Abstract
In large organizations that produce complex products, the supporting systems that enable operations are a legacy that heavily interferes with Business Agility. Regardless of excellency, the tale of legacy is far too long to be organized around value with effective Development Value streams that can execute in cadence and sync.
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Modularization with viable business interfaces will reduce the complexity and remove the limitations any system ultimately will reach. The strategic forming of new business entities requires decisions on the highest level of authority and must be supported by business architecture competency.
Background
Large organizations that produce complex cyber-physical systems have, as all other organizations, a need to transform their ways of working. Typical industries where development speed and quality are essential are automotive, aircraft, aerospace, and defense. New competitors with less legacy are just around the corner to introduce entirely new services. The all too well-known disruptive pattern will play faster in the digital age.
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By taking a high-level view of value streams in a typical automotive business we can explore the challenges in business architecture.
The right decision level
The power needed to rebuild fundamental organizational structures belongs to the highest level of decision-making. Determination to form new business entities is often for the board to engage in organizational design and decide about business model and principles for operations.
Unfortunately, board members seldom engage in business architecture nor do they have the expertise to model and explore alternatives. Their alternative is to expand strategic authority for the C-level and to reshape business structures.
Monolith enterprise with Value Streams & Systems
The concept of value streams can help to understand how an enterprise operates.
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In one monolith enterprise, the lead time for creating the required new structures is far too long compared to what speed of the market.
Modularized business models
We have seen this happen in many industries before. Telecom is maybe the clearest example where there are infrastructure providers, operators, and then Google and Apple at the top. Also, the automotive business has modularization in their blood and the industry is based on component suppliers that work for a multitude of brands. But will the brand owners be able to take the next leap to the top of the value pyramid, or will they become a commodity?
Modularized enterprise with Value Streams & Systems
To modularize a large business and work with a well-defined interface between the basic product and the customer-facing digital services would create many advantages.
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Conway’s law is another applicable guide for understanding how the organization and products should be set up.
Advantages of a Modularized enterprise
To modularize a large business and work with a well-defined interface between the basic product and the customer-facing digital services would create many advantages.
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Separate compliance responsibility
References
https://www.pega.com/insights/articles/applying-microservices-principles-your-business-architecture
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https://en.wikipedia.org/wiki/Federated_architecture
Old
The enterprises that have been around for a while, normally have plenty of legacies, both technical and structural. The legacy is hindering business agility because the systems are not designed for the complex area of digital services.
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