Enabling Operational Excellence
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Posts Tagged ‘business capability’

IT Departments Should be Evacuated – Agree/Disagree?

Fire_Exit_Doors[1]Let’s put you on the hot spot. You are forced to agree or disagree with the following statement, and defend your answer. What would you say?

Evacuating the IT department to weave IT into the business optimizes business capabilities.

Here’s how I answer: I agree. How about you?

My reasoning: Almost 20 years ago, John Zachman made me read an article by Peter F. Drucker in Forbes Magazine called The Next Information Revolution. It made such an impression on me I still have a yellowing copy of it pasted on a cabinet in my office.

To make a long story short, the article relates how in the 1400s and 1500s there was a period of time when printers of books dined with royalty and noblemen. Printing was such a revolutionary and scarce skill they were the heroes of the day.

By the late 1500s, however, printing had become such a commodity that the occupation had completely lost its luster. No more dining with kings and queens.

My point is this: The days of traditional departmental IT staff having unfettered access to the financial assets of the corporate budget will end sooner than you might think. The current way of building business systems is unsustainable. If you think the cloud was something, just wait!

I look at agile software development as the death throes of traditional IT. Beyond it there’s nowhere left to go to accelerate except to elevate the level of human interfaces with machines. Economics will demand it.

As traditional IT loses its grip, IT will of course become better woven into the fabric of the business. And that’s going to be a great thing for optimizing business capabilities.

Knowingly or not, business analysts are playing a founder’s role in that shift of power back to the business side. Yes, some days it feels like an impossible struggle, but time, economics and technology are on your side.

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Mark Your Calendar: The annual Building Business Capability (BBC) conference is November 6-10, 2017 at the Loews Royal Pacific Resort, Orlando, FL. The BBC is the place to be for professional excellence!

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BPM and the Knowledge Economy: White-Collar Work

Make no mistake, the future lies with automation of white-collar work. Fewer and fewer business problems these days focus on manufacturing and production processes, i.e., the nothing-but-widgets category. For all the non-widget-centric business activity in the world – which includes just about all every conceivable form of white-collar work – the following needs become paramount.
  1. Ensuring the quality of meta-data.
  2. Demonstrating compliance based actual rules, rather than the artifacts and effects that IT systems produce.
  3. Retaining, teaching and repurposing intellectual capital.
What would I do to correct the shortcomings of BPM for non-widget-centric business activity? Our answer is to become more why-centric, as opposed to narrowly how-centric.[1] You should focus on business capabilities, not just business processes. That shift has several essential features:
  • Understanding business strategy as something distinct from business processes (and BPM). Business goals and business risks should be drivers of business process design – not the other way around. You need to be strategy-driven, not simply process-driven.
  • Designing core metrics around business goals and business risks – the things that concern C-suite executives the most.
  • Realizing that for white-collar work the 3-D world of widgets has vanished, and that tolerances and quality can be expressed only in terms of business rules.
  • Treating business rules as a first-class citizen, externalized from process models.[2]
  • Identifying operational business decisions (based on encoded business rules) as a crucial focal point in re-engineering business processes.
  • Including a Why Button as part of every business solution. Pressing the Why Button leads immediately to the business rules that produced the results you see from any process.
~~~~~~~ Read more about the future for processes: BPM and the Knowledge Economy: Nothing But Widgets? http://www.brsolutions.com/2015/11/16/bpm-and-the-knowledge-economy-nothing-but-widgets/ What is the Future for Processes? http://www.brsolutions.com/2015/11/09/what-is-the-future-for-processes/ Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to: Ronald G. Ross, “The Why Engineer™,” Business Rules Journal, Vol. 14, No. 11 (Nov. 2013), URL:  http://www.BRCommunity.com/a2013/b727.html
[2] Refer to the Business Rules Manifesto, now in almost 20 languages: http://www.businessrulesgroup.org/brmanifesto.htm

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BPM and the Knowledge Economy: Nothing But Widgets?

BPM often overreaches. Understanding, modeling and managing a business capability effectively requires a balanced view of six basic questions, not just one, as given in the table below. I follow Zachman in these matters, so yes, the table is Zachmanesque.

Interrogative

Basic Business Question

Kind of Model

1. What What inventory of things needs to be managed to support business activity? structural model (e.g., concept model[1], data model)
2. How How do transforms of things in business activity need to take place to add value? process model
3. Where Where does business activity occur? network model
4. Who Who collaborates with whom to undertake business activity? interaction model (e.g., organizational chart, use case)
5. When When does business activity take place? temporal model (e.g., schedule, event model, milestone model)
6. Why Why are results of business activity deemed appropriate or not? strategy model (e.g., Policy Charter[2], constraint model)
  If your business does nothing but manufacture or produce physical widgets (forget all the meta-data about those widgets), you will probably emphasize question 2 (i.e., process) above the others. Your overall approach and architecture will reflect that. You will naturally gravitate toward BPM. That tendency has at least three basic risks, even for organizations that do fall into the nothing-but-widgets category:
  • Your metrics will largely focus on process productivity (e.g., throughput, bottlenecks, latency), rather than strategic goals and alerts centered on external risks. E-suite executives tend to be much more focused on the latter.
  • Your mindset will be procedural, rather than declarative, which can cause you to embed business rules in process flows rather than externalize them. As a result your process models will be unnecessarily complex and your overall solutions un-agile.
  • You approach will fall woefully short in addressing the intellectual capital that underlies your processes. Such operation business knowledge ranges from simple meta-data, to the business logic that underlies operational business decisions.
Fewer and fewer business problems these days fall into nothing-but-widgets category. Even for widget-centric businesses, at least three needs are increasingly urgent:
  1. Ensuring the quality of meta-data.
  2. Demonstrating compliance based actual rules, rather than the artifacts and effects that IT systems produce.
  3. Retaining, teaching and repurposing intellectual capital.
These are not strengths of common BPM practices. ~~~~~~~ Read more about the future for processes: What is the Future for Processes? http://www.brsolutions.com/2015/11/09/what-is-the-future-for-processes/ Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to Refer to Business Rule Concepts:  Getting to the Point of Knowledge (4th ed), by Ronald G. Ross, 2013, Chapter 1 and Part 2.  http://www.brsolutions.com/b_concepts.php 
[2] Refer to Building Business Solutions:  Business Analysis with Business Rules by Ronald G. Ross and Gladys S.W. Lam, 2nd ed. (Sept, 2015), an IIBA Sponsored Handbook, Chapter 4.  http://www.brsolutions.com/b_building_business_solutions.php 

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Pleased to Announce Release of Our New Book Edition!

Building Business Solutions: Business Analysis with Business Rules (2nd Edition) … Just Out! http://www.brsolutions.com/b_building_business_solutions.php Get it on Amazon: http://goo.gl/HXxN1f What It’s About: How to develop business solutions working directly with business leads, create blueprints of the solutions, and then use those blueprints for developing system requirements. Engineering business solutions, not just requirements.We have applied the techniques described in this book successfully in hundreds of companies worldwide. Kind Words from a Practitioner: “We have based our whole business rules analysis practice on the methodology and techniques developed by the Business Rules Solution team. This book is an integral part of our practice. It’s an easy to read, useful guide with real life examples – we use it daily and couldn’t do without it!” – Michelle Murray, Inland Revenue Department NZ New in this Edition: How Business Architecture corresponds with your projects and requirements work. Developing a Concept Model and how it will help you. How business rules align with the new terminology in the recently released IIBA® BABOK® Guide version 3. ~~~~~~~~~~~~~~~~~ www.BRSolutions.com

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Attn: All ‘Capability’ Advocates – Where’s the Proof?! No Imponderable Opinions Please!

I asked: What is a Business Capability? How Do Business Rules Relate? The Missing Man in Business Capabilities? http://goo.gl/JLLdx Ralph WhittleGuest Post by Ralph Whittle, independent consultant This is a most interesting topic, but one I fear will NOT yield answers to your questions. Considering all of the LinkedIn “capability advocates” who have actively participated in other various discussions, why have they NOT responded to your posting during its six months listing? Perhaps the “capability advocates” have realized that they can respond to your posting, but ONLY with indeterminate comments, and these are NOT real answers! At the end of their typical response, you will still NOT have the very much needed “guidance (aka business rules)” you mentioned, just more imponderable opinions!  I too, wish to see the formally accepted “guidance (aka business rules)” on capability modeling and mapping, along with some real industrial strength examples. Abstract examples are good, but they need to be supported with real ones. Where are the seminal documents, articles and research papers from any historical capabilities related archives, which describe how capabilities are designed and developed? Since capability modeling and mapping are usually associated with the Business Architecture, where is the analysis of the approach that was used to determine that capability artifacts meet specific architecture criteria? For that matter, where is the formally documented and accepted capability modeling and mapping, ontology and metamodel? Surely these documents exist, but where are they?  Maybe as in your posting, my questions may get responses, but not answers!

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What is a Business Capability? How Do Business Rules Relate? The Missing Man in Business Capabilities?

There seems to be widespread difference of opinion about what a “business capability” is. When I use the term, however, I simply mean the ability of the business to conduct some form of operational activity. What does the business need for that? It clearly needs people, technologies, data, and processes. And it also needs guidance (aka business rules). Business rules are not just things you document; they are things you run the business by. That intelligence, that intellect, is perhaps the most important business capability of all.

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What is a ‘Business Capability’ … And Can It Be Part of a Business Architecture Methodology?

Suppose you wanted to make ‘business capabilities’ the centerpiece of a business architecture methodology. Could you go out into the business and find existing ‘business capabilities’ in some form? Would a focus on business capabilities help you better design the business as a whole? My answer is at this point in time is … well … I dunno. I’m looking forward to the new Business Architecture Summit (http://www.buildingbusinesscapability.com/bas/) at the BBC2011 Conference (http://www.buildingbusinesscapability.com/) the first week of November to shed some light on the matter. There’s going to be some real excitement at the Conference this year on that topic! Here’s our current thinking on the term ‘business capability’ … An IT project always delivers a system and/or database and/or rulebase. But let’s say you want to take a business-oriented approach to solving some problem in business operations. The solution will probably involve significant (re-)automation – but not necessarily. The main focus is finding a winning business solution. What would you call what you deliver as an end-result from such an initiative? Unfortunately, there’s no generally accepted business name for such end-results. In our new book coming out this month – Building Business Solutions: Business Analysis with Business Rules (http://www.brsolutions.com/b_building_business_solutions.php) – we call them simply ‘business capabilities’. Any given business capability is likely to include business processes, business rules, business vocabulary, business roles and more. And it should also feature key performance indicators to measure continuing alignment with business goals.  So my bottom line is this: I know it when I’ve created a business capability, but I’m not sure I would know one beforehand. I’ll let you know if anything I hear from this post or at the Conference changes my mind. Please jump in!

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Q&A: What is Meant by ‘Capability’ in Business Architecture and How Does it Relate to ‘Services’ and Business Rules?

In preparation for this year’s Building Business Capabilities (BBC) Conference (http://goo.gl/6JcB9) and its new Business Architecture Summit (http://goo.gl/5hnzh), I’ve been doing some background research on how professionals in the space view ‘capability’. Here’s a good exchange I had with Alexander Samarin (http://goo.gl/DNGLp).  RGR: What is meant by ‘capability’ in the context of enterprise architecture?  Samarin: ‘Capability’ is the proven possession of characteristics required to perform a particular service (to produce a particular result, which may include the required performance). Capability needs to ‘understand’ the mechanics of delivering that service for expected demand. The mechanics include the resources, skills, policies, powers/authorities, systems, information, other services, etc., as well as the coordination of work within the service. There are three options to ensure a service has the required characteristics: 1. By contract (“re-active” approach) – acquire a service with the required characteristics, use it, check that its performance is acceptable and replace it if something is wrong with it. 2. By measurement (“active” approach) – implement a service, use it, measure it, improve or re-build it, etc. 3. By design (“pro-active” approach) – build a service model, run a simulation test, improve the model, build the service, use it, measure it, improve it, etc.  RGR: By contract do you mean ‘contract’ as a business person would understand it (legal), or as understood in object/component IT methodologies? Other?  Samarin: Legal.  RGR: By service do you mean a business service, a system service, an eCommerce service … other? All the above? Samarin: A service is a consumer-facing formal representation (i.e. explicitly-defined) of a self-contained (i.e. operationally-independent) provider’s repeatable set of activities which creates a result for the consumer. (It is considered that there are internal [even within an enterprise] providers and consumers.) It is important that the internal functioning of a service is hidden from its consumers, so that some parts of the enterprise can be changed independently. For example, a ‘proper’ service can be relatively easily outsourced. Services are expressed in terms of expected products, characteristics and delivery options (cost, quality, speed, capacity, geographic location, etc.) – this is the Service Level Agreement (SLA). RGR: How does the notion of business service apply to a company that sees itself selling widgets, not services in a conventional sense?  Samarin: An enterprise creates a result which has value to a customer who pays for this result. The enterprise acts as a provider (supply-side) and the customer acts as a consumer (demand-side). There is a (business) transaction between the provider and the consumer. From the point of view of the consumer (the outside-in view) the transaction is bounded by the pair ‘request and result’, e.g. from making an order to receiving goods. From the point of view of the provider (the inside-out view) the transaction is a set of several distinct activities (or units of work) which function together in a logical and coordinated manner to satisfy / delight the consumer. These activities are carried out in response to the consumer’s request which is an external business event for the provider. The main ‘problem’ is the coordination of activities (remember – they have to evolve). Processes, services, capabilities are, finally, the tools to improve the coordination (and the final outcome). For example, services are building blocks which are ‘glued’ by processes in bigger services. Capabilities are measures for how solid those blocks should be. RGR: In the approach you describe, how is the how-how handled? Surely know-how is essential to ensuring repeatable, ‘delightful’ results, gluing services together, etc. Samarin: As much as possible, ‘things’ (e.g. artifacts and relationships between them) should be made explicit and executable. For example, coordination of activities can be expressed in different techniques: template-based, event-based, data-based, rule-based, role-based, intelligence-based, community-based, etc. Also it should be known how to use those techniques together – similar to changing gears. RGR: Sounds a bit vague to me. Let me try a different angle. The problem with BPMN is that it is token-based. It doesn’t externalize the state of business things. But talking about the state of business things is exactly what business people want and need to do (and do informally in everyday conversation). Structured business vocabulary (fact models) is how you externalize state so business people can talk about it. Business rules are how the business encodes its know-how so as to constrain the states of things (and derive classifications) … and retain the know-how. Business processes attempt transforms and add value. Thoughts?  Samarin: You consider that BPMN is token-based, but it also provides some event-based coordination. For me, this is not a problem, but just a building block to execute some coordination techniques. I don’t think that BPMN is designed for externalizing states of business objects. You emphasize that business people want to know state. And, in addition, I am asked by business people to show them a course of actions to obtain the result and to warn them in case of potential problems. Different people have different needs.

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Business Capability … You Have to Know in Order to Do

As many of you are aware, the Business Rules Forum Conference is now one of three conferences in the annual Building Business Capabilities (BBC) Conference (http://www.buildingbusinesscapability.com/), which includes the Business Analysis Forum, the official conference of the IIBA. So Gladys and I have had to do some hard thinking about the meaning of “business capability”. Here’s our take emphasizing business … A business capability is not an application system, database, set of use cases, enterprise architecture, or any other IT artifact. Its design and implementation might depend on some or all of those things, but that’s a different matter.  Instead, a business capability is created as a business solution to an operational business problem. That solution and the problem it addresses have a scope (definite boundaries) that can be identified in terms of what business items make it up. The business solution is initially developed and expressed as a business strategy (a Policy Charter in our methodology, Proteus).  The business model you create in business analysis is the business architecture for the business capability, a blueprint enabling business people and Business Analysts to engage in a business discussion about what needs to be created, managed, operated, changed, and discontinued. Developing a business solution using a business model does not necessarily imply software development, but if software development does ensue (and it usually does), the business model provides a solid grounding.  Our definition of business capability comes down to this: What the business must know and be able to do to execute business strategy. The part that many people miss is what the business needs to know. Quite simply: How can you really ‘do’ without knowing what your business rules are?

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