Enterprises as Systems:Essential Challenges and Approaches to Transformation
Abstract:
The nature of enterprises as systems is considered.
This exploration begins with discussion of the work of enterprises, with emphasis on challenges rather than routine operations.
This reflects a desire to support enterprises as they address essential challenges.
Situations where enterprise transformation is needed to successfully deal with challenges are then discussed.
The nature of enterprise transformation is discussed in terms of ends, means, and scope, as well as perspectives, approaches, and solutions.
This leads to elaboration of a portfolio of important research issues that suggests a wealth of potential means for supporting people in enterprises to accomplish the work of these enterprises.
Introduction:
When members of the technology community talk about systems, they often are thinking of airplanes, process plants, factories, transportation networks, and command and control systems, to name just a few typical domains.
Within these domains, concerns often focus on the effectiveness, efficiency, and safety of these systems.
Pursuit of these issues may cause one to take great interest in the operators, maintainers, and perhaps designers of these systems.
Consequently, in the past several decades, an enormous amount has been learned about how to support design and operation of such systems [e.g., see Sheridan and Ferrell, 1974; Sheridan, 1992, 2002; Rasmussen, 1986; Rasmussen and Goodstein, 1994; Sage, 1992, 1995; Sage and Rouse, 1999].
These types of systems are certainly very important. However, their importance to our economies and societies should be kept in perspective.
There are thousands of commercial airplanes and hundreds of nuclear power plants, for example, and many thousands of people involved in their operations.
In contrast, a much more ubiquitous type of system is the enterprise.
An enterprise is a goal-directed organization of resources—human, information, financial, and physical—and activities, usually of significant operational scope, complication, risk, and duration.
Enterprises can range from corporations, to supply chains, to markets, to governments, to economies.
If we consider this full range, there are millions of enterprises and billions of people involved in these systems.
Despite their prevalence, enterprises are seldom considered to be systems.
Instead, the focus is on engineering or manufacturing, or perhaps finance or sales, or maybe human resources.
One might pursue optimal designs of products, processes, supply chains, etc.
Or perhaps one might be concerned with managing the uncertainties of revenues and costs.
This emphasis on maximizing, or minimizing, one attribute in isolation from others is sometimes termed suboptimization.
One makes sure to get one thing “right” but, in the process, ignores everything else.
However, computer and communications technologies are leading to everything becoming more integrated— everything connects to everything.
We decrease our potential success when we try to design and manage functions within the enterprise independently of each other.
The interactions are important, indeed essential to fully leveraging the enterprise’s assets—human, information, financial, and physical— to the greatest benefit for all stakeholders.
This requires that we look at the whole enterprise as a system, rather than as a collection of functions connected solely by information systems and shared parking lots.
It could be argued that the issues just raised are not the province of systems engineering.
However, in our experience working with a wide range of enterprises, we have found that other disciplines are not sufficiently systems oriented.
They either focus on functional silos, or think in terms of “installing” a solution that, they hope, will inherently integrate the enterprise.
The perspectives and expertise epitomized by this journal are needed to truly pursue a systems-oriented view of enterprises.
This paper addresses the nature of enterprises as systems.
This exploration begins with consideration of the work of enterprises, with emphasis on strategic challenges rather than routine operations.
This reflects a desire to support enterprises as they address essential challenges.
We then discuss those situations where enterprise transformation is needed to successfully deal with these challenges.
The nature of enterprise transformation is discussed in terms of ends, means, and scope, as well as perspectives, approaches, and solutions.
This leads to elaboration of important research issues whose pursuit is central to both understanding and enabling transformation.
The portfolio of research issues outlined suggests many potential means for supporting people in enterprises to accomplish the work of these enterprises.
Conclusion:
Understanding enterprises as systems—or as a system of systems—is critical to moving beyond piecemeal transformations.
This understanding is also important to creating better enterprise systems that can support transformation rather than just incremental improvements of collections of enterprise functions.
Overall, the goal is for these huge investments to yield greater returns, sooner.
Fundamental research is necessary to provide a firm foundation for achieving this goal.
This research is inherently highly multidisciplinary and must address somewhat messy, complex problems laced with technological, economic, behavioral, and social issues.
The research outlined here can certainly contribute to understanding the apparent complexity of these problems.
However, we must also create the means for coping with the complexity of reality if we are to improve this reality.
Understanding enterprises as systems is necessary to facilitating and sustaining enterprise transformation.
Previous functionally oriented solutions have resulted in suboptimization and substantially less benefit than possible with more integrated solutions that involve architectures premised on a system of systems perspective.
The “macro” perspective advocated here embraces multiple views of the enterprise and, thereby, can take advantage of the concepts, principles, methods, and tools of many disciplines—this strongly reflects both the philosophy and substance of systems engineering and management.
The resulting level of integration and interoperability, both theoretically and practically, we believe will prove to be the key to successful enterprise transformation.
The perspectives and expertise epitomized by this journal are needed to frame and pursue this research, as well as facilitate deploying the results of research initiatives.
Given the inward focus of the many disciplines essential to these pursuits, success will require considerable “intellectual integration.”
Systems engineers, as is often the case, will have to serve as facilitators and communicators that see the connections and distinctions of most importance.