information structure. Fractal patterns are those that repeat themselves at any scale on which they are examined.  An example of a fractal pattern in nature is the branching of a tree from the trunk and major limbs all the way out to the most minuscule stems and twigs.  Note that at the most basic level, each of these concepts is recursive, as indicated by the looping relationships on each of the concept boxes.  This means that a business location is composed of business locations, a business resource is composed of business resources, and so on.

Another implication of Figure 3  is that groupings of these concepts form intrinsic patterns.  For instance the relationships among role-players, function, and behavior are mutually defining.  These mini-patterns are fractal, by virtue of the recursions on the basic concepts.  Furthermore, the whole pattern is replicated at various levels of business organization.  In the same way that twigs are different than trunks, each level of recursion potentially has a different meaning.  This is particularly important in using this scheme to partition the work of building applications.

Requirements on the Business System

Figure 4 allows us to separate the architectural concepts into three sections: those that address the requirements imposed on a business, those that address the business as a system that exists to deliver against those requirements, and a set of concepts that define the boundary where the business accepts the driving requirements and commits to various forms of value delivery.

 
Figure 4

The following sections define the concepts in this architecture, starting with the drivers, and then moving on to a discussion of the boundary concepts, and then finally a definition and explanation of each of the concepts in the business delivery systems.

Drivers of the Business

The following is a discussion of concepts that articulate requirements placed against the business as a system.

Business Situation

The concept of a business situation as used here is derived from a body of work in an interdisciplinary field known as situation semantics.  A brief definition of a situation is "a structured part of reality that … [a person] somehow manages to pick out.”[6]  A situation is composed of a whole set of things in the world, their current state, and their interrelationships.  It is very powerful to think about classes of situations, such as .  At their most inclusive business situations are composed of all the environmental, societal, technological and marketplace factors that exert an influence on the business. Situations can represent reality beyond the business - a whole environment or industry - "the financial services marketplace".

A business situation is the source of requirements that are placed on a business, largely by the state of affairs outside the business.  It can both motivate and constrain what the business can aspire to accomplish.  A situation is created in large part by role-players, inside and outside the business, and it can be altered by the outcomes produced by the business.  A recursive relationship on situation means that a situation is composed of any number of other situations.

From an architectural point of view, the concept of situation allows us to reason about the external factors that are driving the business.  This allows us not only to understand the fundamental sources of information system requirements, it can enable us to predict such requirements before the business itself has articulated them.  We are looking for factors and trends in the marketplace that call for information system functionality, such as a move toward integrated supply chains in an entire industry.

Situations can be desirable, in which case the business will attempt to sustain them, or undesirable, in which case the business will attempt to change them.   Situations can arise from natural causes, or in the case of business, quite commonly are the result of legal issues.

The concept of situation is actually the heart of most service businesses, which manage more or less complex situations on behalf of their clients.  A classic example

Business Purpose

Business purpose is an expression of the reason that the business is in existence.  A number of stakeholders make demands on the business, and the purpose of the business is the satisfaction of those demands.  These stakeholders include customers, suppliers, creditors, debtors, shareholders, community groups, and employees.  The most fundamental purpose of any business is to produce a result expected by its customers.  Also critically important are the satisfaction of the shareholders or owners of the business, and fulfilling the requirements of employees.

Business purpose is both motivated and constrained by the situation that the business finds itself in.  In turn, the expressed purpose motivates the role-players.  The purpose is supported by the commitments made on behalf of the business.  And, it is fulfilled by the outcomes produced by business behavior. The recursive relationship on business purpose means that a high-level reason for being can be expressed in any number of goals and objectives.  A measure of business effectiveness is the extent to which the more detailed and specific goals and objectives work together to support the more fundamental purpose, or reason for being.

The reason we are concerned with business purpose is that any investment in information systems and technology must be justified by how it supports the goals and objectives of the business.  As we investigate the business, there are a number of areas we can look for statements of purpose.

Business purpose is expressed in many forms, using various different terms.  Mission statements, also called value statements, credos, or principles, are the operational, ethical and financial guiding lights of companies.  They articulate the goals, dreams, behavior, culture and strategies of the business.  Vision statements articulate the long term objectives of the business in terms of target marketplace, products and services, as well as the desired financial position (revenue, profit, etc.).  Critical success factors call out certain specific areas in which satisfactory results will ensure the achievement of business goals.

Business Outcome

The concept of a business outcome can be seen as a generalization of the concept of product.  Other types of outcomes are services, byproducts, and interim outcomes that are produced in the course of business activity.

A business outcome is mandated by a commitment and exists to fulfill some purpose.  It is produced by business behavior and consumes resources in the process.  The recursive relationship states that an outcome can be composed of outcomes (as products are bundled into higher level products, for instance).

From an architectural view we are concerned with outcomes such as products and services because these are often exactly what information systems are built to support.  In terms of structuring work and forming a conceptual architecture of the IT system, the variations in product lines and other outcomes of business processes are very strong differentiators.

Business Boundaries

[At the time of the article I kind of forced some subjects into the general category of boundaries.  Subsequently I did a lot of work on the idea of business boundaries.  I will post material about that, and I hope I remember to come back here and link to it.]

Business Role-Player

The concept of business role-player lies on the boundary between the requirements that drive the business, and the business delivery system.  This is because some business role-players are outside the business making demands, while others are inside the business fulfilling demands.

As external entities, business role-players are key factors in the creation of business situations.  As internal entities they are motivated by the purposes pursued by the business.  Business role-players are bound by commitments that are made on behalf of the business.  They are defined by the function they perform or are responsible for, and they perform business behavior.  They have resources assigned, in the form of capabilities of either people, groups of people, or devices.  Recursive relationships among role-players mean two things.  A containment relationship says that one role-player is part of another, as in the standard organization chart. It is also possible for one role-player to report to another, without actually being a part of it as a larger entity (such as a project team that reports to a steering committee, without being contained by the steering committee).

From an architectural point of view, identification of the various types of role-players in the business is extremely valuable.  An understanding of how responsibilities are partitioned in the business.  This helps to partition business behavior, which is a major factor in designing software and allocating work on application development and/or implementation projects.
The concept of role-player brings together aspects that are often separated: the role itself and the player of the role.  We’ll take a closer look at these constituents of the role-player concept below.  They are brought together here because either alone does not meet the architectural concerns of organizing key knowledge and driving development work.

Roles exist in distinct types, including customer, employee, regulator, sales or distribution channel, and supplier, as well as more general types such as performers, managers, and recipients of various types of outcomes.  Roles, job titles, and organizations all may exist in many-to-many relationships to each other.  Roles may be formal (job title) or informal (committee membership).  Roles can be even more granular, such as “opportunity noticer” or “call recorder”.  A role is characterized by capabilities, skills, abilities, etc., which enables it to be matched with potential players who have those characteristics.  A role implies a set of responsibilities.  Job titles are created to group a number of compatible roles along with their attendant responsibilities.  Roles exist in a number of complex relationships to each other:  Some roles require other roles (the role of a store manager can only be played by someone who is a regular employee), while some roles preclude other roles (a teller may not be a loan approver).

The players of roles may be individual human beings, organizations, and devices.  An individual human being is one type of legal entity (the other type of legal entity is a legally constituted organization).  Organizations include groups of people of all types.  Within some context there are replicated organizations (field offices, project teams) and singular organizations (the Board of Directors).  An organization can be formal (a department), informal (a committee), or legally constituted (a corporation).

Assignment of the appropriate human being, organization, or device to a role implies a kind of pattern matching that lines up capabilities needed by the role with capabilities of the potential fillers of those roles.  If the role-player is a human being there is the additional factor of accountability that can be applied.  A key issue for IT system builders is the indirection of accountability.  When responsibility is assigned to a device that would otherwise have been assigned to a person, accountability is shared between the creator of the system and the deployer of the system.  This has major implications for builders of applications that increasingly play roles that directly interact with stakeholders of the business.

Business Commitment

Business commitments comprise the glue that binds businesses and other organizations at their boundaries.  A business commitment is the result of an agreement between business parties, or role-players.  Business commitments may be binding, contractual agreements, or they may be more informal.

Meaningful business commitments support the various levels of business purpose.  Business commitments are binding on the role-players who are party to them.  They mandate certain outcomes that are to be produced by the business.  As a result, commitments govern business behavior.  Commitments have a strong recursive element which says that agreements are composed of more granular agreements such as terms and conditions, conditions of fulfillment, and conditions of satisfaction.
It is important for information system development for us to understand the types and extent of business commitments in the business at hand.  In some cases these commitments are the heart and substance of much of the information system functionality.  The clearest example is that of an insurance company, whose very product, the insurance policy, is nothing more or less than a set of contractual commitments.  Much of the architectural structure, and the partitioning of work, can be driven by an understanding of the business commitments.

Business Delivery System

The third set of business concepts includes those that are squarely in the middle of the business as a system for delivering value, based on its commitments.

Business Function

The business function is a key concept in this semantic framework.  The concept of business function can be thought of as a virtual or idealized organization within the business, as shown in Figure 5.  It is true that organizations are established to perform specialized functions in the business.  It is also true, however, that frequent reorganization within any business is a recognized fact of life.  So functions are idealized conceptual structures that are stable over time and in the face of managerial reorganization whims.  As stable concepts, functions provide a point of commonality in describing different businesses that otherwise exhibit significant variation.

Functions as we are defining them here provide definition to role-players in the business.  This definition is demonstrated by the way the accounting function defines the accountant, the management function defines the manager, the underwriting function defines the underwriter.  Business functions may be concentrated and housed in specific business locations.  Specific functionality is invoked as required during the course of business behavior. They are one of the main points of recursive definition, because high-level business functions are easily seen to be composed of multiple more granular levels of functionality.

From an architectural point of view we are interested in functions because they provide us with a key partitioning opportunity.  If functionality is partitioned in a meaningful way, it can stand the test of time and the vagaries of political reorganization.   This is also the point where we can talk about software performing or supporting specific aspects of the business, independently of how any business is organized at any point in time.


 
Figure 5

Function definitions are not completely deterministic, which is the source of a long-standing criticism of functional decomposition as a technique. There is an element of subjectivity, based on the viewpoint and the principles being applied in the partitioning of the domain according to functions.  For this reason it is important to be as explicit as possible about the principles that are used to create the particular partitioning scheme.  The principles used here include:  The functions defined should be as independent as possible from existing or typical organization structures.  They should together constitute a set of functions that are typically required for any living[7], or viable system[8].  Since we are focusing on the information system aspects of the business system, they should constitute a complete set of functions that could give rise to a cognitive view of the business system[9].

Figure 6 below is one example that is provided for purposes of illustrating how a completely generic set of functions can be constructed that follow the principles noted above.  There are several information processing functions, abstracted from a combination of a living systems model, the Viable Systems Model, and a cognitive architecture.  They are unlikely to be mistaken for any existing or traditional organization chart.  Each one is a socio-technological subsystem in its own right, potentially containing both human beings and computing technology.

Figure 6

The points below define each of these business functions, starting with the most primitive ones that are equivalent to simple patterns of neurons and synaptic matrices, similar to the simple cognitive agents of Marvin Minsky’s[10] “society of mind”.  From these simple functions, progressively higher-level and more complex domains emerge.

  • The perceiver is a sensing mechanism, relying on both human and machine capabilities.  Computers support human perception via user interfaces.  Machines maintain direct environmental perception via probes physical sensing (temperature, etc.) and chemical probes.  The perceiver senses the occurrence of activity that is of interest to the business (such as a request to place an order, or the arrival of a shipment). It recognizes the existence and identity of some entity of interest to the business (such as customer Doris Smith).
  • The transmitter moves information within the business and between the business and external entities.  It requires a medium such as air waves, wires, or paper to move information from one location to another. It transforms information from one form (language or protocol) to another, and amplifies and filters information as required.
  • The expresser provides the means of conveying information to entities inside and outside the business in a form that is accessible to them.
  • The memory maintainer is the highly distributed function of maintaining the business's stored memory. It stores the values of information in various forms of business memory, including time-stamped records and groups of records in the databases of the business, as well as scenarios and anecdotal memories of employees. It keeps memories of agreements, rules, roles, etc.  It provides the ability to compare information in stored memory with external conditions or other information, so as to maintain the quality of information used in business decisions.
  • The locator provides the ability for the organization to locate physical entities in three-dimensional space or logical entities in arbitrary, cognitive space.
  • The producer performs the fundamental product and services production work of the business.  It accepts assignments for work to perform and reports on results of work completed and in progress.  It moves physical resources, i.e. solids, liquids and gasses, creates parts and components from raw materials, creates larger units from previously existing components, and acts on numeric data from counts, measurements, and accessed from memory.
  • The resource maintainer has the responsibility of assuring that the organization is supplied appropriately.  It acquires and allocates resources, determines the value of required resources, rejects inadequate resources. It compensates suppliers of resources, and keeps track of the level and state of resources.
  • The business relationship maintainer cares for the relationship between the business and the key role-players, including customers, suppliers, regulators, partners, agents, broader community stakeholders, internal organizations, and employees).  It negotiates deals and performs transactions such as selling and delivering goods and services, billing customers, collecting payment due, ordering goods and services from suppliers, and paying suppliers.  It provides the ability to broadcast a message to a more or less inclusive audience within or external to the business.  It also provides the ability to reproduce business configurations.
  • The arbiter provides business norms of behavior - "how we do things around here".  It codifies specific rules of business behavior, defines roles, accepts rule definitions from external sources, such as laws and regulations, and rewards behavior that conforms to business norms, while punishing behavior that does not.
  • The commander is responsible for the accomplishment of goals created by the direction setter.  It assigns these goals to the producer as bottom-line, operational goals.  It creates specific work assignments for business units and watches over activities in progress.
  • The direction setter forms purposes, or intentions to pursue opportunities and/or avoid risk.  It recognizes large and small opportunities, from individual sales potential to whole new marketplaces.  It formulates new types of goods or services that will be provided by the business within its marketplace.

 

Business Behavior

Business behavior is an ordering of tasks or activities that accomplish business goals and satisfies business commitments.  It may include manual or automated operations that complete units of work.  Business behavior can be triggered by events in the environment or by internal initiatives or conditions.  It is justified because it either generates value for the business or mitigates costs to the business.

Business behavior is what produces the outcomes that fulfill the purpose of the business.  Behavior is governed by commitments.  It is performed by role-players.  As an end-to-end set of activity, behavior can invoke various functions within the business.  Behavior manipulates various resources in the business in order to produce the desire result, and it is enabled by resources of all kinds.  Business behavior is quite recursive, although we will discuss various reasons and methods for imposing specific structure on aspects of business behavior.

The architectural purpose for understanding business behavior stems from the opportunity to support or replace it with automation.  From an architectural point of view we are looking for structure that can help us organize the work of building software components and create interfaces from one component to another, and from the software world to the world of human activity.

It is important to stress that we are talking about business behavior of all kinds.  There are both physical behavior and information bearing behavior involved.  We are generally only interested in physical behavior to the extent that it is accompanied by information or provides an opportunity to capture useful information about the business.   Much of the business behavior that is covered by this concept is performed by human beings, while some subset is either supported or performed by software.

Behavior can be seen as having structure.  This may be arbitrary, but it is useful to apply some principles to the way we view this structure.  Various methods have applied specific terms to specific levels of business behavior.  We will do this as well, keeping in mind that almost any term we choose will be hopelessly overloaded, and defined in completely different ways by other practitioners and methods in the industry.

Fundamental to the structure of behavior is a concept we will call a “process”.  A process, as used in this discussion, is a complete sequence of business behavior that is triggered by an event and produces a meaningful business result as shown in Figure 7.  Figure 7 depicts an interaction between the business and one of its stakeholders.  What we see here is that the process continues until a meaningful business outcome results, in this case the delivery of a product to the customer who initiated the process.  In the course of this string of activity, various areas of the business must get involved.  These unlabeled areas in Figure 6 can be interpreted as organizations or as business functions as we’ve defined that concept.  The fact is, processes, as defined here, do cut across, or invoke, both organizations and functions in the business.

 

 

Figure 7

Major subclasses of business processes are transactions, transformations, services, and maintenance.  Transactions can be primarily inward - bringing things into the business (money, information, or other resources) or outward - sending things out (bills, products, byproducts and waste).  Transformation (conversion) processes take resources as input (material and energy, or information) and transform them into other (value-added) states.  Service businesses are particularly defined by their processes which are, in effect, their products.  These service processes can be either passive from the customer viewpoint (haircut, restaurant meal, airline flight) or collaborative (consortium, information retrieval).

Part of the structure of business behavior are events or triggers that initiate activity within the business.  They are the stimuli that prompt the business to act.  Many business events occur at the interface point between the business and one of the external entities that it interacts with.  For example, an inquiry may trigger activity that leads to an order, or a trouble call may trigger dispatch and repair activity. Other events are internal triggers based on specific conditions or predefined time intervals.  For example, an inventory level may trigger a reorder point, or the 15th of the month may trigger an automatic billing cycle.  Externally generated events can be solicited, and therefore expected, or predictable to an extent (e.g. sales, stimulated by marketing campaigns). Unexpected events are things like typhoons, stock market movements, or the appearance of new technology.  Though unexpected in the sense of not being under the control of the business, they can in many ways be anticipated and provided for with contingency plans.

Figure 8 depicts the kind of structure that can be discussed with respect to business behavior.  What we see here is that a business event and outcome occur at a stimulus/response level of the business.  From stimulus to ultimate response is the structure that we’ve called a “process”.  At another level inside the business there is behavior that is assigned to and performed by a responsible internal role-player.  At the bottom there is some leaf-level behavior which manipulates a discrete business resource in some meaningful way.  At an intermediate level there can be some number of identifiable groupings of behavior that are called out for the sake of convenience of analysis and understanding.  At any of these levels business behavior is governed by rules, which dictate how flows should be initiated and directed.

 


 
Figure 8

The reason for attempting to structure this behavior is to make clear architectural decisions about which behavior to support, how it should be supported, and how to allocate the work of building software components to support it.  The leaf-level is the place that behavior directly touches resources and devices, and it is where we see a tradeoff between individuals and devices in performing the work.  This is the level where it is most reasonable to analyze time durations that aggregate together to allow us to simulate business behavior.

These levels have been expressed in a representation of application architecture with the terms “process”, “activity”, and “service”.  In another representation “process” is replaced by “procedure” and elsewhere the “activity” level is replaced with “task”.[11]  By whichever name it is called (activity or task) it is suggested to map the responsibility level from Figure 8 to use cases, when the business behavior involved is to be supported by the IT solution.

Business Resource

The concept of business resource represents all those things that are required by a business to sustain its processes and create its outcomes.  Resources break down into five general categories:  physical things, energy, monetary value, information resources, and various kinds of capabilities.

Business resources are consumed in the course of producing outcomes.  They are housed in specific locations.  They are manipulated by business behavior and enable that behavior to take place.  Resources in the form of the capabilities of people, groups and devices are assigned as role-players.  The recursive relationship on the resource concept indicates that there can be many levels of composition and interrelationship among resources of all kinds in the business.

From an architectural point of view resources are important because the business spends much of its time and effort in acquiring, using, maintaining, and tracking its various resources.  This is a key source of requirements for information systems.  As we allocate work to study the business, the range of resources, and their further classification, is a major organizing principle.  The major types of resources, along with various resource-related issues, are outlined below:

  • Physical resources represent tangible, molecular things that are used and consumed by the business.  Two intersecting type structures help categorize physical resources.  Resources may be mass (sand, sugar, hydrochloric acid), countable (pencils, transistors), or identifiable (individually tracked and accounted for).  Resources may also be supplies, devices, components, or environmental resources.  These category sets influence each other.  Supplies are almost always either mass or countable type resources.  Environmental resources (land, water, trees) tend to be mass types, but may also be identifiable (a particular lake, a large oak around which a courtyard is constructed).  Components are either identifiable or countable, while devices (tools and machines) are usually identifiable. Physical resources are always quantifiable, and almost always have additional physical characteristics (weight, dimensions, quality, color) that we are interested in.  Many physical resources (devices) require energy, while some are used for storing potential energy.  We need to be able track the life cycle of physical resources, for depreciation and inventory purposes.
  • Energy is a factor that should be considered more than it generally is in business models.  Energy is either kinetic (producing physical motion), thermal (expressed in terms of temperature measures), or potential (stored in a medium for future release).  Physical resources store or contain energy (fuels, batteries) and device-type resources consume energy.
  • Money can be promised (to be available in the future) or actual.  In can be incoming (billings, receivables), outgoing (payments, liabilities), or static (balances).  Monetary resources are assigned to accounts (which are logical locations).  Money provides valuation for all other types of resources used by the business.
  • Capability is a major resource of all businesses, from the skills, knowledge, attitudes, and experience  of human beings.  In our concepts we have separated aspects of people into their capabilities, which form a business resource and their relationship to each other as role-players.  We can say things like "Three years of Visual Age experience is worth ...", and then negotiate with individuals, with that monetary valuation as one aspect of the negotiation.  Capability as a business resource is subject to many levels of aggregation and identification.  We sometimes talk about the core competencies of a business, and this is a capability consideration.  The ability to manage and apply capabilities in an effective manner is largely a matter of externalizing the tacit knowledge of individual employees and making it explicit.  This in turn becomes a major opportunity for the application of information technology.
  • Information resources represent the kinds of things that can be known by the individuals and organizations in the business.  What does it mean for an business to know something?  It means that it has stored data (physical or electronic), or that its member individuals know it.  There are many types of information resource that the business needs to be concerned about.  A few of those include: identification of things of interest to the business, relationships among those things, characteristics of things, including quantities and other forms of measurement, descriptions, categorizations, histories, templates, plans, and documents of all kinds.  A key form of information as a business resource is the business rule.  A business rule is an information resource that is expression of business policy.  Business rules can be found in relation to almost all of the concepts in our conceptual architecture.  A business rule may:
  • provide a set of conditions that govern business behavior
  • provide the criteria for when an action is successfully or unsuccessfully completed
  • stipulate what other actions can or cannot be performed as a result of successful or unsuccessful completion
  • specify the  response to some external event that impinges on the business
  • govern relationships that need to apply among various business entities.

Business Location

The final concept that we will discuss is that of business location.  Business locations come in two main varieties: physical and logical.  Business locations house resources and functions. Locations exist in recursive relationships to each other which are generally of the “piece/whole” variety.  This means that location is often an arbitrary process of carving up space into pieces as a matter of convenience.

Architectural interest in locations differ, based on whether they are physical or logical.
Physical locations have to do with space.  Space defined in three, two, one, or zero dimensions corresponds respectively to volumes, surfaces, lines, and points.  Points can be of two types: coordinate (x,y; latitude, longitude) or referential (on the fourth floor of the building; next to the car).  Our main architectural concern with physical location is to determine work locations for deployment of technology.  Physical locations correspond very closely to the location concept in the application description standard for IT systems.

Logical locations include accounts, postal addresses, and network addresses (phone numbers; TCP/IP addresses, etc.).  Clearly IT systems are interested in networking addresses.  They are also concerned with accounts as types of logical location.  Some of the basic categories of account include payable, receivable, ledger, personal. Accounts are often one of the top-level categories in business thinking.  This point of view stems from the preeminence of the accounting discipline in the history of business, and of computing systems.  From the overall perspective of this business concept architecture, accounts are assigned a lesser position, as logical locations, or buckets, for monetary resources.

Variations on Concepts

What we have organized here is a very generic architecture of concepts of relevance to the development of information systems for business.  As  the old saying goes, however, “the devil is in the details”.  In order for this architectural approach to be useful in practice, we need to be able to organize and depict the complete set of details relevant to the business or class of businesses being supported by the IT system.  This is the business equivalent of commonality and variability among IT systems, which itself is partly driven by “differences between the requirements and/or existing solutions across the customer set” for a solution to be created or deployed.[12]

A work product-based methodology is the way to introduce variability and details into the common structure that is represented by our generic business concepts.  We will briefly discuss a set of possible business modeling work products that can be used to articulate the needed levels of detail and variability.

The front-end into a set of business modeling work products is the terminology used by a particular business or class of businesses being studied.  The classified business terms work product consists of two things: a classification structure of generic business concepts, and a set of terms that are actually used by the business people in the particular business entity or organization under consideration.  The classification scheme is simply an expansion of the generic classifications we’ve already been discussing here.  The business terms of interest can be discovered by interviewing business people or analyzing key documents from the business domain of interest.  The terms are classified and grouped according to the more generic business concepts.  This provides the foundation and much of the material for many other business modeling and system development work products.[13]

Classified business terms help to focus our attention on the detailed instance of all of the concepts in our framework.  The most common terms to be found in business documentation apply to the concepts of resources, outcomes, behavior, functions, role-players, and locations.  It is also possible to find specific instances of situations and situational factors, purposes, and commitments.

To focus attention on these last three concepts, and to foster the work of articulating them, a work product such as a to-be business goals list can be used.  This kind of work product is a specific way of discussing purposes and commitments that are driven by the business situation.  This is exactly the set of factors that drives and justifies the investment in IT solution development and deployment.

A business context diagram is a graphic depiction of relationships among business role-players.  From the point of view of the business area being studied, it shows external relationships with businesses and individuals in the marketplace.  It can also show relationships among various internal business role-players.  The diagram consists of a simple notation with labeled circles standing for business role-players, and labeled arrows that indicate the type and direction of business interactions.  Business role-players are generally organizations, including corporations, divisions, departments, etc.  They can also be potential organizations (business functions, as we’ve discussed), when modeling a generic situation, or a possible future situation.

In addition to role-players, the context diagram helps us to understand more about business locations, functions, behavior and outcomes.

A business process model is a set of process flow diagrams.  Process models explore the ordering of tasks or activities that accomplish business goals, and that satisfy commitments between external actors and internal agents.  The common denominator for almost all process models is that a set of roles or organizations are defined, discrete units of activity, or tasks, are assigned to these roles, and the flow of activity from one task to another is indicated.  The most common way of depicting these elements of the process model is a linear flow of activity that moves generally from left to right.  This notation is often called “swim lane” notation, because of its resemblance to the racing lines painted on the bottom of a swimming pool.  Each of the horizontal areas that cut across the page corresponds to a role, played either by an organization or employee.

The business process model can be easily built based on verbs discovered during the classification of business terms.  Verbs denoting business behavior can be characterized in a number of ways, which all have an impact on the types of information system support that should be built into IT solutions.  The following are a few especially interesting dimensions of this characterization:

  • The duration of the behavior: sub-second, minutes, hours, days, years, etc.
  • Whether the behavior is boundary crossing (selling, advertising, emitting).
  • If there are things of interest to the business, then we can be sure that there are verbs that relate to how the business:  invents those things, creates those things, creates templates for those things, and classifies those things.
  • Pairings and groupings of behavior.  If we find one verb in any of these groups, we can anticipate that the others are lurking out there to be found as well.  Groups of verbs include: suggest / exhort  / persuade / coerce, reduce / increase, propose / approve, separate / combine, begin / accelerate // decelerate / halt, permit / forbid, ask / grant, store / retrieve, and borrow / loan // buy / sell.
  • Many actions can be decomposed into more granular, behavior.  For instance a transaction can be decomposed into: alert, identification, authentication, fact finding, determine availability, negotiation, agree, record agreement, record state changes (inventory ...), fulfill, settle, and conclude the transaction.
  • Another common business behavior is the decision process.  Decisions are the point where we can determine the value of information, and the cost and benefit tradeoffs in the work of capturing information to reduce uncertainty to the point where decisions can be made.  This is high leverage for the process of justifying information systems development.  In general the business wants the decision process to become more automatic (like the automaticity that takes place as human beings repeat learned tasks).  Some decisions will never be part of a standardized, repetitious process, but are part of a more open-ended “course of action”, or even initiate such a course of action.  The business also needs to be able to change the decision-making parameters as conditions change in the market.  If this is done well it can be a point of flexibility for information system support.  A typical decision protocol includes: recognize decision situation, gather data, analyze data, evaluate analysis, make decision, record decision, communicate decision.
  • Even the behavior of innovation (which is more like a course of action than a deterministic, formal process) has such recognizable parts as: explore, conceive, demonstrate, and implement.

Business commitments and many other facets of the business are subject to business rules.  Many policies of the business are explicitly stated in documents.  Others are already encoded in application software.  Still others are implicit, or are part of the tacit knowledge base of common practice.  The rules that a business lives by form the heart of the application software that is needed by that business, which is built largely to enforce those rules.  The purpose of an explicit business rules catalog is to create an external representation of these rules so that business people can validate them and developers can use them as well-defined input into the process of building software.

Finally, a useful modeling technique that helps to transition from a business system view to the IT system view is the business object model. The business object model is the work product that brings structure and behavior together, where structure and behavior may have been separated in other work products.  It is a bridging work product that articulates business concerns in a way that is similar to the way software developers think, while still retaining a purely business content.  It is a consolidation of what we know about the area of business concern expressed in terms of objects, attributes and responsibilities.
By the time we get to business object models we are generally working with the concepts of resources, role-players, outcomes, and to some extent locations behavior and functions.  We have left behind business purposes and the situations that are driving them.  For that reason, and to assure that we stay within the justification for the IT solution work, it is good practice to maintain traceability matrices for the various work products of business modeling, and the downstream work products that address requirements analysis and design.

Mapping Business and IT Concepts

In the introduction to this discussion we noted a symbiotic relationship between businesses and IT systems.  We said that this relationship calls for the ability to capture and portray business and technical information in a way that makes them easy to interrelate.  In this section we will discuss some key relationships that bridge between the concepts in the business system architecture and the IT system architecture.

Figure 9 is a graphic portrayal of some of the key relationships that bridge these two conceptual architectures.  The concepts on the left are the concepts previously discussed here, while the concepts on the right are explored in detail in a companion article in this issue on the conceptual framework for IT systems.[14]

 

 
Figure 9

 

The first thing to notice is the single relationship between the business situation and the total set of IT concepts.  What this is saying is that information technology is intrinsic to the business situation, most especially in the form of the legacy environment that is always present in any business.  As we have seen, the business situation provides both motivation and constraint on what the business can aspire to accomplish, and the current state of available and actual information technology is a major factor in this situation.

Another business concept that maps to the whole world of information systems is the concept of business function.  As we’ve seen, business function is a major partitioning concept which provides a means of considering generic, or logical organizations.  This viewpoint is also a powerful means to partition information systems along functional lines.  Each functional partition contains both human and technological capability, and through its recursive decomposition, or fractal nature, this concept allows meaningful partitioning of the complete IT architecture at any number of levels.

The concept of business behavior is a key to organizing IT functionality.  Behavior is defined and performed by such software components as workflow engines.  The behavior of a component is made externally accessible through the component’s interfaces.  It is also drives and is embodied the IT concepts of collaboration (which is a sequence of operations that realizes a use case scenario).

The most salient feature of Figure 9 is the number of relationships between the IT concept of component and various business concepts.  We have already seen that components actually perform business behavior, within the boundary of automation, and capture key information about external human behavior as well.  Components, as modular units of technological functionality also provide the expression of business semantics, such as the existence and interrelationships among business resources and business outcomes.  Business role-players and the commitments among them are also subjects to be supported and expressed in software components.

It is easy to see that several of the IT concepts are closely related to the concept of business resources.  All hardware, software, and combinations in the form of devices, systems and applications constitute resources of the business.  The IT concepts that express these hardware and software resources are component (as we’ve seen) and node, a hardware platform onto which components in the form of deployment units can be placed, as well as connection, a kind of network or communication path (LAN, WAN, dial-up, infrared, wireless, satellite, etc.) that joins two or more nodes, thereby supporting interactions among components.

Finally, note that nodes, or hardware platforms, are directly related to business locations, where such platforms can exist in physical space.

Concluding Remarks

We began this article with a brief description of the interaction of technology with business which is driving continuous change in the marketplace.  This provided a motivation to understand this interaction on a conceptual level.

We have created a business concept architecture, drawing on some models from general systems theory and on a cognitive architecture of the human brain.  This is a companion piece to similar work that has explored the concepts relevant to understanding architectures of IT systems.  Our conceptual architecture tries to understand the sources of requirements imposed on business systems, and the key areas of interest in the business system itself.

We have discussed various methods of extending and refining business patterns, via a more detailed set of business models produced by a work product based methodology.  This is an approach to handling the continuum from commonality to variability that is a significant challenge for leveraging investments in information systems technology.

Finally, we have mapped business concepts to information technology concepts.  Throughout this discussion we have maintained a focus on how this business conceptual architecture can help drive the content understanding for the IT system, and partition the work of building it.

This article lays the groundwork for additional work in subsequent phases of ESS in the area of articulating variations on the business architectural concepts and relating them to the set of IT system architectures at a more detailed level.

Acknowledgments

The author would like to thank in particular the following people for their insightful influence on this article:  Martin Cooke, Don Crocker, Ed Kahan, Jim Reigrut, Srini Chari, Genie King, Juan Zumbado, Emily Plachy, Deborah Leishman, Tim Lloyd, Burnette Blakeley, John Fetvedt, John Cameron, David Redmond-Pyle, Jack Ring, Ralph Hodgson, Mark Simos, Steve Johnson, Pat Gongla, Rock Angier, Kathy Yglesias, David Ing, Ian Simmonds, and Stephan Haeckel.

Footnotes

[1]Plachy and Hausler, 1999

[2]Youngs, et al, 1999

[3]See Lloyd, et al, 1999 for a reference to Christopher Alexander in this regard.

[4]Biological evolution is driven by changes in DNA produced by mutation, bacterial recombination, and symbiogenesis.  Symbiogenesis is the process whereby long-ago bacteria formed such inextricable associations with each other  that they created whole new life forms.  Every cell in every plant and every animal on earth contains myriad independently reproducing mitochondria, each with their own DNA and RNA, that are the living descendants of these symbiotic relationships. Lynn Margulis refers to our cells as “cellular corporations.”  Margulis, 1997.

[5]Species tend to emerge to fill empty eco-niches.  Generally this follows catastrophic events, such as asteroid collisions or the oxygen crisis.  Occasionally this is the result of new environments being created.  An example of non-catastrophic opportunism is the existence of some 170 of species of fish of the same genus found only in Lake Victoria in East Africa.  They evolved from a river-dwelling ancestor when earth movement suddenly created one of the largest bodies of fresh water on the planet. Rothschild, 1990.

[6]Devlin, 1991

[7]James Grier Miller provides a functional view of a living system which includes 19 distinct subsystems.  Within the realm of information processing he articulates the functions of memory, input transducer, encoder, decoder, decider, and channel and net.  He claims that the 19 subsystems apply at all levels of living system, from a cell to a multinational organization.  Miller, 1978

[8]The Viable Systems Model talks about five major subsystems for communication and information processing.  These are the operational units, a normative function, a command and control function, an R&D function that is oriented toward the future and the external environment, and an executive function that resolves high-level disputes in the organism or organization.  Clemson, 1984

[9]The human brain can be viewed from an architectural perspective, with low level functions collaborating to give rise to all cognitive capabilities.  Trehub, 1991

[10]Minsky, 1985

[11]See, for example, Lloyd, et al, 1999

[12]Leishman, 1999

[13]McDavid, 1996

[14]Youngs, et al, 1999

Biographical Sketch

Doug McDavid is a senior consultant in IBM Global Services.  He specializes in business semantic modeling in support of  information systems development.   He has almost 30 years of experience in information management, information systems and application development in telecommunications, insurance, brokerage, banking, and the public sector. He has been an innovator in the use of modeling to align business and information technology strategies, and has published and presented his ideas widely.

INFORMATICS FOR BUSINESS IS MORE THAN PROCESS AUTOMATION: i-BUSINESS > e-PROCESS

INFORMATICS FOR BUSINESS IS MORE THAN PROCESS AUTOMATION:

i-BUSINESS > e-PROCESS -- 2004

J. Q. Trelewicz, J. L. C. Sanz, D. W. McDavid, A. Chandra, S. C. Bell

IBM Almaden Research Center

650 Harry Road, San Jose, CA 95120 USA

e-mail: trelewicz@us.ibm.com

ABSTRACT

In the rapidly changing, global markets of the early

21st century, many businesses – not only IT businesses – are forced to evolve quickly to remain competitive. New tools have made possible the realtime collection, analysis, and display of enterprise data, that can help business executives to make enterprise-level decisions quickly. This has spawned a new trend for tools for “business design”, “business process integration”, etc.

Business process design and automation is not new to IT and manufacturing companies. When asked how to design and analyze a business, many technical practitioners think of business process. However, process alone is not su?cient to design and analyze a business, and tools that focus solely on process will isolate many business practitioners. Furthermore, focusing on process for the purpose of automation ignores many important aspects of collaboration among employees in a business, the interest and capabilities of individuals in developing relationships with clients, the understanding of the situation and conditions emerging from the market or sector that the organization serves, etc.

Many tools, designed by IT practitioners, classify their design, monitoring, and analysis techniques into one of “strategy” or “operations”. This hierarchy ultimately shows the relatively poor theoretical understanding on which tools for e-business have grown. In this paper, we lay some stronger foundations and a more solid theoretical framework. We show that informatics for business design and analysis require a toolkit of models, including process and others. The impact of people on the business is also included in the model, and an example shows the importance of this inclusion. We introduce an approach for utilizing multiple models together for electronic assistance for design, analysis, and management of business.

Link to full article here: RJ 10325 (A0408-014) August 26, 2004

ISSS 2008 - Sociable Technologies for Enterprising Sociality

This is a very packed paper that explores the relationship between the social in enterprise and social technologies.  In order to call on structural coupling, we set up a definition of architectures, and then work through a number of architectural questions and issues.

The paper appears here as part of the proceedings of the 2008 ISSS conference.

More about the conference is here.

A Powerpoint version of this is located here.

Abstract

We are witnessing a proliferation of information and communication technologies (ICT) to support the socializing function in human communities. At the same time there has never been a greater need, and a greater opportunity, for socially-based and socially-oriented enterprise. Enterprises and technologies are rapidly co-evolving, driven by the ecosystem of globally integrated enterprises and enabled by such technologies as Web 2.0 and virtual worlds.

It is particularly timely at this moment in history to focus on the viewpoint that businesses and other enterprises are fundamentally human social systems. There has been recent emphasis on the importance of services and service economies as we move into an anticipated period of deepening integration of ICT into the fabric of global society. Human capabilities and inter-relationships actually constitute the primary source of value in a world of increasingly urgent problems and opportunities, yet the creation of value by human social systems is often ignored or downplayed.

Several theories of human social systems are used to articulate the dimensions of enterprising sociality. A specialized ICT architecture is presented to help understand the dimensions of sociable affordances. These views of both enterprise and technology are then brought together to explore the structural coupling that needs to occur between the organizational and technological domains. Evidence from literature and experience reveals the unexpected power of socializing technologies to enhance and catalyze new ways of pursuing life and work as we move deeper into the 21st Century.

Keywords: ICT, Web 2.0, virtual worlds, human social systems, enterprise, social technology, business architecture

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Introduction

The title of this paper introduces two phrases that are not in widespread use, ?sociable technologies? and ?enterprising sociality?. The choice of unusual terms is by design, so that key concepts are not confused through association with terms that may already have multiple current referents. The word sociality is selected to indicate the interaction of humans in the pursuit of mutual desires. These desires might be comradeship or comfort, familial affection or successful competition. In some cases the desired activities and states may be pursued with an organized economic aspect. In these cases there is an enterprising orientation, and so we introduce the concept of enterprising sociality. This is the social dimension of the human condition as manifested in economic terms.
By sociable technologies we mean affordances that specifically support the ability of people to interact on a social level. If this phrase happens to evoke images of relaxing around the fire in a bistro or office, dormitory or barracks, that would be appropriate. If it also evokes the image of telephones, teletypes and e-mail, that would also be appropriate. In this case, these images should further evoke a picture of people working together toward common economic goals, experiencing virtual togetherness via ICT.
This discussion is partially motivated by the understanding that there are ongoing accountability issues at the intersection of social systems and technology. Information technology has become a key role-player in enterprise settings.2 Significant invention and innovation is directed toward creating technologies that take over responsibilities from human role-players. But when technology takes the place of functions formerly performed by accountable human beings, or introduces functional capability that was not even possible before, the technology itself is not accountable for expected results or unintended consequences. As technology is increasingly inserted into the fabric of our lives, there is accountability that includes both the creator and the installer of the technology. Anyone in the chain from invention to end-use bears a share of the responsibility for those results as they impact individuals and organizations involved in enterprise. Our focus here is on the social dimension of that impact and responsibility.
We approach this discussion from an architectural viewpoint. We use the term architecture in an expansive sense that goes beyond representation, and includes the dynamic structure of the phenomenon itself. The definition here of ?architecture? is similar to Maturana?s when he says that, ?Autopoiesis occurs only when the dynamic structural architecture of the molecular domain in which it can occur satisfies the conditions for its occurrence.?3 In our case we are speaking of architectures within the cultural domain, referencing organizations and technological complexes.
This paper focuses on the architectures of enterprising sociality and sociable technologies, in a way that will allow us to begin to speak of structural coupling between these two domains. Enterprising sociality and sociable technologies exist within an ongoing coevolution process. We can observe the process whereby business advances depend on technology (e.g., reputation system for e-Bay), and technology advances respond to business drivers (e.g., Moore?s law as a mandate for continuous investment).4 The consideration of couplings of respective architectures and characteristics will provide a language to talk about the accountability of providers of technology with respect to the human social systems to be served by various technologies.
Before we get into the domains themselves, we will briefly explore some of the current context that makes this exploration interesting as we find ourselves pretty far into the first decade of the 21st Century.
In order to avoid unnecessary misunderstanding or controversy, we heed Alfred Korzybski when he reminds us, ?Whatever you say a thing is, it is not.?5 The fact that we talk about the social aspects of enterprise and technology should not be interpreted as an argument that this is the only way, or some specially privileged way of talking about those subjects. Viewing enterprise and IT through a social lens turns out to be especially useful and timely for technologists, organizational designers, executives, and vendors. But this is not to denigrate other ways of looking at these subjects. There are many maps for the same territory, so it is important to be explicit about the kind of map being used here.

Problem and Opportunity Environment

The following section highlights a few trends and factors that contribute to the relevance of socially-oriented enterprise and technology. We are also generally focused on the positive potential for an escalated emphasis on the social perspective. It is particularly timely at this moment in history to focus on the viewpoint that businesses and other enterprises are fundamentally human social systems. Both the complex of problems and the complex of opportunities have a fundamentally social aspect.  We will briefly review some of the factors that are most interesting for our purposes.
First of all, it is worth noting that there is a rich proliferation of human and ecological problems, from local to global scales. This is no secret, and there are several media industries that are doing quite well for themselves by keeping us informed on all aspects of this problematique a 24-hour a day basis. The pages of any newspaper, or an hour-long television newscast, provide plenty of examples of problems that have their origins in the way humans are living in increasingly complex and widespread social systems.
It is also a truism to mention that we are currently experiencing an increasingly globalized economy. The flat world discussion of Tom Friedman  and others is borne out in experience of the globally integrated enterprise of Sam Palmisano.  This creates interdependencies on a planetary scale that go far beyond the experience of previous generations of human beings.
In parallel with a globalizing economy, businesses and other enterprises are becoming more fragmented through specialization, and then reintegrating in the form of ecosystems of widespread outsourcing and global supply networks. An example of an enterprise ecosystem is the electronics manufacturing industry, where almost anything that can be outsourced continues to spawn separate specialized companies. Another example is mortgage banking, which is fragmented into various specialized banking institutions, bundling loans, sharing risk, and providing various banking services to each other.
We see the financialization of the global monetary and production economy, where various derivative financial instruments facilitate massive value flows and exchanges on a continuous basis. This has led to a few prominent meltdowns of major high-flying corporation, but it also creates a certain dynamic stability of the world economy, where moneys can flow to where they are needed, and away from emerging dangers. We mentioned the mortgage banking example above. This industry has recently experienced a crisis with sub-prime mortgages, a crisis made possible by the risk-masking derivatives that are offered within that enterprise ecosystem.
The sheer complexity of both systems and problems today simply requires increased collaboration. As both systems and problems become more complex, they require more interdisciplinary approaches, which in turn drive ever more effective sociality in pursuit of problem solving. An example of how collaboration is evolving is the idea of wikinomics,  where companies open up the product development process to participation by customers. The ICT industry is struggling to find the best kinds of supporting systems for advanced collaboration, and it is critical to enterprise success in the future.

Long-wave View of the Situation

As a specialized lens through which to view the types of problems and opportunities outlined above, we call attention to the work of economist Carlota Perez.  Perez addresses the observation that technological revolutions have been the drivers of long cycles in the world economy over the last 300 years. Her analysis is based on Kondratiev’s long-wave economic cycle theory.  Perez’s view of the theory is that successive surges of technological innovation drive predictable patterns of economic activity. According to this reading of economic history there have been four full long-wave cycles during the period since the industrial revolution, and we are in the middle of a fifth cycle at this point in the early 21st Century. The cycles and approximate start dates are: the industrial revolution (1771), the age of steam and railways (1829), the age of steel, electricity and heavy engineering (1875), the age of oil, automobiles and mass production (1908), and now the age of information and communications technology (ICT) (1971).

Each of these five cycles is perceived to have four distinct phases, with a disruptive transitional mid-point. The first phase is an “Irruption”. This is the sudden appearance of a new and interrelated set of technologies, which, taken together comprise a highly disruptive perturbation in the status quo in the economy at large. The Irruption is followed by a “Frenzy” phase, when entrepreneurs and investors pursue the development of the new technologies so furiously that financial capital becomes decoupled from underlying sources and production of value. With the decoupling of finance from value creation, pure speculation takes hold, leading to a bubble and then a major crash. This is followed by sustained period of growth based on the efforts to achieve full deployment of this new set of technologies throughout society. Production capital becomes dominant over financial capital and supports real wealth creation and productivity, especially during the “Synergy” phase, when people find many ways to apply the new technologies. The crashes do not invalidate the value of the technologies themselves (railroads, ICT, etc.). Deep value is obtained through the economic activities unleashed by application of the technologies. Perez stresses the social aspect of the synergy phase: “The turning point has to do with the balance between individual and social interests within capitalism. It is the swing of the pendulum from the extreme individualism of Frenzy to giving greater attention to collective well-being.”  The fourth and final phase of the long wave is “Maturity”, when the potential of the technology complex has been largely exploited, and the seeds of the next cycle are being sowed in the form of new invention and discovery.

If the theory holds, we have been in the Synergy phase of the ICT cycle for a few years since the dot-com crash. In the case of the current cycle, the technology itself intrinsically supports human interaction, and therefore enterprising sociality. To some extent this paper is an observation of this phenomenon unfolding, with a bit of speculation about where it seems to be going. One such observation is that the Synergy phase of the ICT wave is coincident with a strong current focus on services, as discussed in the next section.

A Services-Dominant View of the Situation

There has been recent emphasis on the importance of services and service economies as we move into an anticipated period of deepening integration of ICT into the fabric of global society. The growth of services in the economy is sometimes measured by the relative percentage of employment in three major sectors of an economy, agriculture, manufacturing, and services. By this form of reckoning, employment migrated from over 90% agricultural in 1800, to a majority in manufacturing by the end of World War II. Since then services has risen to a dominant position in U.S. employment, and this pattern is rapidly being repeated all over the world.

This so-called “services dominant logic” defines service as “application of specialized competences … through deeds, processes, and performances for benefit of another entity or the entity itself ”  In marketing and accounting for economic activity, this view turns attention away from goods and toward exchange of intangibles in the form of specialized skills, knowledge, and processes. Of course, Korzybski reminds us that this is one way of looking at things. Looking at the economy in a services-dominant way does not preclude other viewpoints. On the other hand, some might say that service dominance is not unique to the 21st Century. Vargo and Lusch quote Frederic Bastiat from1860, “The great economic law is this: Services are exchanged for services… It is trivial, very commonplace; it is, nonetheless, the beginning, the middle, and the end of economic science.” Clearly the services-dominant model has been around for a long time. The fact that a more product-centric model has been the standard viewpoint is as much a mindset as a reflection of reality. However, these viewpoints and models have a large effect on choices made and the direction of events. If the economy looks like a product-producing machine, it reinforces machinelike product producing and product consuming behavior.

The services dominant model of the economy reinforces the focus on sociality in enterprise. The canonical service is intrinsically human, with either the recipient, or the provider, or both, being people. Even with increasingly technology-based services (ATMs, downloadable legal assistance, etc.), the functioning of the technology is traceable back to its inventors, makers, and distributors, who, in a very real sense, are people who are providing services to other people but liberated from time and distance constraints by the mediation of technology. A growing and evolving fabric of services performed by people on behalf of machines, as well as by machines for machines, enables all of this. The point here is that service-based enterprise is recognized as a major beneficiary of the deeper incorporation of ICT into existing economies. The social interactions that are necessary for enterprises are enabled by ICT that allows people to interact at a distance.

As part of the background of the world situation, we observe that ICT itself is evolving to support a service and people-oriented economy. Communication networks and continuous connectivity are becoming nearly ubiquitous. We are living in a mash-up world, in which Internet technologies make global markets commonplace. These developments have made possible a range of on-line marketplaces (e-Bay, etc.) for previously undervalued and low-demand specialty assets. People are flocking to social networking applications, such as Facebook, and LinkedIn. We are rapidly moving from Goffman’s presentation of self in everyday life  to the projection of self. The projection of self is being made possible be feeding images and other information into and through various ICT-created spaces.

Ironically, in this apparent age of services economic systems we observe that often the capability and potential of people in services relationships is undervalued and undercapitalized. In many circumstances people are treated as factors of cost, rather than as engines of value-creation. It can be argued that human capabilities and inter-relationships actually constitute the primary source of value in a world of increasingly urgent problems and opportunities, yet the creation of value by individuals operating within human social systems is often ignored or downplayed.

All of these factors of the problem and opportunity environment converge to reinforce the perception that the social aspect of enterprise is of utmost importance, and deserves specific attention and cultivation. The next section provides some such attention.

Enterprising Sociality

This section examines the architecture of enterprise, with an emphasis on social aspects. The word enterprise as we are using it represents something along the lines of “a purposeful or industrious undertaking.”  Earlier we defined the concept of enterprising sociality as the social dimension of the human condition as manifested in economic termsIt is reasonable to talk about enterprises that do not have economic implications, but certainly businesses and public sector organizations would fall under that definition.

Enterprise has its genesis in human desire. The mechanism of enterprising sociality starts with the perception that there is some differential between the current state of affairs and the desired state that requires some form of collaboration. The activities and exchanges that are directed toward achievement of these desired states are the very essence of enterprise.

In the same way that we were careful not to claim that the prevalence of services is a new phenomenon, we also recognize that there has always been enterprising sociality. There have always been social aspects to economic activity, from hunting and gathering onward. In fact, one could make the case that we have been going through a period when economic activity has become focused on consumption of products to the detriment of sociality in many spheres of life. The socially-oriented enterprise may be revisiting earlier forms of behavior. While enterprise sociality may not be new, it appears that there has never been a greater need, and a greater opportunity, for socially-based and socially-oriented enterprise.

Enterprises as Systems

For our purposes we choose to take a systems view of enterprise. We are not alone in thinking of businesses as systems. Peter Drucker says, “There is a fundamental insight underlying all management sciences. It is that the business enterprise is a system of the highest order:  a system whose parts are human beings, contributing voluntarily of their knowledge, skill and dedication to a joint venture.”  Lou Mobley, who established the management and executive development program for IBM, notes that, "The information age has been born out of systems thinking.  The only way to capitalize on complexity is to order it with systems.  Without systems, complexity dissolves into chaos… [Y]ou can apply systems to leadership, marketing, and finance… Systems thinking evolved out of four pursuits -- operations research, game theory, cybernetics, and finally, the most far-reaching, general systems theory.“

Autopoietic Systems

A large variety of phenomena can be swept into the general category of systems, so it is fair to ask what kind of systems we are talking about.  The short answer, which says a lot about our subject and our point of view, is that enterprises are autopoietic social systems. The aspects of autopoiesis that are most relevant include the interplay of closure and openness, and the ongoing co-creation between the parts and the whole within self-created boundaries. This does not force us to take a strong position on whether an enterprise is a living system. Surely a human social system is in a different class than biological life in the form of an organism. But to the extent that autopoiesis implies life-like characteristics, we will say that the architecture of enterprising sociality must account for life-like behavior.

A biological system is closed inasmuch as it creates its own boundary, within which its processes create its parts, which it integrates into itself as it creates its own structure. The biological system can also be perceived as open, in the sense that von Bertalanffy  describes. It is a local defiance of the 2nd Law of Thermodynamics. It is sustained through structural coupling with its environment, exchanging chemical compounds in gaseous, liquid and solid form, as well as light and other electromagnetism.

The enterprise, as an institutional system, is both open and closed in a similar fashion. As the biological system is open to its needed inputs and outputs (transputs), the social system of enterprise is open to relational interactions with other social systems in the environment. Since it is also composed of relational interactions, this is an interesting analog of the chemical compounds that flow through the biological system. In the one case chemical reactions beget chemical reactions inside and between systems, and in the other case relational interactions beget relational interactions within and among systems. Of course the social system is also open to all the biological transputs by virtue of the participation of humans as biological systems. But more importantly, many of the relational interactions of social systems are designed and evolve to manage the biological transputs.  Even if we choose not to see them as living by some strict definition of life, enterprises and other human social systems are composed of the stuff of life and can have quite lifelike behavior.

 

Living Systems?

Interestingly, this is not an outlandish point of view for many people. Business executives often use living systems metaphors when speaking about the enterprises they lead. Sam Palmisano, current CEO of IBM is quoted in an interview as saying, “An organic system, which is what a company is, needs to adapt. And we think values–that’s what we call them today at IBM, but you can call them “beliefs” or “principles” or “precepts” or even “DNA”–are what enable you to do that. They let you change everything, from your products to your strategies to your business model, but remain true to your essence, your basic mission and identity.”  Irving Wladawsky-Berger, a retired IBM executive and technological evangelist says, “While business systems are clearly engineered, that is, designed, built and managed by people, they share many characteristics with biological systems, in particular, the need to be flexible and adaptable so they can evolve and survive as their environment changes. The connection between business and biological systems is not new, but it is particularly important in these times given our fast changing, global, highly competitive marketplace. It seems that the key for a company to stay alive, in spite of the odds and market pressures, is to have something in its basic culture - its DNA - that somehow keeps it going and enables it to adapt itself to wildly different market environments.”

The following functions have been abstracted from several scholarly definitions of what it means to be living.  The synthesis of definitions from these sources reveals key dimensions and dynamic tensions over which living systems range:
•    A living system maintains an identity over time in the face of changing conditions.
•    Like all systems it is embedded in an environment.
•    A living system creates its own boundary.
•    It forms itself from parts that it both creates and interrelates.
•    It can be seen as a closed system within an open system: a structurally closed autopoietic system within a thermodynamically open system.
•    It maintains dynamic stability within a flux of material, energy, and information.
•    It has autonomy as a system and interdependence with the environment of other living systems.
•    Autonomous interdependence leads to both cooperation and competition with other living systems.
•    A living system undergoes a life cycle that includes emergence as a living entity, sustainment of itself over a certain period of time, and then ultimately disintegration.
•    Sustainment requires the abilities to: spontaneously emerge from a codified design, self-regulate, manage variety, self-regenerate, maintain relationship among elements, grow, metabolize, adapt, respond to stimuli, learn, form a purpose, decide, communicate, produce, and reproduce.

The point of this recitation is to provide a framework for thinking about architectural viewpoints on enterprise. Whether enterprises are living or merely life-like, the architecture of an enterprise should be able to reflect its fundamentally life-like characteristics. To what extent the foregoing is a meaningful characterization of human social systems such as enterprises is the key question. To the extent it is meaningful then these core issues for living systems provide some indicators of the dimensions and constructs that we might expect to see in a full-blown architectural representation of a business or other human enterprise.

Architectural Viewpoints

In this section we will briefly review or introduce a number of ways to look at enterprise, and in particular the social aspect that we are calling enterprising sociality. These are viewpoints, or specially focused models, that appear to be useful ways to analyze business for a number of purposes. These architectural statements form a map or model of what we want to talk about. No one should confuse this with a complete definition or description of an enterprise, keeping in mind that “whatever you say a thing is, it is not.“

Before we move on, let us make a distinction between architecture and typology. Architecture is a pattern of structure and behavior, which is either discovered or designed. Typology is the observation and classification of individual instances and groups of instances of phenomena under consideration. Variation of the architectural components and relationships of the phenomenon in focus creates variation among the factors that are available to classify instances of the phenomenon. For example, as we narrow our focus to enterprising sociality, there are social aspects of enterprise that become the basis for an architectural representation. This is based on classifiers that have social significance, such as power apportionment, or degree of encouragement of trans-organizational communication. In a complementary fashion, as new classifiers of the subject are emphasised, this requires new architectural representations to capture these salient characteristics in a coherent manner.

Levels of Analysis

At the heart of this issue is the business organization as a human social system. The key challenge is that social systems are intrinsically invisible. No one can point a finger at a social system, or reach out and touch one. A social system consists entirely of relationships among humans, and as such is invisible, intangible, colorless, tasteless and odorless. To that extent, a social system is more like software than hardware, and even less deterministic and controllable than any artificial system. This makes it important to have various lenses through which to view and construct representations that provide useful information in a usable form. Part of the representation question depends on how close you look.

Micro Architecture

The micro-architecture of business is something like the molecular structure of the fundamental stuff from which businesses are made. At a micro-architecture level, there is significant apparent commonality and simplicity. The micro-architecture of all business organizations is composed of a structure of conversations, commitments, contracts, and transactions. This apparent simplicity is somewhat misleading, since the properties of the system may be vastly different than the properties of the elemental building blocks. The simple set of four nucleotides of the DNA molecule is a starter program that underlies all the complexity of life.

Macro Architecture

The macro-level of business architecture addresses the equivalent of the anatomy of an individual enterprise. There are many ways to look at the macro-architecture of business structure and functionality. A traditional organization chart is a point in time snapshot of how an enterprise has assigned responsibility for various functions. Enterprise reorganizations are commonplace, so an analytical framework can benefit from a macro-architectural view that is independent of the current organizational reporting structure. Such a macroscopic view recognizes functions, roles, and accountabilities beyond current authority structures. In a relatively unchanging way all enterprises need sensing mechanisms, information transmitters and expressers, memory maintainers, a locating function, producers of the intrinsic products and services of the business, resource maintainers, business relationship maintainers, arbiters of behavioral norms, strategic direction setters, and bottom line oriented managers. 

Eco Architecture

The eco-architecture of business addresses multiple enterprises as they interact with each other in a marketplace environment. Increasingly partnerships of supply chains are competing against other supply chains to gain market share.   It is more difficult these days to distinguish the internal complexity of an organization from the relationships across the ecosystem. Aside from falling back on the formal or legal constitution of the organization, it is more useful to consider whether an organization is viable, outside of its embedded corporate structure.

Architectural Viewpoints

Key views of the architecture of enterprising sociality are listed below. This is really little more than a list, with some description of the basic architectural elements that are featured in each of these viewpoints, along with some types of things the viewpoint can be applied to, and the kind of light it sheds on the social domain of enterprise.

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 in a clear and simple way many of the important functional specializations and power relationships in the enterprise. This not a stable architecture, because the chart itself and incumbent responsibilities of groups and individuals is in a constant state of flux in most enterprises. However, no one who is interested in the social architecture of a particular enterprise should ignore the evolving versions of the org chart.

•    Elements: organization, manager, reporting relationship
•    Types: hierarchy, matrix
•    Sociality: The social aspects of the organization chart are limited to a power reporting structure

Processes and procedures

The word process is linked with the word procedure here for a reason. Process is a highly used word, and has many meanings, depending on the context. One common way it is used is to signify the organized activities of the operational side of the enterprise. This tends to connote the idea of proceduralization, whereby the processes of interest 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. A business process designer now has a number of alternatives that support various different process architectures, and tie into ICT activities in various ways.

•    Elements: activities, roles, role-players, outcomes, inputs, resources, flows, triggering events
•    Types: Typology of process is largely determined by types of results. So an automotive production process is quite diverse from a market campaign development process. Another key typology differentiator is the type of role-player, keeping in mind that ICT is considered here to be a role-player.
•    Sociality: Role-players, often human, are involved in most processes, so there is an intrinsic 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.

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 seems to be a natural form of socializing in enterprises.  The architecture of practice includes specific types of role-players, such as mentor and legitimate peripheral participant.  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
•    Types: manner of learning and practicing, type of practice outcome (mechanical repair, law, medicine, entertainment, etc.)
•    Sociality: Since practices are practiced by humans (not automation) they are intrinsically sociable

Social networks

Another viewpoint corresponds to the observation that in addition to any formal organizational structure, and documented, repeatable processes, a lot of what is accomplished in organizations is done informally and almost 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. As with all of these viewpoints, it is impossible to get into many details, but it is important to note that this viewpoint is the heart of our concern for sociality of enterprise. There are tools and applications today that address social networking, so this is an emerging set of capabilities that purport to enable communities of interest and practice.

•    Elements: role-players, organizations, ties, strength of tie, information transfer
•    Types: A key aspect of social networks is how far they range. Some social networks bridge across organizations and types of organization.
•    Sociality: By definition social networks are social. This is a wild card kind of sociality that managers and organization designers ignore at their peril.

Roles and accountabilities

A specific viewpoint on enterprise social interaction is the role and accountability (R&A) model. Steve Haeckel proposes 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.

•    Elements: role, role-player, negotiated accountability, outcome, terms and conditions
•    Types: The main variances of this architectural pattern is the type of enterprise where it is applied.
•    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.

Institutional architecture

The idea of institution here is an organizational element that shapes enterprise behavior based on established custom or law. An example often given is “the institution of marriage”. A significant aspect of designing organizations is the selection of institutional elements to be applied to the architecture of the enterprise being designed. Our usage is based on the concept as used by institutional economists.

•    Elements: rules, guidelines, mandates
•    Types: 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; esthetics – and many more.
•    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.

Brand architecture

There is a branch of marketing devoted to study of brands. People in that discipline use the term “brand architecture”. This is a key viewpoint for the architecture of enterprise sociality. Brand “reflects the extent to which the brand spans product categories, subcategories, and markets,”  and addresses the scope of a given brand in relation to other company brands, as well as its relation to competitor brands and portfolios. To a significant extent, technology is used as a means to make the business system visible to those that would interact with it.

•    Elements: portfolio, brands, 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.)
•    Types: Corporate branding, individual branding
•    Sociality: Branding is one area of enterprise that is deeply psychological. 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.

Cultures

For people who want to get beyond the obvious architectural constructs of procedural processes and the organization chart, often one of the first considerations is culture – 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.”

•    Elements: norms, guidelines, styles, founding stories (myths), personality of the founders, internal branding, ceremonies, manner of working
•    Types: natural, artificial
•    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.

Decisions

The enterprise is constantly making decisions across a broad range of impact areas. Some decisions are fundamental and far-ranging strategic decisions. Some are rapid-fire operational decisions that must be made as events impinge in real time.

•    Elements: perceptions, deviations from desired state, role-players, alternative courses of action, empowerment.
•    Types: relationships (partners, employees, customer or client), business or organizational structure, transaction, offer
•    Sociality: In enterprises, significant decisions are made in a collaborative fashion, hence fundamentally social. Small operational decisions may be less collaborative, and more in the manner of automaticity. But the pre-decided parameters of automatic decisions have been worked out in management collaborations. And all decisions of the enterprise are likely to have social impact on its various constituencies (customers, vendors, etc.)

Social bonds

Intrinsic to understanding enterprise sociality is an architecture from the viewpoint of social bonds themselves. Of the types of bonds available to humans, there is variable acceptability in the context of enterprise. The most pervasive is still today probably power relationship. This is a complex topic, deserving of its own treatment, but the basic relationship in most enterprises is that of employer and employee, extended through limited power sharing to that of boss and subordinate. In the regime of enterprising sociality we expect to see more emphasis on other types of social bonds, especially where they can coexist with acceptable levels of the power relationship.

•    Elements: bond, role-players, emotion, desire, purpose, preferences (utilitarian, aesthetic, ethical), image of self, image of other, attraction, trust, characteristics, experience, capabilities
•    Types: power, friendship, collegiality, sexual, dependence
•    Sociality: This is the heart of sociality.

Meaning

Meaning, or enterprise semanticarchitecture 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. The problem is that as human beings, we really only have one way to express concepts to each other, and that is through language of one kind or another. So that the minute we try to separate concepts from language, we find ourselves using language again to express the concepts that we are trying to isolate. It is possible to do this, and there have been techniques developed specifically for this purpose, but it is beyond our scope to go into detail.

•    Elements: concepts, terms, definitions, lexical relationships, logic
•    Types: folksonomies, tagging, ontology language, database, glossary
•    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.

Boundary Concepts

The study of languages leads to the study of language communities. This section is a longer treatment of one particular architectural view of enterprise. The viewpoint here is toward communities of practice, and in particular how boundaries are created and bridged by boundary objects. This has a major impact on functioning enterprises, though it is not widely recognized as other views (org chart, process, etc.)
Boundary objects were introduced by a study of the Museum of Vertebrate Zoology in the University of California at Berkeley.  Star and Griesemer studied the museum as it had existed in the early 20th century, when it had set itself the daunting task of documenting the ecology of the entire state of California. Professional scientists, amateur naturalists and, backwoods trappers worked together to capture and document species and their habitats. A brief form was provided by the museum, so that the non-scientists could write a few key observations about each specimen. This simple written form served as the primary boundary object. It adequately bridged the gap between the non-scientists and the scientists in the museum, to the extent that they needed to communicate in this structured way. Star and Griesemer identify four types of boundary object:

•    Repositories – Modular, indexed collection of objects that people from different worlds can draw on without direct negotiation with each other.
•    Ideal types – An abstraction based on a template of common characteristics.
•    Coincident boundaries – Concepts that have common and agreed upon scope for all participating communities, but that have different internal contents in each.
•    Standardized forms – Templates and standardized indexes.

A number of writings hint at the richness of insight in the study of organizational boundaries. Phil Barnard  writes about “bridging representations” that bridge gaps between theory and practice. These representations tend to be developed in one community and imposed on downstream communities. Nicholas Chrisman  compares the concepts of trading zones and boundary objects. The concept of trading zone is borrowed from Peter Galison’s Image and Logic where dynamic "trading zones" in the field of modern microphysics require instrument makers, theorists, and experimentalists to meet and share knowledge. Within such trading zones a kind of pidgin language arises which allows diverse communities to conduct a form of trade using shared terms and concepts that are agreed to by all, even though they are subsets of the full language of any of the communities involved. Hildreth and Kimble  address the problem of knowledge in distributed teams and communities of practice, in particular as work becomes increasingly distributed across international boundaries. They compare the concepts of legitimate peripheral participation as a way that newcomers learn the concepts of a community with distributed cognition as a way work gets done in an ongoing manner. They believe that distributed cognition and boundary objects are complementary notions, where “Distributed Cognition concentrates on the ‘absolute meaning’ of artefact and representations, where as boundary objects are concerned with ‘interpretative flexibility’ of representations across boundaries.” Ackerman and Halverson  raise the important point that organizational memory is a process whereby individuals translate among various memory states to achieve a useful understanding of business situations. Memory objects as boundary objects are often decontextualized from their original point of observation and recording and then must be recontextualized within a process that involves some different part of the enterprise.

Adam Nieman  provides the concept of intermediate dependent entity as a way of differentiating and putting boundaries around various communities. An example of boundary creation is the case of mad cow disease, when both scientists and politicians tried to define the problem into each other’s domain, with a boundary definition that attempted to reduce responsibility for the problem.

An interesting concept to contemplate is the pervasive boundary object of currency.  A currency can be a strong definer of the boundary of the social system within which it is valid and valued. It is also a boundary spanning mechanism to transfer value across system boundaries

•    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)
•    Types:  community of interest, community of practice, department, profession,
•    Sociality: covered in the elaborated discussion above.

Sociable Affordances

In the previous section we have developed ideas about the nature of enterprise, with an emphasis on sociality in the enterprise context. We turn now to a discussion of information and communication technologies (ICT). In particular we are interested in specific ways that ICT can be used to support the socializing function in human communities. We consider sociable technology to be any ICT that is applied to help “coordinate the coordination of our doings”, to borrow a phrase from Maturana.

Again, as in the enterprise domain, we take an architectural approach to analyzing the domain of socializing affordances  in order to help understand the dimensions of ICT capabilities. As we move deeper into the 21st Century evidence from literature and experience reveals the unexpected power of socializing technologies to enhance and catalyze new ways of pursuing life and work.

Background

Before diving into the details of the emerging socially-oriented technologies, let’s take a look at a bit of ICT history to set the stage. This is easy to do, since the history of enterprise use of ICT is relatively brief. Business computing is traceable back the emergence of the COBOL language and the IBM System 360 in the 1960s. The emergence of databases of computerized records, separate from the programs that operated on the data, was a huge step forward in the ability to maintain and access histories of transactions. Accounting for business conditions has become possible at a fraction of the cost and with much greater functionality since it has been addressed by computerized applications. The accounting function has spread further into the enterprise, through the shop floor and out into the supply chain, as the cost of computing has plummeted and as computers began to talk to each other in the late 1970s. The flip side of the supply chain is the customer relationship, and major software vendors address that aspect of business, as well. Today, with the Internet and a new generation of middleware technologies, these applications are becoming more interactive and readily available. The current generation of business software is moving toward service-oriented architectures (SOA) whereby software functionality is distributed across the network, and invoked on demand by any other software that is enabled to interact with the service.

We mentioned customer relationships above, as a significant ICT application area. Customer relationships in business can be quite sociable. Lunches and golf outings are the proverbial social interactions of the business enterprise. But customer relationship management (CRM) software is anything but an appealing manifestation of sociability. Screens of text and pop-up windows are pretty utilitarian and dry. Still, these relationship management applications, whether the relationships are with customers, suppliers, or employees, are one form of sociable technology.

In recent years we have witnessed a new phenomenon in ICT as the Internet has become virtually ubiquitous. Enabled by the existence of bandwidth, and the standards of the World Wide Web, the technologies known as Web 2.0 have been emerging. People are pretty familiar with blogs, less so with wikis and tagging software. It is hard to avoid Web 2.0 applications that are native to the Web, such as Facebook, LinkedIn, Flikr, YouTube, etc.

Sociability-Supporting Affordances

In the section that follows, we will lay out a set of affordances that the Web now provides, which can be brought together into mashups of functionality that work together to provide business applications, and even whole businesses that are largely enabled on-line. Above we mentioned service-oriented architectures that allow technology to interoperate (be social) with other technology, but that is not our focus here. We are focusing on technological capabilities that are good for the projection of self, including personality dimensions that one chooses to accentuate, and for the ability to collaborate around projects and various work and play activities.

Purposes to be Served

When we think about ICT that supports sociality, we are primarily talking about projection of self and collaborative work. There can be any number of motivations for reaching out and interacting with other people via ICT, including instruction, entertainment, and persuasion. We see people projecting various levels of insight into themselves as subjects, including their relationships at work, professional affiliations, and friends, as indications of their social networks. In the enterprise, there are many opinions about how much of this social insight is helpful, or even appropriate, but experience suggests that working relationships that have the personal dimension can produce enhanced productivity and innovation through a kind of mind meld based on shared interests and trust. The focus of interest for social networks includes cohort membership, such as alumni groups, and various activities, hobbies, and sports.

There is one additional point to be made about sociality. In the enterprise we are talking about the human interrelationships in formal and informal groups and communities. This is not a judgment on the worthiness of that behavior. There can be social interactions in enterprises that have asocial or even downright anti-social outcomes and consequences, depending on one’s point of view. An Army platoon behaves in a highly social manner in the middle of a firefight, but the enemy would not regard that behavior in a positive light.

An Architecture of Affordances

In this section we list a number of generic ICT capabilities that are available to Web 2.0 applications and businesses, and consequently have special relevance in a social context.  This section covers a number of types of technology that are socially interesting. We say “types of technology” advisedly, because this is not about particular products or applications, but rather the kinds of functionality from which social applications can be assembled. This list spans from very generic and foundational capabilities to more complex and higher technical functionality. In each case we define the capability and focus on how it supports social interaction, such as effective communication, projection of self, and workplace collaboration.

We also want to remember the difference between architecture and characteristics. As we vary the architectural elements, we bring into our model different sets of characteristics that we can talk about. Similarly, as we register characteristics that we want to capture, the architectural structure of our model will have to change to accommodate variations in characteristics of interest.

Some very basic building blocks are required for sociable technology.  These are generic enough that they are needed for other, less sociable ICT applications. At the same time there are many other generic ICT capabilities we could mention that are not so relevant from a social perspective, such as the obvious computing functions of performing mathematical operations, sorting, windowing, etc.

The ability to store and retrieve data in various forms can provide persistence that is needed for the continuity of social relationship. File service and document sharing are variations on storage and retrieval, and can be selected based on the depth and complexity of the social relationships being supported. Versioning can be important for collaborative work where the object of the work is some kind of document that various parties are working on together.

Basic internet technology provides various mechanisms to track interactions through access data that is accumulated by web servers. It is pretty much automatic that a web site will capture data on the hits that come to the site, and where they come from. A more sophisticated function is available to track click-throughs where a user not only visits a site, but follows a link that is provided by that site to still another site. On the other side, cookies provide the ability for the user, and others, to know the history of sites that have been visited. The data about user interactions can be used to track and enhance social interaction for purposes of research, marketing, and group effectiveness.

Consideration of content types is important to the design of sociable software. For our purposes we consider the basic types as textual, graphical, and audio. Text (and numerics) have been the staples of computing. But in the Internet era, graphic content has taken on a more visible (pun intended) role in application design. In the social domain, the ability to project images and voice is very important to provide the human dimension. It is also important to note that the two modes of still vs. behavioral content have an impact on sociality.  Text is intrinsically still, and audio is intrinsically active. Graphic content can be either (still photos and other pictorial material, videos of live or animated subjects). The canonical realm of the active graphic is YouTube, and the moving picture with audio is fast becoming an expected form of content wherever the social intersects the enterprise.   

To the extent that ICT is a medium for social interaction, it is critical that content from people be accessible to other people. A key to this is simply the ability to find content. This requires some form of search, which is a standard function that has been implemented many times, and most successfully by Google. There are various forms of search, but the basic function is that content can be found based on text that it contains. A more proactive way to help accessibility is some form of classification scheme. The basic scheme in wide use is tagging, whereby keywords are consciously assigned to some content, either by the author or by subsequent users. More sophisticated classification is sometimes accomplished with ontologies and controlled vocabularies constitute a form of standardized semantics. Complementing this structural support is the capability of text analytics, which seeks to make sense of large bodies of textual content. People who say things in a social content definitely want to be heard, and these semantic technologies can help make that so.

Boundaries are important considerations in the social domain, as we have seen earlier. Internet technology provides zones of availability on a very large-grained scale. An intranet application is available only to selected individuals, such as employees or business partners. An extranet is a site dedicated to a particular enterprise, but open to the general user for purposes of learning about or interacting with the enterprise. The Internet itself is open to all comers. These are important distinctions to delineate the scope of sociality that is supported by an enterprise. But finer-grained access control based on user IDs, passwords and other identity controls, such as biometrics, is often desired to help create the membrane of community boundaries.

On the other side of the coin, boundary-spanning is a fundamental social affordance. Links, both inward, outward allow communities to span from their virtual presence to others. Internet linkage provides a high degree of flexibility and control that can be used by leaders and members of social groupings within and across enterprises.

The communications side of ICT enables linkage within and among communities. There are key modalities to consider with respect to social communications. This includes broadcast where some entity sends out messages to anyone who is able to listen, narrowcast, where messages go out to a limited set of potential recipients, pointcast where messages are directed individually or in tailored bundles to an individual recipient, peer-to-peer, where computers communicate directly with each other, rather than mediated by a 3rd party server, publish and subscribe (pub/sub), where both users and creators express interest in categories of content and make contacts based on common categories, pull, that allows users to set up an RSS feed (for example) that automatically sends links to new and changed content from specified sources.

The modes just mentioned convey the general sense of an author or performer with an audience of some kind. A more fully social experience is multidirectional and less structured, and can be supported by various forms of interaction technologies. Interaction here means a back and forth process similar to a verbal conversation between two or more people together similar to normal spoken conversation, but mediated by ICT. When enabled by ICT, such interaction has various alternative degrees of freedom. Interaction can be accomplished in real-time mode, such as instant text messaging (IM), or in asynchronous mode, such as embedded comments in a blog, e-mail, phone tag etc. Interactivity can be two-way or with multiple participants as in teleconferencing or web conferencing. It is important to note that this whole class of affordances is optional, such that one might design a supposedly social application in with which no feedback or interaction channels are provided. This raises an interesting question of how social such an application would be, in actuality.

Threading of interactivity is important to maintain the continuity of a conversation to help build an ongoing social relationship. Threads are possible for text chat of course, but other modes like voice and video can allow for threaded chains of responses (a video posted in response to another video, etc.)

Based on the more generic capabilities outlined above, there are various more complex ICT services that are useful for social activities in the enterprise. Things like calendar functions, and mechanisms for managing work allocation, such as project management, are common. In many socially oriented applications, groups can be defined, with subgroups, roles and responsibilities of members, various rules of conduct, shared property and access rights, etc. Workflow and group management often take advantage of automated origination of messages and replies. These may be meant to convey more or less an illusion of human communication. These can be helpful or annoying depending on the design of the application and its match to the culture of the enterprise. At an even higher level of automated support is the whole area of ICT-aided decision-making.

Social technologies are providing the ability to express an opinion, as well as ways to indicate that it is an opinion, rather than a fact. A structured opinion might be the rating of any possible thing, from a short video to our work together on an extended project. A variation on rating is ranking, which asks that a population of choices be put in order, like the finishing positions of a horse race. These ratings and rankings may be used on a personal basis (such as matching preferences) or they can be collective where gathering opinions across populations of individuals is the goal. Ratings and rankings may lead directly or indirectly to rewards. Socially oriented systems may benefit from having the ability to support rewards. One of the common reward structures is a reputation system, where at least part of the reward is public recognition and esteem. A generalization of rewards is to consider them all as different forms of money as payment and settlement mechanism, or more generally as an operating system protocol for threading and registering transactions among various forms and states of value creation.

As we’re winding up this list of socially-oriented ICT capabilities, we’ll do a quick nod to aesthetics and commerce. A key factor in social settings is atmosphere and style. The ICT environment is no different, and the web has brought forth a spectrum of visual design. This is automated to a degree in those applications that use visual themes called “skins”. Aesthetic touches to technology are big business in their own right, as witness ring tones for mobile phones. Today’s public versions of social applications tend to be plagued with the commercialism of advertisements, in the hopes that visitors will click through and make purchases.

A final consideration for the moment (not that this list is exhaustive) is openness to integration. This means that one of our criteria for evaluating any technology is how much it is able to be integrated into more complex applications via APIs, plug-ins, mashups, software services, or whatever you want to call them. It is through these interfaces, as well as advancing waves of standardization, that more and more integrated and richly functional social tools are coming into being. This is the result of a kind of wikinomics  process whereby an open community, including users or customers, can participate in design of the product or service they will consume.

All of these affordances are available in various combinations to help support the social aspects of enterprise. They supplement other forms of business communication.
All of this begs the questions: “Where do you go to hang out?” and “Where would you go to have a celebration?” In the physical world people can be observed congregating in certain places on a regular basis. Whether it is a coffee shop on the street, a bar, tavern or pub, a break room in the workplace, a cafeteria, the proverbial water cooler, people manage to find places to hang out. A lot of important things happen where people hang out.

From a sociable ICT perspective people hang out in chat rooms, where notoriously a lot of the hanging out has sexual content or overtones.  They hang out in a very limited sense in interactive blogs that foster conversation through persistent comment streams. But they really hang out in virtual worlds. An answer to the second question about where to hold a ceremony, one good answer is also virtual worlds. We will look more deeply into these questions in the next section.

Virtual Worlds

What do we mean when we say virtual worlds? This is a term in use in the market, and it is roughly equated to terms such as Metaverse, virtual environment, 3D Internet, etc. The term Metaverse is taken from a novel by Neil Stephenson,  where it describes a kind of parallel universe where people engage as an extension of their physical lives.

From a technological perspective virtual worlds grew out of the gaming technology called MMORPGs (massively multiplayer online role playing games). This describes a genre of online games that are played within a simulation platform that can support large numbers of players interacting with each other in fictional settings such as fantasy, war, historical episodes, and space missions. These games feature 3D virtual reality that provides a setting for players to interact with each other and with the playing environment through the use of so-called avatars.

A surprising development in the last couple of years has been the emerging usage of virtual worlds for pursuit of business and educational goals. In other words, serious use of technology that had been developed for entertainment. Some of the platforms involved in the serious use of VW include Second Life, Active Worlds, Forterra, Wonderland, Qwaq, Cobalt. The serious use is beginning to mirror the enterprise use of the Web with its own intraworlds to match intranets as private zones, extraworlds that match extranets as projections of enterprise content into the public, and fully public worlds that mirror the Internet itself. There is currently a lack of standards to allow worlds to interoperate, but many minds are working on that problem.

Virtual Worlds for Enterprising Sociality

Virtual worlds supply for the social enterprise some new places to hang out, and some new places to hold celebrations and other ceremonies.

The author draws on personal experience here, staring with a project that caused me to assume an avatar in Second Life. This project built the observation that people regularly rehearse complicated tasks and events, such as stage productions and sporting events. The insight was that there is also value in rehearsing complex team tasks in enterprise services, such as preparing for a client presentation or working on technical problems with teams that are widely distributed geographically. This notion of rehearsal services fostered some exploration of various collaborative technologies, and I was elected to do some due diligence on the appropriateness of Second Life, as representative of virtual spaces more generally. I was surprised at how compelling the social interactions turned out to be, based on the psychological suspension of disbelief about being co-present with colleagues in a virtual location. This rehearsal work is just one early experiment in using 3D technology to facilitate serious business interaction. As we will see, there are many ways of using the compelling immersive social presence of the virtual environment for enterprising purposes.

Since my initial introduction to virtual worlds (VW) I have had many adventures in the virtual environment, including helping to organize conferences where all the attendees are avatars meeting in a virtual space.  I have gotten involved with the arts and education communities, with an emphasis on the work in virtual libraries. This has led to speaking engagements, travel, and leadership positions in groups that I otherwise would have never gotten involved with. This all supports a perception that a virtual environment is a rich communication channel that can support serious pursuits in a uniquely immersive way.

Virtual World Purposeful Architecture

This section provides a rudimentary taxonomy of how people can use, and are using, virtual spaces. The terms “manner of use” and “focus of use” form a high-level category differentiation between the ways the technology is used (manner) and the purpose of use, or what it is being used for (focus).

Manner of use: Manner of use speaks to the way people are using the virtual world technology. The fundamental distinction in manner of use is between animated and non-animated uses. Non-animated usage is about artifacts and objects, whereas animated usage involves activities and behavior.

–Non-animated (artifactual) There are some beautiful artifacts being produced by people using virtual worlds (e.g. archaeological replicas of ancient Rome, etc.). A three-dimensional matrix can be constructed along the following dimensions, which helps to analyze the basic dimensions of what VW artifacts represent:

Utilitarian objects or aesthetic creations

Past, present or future objects as illustrative of history or projection and prediction

Real world renderings or fanciful creations

–Animated The animated dimension of virtual worlds includes all types of human activity as represented or conveyed through the VW medium. This is interesting to people who are focused on performance. These people are often thinking of doing collaborative work in virtual spaces

Simulation of activities under programmed or robotic control

Person-driven performance, in the sense that the activity is based on avatars being controlled in real time by various people. A performance may be done for an audience, and has constrained collaboration.

Collaboration among people who are working together toward a common goal. This can take the form of:
•    Simple meetings or conferences where the collaboration is primarily communication of information
•    Joint development, where people meet in a virtual space to create intellectual content

Focus of use: The focus of use tries to articulate what enterprises are using VW for, in the sense of support for business or other purposes.
–Mode of engagement
•    Enterprise that uses VW– Virtual worlds are used in conjunction with other activities. IBM’s promotion of Sam Palmisano’s announcement from Beijing was an example of using VW in the course of conducting business, but not actually conducting business within the virtual space.
•    Enterprise that is within VW– The virtual world is the place to conduct business. IBM has experimented with a virtual Business Center in public Second Life. This has provided experience with conducting business in a virtual space, with real employees available through avatars.
•    Enterprise that is about VW– This occurs when virtual space itself is the business opportunity. An example is IBM’s business relationship with Hoplon Infotainment to provide mainframe servers to run their gaming engine. In cases like this the business opportunity is about VW technology and supplying the technology is the opportunity.

–Issues addressed – This list is probably not inclusive, but indicates some of the kinds of business opportunities people are pursuing using virtual spaces
•    Technology – Hardware, software, and hosting for VW. This is an obvious opportunity for ICT companies to supply hardware, software, connectivity, and hosting for virtual worlds
•    Physical world simulations – Power plants, refineries, etc. This tends to be both artifactual and active, but not social in the sense of people communicating within virtual spaces
•    Marketing -- A lot of companies are using virtual spaces for a kind of coolness factor. This can include branding, both in the sense of displays of marketing material and interactive events, such as live music in Second Life.
•    Market research - There is also the expectation that because virtual worlds can track avatar movements and attention that virtual spaces can be used for interesting forms of market research
•    Product sales – This is about using a virtual world as channel for real-world products. Some people think virtual spaces may become a strong channel for real-world product sales, but so far that potential has not been realized to any great extent.
•    Services seem to provide about the best opportunity for enterprises to use virtual spaces, since they are intrinsically about people doing things together.
•    Public services by jurisdictions, non-profit, NGOs
•    Business services, such as accounting, law, consulting, and technical services
•    Personal services, including medical, fashion, personal shopping
•    Education – Academic institutions and corporate education
•    Travel-cost offset –This is starting to gain a high profile as more and more people experience meetings and conferences in-world, and realize companies can save a lot of money by reducing both commuting and long-distance travel costs.

These specific business purposes crosscut the other dimensions of this taxonomy. In other words, we could look inside any business using virtual space, and potentially see examples of various aspects of the focus and manner of use as described above. Based on the specific business functions being supported, there may be an emphasis on activity over artifact or vice versa. These all become design decisions on the part of business architects of these various enterprises.

Functional Architecture of Virtual Worlds

The following is a set of functional capabilities that are common to virtual worlds as they are emerging today.
•    Programming and scripting languages
•    Creation and inventory of virtual objects
•    Physics simulation and movement, including walking and running, flying, riding virtual vehicles, and teleporting
•    Virtual territory, including land formations, sharding and land controls
•    Avatar management, including avatar animation, avatar appearance and customization (shapes, clothing, etc.), and avatar name space
•    Communications, local and long (virtual) distance, and including text chat, instant messaging (IM), voice, and streaming audio and video
•    Social groups, including formal groups with roles and powers for members, as well as informal schisming
•    Virtual world economy, sometimes penetrating into real world national economies, which requires a monetary scheme, object ownership, the ability to sell and buy objects, real estate transactions and property tax
•    Application serving inside a VW, which is the key to doing real collaboration around content

 

Structural Coupling

Enterprises and technologies are rapidly co-evolving, driven by the ecosystem of globally integrated enterprises and enabled by such technologies as Web 2.0 and virtual worlds.  The generation coming into the working community is conversant with these technologies, and is expecting to use similar technical affordances in the context of their jobs. In this section we will bring these views together to explore the structural coupling that occurs and can occur between the organizational and technological domains.

We are operating from these 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"  It is “...a historical process leading to the spatio-temporal coincidence between the changes of state” in the participants. As such, structural coupling has connotations of both coordination and co-evolution.  Niklas Luhmann has repurposed Maturana’s concept specifically for social systems theory. Luhmann described 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.”

In this case, of course, we are talking about coupling between the domains of enterprise and of technology. As we have noted, technology is not an inert enabler, but through an ecosystem of technological specialists is itself composed of an accountable set of human enterprises. The essence of this particular coupling is that ICT expands the range of communications and meaning processing available to the enterprise. As we discussed earlier, data processing in the form of accounting has produced efficiencies in the management of enterprise, and other applications have made it possible to handle complex operations more effectively. The Web made it possible for enterprises to extend their brands and operations beyond previous geographic barriers. What we are seeing now is that new forms of ICT are becoming available that promise to capitalize on the social aspect of human social systems. These technologies are coupled to the functions of enterprise that project the self of individuals and organizations into a globally open market of services and collaboration.

We have been at great pains to provide summarized architectural frameworks for both the enterprise and ICT domains, with a focus on the social aspects of both. The question that remains is how best to use these architectural constructs to explore the important process of coupling, within which forces of coevolution are operating at a rapid rate.

In general for the era of sociality, we need to look beyond the org chart and operational procedures to achieve effective design and technology introduction. Close attention to cultural and power architectures is necessary to perform interventions that result in healthy viability of organizations, and achievement of the desires that people seek in the context of enterprise.  A long-standing problem is that lack of attention to these factors causes many business and technology improvement efforts to go astray. The new emphasis on social factors should bring renewed attention to a situation that has existed for as long as people have been applying ICT in the enterprise. Examples abound. The challenge of the U.S. intelligence services, before and after the creation of the Department of Homeland Security can be seen as a cultural challenge as much as a technical information access problem. The uneasy marriage known as Daimler-Chrysler was a clash of cultures that is not uncommon in mergers and acquisitions of business enterprises. The aftermath of the IBM acquisition of PriceWaterhouseCoopers Consulting is a classic example of “right vs. right”  ways of addressing enterprise efforts. Disparate ways of working (practices and cultural factors) often jeopardize the most well intended of joint projects, even when each competing set of cultural practices has proven successful (right) within its own realm.

The next two sections consist of examples of structural coupling in relative detail, though still at a level that would probably not be adequate for serious real world business commitments. Based on the coevolutionary nature of structural coupling, we can predict with confidence that this technological “irritation” in these enterprises will whet the appetite for more fully functional affordances. On the other hand, there is always the chance that some irritation (in the form of ICT) will strike a countercultural nerve, and be rejected by the community of potential users.

Example 1 – Enterprise Awakening to Sociality (TTST)

The first example is a hypothetical company that provides after market technical support for some complex electronic products. This company, which we will call TeleTechie Support Team (TTST), can be seen as a high-function technical help desk, where knowledge of problems and their remedies is at a premium.
Salient Business Architecture

Organization structures are central to TTST. Technicians are organized around product support areas, and there is a hierarchical, command and control management structure. The idea of communities of practice is a recent insight for this company. A limited form of decision-making architecture is included in TTST’s problem and fix database, which helps direct problems to the appropriate technician.

The institutional architecture is fairly simple for TTST. It is a privately held corporation that provides transactional services on a pay per use basis. The company is opening up the evaluation arena to peer review and reputation management to supplement simple call volume metrics.

In these early stages of deliberate enterprise sociality TTST does not have a strong focus on cultural aspects of their business architecture. TTST is starting to understand the importance of community boundaries and boundary objects, so this architectural viewpoint is just beginning to emerge. Direct support for individual and group branding is also beginning to emerge, but only informally.

Salient Sociable Technology Architecture

TTST needs persistence support, in the form of database storage and retrieval for the problem and fix history. Search and limited tagging are provided, but not ontologies, or advanced text analytics. Limited graphical capability in the form of still images is provided as part of the new profile application. Versioning is also important for problem history and threaded comments on fix records.

TTST is beginning to see the value ofsome form of reputation management capability based on the supporting functions of opinion, rating, ranking, and rewards. This has not been explicitly documented in their enterprise architecture yet.

The TTST ICT architecture has some openness to integration, but the application suite is homegrown and not standards-based beyond the basic functionality of web technology. TTST is not very far along in their thinking about possible use of virtual worlds (VW) technology.

Structural Coupling

TTST has a well-developed database of problems and known fixes, which is updated and used continuously by the professional technicians. They decided to introduce a simple social application of ICT to supplement the problem database. The idea was to add product unit bulletin boards and a photo and comment profile page, with links to a basic instant messaging (IM) system. The profile information was meant to personalize the projection of self of each technician, and IM was intended to allow technicians to reach out to each other in the course of resolving problems. The idea was that teaming within product lines would support faster and better problem resolution. This also led to big debate about whether there should be partitioning of IM access by group, including maybe real-time group IM chat.

A disaster threatened to occur because the design and deployment had overlooked the rough-hewn, locker room oriented aspect of the culture. Comments that had been limited to the lunchrooms and e-mail became public on profiles and bulletin boards. Old-fashioned flame wars broke out and some people took offense at the harsh barbs that erupted. Management considered scrapping the system in the face of bitter employee complaints, but instead did some belated but effective cultural redesign. They made it clear that the company wanted to foster a culture of technical excellence and reputation, but that workplace discrimination and harassment standards applied in the arena of sociable ICT.

Example 2 – Deeply Social Enterprise (CPSSN)

The second example is a hypothetical community-based problem-solving services network. In fact, that is its name, abbreviated (CPSSN). It is a thoroughly dot-com kind of company, based on Web 2.0 and other ICT from top to bottom. The business is based on the idea that people, through their knowledge and their relationships, constitute an intrinsic form of value that is often not fully recognized or appropriately rewarded. The stated purpose of CPSSN is to make social relationships and capabilities manifest in a way that captures and monetizes them. CPSSN harnesses social networks in support of any kind of problem-solving mission, where “problem” is broadly defined as any deviation between the current situation and some desired state. The communities may be contained within existing organizations (project teams within corporations, or collaborative learning design and practice within a consortium of higher education institutions). Communities join the network and stand up a value-recognizing structure of simple contracts that creates a motivational and monetizing environment for services practitioners operating as inductees to communities where they can contribute. Problems can range from a large effort to remediate an environmental problem to the creative performance of a technologically saturated artistic event.

Salient Business Architecture

In CPSSN’s business architecture there is minimal emphasis on formal organization structures. CPSSN itself is a Limited Liability Company (LLC), so the partnership model is pretty simple. There are basic corporate functions, but they are mostly outsourced, inside or outside the community network. Similarly, procedural processes are not a main focus, aside from things mostly outsourced. There is a procedural protocol associated with the community functions of induction and managing assets, and there is deep process in the core competency of sweeping and calculating community value.
On the other hand, the architectural viewpoint of “practices” is the focal point for CPSSN. The company exists in order to support communities of practice, so an emerging knowledge base about practices is key to future success. Networks within networks comprise the basic structure of the communities of practice, so there is a need for strong support of social networks and role and accountability structures

There is a complex institutional architecture for CPSSN. As mentioned, it is an LLC with aspects of a franchise model. There is an emphasis on intellectual property and contracts, and many property issues come into play (title, equity, investment). CPSSN actually creates a market and supports transactions and payments. All forms of evaluation (ratings, peer review, reputation) are integral to CPSSN’s business architecture. Practice analytics form a necessary set of research protocols. And there is a strong emphasis on aesthetics in branding and creation of collaborative working environments. Brand architecture is key, since success of individuals and communities within the network consists of projecting self and the ability to form relationships within and across networks.

Salient Sociable Technology Architecture

CPSSN clearly needs lots of persistence support, for managing large amounts of content for problem-solving communities. This includes database storage and retrieval, as well as file service and document sharing. All types of content need to be supported, including textual, graphical, and audio, and behavioral as well as still images. Textual affordances such as search, tagging, ontologies, and text analytics are key to the ability for CPSSN to manage vast amounts of community-generated content, as well as the ability to find and match problem-solvers to problems. Versioning is also important in a heavily collaborative environment.

CPSSN plays across the spaces of intranet, extranet and the Internet. It is a heavily user of access control in support of groups and individuals. Those groups provide significant linkage to their members and associates. There is not much need for true broadcast to the public at large, but CPSSN narrowcast, pointcast, and publish and subscribe methods of content access. There is talk of going peer-to-peer, and even possibly grid processing, but there is also hesitancy based on difficulties of managing IP issues in this mode.

Some of the commerce-oriented affordances, such as advertising and purchases, enabled by more basic functions like hits, click-throughs and cookies, is being repurposed by CPSSN for use in a services marketplace. Basic business functions, such as calendaring and project management are provided to communities from 3rd-party suppliers via app sharing.

A key affordance for CPSSN is support for both real-time and asynchronous threaded collaboration, often with multiple participants across a community. A significant part of CPSSN’s business model is based on the reputation management capability that repurposes vendor reputation systems like eBay’s for a service network of individuals working through communities. This is based on the supporting functions of opinion, rating, ranking, and rewards.

Along with heavy use of web-based visual design, CPSSN is a leader in the serious use of virtual worlds (VW) technology. There are several ways that problem-solving communities can collaborate, but one of the most popular modes is in virtual “studios” where community members are represented by avatars that interact with each other and share applications for cooperative manipulation of intellectual content.

CPSSN’s ICT architecture is based on openness to integration. Many of the affordances mentioned above are provided by 3rd parties in a mashup mode.  In actuality, CPSSN has developed a secondary marketplace (to complement its market in the form of network of problem-solving communities) for ICT providers who support community collaboration and other business functions. This is a complex form of wikinomics, where CPSSN has developed a standard business protocol around which a community of developers has assembled, who in turn use the community structure to support their own operations.

Structural Coupling

It is clear from this hypothetical example that emerging businesses based on enterprising sociality can push the envelope on integrating supporting technologies. In this case, a strong need for societally relevant problem solving is being served, as well as a desire for new wealth-creating opportunities for communities of service providers. New forms of ICT are being created as a result of this community desire.  Communities are adopting the new ICT and creating innovative new social practices as a result. These in turn spawn new technical innovations, in a virtuous cycle of coevolution.

Conclusion

We have covered a lot of territory here, from global socio-economic forces shaping the nature of enterprise, to architectural views of the social nature of enterprise and socially supportive ICT, to a brief and limited discussion of how these architectural views can be used to understand and design socio-technical systems that have desired properties and successful adaptations to the marketplace. 

We have tried to convey a sense of the dynamic nature of the ongoing coevolution of social enterprise and technology. We can also observe the impact on enterprising social structures through the introduction of technologies. This clearly highlights the complex accountability assumed by the inventor, the designer, the creator, the acquirer, the installer the maintainer, and the user of the ICT components of the enterprise. This calls forth a need to assume responsibility for those results as they impact the individuals and organizations involved in enterprise.

We see that trends of complex global problems, the Synergy phase of it ICT long wave economic cycle, and an increased emphasis on the services paradigm for enterprise are converging, and that the importance and complexity of this domain will lead to significant opportunities for innovative employment arrangements and wealth creation.

Business Model Generation and BA -- BPMInstitute 2011

This short article points to the book Business Model Generation as a form of business architecture applied during early, entrepreneurial phase of business.  

Vision of a world without jobs - Almaden symposium, 2011

This paper calls attention to the changing nature of work in the 21st Century and proposes a services-based money system that is intended to release an enormous source of pent-up value creation into the economy at large.  This paper also contains some cautionary thoughts about the dangers of corruption whenever economic interests are at stake.

http://www.box.com/shared/uso4hvnds9

Architectures of Wellbeing -- TMTC Journal of Management - 2012

 

ABSTRACT

 

This article starts from the premise that enterprises exist to support human wellbeing, defined as fulfillment of human desires.   Enterprises, as complex human social systems, consist of people with their own desires, supporting constituencies composed of people equally driven by their desires.  We focus on the architectures of such systems for purposes of both understanding and design.  We seek to transcend the architectures of information technology, and models of standardized operational processes.  We introduce a wide variety of useful views of the enterprise as producer of wellbeing.  Notably we focus on a view called “institutional architecture”, based on the belief that we are moving into an Age of the Human Institution, a period of history that follows and builds on the current age of information and communications technology.  This article concludes with a brief discussion of how this framework applies to enterprises from their earliest life-cycle stages.  

Link here

Determinism and Determination in Socio-Technological Systems -- INCOSE Insight, July 2012

In a time when machines are becoming increasingly autonomous, issues of accountability for such systems becomes increasingly problematic.  This essay for Insight, the journal of the International Council on Systems Engineering seeks to bring this issue into focus for consideration by the community of Systems Engineers.  The complete final draft of this essay is posted on the Box.com document sharing application here: Link 

 

An architectural framework for money forms

This is a special-purpose Powerpoint that explores various dimensions that come into play in the design an implementation of forms of money.  This deck is highly linked internally, which I think requires the viewer to have a local copy and operate in screen-show mode.

http://www.slideshare.net/dougmcdavid/tau-architecture-framework-v14v3