Let's introduce myself: Martin Op 't Land

Transcription

1 Enterprise Ontology Based Organization Splitting and Contracting at Rijkswaterstaat / Deltares Martin Op 't Land, Capgemini November 26 th, 2008 Let's introduce myself: Martin Op 't Land Principal Consultant and Certified Enterprise Architect at Capgemini coherence business <> ICT, concepts <> implementation > 20 years active in Banking and Public, e.g. several educational affiliations Radboud Master "Architectuur in de Digitale Wereld" responsible for all Capgemini's content, lecturing "Extended Enterprise" in Hogeschool Utrecht's "Master of Informatics" lecturing DEMO Professional just finished PhD-research / TU Delft PhD-thesis "Applying architecture and ontology on the splitting and allying of enterprises" Summarized for managers in Instrument for fast and effective splitting of organizations Page 2 9 November

2 Towards good methods in Splitting, Merging & Allying: motivation & results Our customers needs a fast and underpinned method for organization splitting, clarifying (a) where to split and (b) how to cooperate after the organization split e.g. in Post Merger Integration, Shared Service Centers and Business Process Outsourcing Taking DEMO's Construction Model (CM) as a basis, embedded in a way of thinking & working with Group Decision Support (GDS) and precalculated splitting alternatives, the EBSO-method works at least 5 * better than existing methods different interests and responsibilities are clarified mutual dependencies become clear I like to take you on the journey how this method Evidence Based Splitting of Organizations (EBSO) worked at Rijkswaterstaat / Deltares 3 Enterprise Ontology Based Organization Splitting and Contracting at Rijkswaterstaat / Deltares splitting organizations: relevance & the pizzeria! is it possible to calculate a best organization split? using principles in determining the organization split collaborating across the organization split: what to agree upon? results attained conclusions and outlook 4 2

3 Importance of rightsplitting the enterprise Organizations increasingly split off parts & start cooperating with it: why? extern: for NGE high agility right product componentization + right production componentization competence for "right" splitting enterprises adequate splitting decision (a/o make-or-buy) diversity of operations quality of operations scalability of operations (incl cheap & simple starting / stopping) offer complex products width customer-base time-to-market costs of commercial product-failure CashFlow in CashFlow out intern: cost savings by removing redundancy redundancy in processes & ICT use geo-flexibility of operations cheap availability advanced ICT 5 Take for example Mario's pizzeria S02: Pizzeria S01 T01 A01 T02 A02 baker customer complete purchase sales bake purchase A03 T04 T03 transporter pay purchase transport purchase 6 3

4 Intermezzo: basis for EBSO = DEMO with a/o its Construction Model DEMO = Design and Engineering Methodology for Organizations a DEMO Construction Model expresses the coherence (chain/network) of services, delivered by actors to other actors within a defined scope ingredients actors transactions information links T7 deliver service T1 A1 is restricted by T7 (inspects facts of T7) A0 Principal T1 A1 Contractor A0 is initiator of T1 A1 is executor of T1 7 Back to Mario: his pizzeria can be split in many different ways... a shared call center? S02: Pizzeria Shared Service Center Bakery? S01 T01 A01 T02 A02 baker customer complete purchase sales bake purchase A03 T04 T03 transporter pay purchase transport purchase outsourcing? According to which rules should we split the organization? 8 4

5 ! Of course, principles play a vital part in splitting the organization what is the influence of professional (non situation specific) principles? nr PC01 PC02 PC03 PC04 PC05 PC06 PC07 PC08 PC09 PC10 PC11 Organization-construction rule: keep actors together, when... their mutual interface cannot well be standardized, due to complexity... their mutual interface cannot well be standardized, due to frequent change they cannot have a supporting role for other actors they use the same language / culture they operate under the same regulatory, legal and tax-regime those actors more or less work on the same case / deal with the same event the risk to fail (in banking sector: operational risk) of a split is unacceptable high they need comparable competencies a (business) transaction relationship exists between them an information relationship exists between them they have High Internal Cohesion and Low External Coupling (HICLEC) what is the influence of situation-specific principles? e.g. "market unless, " "open standards" "knowledge-intensive work to be done by Deltares" "policy-related work to be done by Rijkswaterstaat" nr PF01 PF02 PF03 PF04 PF05 PF06 PF07 PF08 PF09 Professional functional principle better quality of operations more flexibility in service levels accelerated operations accelerated time-to-market lower operational costs increased turnover client centricity customer ownership multi-channel offering ability 9 Is it possible to calculate a best organization split? basic principle HICLEC = high internal cohesion, loose external coupling 1. assign uniform weight to all B&I-relationships from the CM; e.g. BI=91 2. interpretation: high weight T01 keep A00 & A01 together high weight I (A07-T01) keep A07 & A01 together 3. organization splitting pay a penalty S 1 : P=10 S 2 : P=4 one organization A27 3!!!! 8 A A28 A33 A27 8 A31 A A28 A33 A28 A31 4 A33 4. optimal organization = the one with the minimum penalty P (here: S 2 ) given that (for other reasons) a split has to occur anyhow S known 1 from Solution mathematics as the min-cut A28 Actor problem ( graph theory) 10 Business or 4 P Penalty 5

6 Organization splitting: way of working tune approach draft CM tested CM situation-specific splitting criteria general principles / construction rules criteria rough splitting mgt OK? intermediate results before expert meeting expertmeeting (+GDS) after expert meeting synthesis gutfeeling calculated splitting + analysis of alternatives consequences fine splitting: underpinning = gut-feeling criteria score list ownership of results and means of organization-part to be split off method-test by experts on the split: specify services/information incl. quality/ form. Critical dependencies? method-test by management test method (process, result) 11 final results 1. splitting proposal + underpinning + consequences 2. subjects for contracting (SLA, cooperation) 3. testresults of the method Support decision making (GDS + calc) on Rijkwaterstaat-Deltares organization split 12 6

7 Challenges for agreements in the chain ms. Janssen should be wiped off can somebody come & wipe me off? request wipingfunction customer Janssen yellow form E17, target: AF/FUN, case: for moist paper: press 1 13 Use DEMO CM as stepping stone to detect items for contracting (a) (b) (c) a. specify ownership of all assets all business and information results and means for including the life-cyle of all these assets b. behavior on organization split: specify business and information services include content, quality, shape c. the same as (b), but then for critical chain dependencies a. ownership business results (baken pizzas, flour), information results (#bakings/order, MTBF, #wasters), means (3 experienced bakers, kitchen furniture incl replacements) b. BS pizza-delivery: <10 min, >90 C, #customer complaints < 0,5%. IS prognosticate pizza-baking-time: accuracy ± 5%, in pizzaml c. BS: order fresh ingredients Shared Service Center Bakery 14 7

8 Significant contracting items: examples RWS-Deltares (a) (b) (c) a. specify ownership of all assets all business and information results and means of the organization-part to be cut off include the life-cycles of all assets b. on organization-split: specify business and information services include content, quality, shape c. do the same as (b) for critical dependencies on suppliers item area example Rijkswaterstaat-Deltares a. ownership of the models for water behavior prediction (including maintenance, provision) and the software means supporting that; ownership of the delta research (publication time, IP, copyright) b. BS Advice: who is responsible to bring in knowledge on national legislation? IS: required data (like GIS, meteo, international water model data), required data-access (to prevent imperfect competition c. Deltares has to show on a per project basis it involves the relevant knowledge institutions in formulating their advice 15 What results did we achieve? What is the Return On Modeling Effort (ROME)? Construction Model has a precisely defined level of abstraction focus on domain modeling & scoping complete business transactions drafting Construction Model was fast 13 expert / 45 consultancy man days, for an area of 7.5 mio yearly turnover Construction Model was understood fast ¾ hours to explain for newbie managers Construction Model was a fast steering instrument ½ day in a Group Decision Support Session, using the calculated alternatives for the organization split splitting choices were underpinned easily and in consensus bottom-up or in terms of previously formulated principles a plausible organization splitting proposal could be calculated, using CM and graph-theoretical algorithms (minimum penalty, maximum modularity) using the CM as a structuring framework, contracting items for allying after the organization split could be systematically detected Using this EBSO-method works already 5 * better than existing methods 16 8

9 Conclusions and outlook open research questions more insight in the sensitivity of optimal organization splits for e.g. a missing information link or small differences in BI-weight is desirable would this instrument work as well in sectors with material production? how do organization splitting ICT splitting mutually depend? the need for well structured and fast methods for Splitting, Merging and Allying is increasing the potential for Enterprise Engineering in integrated and informed governance of the enterprise as a whole is emerging instead of either black-box business governance or white-box just ICT governance the Enterprise Architecture team / department should have sufficient mandate / trust to fulfill such a role in organization (re)design 17 References Op 't Land M, Dietz JLG (2008) Enterprise Ontology Based Splitting and Contracting of Organizations. In: Proceedings of SAC'08, Fortaleza, Ceará, Brazil, pages , ISBN: Op 't Land M (2008) Applying Architecture and Ontology to the Splitting and Allying of Enterprises. PhD-thesis Delft University of Technology, ISBN Op 't Land M (2008) Instrument for fast and effective splitting of organizations. Booklet, ISBN Op 't Land M (2008) Instrument voor snelle en effectieve splitsing van organisaties. Booklet, ISBN Op 't Land M, Proper E, Waage M, Cloo J, Steghuis C (2008) Enterprise Architecture: Creating Value by Informed Governance. The Enterprise Engineering Series, Springer, ISBN Martin.OptLand@capgemini.com 18 9

10 Leave your name / business card receive * a (NL/EN) management summary * as long as stocks last or the PhDthesis itself 19 10