My corporate and consulting careers have largely been focused on providing executives and operational staff with methods and tools for visualising, managing and improving business performance.
The predominant lenses of understanding and analysis I use are of systems theory & business process management and how people best engage with these. The latter part of my corporate career, the establishment of my consulting practice, and publishing two books all stemmed from these disciplines.
Taking a wholistic perspective on enterprise performance management (see also Business Excellence Frameworks) has enabled IHC to engage with organisations through various client requirements including transformation program design and management, process management and improvement, strategy development and execution, enterprise architecture and operating model design. Whatever the initial customer requirement, using systems and process perspectives has on almost every occasion resulted in the client seeing the other interrelated enterprise elements that must also be defined, managed or improved to ensure sustainable performance improvement.
My 2008 book “Business Process Management – Insights and Practices for Sustained improvement” detailed my “Enterprise as a Dynamic System” model – a later version of which is now the landing page of my consulting practice website. This probably equates to what would be referred to as an Enterprise Operating Model. It is a simplified mix of a SIPOC and select enterprise architecture elements.
We are still coming back to this model as a baseline reference to context client requirements and facilitating discussions on operating model design. Key design principles include:
- Consumable by executives and operational staff alike
- An open system including inputs, outputs, suppliers and customers
- Explicit and implied relationships between multiple elements – a sense of flow
- Includes ‘hard’ and ‘soft’ sub-systems
We have found it to be an easy to explain discussion starter – from which client-specific models are developed.
“…it is more about the relationships between the defined entities
than it is the entities themselves…”
More than ten years later many of the leading professional services consulting firms have their own enterprise models (and there are many different types – operating/business/enterprise/process/architecture…). They are all attempting to do at least two things:
- Define the key elements of an enterprise, and
- Explain the way in which performance is realised through managing the interrelationships of those elements.
As per the aphorism “…all models are wrong – some are useful…” (often attributed to George Box) – we find strengths and weaknesses in each of the models.
Enterprise models vary significantly in their visualisation, structure, format and content; typical constructs include:
- Pyramids or hierarchies
- Left-to-right flows of value
- Circles or cycles
Many of the enterprise models are very mechanical or technical in nature – IHC prefer more organic visualisations as we feel that better reflects the dynamic and complex relationships of any enterprise; rather than overly structured models that imply more simple cause-and-effect relationships – sometime between only certain elements.
What enterprise models do you find useful?
The following is an extract from “Business Process Management – Insights and Practices for Sustained Transformation (2008) p.21-22
It takes a BPM perspective thoughts largely applicable to broader disciplines. Importantly, it sees “culture” as an output of the enterprise system…
The enterprise system
BPM is very much about managing your enterprise as a system of inter-related activities in order to positively influence the outcomes of that system. Having an appreciation for the components of your enterprise system and the fact that they pervade the enterprise boundaries is a starting-point towards sustained business transformation through BPM.
A framework for managing all the elements of a business (including processes) is highly recommended as part of the way in which you contextualise, monitor and improve your business process performance.
This framework represents the key elements of any enterprise. Business models and architectures are used to further detail the components of each element and the various interactions and relationships that describe effective enterprise operations. An overview of the key elements follows.
The enterprise strategy guides all activities. It is informed by market conditions, customer feedback and business results. Strategic alignment is an important goal for BPM. Key elements include:
- Value disciplines;
- Strategic drivers; and
- Strategic planning and business planning processes.
How work is done, manually and automated. Value is delivered to customers through the effective design and enactment of processes. All forms of improvement rely on processes. Key elements include:
- Process architectures – domains, value chains, flowcharts, procedures, work instructions;
- Process improvement and management methods; and
- Performance measures.
The enabling of business activities through network and information technologies. Key elements include:
- Network and application architectures;
- BPM software for all aspects of the process lifecycle management including visualisation, design, simulation, deployment, monitoring, reporting, and optimisation; and
- Human interface design.
The physical and logical configuration of how the enterprise manages the ‘current- state’ and moves toward ‘future-states’. Key elements include:
- Business model;
- Organisation hierarchy;
- Facilities; and
- Governance – enterprise, technology, human, process, risk, financial.
The enterprise employees, whether they
are full-time, part-time, contracted or consultants. Suppliers, partners, shareholders and other stakeholders who represent the enterprise are another category within scope. Key elements include:
- Leadership and management styles;
- Decision-making, reward and recognition, and development systems; and
The results and value that the enterprise creates as measured by the various stakeholders and customers in receipt of the products and services. Includes environmental, market, cultural and economic impacts and dimensions of value. Key elements include:
- Measures of performance;
- Long-term partnerships and relationships; and
- Continuous feedback mechanisms.
The ‘enterprise as a system’ framework provides the backdrop against which the various interactions that constitute the daily life of enterprise may be set and measured. A break in the flow between elements will likely have numerous effects. For the BPM professional, there are a number of familiar breakpoints. These are significant issues in deploying BPM, as any existing point of ‘enterprise system failure’ will compromise the success of both process-improvement initiatives as well as enterprise capability- building activities, such as the development of process architecture.
Written by Imre Hegedus
Enterprise Operating Models (Article)