BPM Conference Portugal 2017 – Artificial Intelligence

BPM Conference Portugal 2017 is going to talk about artificial intelligence.

Artificial Intelligence (A.I.) is for the time being and important new domain to be discussed. As far I am concerned, perhaps the most productive debate we can have at the conference in the 2017 edition isn’t the one of good versus evil, the rise of the machines or singularity is near. The debate could be about the guidelines instilled in the people and organizations using A.I., something that cybernetics tried to push back in the 60’s.

Why the human element still matters?
At the same time that demand for efficient, transactional, prediction-driven workplace systems is on the rise, just look around you and you will realize that most of the interactions you have with companies or even to perform daily tasks – like find the better route to commute – have embedded intelligence and are context aware, taking into consideration your location, profile and transactional history. However, there are a set of skills we seemingly don’t want systems to perform. Despite new techniques like deep learning are denting our ability to prevent we will become dispensable, emotional intelligence is said to be among the fastest-growing job skills, and some experts say the ability to collaborate and listen thoughtfully can even protect your position and help advance your career over the next decade as automation progresses. This is probably the reason that contact centers were not totally replaced by robots. Yet.

Ultimately, humans and machines will work together, not against one another. This is already a reality. Imagine if human and machine work together to solve society’s greatest challenges like providing healthcare services, probably one of the areas on which we have seen the deepest progress, as well as, fighting insurgency and keep our cities safe. Other area that is being disrupted is transportation. Some car manufacturing companies are already assuming that in the future most of the people will not own a vehicle and autonomous commute will be a de facto-standard in high density population areas.
This is probably one of the most sensitive areas of discussion, but we will see that today we can do much better humans if we combine our work together with A.I. systems.
How to enforce principles in the design of A.I. systems?
I would argue that perhaps the most productive debate we can have isn’t one of good versus evil. The debate should be about the values instilled in the people and institutions creating this technology. We must enforce technology with protections for privacy, transparency, and security. A.I. must be designed to detect new threats and devise appropriate protection and must be inclusive and respectful to the human being. This put an extra challenge –  more than discussing on rules, policies and how to implemented coding, is the foundation principle on what is right and what is wrong. The definition of a concept, a domain, is a consequence of the surroundings, of the environment we live and the multitude of human principles and beliefs. What in a society can be accepted as a practice, in other can be condemned.
If in the future A.I. can bring transparency, in what kind of transparent society we want to live? Being transparent means you are not afraid of hiding your medical records because it can save your life, as also you are not afraid of exposing your earnings and tax situation. Becoming transparent will also contribute to avoid crime, bribery, and corruption? Or being transparent is the realization of the classic Orwellian apocalypse that looms and take control of our society? Anyway, from a solution design perspective it is necessary to define the particulars about data protection and security, among others, setting-up specific rules concerning the processing of personal data in the electronic communication sector. What people most often want is a sense of control over their data (even if they don’t exercise this control very often). Many people feel that this control is a fundamental human right (thinking of personal data as an extension of the self), or an essential part of your property rights to your data.
To that end, this is something we must debate during the event.
Will A. I. power the next industrial revolution?
Advances in technology is powering the next industrial revolution, basically blurring the physical and the digitaldivide. Technology is today omnipresent. Capitalizing on this phenomenon is the key to innovation. From the rise of A.I. and related technologies, the challenge and opportunity for business leaders is to harness the ubiquitous, disruptive force of technology to be more agile, fuel efficiency and ultimately shape the shape of the industry destiny. Definitely in this next industrial revolution, we are facing a range of new technologies that combine the physical, digital and biological worlds. Failure to understand how to embrace A.I. into operations and business models, may end up of being out of market.
Having said this, should companies do a deep dive with A.I. or not?
How can we put A.I. work for the goodness of our own society?
For healthcare, A.I. can advance recommend the most effective treatments for their patients, as well as, predict human body organs failure and increase our life expectancy.
For transportation, A.I. can improve the efficiency transportation systems, integrating supply chain on real time, prevent incidents, optimize the fuel consumption and safety and support maintenance of infrastructure.
For public safety, A.I. can deploy predictive models for crime and help security forces to find associations in massive amounts of information to spot insurgency and handle complex crime cases.
For financial services, A.I. can manage must better risk exposure, by ingesting millions of data segments used in risk models, reduce fraud and tax evasion, assist in providing the best insurance coverage at the right cost combining data provided by the customer and its relationships.
For individuals, A.I. can assist humans in developing personalized recommendations based on the stage of life the individual is, combining data about the individual preferences, beliefs and transactions.
In this globalized world, economy growth crucially depends upon the creation of new business models that rewards more effective outcomes and overall benefits to society. If business model innovation was always behind differentiation and competitive advantage, A.I. is for sure a technology can enable a more innovative society.

Digital Banks – Providing Banking Platform as Service

During the course of last two weeks, I was involved with a series of workshops with the IT department of a bank that operates in more than 30 countries. The workshops objective was to define a digital banking transformation roadmap.

During many years, for those that are involved in BPM projects have discussed the meaning of what is the definition of end-to end processes. One of the classic examples in the banking industry is when the account opening process ends. It ends when the account number is created or it ends when all the channels which the customer can consume financial services and execute operations are available and operative?

Today, opening a bank account trough a friction-less process is not a common desire. The wish of any customer that belong to retail banking is how it can construct the Bank of Me, how it can incorporate using the bank mobile app making transactions with 3rd parties, like a youngster paying the school fees, do social banking (transfers, borrowing from Facebook friends). Corporate banking, oriented to trading operations, which to integrate supply chain operations between, customers, suppliers, road haulage companies, combining the flow of documents, status of merchandise movement and money transfers.

Five years ago, under the new e-CMR regulation, there was the possibility in road freight to eliminate the famous paper based system (that still exists) and exchange information digitally between all the involved stakeholders – buyer, seller, transport company and banks [1]. The CMR is a document that underpins the legal transport contract between a seller, a transport company and a buyer. It ensures the goods were shipped and received accordingly, on which banks rely to wire the money between the involved trading parties. Without such a document, financial transactions are halted, supply chain document reconciliation is blocked, as well as financial close activities. Now, that piece of document travels physically in the truck. Some long haul trucks return to logistics head quarters every 15 days – because they need to optimise cargo utilisation, a key KPI for business viability – this means only when the physical CMR arrives to the logistics back office, payment processes between buyer and seller can start (digital copies are ignored, due fraud and contractual implications between the parties involved). In such kind of transactions there is room for optimisation and automation, but unless companies do not embrace the concept of open systems architecture is very unlikely that operations will suffer from the tangled syndrome.

The era of Open Socio-technical Systems

Fred Emery defined and evolved the concept [2] and defined such kind of systems as:

“Is a purposeful system composed of an interrelated social component (people, culture, norms,) and technical component (technology, tools, materials) which is embedded in a greater context, an environment, which the system is influenced by and also influences.”

Later, Merrelyn Emery [3] evolved the concept to “Socioecological” means:

“people-in-environments,” which is expressed by the concept of the open system […] expresses the transaction of system and environment, all components of which are governed by laws which are able to be known. “

Gartner [4] defines in the Magic Quadrant for Enterprise Integration Platform as a Service:

“integration platform as a service (iPaaS) is a cloud service that provides a platform to support application, data and process integration projects, usually involving a combination of cloud-based applications and data sources, APIs [5] and on-premises systems”.

Gartner single focus in the technical platform enablement plays the de-stratification of the Open Socio-technical Systems that goes against experimentation, multiplicity and intense social human interaction and important component of Open systems. When designing IT strategy, the peril for the CIO and the IT teams is to overdose the enterprise with integration technology and superpower the enterprise service bus, over-dosing on too much de-stratification decoupled from the new business models and human relationship management of digital banking.

Providing Banking Platform as Service

Exposing the Banking Platform As a Service – BPAaS, allows banking services to talk to other services. In this sense, leveraging on API allows you to open up data and functionality to other developers, to other businesses or even between departments and locations within the bank. It is increasingly the way in which banks exchange data, services and complex resources, both internally, externally with partners, and openly with the public.

BPAaS, can provide a common root so that transactions can flow from wherever they originate: mobile apps, integrations with clients, the client’s website or physical devices. All mapped into a strong ecosystems of partners that repurpose, resell and re-bundle assets to reach new customer segments – like the millennials – that the bank could never have reached alone.

Imagine for example, you want to offer a mortgage service coming from a real estate website or you want to open the possibility to customers subscribe financial products from 3rd party, like Brokers or the case were the bank can outsource loan services to partners keeping costs low. Providing the banking platform allows customers and partners to integrate them as a self-service adapted to their particular needs or bringing the reality of the Bank of Me.

Regulation want banks to embrace open ecosystems
The UK regulator, issued a report [6] that sates in the remedies section:

“mobile banking tools have been rapidly adopted, and a growing financial technology (‘FinTech’) sector is developing and applying new tools. Application programming interfaces (APIs) will allow publicly available data and customers’ own data to be shared with trusted third parties, and ‘open standard’ APIs can be particularly powerful (with necessary safeguards for security and privacy) in opening up new customer information and advice services.”


CMA states clearly about the importance of:

“development and implementation of an open API banking standard has the greatest potential to transform competition in retail banking markets […] by making it much easier for both personal customers and SMEs to compare what is offered by different banks and by paving the way to the development of new business models offering innovative services to customers.[…] APIs may also be used, with the customer’s informed consent, to share securely their transaction history to enable access to tailored current account comparisons and other services.”

As I pointed before in this post, banks can offer for example, in the retail segment, custom services like automated financial management based on your spending patterns, risk appetite and the phase of your personal life – before entering into labour market, in labour market, retirement – this is just a matter how soon banks want to enter in this new kind of business models before they are expelled from the market.

From a strategic point of view, some banks consider the remedy with a very strong dose or as a threat to their outdated business models. In my experience dealing with CIO’s and CEO’s from different banks is clear that the younger generations are much more prepared or already sparked business model transformation and look to this more as an opportunity. The generational gap – a self-acquired soft skill – can play a key role how the organisation perceives the way forward.


[1] Unfortunately, due protective measures related with entry in force of the regulation, most countries in European Union delayed the application of the new regulation, meaning that a cargo travelling from Portugal to Germany will only benefit from the electronic act when enters in Germany, meaning that all way down the road the paper document should exist to present to customs and other government authorities. In other terms, the digitalisation of the process is impracticable, an outcome that is still a reality.

[2] Magic Quadrant for Enterprise Integration Platform as a Service, Worldwide, 2016. […] “Integration PaaS delivers some combination of the capabilities typically found in enterprise service buses, data integration tools, B2B gateways, managed file transfer products and API management platforms. IT departments, line-of-business developers, mobile application development teams, application teams and even business users (aka “citizen integrators”) leverage these capabilities to develop, execute and manage integration interfaces (or “integration flows”).”

[3] Emery, Fred E. “Characteristics of socio-technical systems”, in Design of Jobs: selected readings, Davis, L. E. And Taylor, J.C. (Eds.), Penguin Books, ASIN: B013KQY62S

[4] Merrelyn Emery “The current version of Emery’s Open System Theory” Systemic Practice and Action Research.

[5] Application Programming Interface

[6] CMA – Retail banking market investigation. Summary of final report. August 2016

A Thousand Plateaus

On June 2014, I was at Enterprise Architecture Conference Europe in London to present my work on the theme of cybernetics, called Viable System Model meets Enterprise Architecture. During the preparation of the presentation, I was exposed to the concept of the rhizome, created by two French philosophers, Deleuze and Guattari, designed to bring some random pointers about complexity theory, deeply related with the challenges a cybernetician like to reflect on. The rhizome was brought to life in a book called A Thousand Plateaus, that according to the authors, was written in random mode. Every day, they decide in which part of the book they will work on with no direction, rejecting ‘the law of narrative order’, like Robert Musil’s masterpiece Der Mann ohne Eigenschaften (the man without qualities), that by coincidence, was one of my inspirations for the talk at the conference. I bought the book when I was in London but once I buy more books I can read, I only started to read the book these days.

A thousand plateaus is broken down is many directions, that I would like to point only some, as follows:

  • Epistemological – how the models we create to understand the reality are fit in terms of meaning, completeness and de-territorialization (what Deleuze and Guattari refer to the true meaning of systems out of context of operation);
  • Ontological – how the meaning of concepts evolve in a way they are the result of constant change;
  • Anthropological – how human beings are able to interpret signs that will tell about the necessity of change. A theme I explored with Amy Santee in February 2015, when I was in Seattle;
  • Social – how individuals can self-organize in a knowledge oriented world, contrary to Kant’s ideas of following the natural order of laws, rules, regulations and procedures.

The emergent self-organization is a matter in focus which is materialized in the concept of chaosmos, that explain the functioning of the universe as a meta-system composed of abstract machines, very well aligned with cybernetic principles. Exciting days are coming.

Machines are taking over me – II – cybersecurity

During last week I’ve been working in Nigeria with an Oil & Gas Company on defining an IT Strategy program to move to the cloud. One of the key topics of designing the IT strategy is related with the countries societal impact, that needs to fight with terror, insurgency, wash away corruption and institutionalized informal economy. For those that are not familiar with the country environment, it is commonly accepted under such an inequality standard, you can take loot or steal other’s assets, because the others, cannot live so large and leave so little to the rest of population. Hence, I am helping the organization I am working with to either establish or reengineer security command centres to consolidate their security programs, detect insurgency, theft, improve their risk management and loss of primary containment. Accomplishing these goals requires that the security command centre perform these key IT functions: have access to massive information sources, ingesting and processing such data in real time making sense of it; summarizing and presenting key data in a meaningful way that supports quick and effective responses to events as they happen in real time. To implement these functions, the organization must not only have subject matter expertise in security and a deep partnership with security forces (local law does not allow a company to have private security), but it must also have a technology foundation to support decision management, workflow orchestration, communication and collaboration, and data management and protection―all anchored on a secured hybrid cloud architecture.

The field threat environment continues to grow more dangerous like for example attacking pipelines, stealing crude oil or refined products, creating a twofold challenge for Oil & Gas companies and the Nigerian government. Not only must these organizations continually strengthen their protection of the data and systems they manage, but they also do not face stricter requirements to demonstrate that they have done so in accordance with the appropriate laws, regulations because simply they do not exist or are not properly designed, once the new government that took power on May 2015 is “putting the house in order” dealing with more important matters for the population, like end the fuel scarcity – currently in Nigeria, you need to wait on average 2 to 3 hours to fill up your car’s tank in what is the biggest African oil producer.
Anyway, from an architecture design perspective you need to define the particulars and complements the about data protection and security, among others, setting-up specific rules concerning the processing of personal data in the electronic communication sector – in the context of spotting insurgency, one of the data sources is text messages that the population can send, informing the oil & gas company and the military that there are signals that indicate a possible or the perpetration of an attack, as other approaches like live video surveillance feed is not available. As a result, by default, listening, tapping, storage or other kinds of interception or surveillance of communications and the related traffic data by persons other than users without the consent of the citizen concerned, except when legally authorized, is prohibited. The requirement for prior consent is extended to cover the information stored in users’ terminal, given that users have very sensitive information in their computers, smartphones and similar devices. Nevertheless,

How do you deal with the trade-off of enforcing data privacy and putting the population to abdicate from it for the benefit of the Oil & Gas company?

And from a change management perspective,

How do you convince the population to help you fight asset attacks, in a country where everyone is desperate to make its cut on a non-structured economy?

This is because, contrary of designing an advanced IoT business model, in let’s assume, a supply chain, in which truck drivers are rewarded – with airlines miles or discounts in retail shops- by contributing to fuel consumption decrease and safe driving, such kind of gamification strategy must be adapted to social programs to eradicate poverty, providing social services like education and health car of building basic infrastructures. Such gamification strategy, should part of the illusionary, misguided and wrong doing social responsibility corporate programs, meaning that in the end, it is the Oil & Gas company that must share a part of the profits for the IT Strategy work and be effective.

Enter into cybersecurity

This leads to the development and implementation a new IT capability, context-awareness, by the realization of a Context Awareness System, a sophisticated surveillance technology solution that aggregates and analyses public safety data in real time, providing security investigators and analysts with a comprehensive view of potential threats and criminal activity. Such a system protects population sensitive information by designing a series of internal security recommended practices and proprietary and advanced security tooling and technologies for monitoring and detecting advanced asset attacks and related intelligence.
This leaves me as an architect with a challenge in my consciousness, and as such, I would like to invoke one of the most magnificent quote from William Shakespeare’s – Macbeth

“Oh, full of scorpions is my mind, dear wife!”

For that explanation I need to borrow this quote from Frances Stonor Saunders at a London Review of Books talk.

“On the evening of 3rd of October of 2013 a boat carrying more than 500 Eritreans and Somalis founded out the tiny island of Lampedusa, in the darkness, locals mistook the desperate cries for help from the sounds of seagulls, the boat sunk within minutes, survivors were in the water for five hours, some of them close the bodies of the dead companions at float. Many of 368 people who drowned never made off the capsizing boat and were drowned to the sea floor still on board. Among of the 108 people trapped inside the bow was an Eritrean woman thought to have 20 years old were, as she given birth as she drowned, her waters have been broken in the water, rescue drivers found the dead infant still attached by the umbilical cord.”

We are facing a dilemma on how cybersecurity should be used for. On one hand these systems are used to fight and eliminate terror, protecting innocent lives to be taken, to protect company assets from being atacked and looted by contemporary pirates, but one the other hand, like in play, when Macbeth is explaining to his wife about the need to taking life to Banquo, and his son, Fleance, we cannot make a so selfish decision about abandon and condemning thousands of refugees to death, because the same kind of Context Awareness System cannot be used in preventing people to die. The political discussion about where the refugees should be steered to Europe of send back to their failed state countries, it not an argument about the responsibility of protecting human life only in the case where terror is being perpetrated, except when people are escaping and running away from the same terror source.
This something worth thinking about.

BPM meets virtual reality

During the nineties, I was a fan of a TV series called Wild Palms. It had a sci-fi plot that among many other things, brought the rise of a new media concept, holographic television, leveraged on sitcoms that would bring true reality to our living rooms. A decade later, the movie picture Minority Report, which main character played by Tom Cruise, suffer from the disgust of a son loss, projected over and over in his messy apartment, holograms of small video clips when his son was playing with him when he was a little boy.

On the personal side, holographic input can be seen to combat human anxiety about the sadness of lack of physical touch when people are alone, something that is being amplified as the expansion of globalisation and communications technology that displace us from face to face interaction. On the business side, it opens new opportunities for innovation, particularly in an era where we are suffering from the Everything as Everything disorder.

Everything as Everything disorder can be characterised to try engineer in a single system the full multitude of agents and their behaviour that constitutes complex adaptive systems, full of communication flow, natural selection, adaptation and evolution that are part of origins of our existence. This disorder is blooming to a point that some that say the next enterprise architecture frameworks are going to be tailored by Internet of Things.  During a period of time, where options were scarce, frameworks like TOGAF could provide guidance to design enterprise architecture, but with the possibilities that are unfolding, the classic exercises of building the architecture blocks will prove to be impractical, because they cannot cope with the variety of constantly changing information systems requirements. Enterprise Architecture will step forward to a strategic level, helping companies to shape transformation initiatives, while on the operational side, self-organisation will emerge as a way of continuously deliver business change. This only possible if you as a manager inspire all the capacities of your employees. Creating goals that employees believe in and are passionate about it. Running organizations where everyone is a manager a leader and a servant.

Microsoft broke the boundaries when it introduced Hololens, bringing virtual reality as a new way to work and interact with information in a holographic platform. Google took the first steps a couple of years ago when brought Glass to the market and will probably pursue next advances as I understood the Glass project was a new way to perfect a product in a controlled closed market environment with their selected by invitation only customers.

An holographic platform abstracts what the humans always struggle against it: the rigidity of a computer interface and user experience that was designed based on the constraints of the technology used to support work. How many of you fight against non-sense clicks, user space we could not change or a sequence of steps that contradicts the way we want to work because the IT system did not allow it? A holographic platform, breaks all the rules how people access information, collaborate, design their own working environment that fits their needs. It becomes a fully personal working experience. It is possible to create the Process of Me, no more links and tights to process definitions to dependencies of application architecture and interfaces, It becomes a truly natural working experience where workers collate, manipulate, share embed information, augment knowledge where every single objected is linked and related to construct the workers storyboard, automatically.

Break the rules, create your blue ocean and seize of the innovation opportunity

Ross Brown took a huge step ahead when he introduced 3D design and simulation. If there is a drawback when a team is trying to improve operations is the inability to learn to see the results of changes that are being introduced in regards to space dimension. Design thinking techniques brought and advance on the possibilities to see and imagine operations on top of the cold simulation tools, but there is a difference between imagining a discrete set of role-play cards and watch and feel the reality.
We are towards the blend of personal and business interaction. In the near future, there will not be any more distinction between work flows and personal flows, because humans want to have the liberty of defining the way they want work independently of the IT platform system or methodology. It is curious how memory can play some tricks on us, as I stumbled in a short post written in 2011, called Nothing will be the same, where I pointed out:

The user does not need to know how it works. He is sure that will work because cause effect linkage in systems is build-in.

Ontologies providing meaning to the data manipulated thus no one needs anymore to learn the company domain and environment meaning and from it is connected stakeholders because is automatically translated into other business environment.

People will be over connected naturally without the need to request for connection.

BPM Conference Europe 2014

This year I was there to present a session called Viable System Model meets Enterprise Architecture that you can find the script here and this is my takeaway from the event co-chaired by Chris Potts and Roger Burlton that make an effort to keep the event out of the conferencenext big thing “hype cycle”.

Kick off

Roger Burtlon opened the event with a key note about how difficult is to sell BPM and Enterprise Architecture to decision makers. According to his point of view, professionals make it to difficult, because BPM / EA is perceived like a worn out approach. It’s the same old story of creating process oriented organization, centers of excellence, defining process owners, maps, kpi’s and alike. Believe it or not BPM is still understood as the movement that started during Business Process Re-engineering heyday and stopped in time, as also, those old management approaches that mature and crystallized inside of amber and ultimately become fossilized. On top of that, new management generation is not identified with the backbone of BPM (a very fine exploration was given by Paulo de Carvalho at BPM Conference Portugal) – and as such, it fails to get traction.

To overcome the barriers of adopting BPM / EA it is necessary to position the disciplines more strategic oriented. For example: if an utility company want to increase customer intimacy, how that should shape the things to come in order help the consumer to keep energy consumption low, even if is at the expense of increasing the rates during winter but at the same time helping the customer with practical help to cut the energy bill and extending collaboration with regulators, government agencies and construction companies to build intelligent buildings.

The rise of a new role
During a session I learned about a new role in enterprise architecture that was apparently coined by CISCO: the Culture Architect. It have among other responsibilities to shape the culture of the humans resources and make humans aligned with the values the company want to achieve. I could not disagree more with the loom of this concepts. It appeared to me the resurgence of a discussion during Business Analysis Conference 2012. As I pointed out:

I’m tempted to say that like in other profession and in life Analysts are what they want to be. The trick is how you become a linchpin during your path on earth. Finding new ways to think, to structure. Thus stand up a make a difference. Every day of your life.

Hence, the same applies to “whatever” architect. I tend to think the more roles are created, more difficult to make change happens and contradicts the spirit of the so called Culture Architect. This position was also defended at the panel managed by Chris Potts by part of the audience. Arguments like, “why Architects don’t concentrate in Architecture and help organizations change, rather than creating a network of specialists that block change happen” erupted. As a matter of fact, I remember once upon a time, I attended a meeting to present an analysis that was done to a process. During that meeting, some important causes were presented regarding the lack of knowledge diffusion, putting the process on it’s knees. Every time a solution that was necessary to be built to solve a customer problem, it was designed from from a scratch. At the end of the debate, I wanted to talk about the possibilities of making some changes in the way operations were executed and the customer’s team manager replied that changing the process was the responsibility of the process designer team, once the team I was having the meeting with were process analysts. If you want to shape the culture of the organization, let the human resources to their work, like in SONAE that act as role modelers in this kind of field expertise.

Why sometimes predefined frameworks don’t work

I always had the opinion that using best practice, predefined frameworks can (sometimes) bring more hurt, noise and a hike in the effort to comply with the framework when you are thinking in your business and make transformation occurs, that it is more smart if you construct your own framework that talks your business language. For that purpose it is possible to build it on top of an existing one without offending purists.

I loved the presentation called European Air Traffic Management Architecture – Using EA techniques in the SESAR Program, part of the Eurocontrol’s Single European Sky. It involves regulators, service providers, airports managers, space organizations, military and civil aviation . They created a custom enterprise architecture approach called European ATM Architecture (EATMA) to create a pragmatic and common language for communication purposes. The method and language was built using NATO frameworks and TOGAF and covers time elements, core elements, behavior elements, interaction elements and information / data elements, spread across the custom layers like: capability, operations, programme, service and system. This is the living prof that not everything must be modeled using Archimate and TOGAF oriented.

Viable System Model meets Enterprise Architecture

This post is the expanded script of the session I will present at the Enterprise Architecture Europe 2014 next week. It was based on the previous collection of writings about Enterprise Architecture [1, 2,3,4,5,6] and this post called Der Mann ohne Eigenschaften

The Guinea Pig where this method was developed is the Portuguese Engineering Council. Is the regulatory body for the Engineering Profession that have the dream to go DIGITAL. We will come again to that dream later.

Created in 1936, the Ordem dos Engenheiros (OE) is aimed chiefly at contributing to the progress of engineering, by stimulating efforts of its member scientifically, technically professionally and socially and to strive for compliance with the rules of professional ethics.
As a public association, which represents the Portuguese engineers, it is tasked with several functions, among which the support for the personal and social development of these professionals, by promoting the engineering title and profession, as well as the cooperation and solidarity between its members and committing itself in the defence of a prestigious Engineering Council and high-quality, demanding and rigorous engineering

Despite the message of the President is eloquent, the great and critical mission  is to assure that members are what is called a “De-facto Engineer”. The ones that can hold such a title, are qualified to execute engineering acts, I mean, they can and are held accountable for designing bridges, critical systems that control refineries, natural equilibrium of habitats and  spatial planning. Hence the Engineering council it haves a critical mission vis-à-vis with the society and our own human existence, assuring that when the council evaluates a candidate or a member and assure that she or he is entitled to design and conceive a system to control a refinery it means that the person actually have the skills to perform such a quest and will not put in jeopardy the surroundings where the refinery operates.

Doing Enterprise Architecture in layers can deviate from what truly matters

The fact that when we listen talking about Enterprise Architecture, it seems that it is all about intangible concepts, I mean, people talk about the WHAT Architecture is, what is the concept and the metaphors, but never talk about the HOW to do it. The real value of the discipline is how does it helps managers to make strategic decisions, like entering new business, what kind of customer experience should the company provide, how operations should designed, what kind of technology we should use and so forth. If that it is not the case and we continue to talk about concepts, managers will not buy-in the need to architect. Let me bring an example: if there is a merger between two companies that operate in retail, that become to operate both in youngsters and premium segments, while in the mainstream sector we can outsource manufacturing in China, for the premium brand, we need to find manufacturing facilities that are close to the distribution centres and have deep knowledge how to manipulate garments. In the end we can share the same space in the warehouses were the goods are being distributed to the shops. This must be thought.

The challenge is not about the fact that modelling is a wrong thing, the problem lies when such models impose a way of doing things, in other words, a model is neither true of false (most of he times is false), it is more useful or not.

For example, when we look to the Admission and qualification management of members process, the example that somehow will drive us during the presentation this is all about a candidate achieve the official title of engineer, this is about how you control the anxiety of the candidate. Why? Because if in the end she or he does not get such a title it means that the candidate it’s out of the labour market. It’s just that so simple. It is important that the candidate can interact with the Council using a Smartphone (or not, as we are going to see in the next minutes), but if we cannot during the admission process inform how the application process is running and in the end, the Council only communicate if there is success or not and in the case there is no success, because it was not complied a particular request, the candidate must restart everything from the very beginning, we are not doing enterprise architecture, even if we have the best mobile technology.

The VSM System

VSM had in mind to understand a enterprise as a system. If an enterprise is not understand as a system, managers cannot change it with any kind of predictability. The model, consists of environment and a system. The environment is the one the organization operates, related with the industry sector (or multiple industry sectors) the enterprise is in. It have five subsystems that I am not going on details on it (because the principles how they operate are more important that its own definition), the system exists independently if the enterprise have multiple line of business or not (one of key characteristics, together with autonomy, is it’s recursive nature that like fractals, can be solely applied to a particular activity):

  • System 5 – Policy – The system provides strategy and business direction, but the same it’s true for a process. In this context, the process, Management of Disciplinary Matters have the purpose of assuring that any member does not break the rules of ethics and does not executes engineering acts that she or he, was not qualified for that purpose.
  • System 4 – Intelligence – Measure results perceived by the market (environment) absorbs the internal performance, balances mismatch, sense the future and provides guidance for adaptation. This exists strategically, as also operationally.
  • System 3 – Integration – Managing and control operations, provide resources in order to operate (money,humans, equipment, systems).
  • System 2 – Coordination – As defined, it was a balancing act between multiple operations in order to reach equilibrium, called homeostasis, like managing a complete supply chain (i.e. you get an order from customer and managers and operators can make it through delivering it according to schedule and have fully visibility of what it’s happening balancing the counter forces that act against it, the need to process and deliver the other customer orders).  It also sets up the rules, the procedures the guidelines that “prevent” operations from deviation. It’s function it’s not to control is damping oscillation.
  • System 1 – Operations – Where products are manufactured, where services are provided.

All systems are vital to viability, then there is no meaning to be “more important”

Stafford Beer

Design and Diagnosis for Sustainable Organizations - Jose´ Pérez Ríos

Design and Diagnosis for Sustainable Organizations – Jose´ Pérez Ríos

VSM Guiding principles

One of the most important principles of VSM is Viability: “To maintain a separate existence”. To be viable, translating into a different kind of words, it is related “to be economic viable”, in this case study, to be viable as an organization, means members pay memberships and the volume of memberships cover and exceed the costs.
VSM sits of the top of an abstract concept referred “a system is viable if is able to cope with variety”. Variety is linked how complexity is measured and as such variety is measured with all the possible states of a system can be (in order words think about working variants of business process that can be infinite). They key is not to calculate all the possibilities because that is absurd, no, again, limiting information flow, operational variants will filter our capacity to operate to understand and to adapt, to live and to be viable. Is curious how these new concepts that are emerging about adaptive case management loomed to the fact that normalization and standardization could not cope with unpredictability, complexity and variety. Deconstructing the philosophical side of the method, think how an airline deals with the flood of tweets requesting assistance coming from passengers. If it ignore the tweets, decreasing variety or do not answer the tweets, not absorbing variety, will let the customers down, frustrated and next time they will choose other airline.

The other important principle is the recursive system theorem. In a recursive organization structure, any viable system contains and is contained in a viable system. VSM is a recursive system of systems at each level of recursion (like fractals, imagine what is dividing a square in 4 squares and so forth) there is a system that have its own existence. This is the reason why when companies merge or demerge, they continue to exist in the very short term (they continue to be viable). The recursion principle also sets up that all the approach into the full enterprise, to a line of business, to a value chain to a business process to an activity.

The case study

The strategy of the Engineering council was going digital. This was the main strategic focus of the organization. According to top management, they could not continue to rely about the lack of information technology to support business operations. Despite, there was a member portal where they could submit requests, most of the operations were handled by e-mail, spreadsheets and legacy databases (today this is called the personal cloud). This is the typical starting point of about a good project to help an organization to make a shift.

There were two important challenges I would like to stress:

  • The first is the digital paranoia. We all agree that the digital is becoming the way to operate. Companies that were already born in this new era had the possibility to develop very different business models that challenged mature markets, like for example what happened when zip car was bought by Avis (and these days Uber is eating taxi drivers share). But painting this organization fully digital can harm some of the members, the ones that are “digitally impaired”. The council have a long tradition of existence. Some of the older members like civil engineers around their 60’s and older, are not very familiar with the operation of a Smartphone. You can hear from these grownups “before I could operate any telephone, today with this new phones, some you need to swipe left to right, others it’s top bottom, I get confused how to use it”. You can question “but they are engineers, don’t they have an e-mail, they don’t know what an app is?”. Well it turns out that they do not. This constraint have a huge impact about how we will interact with these kind of members. Meaning, phone lines need to be available to customer support, because they don’t know how to operate in self service mode, because they prefer face to face interaction.
  • Again, I stress that the moto of this project (“that is reflect in the slide deck was at reach of a click or a touch”) needed to be slightly redefined.
  • The second most important aspect is that according to the strategy plan (not what you are looking at, because this is just a part of it), there was an intention to setup an engineering observatory. That observatory had as main objective, understand the future trends in engineering and the impact that it will have in the future of engineering at large and particularly in the country, like for example what kind of renewable energy sources should the country adopt and other themes like smart grids. This is like a think tank. We got excited about it once this pure VSM’s system four, but working on reverse, because the results direction were pointed to the society.

What business are we in?

If there is a strategy, if there is a guide and that is clearly understood, the next step should be about the catalogue of business services that we will provide to the stakeholders.  In other words WHAT the organization does.

Ask yourself: “what are the services we will provide?”

But, a business service is associated with a value. If there is no perceived, again, perceived value by the stakeholders, you have “ghost” services just to please someone in the organization (or justify a place in the organizational diagram).

So again, Ask yourself: “What are the services necessary to deliver value to the customer ?”

Before going into details, make a reflection on the what should be, like for example a State.

As you know, the Portuguese State, as well others were under a program of direct aid from the IMF and the European Union. During the financial aid program, it was attempted by the government (I’d say it was only a formal act, poorly done, that public opinion never cared about it) to create a script on the reform of State. In this script, the focus was the balance between a minimal state and a state where everything is universal, from a state where education to health care is provided by private companies and citizens have to pay for it in exchange for less taxes or the same services are public, universal, free, which implies an increase of the tax burden. It is precisely this type of exercise that organizations have to do about the “WHAT “.

Instead of creating 500 boxes and arrows, we need to identify what are values to be delivered to the stakeholders.

A value comes with a result. There is a big difference distinguishing between an output and result. A result of a business process is what is perceived by a customer, let me bring an example:

An insurance company that a customer celebrates an insurance policy is an output, if during an accident or an issue, the insurance company legally defended the customer, assured mobility or health care it delivers a result. Hence, the customer feels in fact, insured (the value).

When the team made a reflection about the most important values to be delivered to the stakeholders, the top three of the list were:

  • To be a “de-facto” Engineer (we already talk about that in the introduction of the case);
  • Be protected of Engineering acts, it means that the Engineer is protected against intellectual property, and the society is protected about the accountability regarding whom executed a particular engineering act when had a negative impact;
  • Provide Technical collaboration, related with acting as advisors on engineering domain expertise (for example how to implement smart cities).

Based on these results it was built a relationship network, of the necessary business services that should exist to assure that set of values could be accomplished. It resulted that:

  • Membership services: related with admission requests and renew or canceling the membership status and technical qualifications related with the membership;
  • Trainee academia: necessary to assure internships (for those that just finished their degree);
  • Professional Training : specialized training that the council provides to its members;
  • External relations: necessary to setup partnerships with third party enterprises (like for example if you have an account in this bank and you pay your quotas trough it, the member get a discount);
  • Protocols and partnerships: that is the extension to cross sell services regarding the partnership that were celebrated, and;
  • Events and venues: services directed at large to the society engineering related, or, specific topics to the engineering themselves.

As you can see, we have here the foundation of the business architecture, this is the core. This is done doing a very deep reflection about the values to be delivered, contrary of adopting predefined frameworks and going through endless interviews about what people do, what people should do, doodling models, etc.

Defining Value trough Services - Professional Association

Defining Value trough Services – Professional Association

Define the value chain

To build a value chain, as we saw, it must be defined first the services of the organization, what the organization is the “WHAT”. For each service there must be a process that “realizes”, operationalizes the service. The service is attached with value.

In the end we wrap up all the services and as you can see there is now a proper place about the observatory of engineering. This service is not a representation of the VSM system 4, is under system thinking theory,  “a system is what is does” and if it is necessary to understand the future of engineering there must a be a place for that. We will come back to that latter.

The definition of the value chain is based on several important principles :

There should be a value chain for each line of business, however, some of the services / processes may be shared. For example, a conglomerate that is in engineering and construction, waste treatment and renewable solar energy business, should have 3 distinct value chains. Processes such as Procurement and Recruitment should be shared with some variations according to the specific business line of business. Creating multiple value chains, based on the cybernetic principle of recursion and autonomy, the organization as a system, is itself constituted by other organizations.

  • Each service must be supported by at least one process . If there only exists in your imagination, you have fillers. Delete them.
  • Do not try to “best fit” value chain models in your business . Although models such as generic SCOR eTOM, APQC are a starting point to reflect on what processes a company should have, are normally contrary to the specific nature of the business model.
  • Do not decompose services or processes to a level of infinite granularity. Don’t do capabilities maps. For example, let’s consider a Procurement Process. What is the value for a manager knowing that you have to specifically improve the way payments are made to suppliers, because this is the cause of the delay in closing the accounts and makes the financial statements take more than 10 days to be published? This information should be part of the Business Case of the improvement project. To the manager, is only necessary to know that the procurement process must be improved.

Process Architecture

For many years we have heard how BPM eliminates silos within companies, because when designing a process it goes through the various departments and the communication barriers are broken, as also, the formal reporting and hierarchical pyramids tend to fade. I tend sometimes to believe this harmonic operation (I am fooling myself), but as soon the organization overcomes the organizational silo syndrome it starts to suffer from the process silo type. The old organizational silos, became  the new process silos, because there are no dynamic linkage between processes. The lethal variety attenuator is ignorance (Beer). And such we are putting in danger the understanding of an organization to be viable.

First principle of the organization. Managerial, operational, environment varieties diffusion tend to equate.

Stafford Beer (Adapted)

One of the important aspects when modeling architecture is reflecting in the high-level diagrams that were previously created. In this perspective, we see that within the realm of “Membership” service, the value expected to be achieved is that engineers are “de-facto” engineers . This is our purpose. In this sense, lets dwell on the Admission and qualification management of members process.

These are the basic principles needed to assure process viability, within the maximum recursion level as VSM defines (from process, sub process, activity and tasks).

  • On purpose. This process is responsible for assigning the title of Engineer or “de-facto Engineer”, i.e. , have the skills necessary to design and build bridges or designing information systems that are responsible for the management of nuclear plants. The way the skills assessment is carried is very detailed and we will not expose it here (it can be formalized in a BPMN diagram if you like), just to provide some insight includes among others, after receiving the application for admission: Evaluate the completion of the degree of Engineer; Undertake a traineeship, Present a traineeship thesis; Create technical reviews, etc.
  • On a proper environment. This particular process have a very unique environment. It is the society. Very few organizations whose own environment is so vast and simultaneously as critical. In the field of engineering, we can be dealing about risks of human life. A poorly designed bridge falls. A poorly designed automobile can cause accidents. Within this large specific environment, candidates are members within each specialty colleges (mechanics, electricity, construction, biology, etc).
  • On the boundaries.Identifying the vertical boundaries is one of the most important aspects of attaining viability, based on the intangible and philosophical fact that many times is quoted that “only variety absorbs variety” and people don’t understand it’s meaning. Absorbing variety, information flux to reason and adapt, means it is necessary to setup dynamic communication channels between operations in a way they can process information. If we limit the way communication flows, because we tend to think they are useless, we are killing the opportunity of adaptation. On the other hand this will prevent bigger oscillation, damping the business (putting shock absorbers) occur when there is a truly dynamic interaction between business processes that tend to equate, rather than set them isolated (process silo mentality) and become uncontrolled. This is typically System 2 prescribes, the homeostasis.

An organization is basically self organizing. All systems are interconnected.

Stafford Beer

Vertical boundaries. The vertical boundaries are about the nature of interaction with other processes , whether internal or external to the organization. As mentioned earlier in this article  we have to eliminate the risk of the silo effect. If you have already set the high-level architecture of services and the value chain, it is easy to define the interactions with other processes. In the case of process “Admission and qualification management of members” interactions are:

  • Partnerships Management. Because after the admission of the member, you are offered the possibility of obtaining a package of services offered by external entities under preferential conditions.
  • Training Management. The Engineering Council offers a catalog of specialized training in that members may be interested in signing up . This catalog of training is normally open to members and non-members, hence for the purposes of assigning specific qualifications related to acts of engineering , it is important to intimate relationship between the process of training management before, during and after the candidate has been admitted.
  • Internship Management. In some cases, it may be envisaged that the candidate has to undertake an internship, particularly if it’s getting out of high school and does not have professional experience.
  • Management of information and complaints requests. The member can complain about decisions made during the application process.
  • Management of disciplinary matters. Before, during or after the admission of a new member, questions about the profession can be raised. It is important that if complaints about fraudulent acts, prevent the member admission or accelerate member demoting.
  • Quality Management. The assessment of member satisfaction during the admission process is an important aspect of consultation about members needs and expectations.
Vertical boundaries

Vertical boundaries

Horizontal boundaries. The horizontal boundaries are about the nature of interaction with stakeholders . One of the biggest mistakes of process design is to ignore who are the real stakeholders. There is a tendency to ignore them, if there is no direct interaction in execution mode, for example, in the particular circumstances of the case “Admission and qualification management of members” there not a single activity to interact directly with the headquarters of the Engineering Council, since the local branches have total autonomy. However, the headquarters exercises control mechanisms in terms of applicable polices and internal regulation (some are adaptation of national laws) but have particular interest in the number of new admissions and “desertions”, as also it have a particular interest to constitute technical groups that provide services to enterprises or government agencies. The stakeholders of this process are:

  • Members ;
  • Technical committee that evaluate the proposals;
  • Entities that offer the possibility to perform a traineeship;
  • The Board of the local branches and the Board of the National Engineering Council. Regarding this particular Stakeholder, I would like to stress that they are not even involved in the process, they do not interfere, but they are very keen in order to figure it out what kind of women and men the Council is made of, in case they need to participate in technical committees to help the government to make decisions. For that reason, that must be an open channel about the kind of members, their expertise, interests, past and current projects that they are involved.

Feedback mechanisms, regulation and control. In some organizations the lack of rules and monitoring capacity and visibility is critical and must be given the relative importance of these aspects. Here is here an organization meets Business Intelligence, Dashboards and KPI’s but it is truly important is the algedonic channel.

What resources are needed? This is pure System 3, what is called the bargaining process. Human , systems , equipment, facilities. The way VSM was conceived during the mid 60’s – 80’s of last century fits in the budgeting process. Although this classical process still exists in the majority of organizations what is important here is to highlight more than having the right resources to run, is the qualification (skills and ability) authority (delegation of duties) to perform. Dietz in the Ψ theory, expressed clearly in the operation axiom about the three conditions that an actor must have to be able to play its role in a process and that based on what we already mentioned above:

  • Authority: The actor can perform a particular activity on behalf of an organization in a process. Authority can be delegated.
  • Competence: The actor has the necessary knowledge to perform the role? If it is a Controller, has a background in finance and accounting to understand whether the entries in the financial statements are correct?
  • Responsibility: By virtue of the values, culture and policies of the organization one represents, is expected to exert the granted authority in a responsible way.

These architectural principles of process that I leave here listed here are vital to achieve operational stability, eliminate the process silo effect and is headed towards system engineering thinking and ensure the viability of the organizations, instead at the expense of creating a company of heroes.

Algedonic channel

In this case we are talking about the lack of applications for membership or membership cancellation. Being a member of the Engineering Council implies pay memberships fees. These fees are the main source of revenue of the organization (the other businesses that can be seen in the value chain (like advertising) are waste, if you delete the revenue coming from membership and perform an acid test, the organization enter in bankrupt mode in the next day).

Technology architecture

Theoretically, all the acts produced across the organization are recorded (despite this is somewhat far from the truth). Hence data (that constitutes the information architecture) is the mirror of what occurs during process execution (independently if it’s automated, normalized, ad-hoc, adaptive, etc). Today, we are headed towards the digitalization of all data as a consequence of the new norm that is, organizations are becoming digital. Hence, the data explosion phenomena, however, there is still data on paper as also data that it is deleted.

Using that amalgamation of data, actors should have the opportunity to infer, reason, make decisions, the expression of our intellect, that is the reason of being the “Information space” – (how knowledge is diffused) that ultimately supports the own existence of the corporation.

The information layer, called by Dietz the datalogical world, is the “fossil” of what occurs in the organization as a result of executing business operations. Information is the fuel that drives business processes; their flow generates value to the user.

Analysing the nature of coordination acts will allow us to identify the informational entities that will build the master data dictionary and will shape the application landscape. It will define what kind of data is necessary for each actor to create and consume during activity execution.

An Informational Entity is: any person, place, concept, thing, or event in the context of the business, about which information is necessary to keep the informational attributes of the entity itself. For example, the informational entity Customer has the attributes: “Number”, “Name”, etc.

Hence, by identifying the informational entities (that can also be redefined as business entities or as Archimate puts it, a Business Object) we are defining what kind of information, actors (humans, machines, systems) will need to access to accomplish its job they have been authorised to by the use of enterprise applications that process such kind of information intake. For example: an invoice is used when making payments, but also when analysing the customer orders history. The invoice will be also used in multiples applications like Billing, Accounting, Recommendation Engines (by retrieving the products that belong to the lines of each invoice in order to cross sell).

Building Information Architecture – identification of informational entities

The process to identify informational entities is bidirectional. Top-bottom, looking to what is the intake during process execution, and bottom-up, looking to the existing applications identifying what is attached to it. Luckily in this example we are working on the top of blank sheet of paper, meaning that most of the existing applications will be erased and we do not need to concentrate in the bottom-up approach. Still, a word of caution: neglecting what the current applications do regarding for example creating and updating informational entities, may cause extreme conflicts in data governance, data quality and confidence by the actors when accessing data. For example: a Controller cannot expect that a Customer balance report includes invoices are on due, but the billing application already processed payment.

The process is pretty straightforward. Start looking to each process that belongs to the value chain in a high level terms (don’t try to detail it, don’t go for BPMN diagrams, at maximum, keep it decomposed into high level steps or sub processes as you like), identify the main activities executed and question what informational entities actors should create, consume to succeed achieving the process results. Identify if during executing process, the informational entity is Created, Read, Updated or Deleted. The CRUD operations should be not seen as database operations but as Application Services that the an Actor invoke.

You should have as a result of analysing a business process, like admission and management of members something like this picture.

Informational Entities of the - Admission and Qualification Management of Members process

Informational Entities of the – Admission and Qualification Management of Members process

This way it is possible to create a puzzle that intersects the processes against the informational entities. The first exercise will result in a very high cluttered board as illustrated. The end result through the application of a set of heuristics will create application clusters.

Intersects the processes against the informational entities after heuristics processed

Intersects the processes against the informational entities after heuristics processed

The application architecture have what I would call very straightforward, most of applications are very clear taking into consideration its purpose, process oriented by bicephalous BPMS / CMS running on top of the secondary “line of business” applications.

One I would like to point out that its particular important, but it’s importance does rise on the diagram is the WIKI.

The observatory of Engineering that relied heavily on the wiki that the critical mission of dealing with engineering variety. Here is a good example about how a viable system can deal with variety. Let me bring this scenario: how to understand the impact of drone use in agriculture? Questions rose like:

  • How to operate in order to make effective crops?;
  • What about data collection, like images that rise privacy issues?
  • And what about licensing to fly?

How to study and bring this challenges to society?

The wiki have three main missions:

  • Support Task forces: “everyday”, it is necessary to create a task force on a specific topic. It can be around creating standards or acting as a liaison with standards agencies, understanding the changes of legislation and alike and its impact, it can be a focus group that develops new engineering methodologies it can  be applied on everyday engineering, it can be a collaborative environment about the thinking of engineering and it is applied for example in schools. This is truly necessary to support the observatory of engineering.
  • Knowledge Repository: the externalization of tacit knowledge in order to become explicit and help members to find answers that are not documented. For example lawyers like to write books about the interpretation of the law to help other professionals to reason an make decisions on that, but that is not practice in Portugal due to the fact that there is no publishing industry that supports that outcome.
  • Experts discovery. When it is necessary to find someone that participated in a project / task force or have a particular skill in a domain expertise is critical to make invitations or interact in order to resolve  particular matter. Constructing a social network on top of an ontology is critical to put the people working to make the best teams.

The law of narrative order as an adequate way of construing the meaning of enterprises does not apply anymore. The challenge is to decipher the meaning of the futuristic way of do Enterprise Architecture that Stafford Beer created that this case study is a living example.


[1] – Pedro Sousa – Enterprise Architecture Alignment Heuristics –  http://msdn.microsoft.com/en-us/library/aa480042.aspx
[2] – Enterprise Ontology – Jan L.G. Dietz –  Springer – ISBN-10 3-540-29169-5