Syncho Research 2008 ECM
What is an Enterprise ComplexityWhat is an Enterprise Complexity Model
Raul EspejoRaul Espejo
March 2008
Syncho Research 2008 ECM
Whats an enterprise complexity model?model?
it is an ingenious form of deploying resources to bridge the complexity gap between enterprise and environment. It is an extension pof the VSM and provides a heuristic to develop dynamic capabilities It is based ondevelop dynamic capabilities. It is based on variety engineering (see paper Enterprise C l it M d l)Complexity Model).
K i
Syncho Research 2008 ECM
Key issues
Explaining what is variety, Law of Requisite Variety and Residual Variety (Module 1)y y ( )
Introduction to complexity management; revision of VSM as discussed in Module 2revision of VSM as discussed in Module 2
Viplan Method; revision of 5 steps as discussed in Module 3
Enterprise Complexity Model as discussed in Enterprise Complexity Model as discussed in this Module (Module 4).
Methodological Issues
Syncho Research 2008 ECM
Methodological Issues
S t i f di ti i hi i ti t i i System in focus: distinguishing organisation, enterprise, primary enterprise, network, cluster, extended cluster and institution.
Network is a group of aligned enterprises driven by a primary t i ( Nik ) hi h i it lf i tienterprise (e.g. Nike), which is itself an organisation.
Cluster is group enabled by institution or enterprise, but members do not necessarily have alignment of their transformations (e.g. S i P k)Science Park)
Structural models are focused both on the organisations transformation and the enterprises transformation.
Variety engineering: variety operators and best practice (communications, transducers and performance)
Dynamic capabilitiesy p
Variety engineering
Syncho Research 2008 ECM
Variety engineering
h f ll i lid fi d l f i In the following slides we find examples of variety operators for enterprises in the network
( lifi tt t deconomy (amplifiers, attenuators and transducers)
The definition of variety operators depends on the transformation (named system) and
f i i (h i i hperformance criteria (how stringent is these criteria)
Enterprise Complexity ModelAmplifiers of Ent. variety Attenuators of Env variety Variety Balance
Syncho Research 2008ECM
Internal to enterprise In Operational Environment Enterprise
Org structure; pushing down t
Internet platform to support i ti b t
Lead enterprise interacting ith l b l k t th hautonomy
Resource centralisation, functional decentralisation
communications between customers and suppliers to work out e.g. equipment specifications
with global market through Regional Industrial Cluster (the Organisation)
specifications
External to enterprise External to enterprise Transformation
Subcontracting manufacturing globallyDistribution network
Bar coding customers behaviours to support sales.Blogging, market research
producing quality textiles for retail markets
In Operational Environment Internal to enterprise Performance
Internet systems to enable customers perform
Operational standardsDecoding suppliers and
KPI for supply chain management
enterprises transactions customers performance
1 A lifi f V i t th t
Syncho Research 2008 ECM
1. Amplifiers of Variety that are Internal to Primary EnterpriseInternal to Primary Enterprise
Strengthening the Enterprises Variety
Increasing the resolution of the
Creating new variety for the
Making the Enterprises variety
Enterprises Variety Enterprise time independent
Website linking Use of Web2 to R&D, future Use internalcustomers, suppliers and distributors.
target customers individually with a focused message
groups..
Developing
communicationsystems to respondqueries globally.
Marketing and communications
ff
(e.g. Amazon)
Regional and local ff f
Dynamic Capabilities
offices sorting offices for postage and parcels
OrganisationStructure
2. Amplifiers of Variety that are Syncho Research 2008 ECM
External to Primary EnterpriseStrengthening the Increasing the Creating new Making the g gEnterprises Variety
gresolution of the Enterprises Variety
gvariety for the Enterprise
gEnterprises variety time independent
Marketing companies supporting
Information technology companies dealing
Distribution centres
Enterprises
Call Centres ,Customer ServicesInternet operations,pp g
enterprise,
Outsourcing
p gwith enterprises transactions (e.g.banks, shares
pcontributing to network /cluster
p ,operating 24 hoursa day, 7 days a week. g
Post Office Branches
management )Global publicity
Banks paying social services benefits (amplifying socialservices)
3 A lifi f V i t ithi th
Syncho Research 2008 ECM
3. Amplifiers of Variety within the Operational Env. of Primary EnterpriseOperational Env. of Primary Enterprise
Strengthening the Enterprises Variety
Increasing the resolution of the
Creating new variety for the
Making the Enterprises variety
Enterprises Variety Enterprise time independent
Franchising: Regional Manufacturing Customers use of Regional enterprises selling locally the primary
enterprises adjusting the enterprises
outlets in cheap countries doing theenterprises
blogs creating public opinion about enterprise
enterprises offerings
offerings to local requirements
designs.
4. Attenuators of Variety within4. Attenuators of Variety within Operational Env. of Primary EnterpriseWeakening thestrength of theenvironmental
Reducing theresolution of relevant
Chopping off partsof theenvironmental
Makingenvironmentalvariety time
Atenuadored de environmentalvariety
relevantenvironmentalvariety
environmentalvariety
variety time dependant
Self organisation of Media managing Media selecting Rythmun ofSelf-organisation of agents in theenvironment: more variety absorption at
Media managinginformation in real time and byexception
Media selecting stories and constructing them
Rythmun of publications and reporting
variety absorption at the local level, lessresidual variety
exception
Government regulations: reducing restrictions, lifting , gconstraints
5. Attenuators of Variety that are5. Attenuators of Variety that are External to Primary Enterprise
Weakening thestrength of theenvironmental
Reducing theresolution of theenvironmental
Chopping off partsof theenvironmental
Makingenvironmentalvariety time
Atenuadored de environmentalvariety
environmentalvariety
environmentalvariety
variety time dependant
Blogging Screening agenciesfor personnel hiring
Blogging Media highlighting stakeholders and
Automatic check-inof passengers in air terminal
for personnel hiring
Market researchagency doing
stakeholders and customers views about enterprise for a short timeterminal agency doing
research forenterprise
a short time
6. Attenuators of Variety that are l hInternal to the Primary Enterprise
Weakening thestrength of theenvironmental
Reducing theresolution of theenvironmental
Chopping off partsof theenvironmental
Makingenvironmentalvariety time
Atenuadored de environmentalvariety
environmentalvariety
environmentalvariety
variety time dependant
Internal review of blogs and other
Clusteringenvironmental
Defining purpose for enterprise
Reducing contact periods withblogs and other
forms of stakeholders views
environmentalagents in categories.
market research
for enterprise
Model of Organisational
periods with customers and suppliers to opening hoursmarket research
done internallyOrganisational structure
Enterprise
opening hours
Enterprise complexity model
Operational model pof customers, suppliers and competitors