Enterprise modelling

Enterprise modeling is the process of understanding an enterprise business and improving its performance through creation of enterprise models. This includes the modelling of the relevant business domain (usually relatively stable), business processes (usually more volatile), and IT.

Overview

An enterprise model is a representation of the structure ("things" and relationships), activities, processes, information, resources, people, behavior, goals, and constraints of a business, government, or other enterprises. Thomas Naylor (Naylor,T. 1970) defines a model as ". . . an attempt to describe the interrelationships among a corporation's financial, marketing, and production activities in terms of a set of mathematical and logical relationships which are programmed into the computer." These interrelationships should (according to Gershefski) represent in detail all aspects of the firm including ". . . the physical operations of the company, the accounting and financial practices followed, and the response to investment in key areas" (Gershefski,G. 1971 : 44).

"Program"ming the modelled relationships "into the computer" in not always necessary: enterprise models, under different names, have existed for centuries and were described, for example, by Adam Smith, Walter Bagehot, and many others.

The RM-ODP reference model identifies enterprise modelling as providing one of the five viewpoints of an open distributed system. Note that such a system need not be a modern-day IT system: a banking clearing house in the 19th century may be used as an example.

The modelling of the enterprise and its environment could facilitate the creation of enhanced understanding of the business domain and processes of the extended enterprise, and especially of the relations -- both those that "hold the enterprise together" and those that extend across the boundaries of the enterprise. Since enterprise is a system, concepts used in system thinking (see, for example, (Weinberg, 1982), or, more generally, works by Bunge, for example, (Bunge, 2003) and by Hayek, for example, (Hayek, 1967)) can be successfully reused in modeling enterprises.

This way a fast understanding can be achieved throughout the enterprise about how business functions are working and how they depend upon other functions in the organization.

Types of Enterprise modelling

Economic modelling

The modeling of the enterprise network could facilitate the creation of enhanced understanding of the business processes of the extended enterprise and relations that extend across the boundaries of the enterprise. A particularly effective form of enterprise modelling is concerned with the definition of statements of purpose and the derivation of human activity systems. In an organisational context these Human Activity Systems become conceptual Enterprise Models, whereas in a programme and project management context they are known as Programme Blueprints, each representing what needs to be done to achieve the stated purpose. Enterprise models derived in this way are useful tools for conducting organisational reviews, information analysis and business systems alignment.

Soft Systems Methodology (SSM)

Enterprise modeling has been developed as a variant of Soft Systems Methodology by Brian Wilson. He also developed an Enterprise Model entitled Vision Realisation in support of the Office of Government Commerce's (OGC) methodology for programme management, i.e. Managing Successful Programmes (MSP) and applied his approach in a large number of public and private organisations, e.g. MoD, NHS, DWP, British Telecom, BAE Systems, Hachette Livre UK, etc.

Other techniques

There are several techniques for modelling the enterprise such as Active Knowledge Modeling, Process modeling (CIMOSA, PERA, LOVEM, DYA, etc.), Object-Oriented Modeling, Integrated Enterprise Modeling (IEM), and modelling the enterprise with multi-agent systems.

See also

*Enterprise architecture
* Synchronization and Management of Different Distributed Enterprise Models
*OBASHI The OBASHI Business & IT methodology and framework

References

Further reading

* Ambler, S.W. (2003). [http://www.agiledata.org/essays/enterpriseArchitecture.html Agile Enterprise Modeling] .
* Ambler, S.W. (2005). [http://www.agilemodeling.com/essays/enterpriseModelingAntiPatterns.htm Enterprise Modeling Anti-patterns] .
* Bagehot, Walter (1873). Lombard Street: A Description of the Money Market. New York: Scribner, Armstrong & Co.
* Bunge, M. (2003). Philosophical Dictionary. Prometheus Books.
* Hayek, F.A. (1967). Studies in Philosophy, Politics and economics. University of Chicago Press.
* Gershefski, G. (1971) "What's happening in the world of corporate models?", "Interfaces", Vol 1, No 4.
* Naylor, T. (1970) "Corporate simulation models and the economic theory of the firm", in Schrieber, A. (editor) "Corporate simulation models", University of Washington Press, Seattle, 1970, pp 1-35.
* Rosenkranz, F. (1979) "An Introduction to Corporate Modelling", Duke University Press, Durham NC, ISBN 0-8223-0426-0
*cite book | author=Swan, Jonathan | title=Practical Financial Modelling, 2nd Edition | publisher=CIMA Publishing | location=London | year=2008 | id=ISBN 0-750-68647-2
* Vernadat, F.B. (1996) Enterprise Modeling and Integration: Principles and Applications, Chapman & Hall, London, ISBN 0-412-60550-3
* Weinberg, G. (1982) Rethinking systems analysis and design. Little, Brown, and Company.
* Wilson, B. (2001) Soft Systems Methodology, Conceptual Modelling and its Contribution, Wiley, ISBN 0-471-89489-3
* Wilson, B. (1980, 1990) Systems: Concepts Methodologies and Applications (2Ed), Wiley,