Enterprise Systems Engineering Background

Capabilities and Competencies

The word "capability" is used in systems engineering (SE) in the sense of “the ability to do something useful under a particular set of conditions.” This article discusses three different kinds of capability: organizational capability, system capability, and operational capability. It uses the word “competence” to refer to the ability of people relative to the SE task. Individual competence (sometimes called "competency") contributes to, but is not the sole determinant of, organizational capability. This competence is translated to organizational capabilities through the work practices that are adopted by the organizations. New systems (with new or enhanced system capabilities) are developed to enhance enterprise operational capability in response to stakeholder’s concerns about a problem situation.

Enterprise stakeholders are the ultimate arbiters of value for the system to be delivered. organizational, system, and operational capabilities cannot be designed, improved, and implemented independently. The key to understanding the dependencies between capabilities is through architecture modeling and analysis as part of the activities described in the article called Enterprise Capability Management. “Capability engineering” is an emerging discipline that could enhance the effectiveness of enterprise systems engineering (ESE), which is further discussed in the article on Systems of Systems (SoS).

The relationships among these elements are illustrated in the figure below, which connects to the previous figure at “People,” “Organization,” and “Enterprise.” Organizational capabilities are addressed in the article on Systems Engineering Organizational Strategy, and individual competencies are addressed in the article on Enabling Individuals to Perform Systems Engineering as they relate to the principles, theories, and practices of organizational behavior.

As you can see in this figure, operational capabilities provide operational services that are enabled by System capabilities. These system capabilities are inherent in the System that is conceived, developed, created and/or operated by an enterprise. ESE concentrates its efforts on maximizing operational value for various stakeholders, some of whom may be interested in the improvement of some problem situation.

ESE, however, addresses more than just solving problems; it also deals with the exploitation of opportunities for better ways to achieve the enterprise goals. This opportunity might involve lowering of operating costs, increasing market share, decreasing deployment risk, reducing time to market, and any number of other enterprise goals. The importance of addressing opportunity potentials should not be underestimated in the execution of ESE practices. See Figure 1 below.

Figure 1. Individual Competence Leads to Organizational, System & Operational Capability (Figure Developed for BKCASE)

Note: Red text in this figure is to indicate changes from the version of this diagram in SEBOK draft v0.25.

This article focuses on the operational capabilities of an enterprise and the contribution of these capabilities to operational value (as perceived by the stakeholders). Notice that the organization or enterprise can deal with either the system as a whole or with only one (or a few) of its elements. These elements are not necessarily hard items, like hardware and software, but can also include “soft” items, like people, processes, principles, policies, practices, organizations, doctrine, theories, beliefs, and so on (even a service can be one of the elements of the system).

Organizational Design

The competencies of individuals are important to the overall organizational capability as discussed in the article on Enabling Individuals to Perform Systems Engineering. The organizational capability is also a function of how the people, teams, projects, and businesses are organized. The organizational design should specify the roles, authorities, responsibilities, and accountabilities (RARA) of the organizational units to ensure the most efficient and effective operations. Effectiveness of enterprise operations is certainly driven by management principles, concepts, and approaches, but it is also largely driven by its leadership principles, concepts, and approaches. These factors are discussed in the article on Systems Engineering Organizational Strategy that discusses how to organize for effective performance of SE.

Organizational structure is tightly tied to creating value for the enterprise’s various stakeholders. Since the enterprise is made up of various elements including people, processes, technologies, and assets, the organizational structure of the people and the allocation of responsibilities for executing portions of the value stream is a “design decision” for the enterprise and hence is a key element of properly performing ESE. This organizational design will be based on organizational design patterns and their tradeoffs, as discussed in the article on Systems Engineering Organizational Strategy.

Enterprise Components

The above depictions of enterprise-related things do not show the components of an enterprise. The components of an enterprise when it is viewed as a “system” are different than the components of a product or service system (which is the focus of most literature on systems engineering). Figure 2 below shows the typical kinds of components (shown here as “domains”) in an enterprise (Troux 2010) that may be utilized in achieving the desired enterprise operational capability as shown in Figure 1. It is this operational capability that drives ultimate value for the enterprise’s customers and other stakeholders. Further discussion on enterprise components is provided by Lawson (2010, chap. 8).

Figure 2. Categories of Enterprise Components (Troux Technologies 2010, pg. 18) Source location is unavailable at this time.

Scope of Enterprise SE

Computer and communications technologies make it easier to integrate activities across the enterprise, but this does not necessarily make the enterprise more effective and efficient. To enable this to happen, one needs to look at the whole enterprise as a system, rather than as a collection of functions connected solely by information systems and shared facilities.

Essential Challenges

Enterprises face strategic challenges (Rouse 2009) that are essential to address in order to ensure that the enterprise will succeed:

• Growth: Increasing impact, perhaps in saturated/declining “markets”
• Value: Enhancing relationships of processes to benefits and costs
• Focus: Pursuing opportunities and avoiding diversions
• Change: Competing creatively while maintaining continuity
• Future: Investing in inherently unpredictable outcomes
• Knowledge: Transforming information to insights to programs
• Time: Carefully allocating the organization’s scarcest resource

To address these challenges, one recognizes that the central source of value in the enterprise is in its people. “Understanding and supporting the interests of an enterprise’s diverse stakeholders—and finding the ‘sweet spot’ among the many competing interests—is a central aspect of discerning the work of the enterprise as a system and creating mechanisms to enhance this work” (Rouse 2009).

Enterprise Transformation

Enterprises are constantly transforming, whether at the individual level (wherein individuals alter their work practices) or at the enterprise level (large-scale planned strategic changes) (Srinivasan 2010). These changes are a response on the part of the enterprise to evolving opportunities and emerging threats. It is not merely a matter of doing work better, but doing different work, which is often a more important result. Value is created through the execution of business processes. However, not all processes necessarily contribute to overall value (Rouse 2005, 138-150). It is important to focus on process and how it contributes to the overall value stream.

After gaining a good understanding of business processes, the next main concern is how best to deploy and manage the enterprise’s human, financial, and physical assets. The key challenge in transforming an enterprise is, in the midst of all this change, continuing to satisfice key stakeholders (see note 1).

Note 1. “Satisfice” means to decide on and pursue a course of action satisfying the minimum requirements to achieve a goal. For the enterprise as a whole, it is often impossible to completely satisfy all stakeholders given their competing and conflicting concerns and interests. Therefore, the concept of “satisficing” is a very important element in the execution of ESE practices. It has less stringent criteria than the concept of "satisfaction," which is commonly used in product/service systems engineering.

Transformation Context

Enterprise transformation occurs in the external context of the economy and markets as shown in the figure below (Rouse 2009). The “market” for the enterprise can be thought of as the context in which the enterprise operates. Of course, in the public sector, the enterprise’s “market” is commonly known as its “constituency.” The term “intraprise” is used here to denote the many systems internal to the enterprise. The intraprise includes more than just the information systems; it also includes the social and cultural "systems" of the enterprise (see the article called Enabling Businesses and Enterprises to Perform Systems Engineering).

Figure 3. Context for Enterprise Transformation (Rouse 2009) Reprinted with permission of John Wiley & Sons Inc.

Modeling the Enterprise

Models of the enterprise can serve as the basis for understanding the enterprise in its context of markets and economies. The figure below shows the various drivers (or inputs) of an enterprise and its potential outcomes (or outputs) (Rouse 2009). Enterprise architecture can be a key enabler for modeling and can serve as a basis for transformation (Vernadat 1996; Bernus, Laszlo, and Schmidt 2003; Nightingale and Rhodes 2004). Enterprise architecture can be used to provide a model to understand how the parts of the enterprise fit together (or don’t) (Giachetti 2010) (See also Representing Systems with Models).

Figure 4. Drivers and Outcomes for the Enterprise (Rouse 2009) Reprinted with permission of John Wiley & Sons Inc.

In Pursuit of Value

Based on his theory of enterprise transformation, Rouse (2005, 279-295) has identified four alternative perspectives that tend to drive the need for transformation:

• Value Opportunities: The lure of greater success via market and/or technology opportunities prompts transformation initiatives.
• Value Threats: The danger of anticipated failure due to market and/or technology threats prompts transformation initiatives.
• Value Competition: Other players’ transformation initiatives prompt recognition that transformation is necessary to continued success.
• Value Crises: Steadily declining market performance, cash flow problems, etc., prompt recognition that transformation is necessary for the enterprise to survive.

Work processes can be enhanced, streamlined, eliminated, and invented to help in the pursuit of enhanced value. These process changes should be aligned with enterprise strategy to maximize value produced by the enterprise (Hammer and Champy 1993).

Enabling the Enterprise

ESE, by virtue of its inherent transdisciplinarity (Sage 2000, 158-169) in dealing with problems that are large in scale and scope, can better enable the enterprise to become more effective and efficient. The complex nature of many enterprise problems and situations usually goes beyond the abilities of standard tools and techniques provided to business school graduates (See also Complexity). ESE can augment the standard business management methods using the tools and methods from the SE discipline to more robustly analyze and evaluate the enterprise as a holistic system. A more general viewpoint, or “view,” for dealing with the enterprise consisting of scale, granularity, mindset, and time frame is provided by White (2007) and McCarter and White (2009, 71-105).

ESE can provide the enablers to address the concerns of enterprise executives as shown in Table 1 (Rouse 2009). The methods for dealing with, and the special characteristics of, complex adaptive systems must be properly considered when adapting traditional systems engineering (TSE) practices for use at the enterprise level — many of which come out of the systems science and systems thinking domains (von Bertalanffy 1968; Weinberg and Weinberg 1988; Miller and Page 2007; Rouse 2008, 17-25). For an approach to complex adaptive system (cas) engineering (CASE), refer to White (2009, 1-16) and McCarter and White (2009, 71-105).

Table 1. Executive Concerns and SE Enablers (Rouse 2009) Reprinted with permission of John Wiley & Sons Inc.

References

Works Cited

Giachetti, R. E. 2010. "Design of Enterprise Systems: Theory, Architecture, and Methods." Boca Raton, FL, USA: CRC Press, Taylor & Francis Group.

Hammer, M., and J. Champy. 1993. "Reengineering the Corporation: A Manifesto for Business Revolution." New York, NY: Harper Business, HarperCollins Publishers.

Lawson, H. 2010. "A Journey Through the Systems Landscape." Kings College, UK: College Publications.

McCarter, B.G. and B.E. White. 2009. "Emergence of SoS, sociocognitive aspects." In Jamshidi, M. ed. "Systems of systems engineering: Principles and applications." Boca Raton, FL, USA: CRC Press, Taylor & Francis Group: 71-105

Miller, J., and S. Page. 2007. "Complex Adaptive Systems: An Introduction to Computational Models of Social Life." Princeton, NJ, USA: Princeton University Press.

Rouse, W. B. 2005. "Enterprise as Systems: Essential Challenges and Enterprise Transformation." Systems Engineering, the Journal of the International Council on Systems Engineering (INCOSE) 8 (2): 138-50.

Rouse, W. B. 2008. "Health Care as a Complex Adaptive System: Implications for design and management." The Bridge, National Academy of Engineering 38 (1) (Spring 2008): 17-25.

Rouse, W. B. 2009. "Engineering the Enterprise as a System." In eds. A. P. Sage, W. B. Rouse. 2nd ed. "Handbook of systems engineering and management." New York, NY: Wiley and Sons, Inc.

Sage, A. P. 2000. "Transdisciplinarity Perspectives in Systems Engineering and Management." In eds. M. A. Somerville, D. Rappaport "Transdiciplinarity: Recreating Integrated Knowledge." 158-169. Oxford, UK: EOLSS Publishers.

Srinivasan, J. 2010. "Towards a Theory Sensitive Approach to Planning Enterprise Transformation." Paper presented at 5th European Institute for Advanced Studies in Management (EIASM) Workshop on Organizational Change and Development, September 23-24, 2010, Vienna, Austria.

Troux. 2010. "Metamodeling and modeling with Troux Semantics." Austin, TX, USA: Troux Technologies. Version 9, July 2010.

von Bertalanffy, L. 1968. "General System Theory: Foundations, Development, Applications." Revised ed. New York, NY: Braziller.

Weinberg, G., and D. Weinberg. 1988. "General Principles of Systems Design." New York, NY: Dorset House Publishing Company.

White, B. E. 2007. "On Interpreting Scale (or View) and Emergence in Complex Systems Engineering." Paper presented at 1st Annual IEEE Systems Conference, 9-12 April, 2007, Honolulu, HI, USA.

White, B. E. 2009. "Complex Adaptive Systems Engineering (CASE)." Presented at IEEE Systems Conference 2009, Vancouver, Canada, 23-26 March 2009.

Primary References

Giachetti, R. E. 2010. "Design of Enterprise Systems: Theory, Architecture, and Methods." Boca Raton, FL, USA: CRC Press, Taylor & Francis Group.

Rouse, W. B. 2009. "Engineering the Enterprise as a System." In eds. A. P. Sage, W. B. Rouse. 2nd ed. "Handbook of systems engineering and management." New York, NY: Wiley and Sons, Inc.

Srinivasan, J. 2010. "Towards a Theory Sensitive Approach to Planning Enterprise Transformation." Paper presented at 5th European Institute for Advanced Studies in Management (EIASM) Workshop on Organizational Change and Development, September 23-24, 2010, Vienna, Austria.

White, B. E. 2009. "Complex Adaptive Systems Engineering (CASE)". IEEE Systems Conference 2009, Vancouver, Canada, 23-26 March 2009.

Additional References

No additional references have been identified for version 0.75. Please provide any recommendations on additional references in your review.

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