Enterprise Engineering Larry Whitman whitman imfge twsu edu 316

Enterprise Engineering Larry Whitman whitman@imfge. twsu. edu (316) 691 -5907 (316) fax Industrial & Manufacturing Enterprise Department The Wichita State University http: //www. mrc. twsu. edu/enteng Enterprise Engineering

IE 880 I Text Ø The Great Transition : Using the Seven Disciplines of Enterprise Engineering to Align People, Technology, and Strategy ä by James Martin ä Hardcover - 503 pages (September 1995) ä AMACOM; ISBN: 0814403158 Ù Also, significant outside articles will be assigned. Enterprise Engineering

IE 880 I - Topics Ù Overview of Enterprise Engineering (3 weeks) ä Basic overview of what is enterprise engineering and its benefits. Students will learn the advantages of Ent. Eng and associated terminology and philosophy. Ù IE 880 I - Exam 1 - February 5, 1999. ä Test will be closed book/notes - fill in the blank/essay format. ä One hour long, then we begin the next topic. Ù We will have class Feb 26, 1999 Ø Dr. Mahlzahn will be guest speaker on Activity Based Costing Enterprise Engineering

What is an Enterprise? An Enterprise is a complex system of cultural, process, and technology components. . . Enterprise . . . a system engineered to accomplish organizational goals. Enterprise Engineering

What do Engineers do? Design things! Same as other engineers, Enterprise Engineers design things. Only their thing is the enterprise Engineering

Systems Approach Environment System Enterprise Goals input External Suppliers Your Supplier output Your Process feedback People Tools Machines Enterprise Engineering Your Customer External Customers

Today Ù Martin Chapter 3 -5 Ù IE and IT Article by Davenport and Short Ù Ent. Eng: A Discipline? Article by Liles, et al. Ù Verndat Chapter 1 Enterprise Engineering

Wrong use of Automation (Chap 3) Design How can we automate what already exists? Replace to make fundamentally better Enterprise Engineering

Wrong use of Automation (Chap 3) System must fit the users and not the reverse? Not always, frequently the users must change their ways in order to maximize profits from automation Enterprise Engineering

Redesign, then automate! Ù Little change, little payoff Ù Big change, big payoff Ù A small change with some payoff may mean it is much more difficult to make the right change later. Enterprise Engineering

Russell Ackoff Ù “If each part of a system, considered separately, is made to operate as efficiently as possible, the system as a whole will not operate as effectively as possible. Enterprise Engineering

Martin Ù “It is appalling how many authorities on “business process reengineering” advocate modeling and modifying an existing business process when the right thing to do is scrap the process and take an integrated approach to building cyber-crop value streams (discussed later) Ù Raise questions about … overall architecture, culture, and IT Enterprise Engineering

Electronic Organism (chap 4) Ù As systems become more complex, the design of these systems must be automated. Ù Automation of Automation Ù Reaction times shrink, complexity increases, decisions become less intuitive. Enterprise Engineering

Key concept Ù JOINT creativity of business and computer people Enterprise Engineering

Architecture - Martin Ù “The architecture of an enterprise is the basic overall organization within which work takes place. Ù Note how this compares with later definitions Enterprise Engineering

Ent. Eng Definition (Martin) (Chap 5) Ù … an integrated set of disciplines for building or changing an enterprise, its processes, and systems. It integrates the most powerful change methods and makes them succeed. The goal is a humantechnological partnership of maximum efficiency in which learning takes place at every level. (Martin) Enterprise Engineering

Goal of the Enterprise Engineer Ù “Identify and integrate the most valuable and successful ways to change an enterprise, and to take them into a professional discipline with a teachable methodology and measures of effectiveness. ” Enterprise Engineering

What do Enterprise Engineers do? ÙIdentify and Integrate best and most successful ways to change an enterprise Engineering

What do Enterprise Engineers do? Ù Two aspects Ù Understand new mechanisms Ø New ways of organizing work Ø New Corporate Architectures must be understood Ù Understand methods that can change an enterprise Engineering

Two questions Enterprise Engineers always ask Ù What should the enterprise be? Ù How do we get there from here? Enterprise Engineering

Seven Components of Enterprise Engineering

TQM, Kaizen Ù Continuous change applied across an enterprise Ù Kaizen - Japanese term for continuous improvement Ù Everybody improves everything all the time If it aint broke don’t fix it! Enterprise Engineering

Procedure Redesign Ù Discontinuous reinvention of existing processes Ù Quick hit Ù Low lying fruit Enterprise Engineering

Value Stream Reinvention Ù Discontinuous reinvention of “end to end” streams Ù Breakthrough improvement for the CUSTOMER Enterprise Engineering

Enterprise Redesign Ù Discontinuous redesign Ù Holistic change to a new world architecture, sometimes accomplished by building new business units of subsidiaries. Enterprise Engineering

All for changing processes Ù Simplifying work Ù Improving results Enterprise Engineering

Simplification of Work (note order) Ù Eliminate (bureaucracy and non-value added) Ù Simplify (work flow, etc. ) Ù Work Smarter Ù Reduce Middlemen (eliminate) Ù Refine IIS Ù Automate Automation Enterprise Engineering

Strategic Visioning Ù What is a vision? Enterprise Engineering

Strategic Visioning Enterprise Engineering

Resisting the Tide of Change “Doing your best is not enough. ” W. Edwards Deming You must know what to do, how to do it and be willing to pay the price to do it. Enterprise Engineering

A Disciplined Planning Process Define Purpose Vision, Values, Mission Understand Environment Issues, Concerns, Assumptions Determine Outcomes Goals Identify Risk Obstacles Plan Act Do Check Enterprise Engineering Evaluate Alternatives Assign Actions Strategies Objectives

An Iterative Process Strategic Purpose Environmental Assessment Management Commitment Focus on the customer Enterprise Engineering

A Disciplined Planning Process Define Purpose Vision, Values, Mission Understand Environment Issues, Concerns, Assumptions Determine Outcomes Goals Identify Risk Obstacles Plan Act Do Check Enterprise Engineering Evaluate Alternatives Assign Actions Strategies Objectives

Do You Need a New Purpose? Ù Confusion about where organization is going Ù Complaints about inability to contribute Ù Losing customers Ù Not current on the latest developments Ù Use of “We” and “They” Ù Excessive risk avoidance Ù Difficulty in describing improvement Ù Hyperactive rumor mill Enterprise Engineering

Purpose Values Customer Expectations Mission Vision Activity Output/ Outcome A Process Input Enterprise Engineering

Vision RIP Humanity is grateful that someone who so adored their species lived among them RIP I would rather be here than in Philadelphia What do you want said? Enterprise Engineering

Vision What the organization ASPIRES to become Enterprise Engineering

Vision Statement Ù Appropriate Ù Inspiring Ù Directing Ù Focusing Ù Guiding Ù Unique Enterprise Engineering

Vision Statement A vision statement can be used as a marketing tool as well as an inspiration to employees: Ford's vision: Quality is job 1. ADM's vision: Supermarket to the world If the vision motivates employees, it will influence customers. Enterprise Engineering

Mission What the organization SHOULD be doing Enterprise Engineering

Mission Statement Broadest strategic planning choices of what the organization should do • Products/services • Markets • Customers • Competitors Enterprise Engineering

Values Guides the organization’s BEHAVIOR Enterprise Engineering

Values Ù Communicates what is and what is not right Ù Provide context for decision making Ù Enduring Ù Widely shared Enterprise Engineering

Values Statement Ù Based on values of organization Ù Commits resources to achieve vision Ù Not a slogan Ù Lived everyday Ù Drives behavior of employees at all levels Enterprise Engineering

Statement of Purpose "We will create a corporation in which all people, particularly technical employees, are respected and are able to work to the best of their ability. " "We will not imitate the products of our competitors, but will try to create goods that have never existed in our market before. " "We will focus on the consumer market and apply the most advanced technology to the consumer products area. " Sony Corporation, 1946 Total Assets: $500 I know those guys! Enterprise Engineering

Assignment For your own (pretend) company, develop Ø Vision Ø Mission Ø Values Enterprise Engineering

A Discipline? Ù Article by Liles, Johnson, and Meade 1996 Ù Industrial Engineering Conference Enterprise Engineering Research

Characteristics of a Discipline Enterprise Engineering

Focus of Study Ù Unique fundamental question Ù Must be meaningful as technology changes Ù Enterprise Engineering - “how to design and improve all elements associated with the total enterprise through the use of engineering and analysis methods and tools to more effectively achieve its goals and objectives Enterprise Engineering

World View Ù Paradigm Ù Guides the discipline through research and practice Ù Enterprise Engineering Ø Enterprise can be viewed as a complex system Ø Enterprise is to be viewed as a system of processes that can be engineered both individually and holistically Ø Engineering rigor is required in transforming an enterprise Ù Enterprise CAN be engineered Enterprise Engineering

Reference Disciplines Ù Supporting disciplines must be discovered and assessed not merely adopted. Ù Allows other researchers to follow the links for the grounding of theories Enterprise Engineering

Principles and Practices Ù Principles - Define philosophical approach to problem solving Ù Practices - methodologies, models, procedures, and theories used to apply knowledge Ù Theory - sound principles Ù Abstraction - modeling or representation Ù Design - synthesis - iterative generation and evaluation of alternatives Ù Implementation Enterprise Engineering

Active Research Agenda Ù Hypothesis generated and tested Ù Multiple subquestions Ù Examples: Ø Ø Enterprise Transformation Methodology Strategic Justification Methodology Ontology Development Virtual Enterprise Architecture Enterprise Engineering

Education and Professionalism Ù Conferences - ISEE Conferences Ù Journals - IIE Transactions, Special Issues Ù Curricula - UTA, Toronto, Edinburgh, Australia Ù Professional Society - ISEE Enterprise Engineering

Disciplines - Summary Enterprise Engineering

The New Industrial Engineering Ù Article by Davenport and Short Ù Sloan Mgmt Review Summer 1990 Enterprise Engineering

IT and BPR Ù IEs use IT in Manufacturing Ù IEs now penetrate offices Enterprise Engineering

The New IE Ù Recursive View of IT and BPR How can IT support Business Processes? IT Capabilities BP Redesign How can business processes be transformed using IT? Enterprise Engineering

What are Business Processes? Ù … a set of logically related tasks performed to achieve a defined business outcome Ù A set of processes forms a business system Ù Characteristics of business processes Ø Customers - recipients of outcomes Ø Cross organizational boundaries Enterprise Engineering

Redesign with IT - Five Steps Ù Develop Business Vision and Process Objectives Ù ID Processes to be Redesigned Ù Understand Measure the Existing Process Ù ID IT Levers Ù Design and Build a Prototype of the New Design Enterprise Engineering

Types of Processes Enterprise Engineering

Management Issues Ù Management Roles - commitment even through across functional boundaries Ù Processes and Organization Ù Skills - new ones required Ù Continual Organization Improvement Ù IT Organization in Enterprise may change Ù Continuous Process Improvement Enterprise Engineering

Vernadat - Text - Definitions Ù CIM - integrates man and machine by: Ø facilitating communication Ø cooperation Ø coordination Ø across departments Ù JIT - reduce procurement delays and stock Ø assumes good integration of info and good logistics Ù Lean manufacturing - minimize product devlopment costs by elim NVA, outsourcing, org changes Ù Concurrent Engineering - integrating all departments to make things better, faster, cheaper Enterprise Engineering

Vernadat - Text - Definitions (cont. ) Ù Enterprise - within the bounds of the company Ø intra-enterprise integration Ù Extended Enterprise - beyond the bounds of the company Ø inter-enterprise integration Ù Agility -adapt quickly (able to respond to unanticipated change) Ù Virtual Enterprise - Extended enterprise on a temporary basis. Ù Hetarchical organization - autonomy Enterprise Engineering

Reasons for CIM Failures • Top Down Approach • One massive project • Too Complex • Bottom Up Approach • Integrating Piece-by Piece • Islands of Automation • Failed to consider people Enterprise Engineering

Loose Integration vs Full Integration Ù Loose Ø simple exchange of info Ø no guarantee of same interpretation Ø ex. Dedicated interface Ù Full Ø specificities are known only the one system Ø two systems contribute to a common task Ø two systems share the definition of items exchanged Enterprise Engineering

Horizontal vs Vertical Integration Ù Business viewpoint Ù Horizontal - from “dock to stock” Ø technologically dependant Ù Vertical - various mgmt levels Ø decision flow Enterprise Engineering

System/Application/Business Int Enterprise Engineering

Model What? Ù Ù Ù Products Resources Information Organization (and decisions) Business Processes Human (effects) Enterprise Engineering

Role of EM Ù Prereq for enterprise integration Ù History Ø integration of data and info Ø really business process coordination Ù integrating infrastructure Ù enterprise model - semantic unification Enterprise Engineering

Problems with EI/EE Ù Cost (unclear) Ù project size and duration Ù complexity Ù management support - does not clearly relate to strategy Ù skilled people Enterprise Engineering

Next Week Ù BPR Ø Hammer and Champy Book Ø Article by Meyer, de. Witte Enterprise Engineering