Abstract
In large Just as the Jet Streams, far up in the atmosphere, control the weather on earth, high-level structures of an Enterprise control the workings of an organization. The Enterprise Jet Streams are the strategic prerequisites to form Business Models, Value Streams, and other fundamentals needed to develop and operate a business.
This article will touch on typical challenges when transforming a business and how Enterprise Jet Streams can reduce the complexity of a legacy structure to enable success in the new digital era. I will show how well-known architectural patterns can be used at the highest management level.
Large organizations that produce complex products, naturally have the biggest challenges. Over time, their supporting systems that enable operations are have become a legacy that heavily interferes with Business Agility. Regardless of excellency in transforming into Lean-Agile development, the tale burden of the legacy is far too long to be organized around value with effective Development Value streams that can execute in cadence and syncstructure is a strategic obstacle that inhibits execution in cadence and synchronization. Thus, removing the benefits of enabling short feedback cycles as the underlying idea in Lean and Agile.
The solution to a very complex enterprise setup cannot be to work harder on defining value streams and continue to accelerate the Product Development flow. Instead, a macro-level view on value streams and the formation of modularized business entities can clarify business targets and create far better options for a successful Lean enterprise.
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 like 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.
In order to grasp the challenges, leaders and change agents need to recognize the operational systems and structures that enable organizations to perform. Especially companies with long-lived consumer products have a substantial legacy.
Under the hood in of these large organizations, there are a large number of systems that are needed to control the entire operational value stream which typically consists of the supply chain, production, development, finance, sales, distribution, and aftermarket. All tighs together in a product structure which is the backbone for making it all work.
To unleash innovation and get a new product out the door, it is not just the product development in itself that needs to become faster and more reliable. It is also the long long tail of supporting systems that must be upgraded. But, there is no time to investigate what operative structures are needed nor how the supporting systems should work. The focus needs to be on exploring what customers want.
The figure below shows the high-level structure of two businesses where the flow of value a forced to take very different routes. In both alternatives, there are Operational Value Streams (OVS), Development Value Streams (DVS), and the Supporting Systems and Products needed for development and operations.
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It requires skills in Business Architecure, mandate to make strategic decisions and the guts to do it.
Any business is built on Operational Value Streams (OVS), Development Value Streams (DVS), and the Supporting Systems and Products needed for development and operations.
Executives on enterprise-level and below continuously put a lot of effort into improvement programs. Consultants are hired, change initiatives are launched, the staff is trained, and much more is done.
The power needed to rebuild fundamental organizational structures belongs to the highest level of decision-making. The board is usually determined to form new business entities to engage in organizational design and decide about the 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 the C-level's strategic authority and reshape business structures.
and making sure structures are flexible and may be adapted afterward.
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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 the 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 its 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
Summary
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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