Strategic Modelli ng for Enterpr ise Integration

Eric YuUniversity of Torontoyu@fis.utoronto.ca

AbstractThe successful application of advanced information technologies andsystems relies on a good understanding of the target organizationalenvironment. Modelling techniques are needed for expressing complexsocial and organizational relationships and to help reason about them.

The i* modelling framework supports the modelling of strategicrelationships among organizational actors. Actors depend on eachother for goals to be achieved, tasks to be performed, and resources tobe furnished. Networks of strategic dependencies can be analyzed foropportunities and vulnerabilities. Means-ends reasoning is used tohelp explore alternatives. Examples at different levels of enterprisemodelling are given.

1 Introduction

The use of appropriate modelli ng techniques is crucial to thesuccess of complex systems. The vision of enterpriseintegration is predicated on the complex inter-working of manyhuman, organizational, and technological systems. Models forenterprise integration therefore need to provide features that canexpress complex organizational issues as well as technologicalones, and to support their analysis and design reasoning.

Today’s enterprise environment is a fast-paced one, withfrequent changes in business relationships and organizationalstructures. Work processes are being redesigned on an ongoingbasis to adapt to changing conditions. Current techniques forenterprise modell ing cover a wide range of capabiliti es[Vernadat97]. For example, in comprehensive frameworks suchas CIMOSA or GERAM, the need for modelli ng and analyzingfunctional, informational, resource, and organizational aspectsare recognized and supported. While these models can providea quite elaborate description of an enterprise as it exists (or as itshould be, if the models are interpreted prescriptively), they donot provide a good way of describing or understanding why it is(or should be) the way it is. Knowing the reasons behind theactivities and structures of an enterprise is necessary for adeeper understanding of how it operates, and for assessing itsstrengths and weaknesses. This deeper understanding will allowan enterprise to be more adaptive and resili ent, to be able torespond to exceptions and to accommodate departures fromestablished routines, with actions directed at the achievement ofobjectives. More significantly, having an explicit understandingof the “whys” can improve the abili ty of an enterprise to evolvesmoothly and swiftly. On the one hand, a successful enterpriseneeds to be constantly looking out for better ways to achieve itsobjectives, taking advantage of new technologies and methods.On the other hand, it needs to keep rethinking its objectives andstrategies to respond to external conditions, while making gooduse of its internal resources and capabiliti es. To complement the

existing types of enterprise models, we need models that canhelp recognize opportunities and vulnerabiliti es, explorealternatives, assess their implications, make tradeoffs, and targetstrategicall y significant issues.

The understanding of “whys” can be assisted by models thatexplicitly represent and deal with goals. One way to understandthe structuring of a complex enterprise is in terms of a means-ends hierarchy of goals [March58]. However, complexorganizations typically do not have a single set of coherentgoals. The goals of an organization need to be traced to thegoals of individual members and groups, and these are shapedby each other and by external forces. The attempt to modelgoals in an enterprise amounts to mapping and analyzing thecomplex web of strategic relationships among the many playersin an enterprise and in its environment.

In this paper, the i* modelli ng framework for supportingstrategic reasoning in organizations is described. Organizationsare viewed as consisting of semi-autonomous units called actors.It is assumed that the behaviour of actors are not fullycontrollable or predictable, but are regulated by socialrelationships. Actors have freedom of action within these socialconstraints. Most cruciall y, actors depend on each other forgoals to be achieved, tasks to be performed, and resources to befurnished. By depending on someone else, an actor mayachieve goals that would otherwise be unachievable. However,a dependency may bring along vulnerabiliti es since it can faildespite social conventions such as commitments. The explicitrepresentation of goals allows the exploration of alternativesthrough means-ends reasoning. A concept of softgoal based onthe notion of satisficing is used to provide a flexible interactivestyle of reasoning.

2 Modell ing Strategic Actor Relationships andRationales -- the i* framework

The i* modelli ng framework consists of two types of models– the Strategic Dependency (SD) model and the StrategicRationale (SR) model.

2.1 Modelli ng intentional relationships among strategicactors – the Strategic Dependency model

The Strategic Dependency (SD) model is a graph, where eachnode represents an actor, and each link between two actorsindicates that one actor depends on the other for something inorder that the former may attain some goal. We call thedepending actor the depender, and the actor who is depended

upon the dependee. The object around which the dependencyrelationship centres is called the dependum. An actor is anactive entity that carries out actions to achieve goals byexercising its knowhow. In the SD model, the internal goals,knowhow, and resources of an actor are not explicitly modelled.The focus is on external relationships among actors.

Figure 1 shows an example of a Strategic Dependency modelrepresenting a hypothetical organization. It shows dependencyrelationships among organizational units such as marketing,engineering, production, and corporate management, as well aswith the customer. Four types of dependencies aredistinguished. In a goal dependency, the depender depends onthe dependee to bring about a certain state of affairs in theworld. The dependum is expressed as an assertional statement.The dependee is free to, and is expected to, make whateverdecisions are necessary to achieve the goal (the dependum).The depender does not care how the dependee goes aboutachieving the goal. For example, Marketing depends onEngineering to have a product designed. Engineering has thefreedom to choose how to do the designing, as long as the goalof getting the product designed is achieved.

In a task dependency, the depender depends on the dependeeto carry out an activity. The dependum names a task whichspecifies how the task is to be performed, but not why. Thedepender has already made decisions about how the task is to beperformed. Engineering depends on Production to produce theproduct according to some process, described in terms ofactivities and sub-activities, and possibly constraints amongthem, such as temporal precedence. (The graphical notation ofthe model only names the tasks. The contents of the tasks aregiven in the symbolic version of the model.) Note that a taskdescription in i* is not meant to be a complete specification of

the steps required to execute the task. It is a constraint imposedby the depender on the dependee. The dependee still hasfreedom of action within these constraints. In the example,Production’s freedoms are also constrained by the “Conform ToDesign Specs” dependency from Engineering, as well asdependencies from other actors.

In a resource dependency, the depender depends on thedependee for the availabili ty of an entity (physical orinformational). By establishing this dependency, the dependergains the abili ty to use this entity as a resource. A resource isthe finished product of some deliberation-action process. In aresource dependency, it is assumed that there are no open issuesto be addressed or decisions to be made. For example,Engineering treats Product Concept as a resource fromMarketing, and the Customer treats the final Product fromProduction as a resource.

In a softgoal dependency, a depender depends on thedependee to perform some task that meets a softgoal. Asoftgoal is similar to a goal except that the criteria of success arenot sharply defined a priori. The meaning of the softgoal iselaborated in terms of the methods that are chosen in the courseof pursuing the goal. The depender decides what constitutessatisfactory attainment (“satisficing” , [Simon83]) of the goal,but does so with the benefit of the dependee’s knowhow. In theexample organization, Profitabili ty, Fast Development,Manufacturabili ty, and High Quali ty are issues negotiatedbetween the relevant actors. They are modelled as softgoaldependencies. For example, Corporate Management’s softgoaldependency on Marketing for Profitable Products indicates thatManagement chooses among the different ways whichMarketing believes can achieve profitable products. IfMarketing is given the freedom to decide, this relationshipwould be modelled as a (hard-) goal dependency.

These dependency types are used to indicate the nature offreedom and control in the relationship between two actorsregarding a dependum. The model also provides for threedegrees of strength of dependency: open (uncommitted),committed, and critical. These apply independently on eachside of a dependency. These distinctions are described in[Yu95a].

The SD model is used to express the network of intentional,strategic relationships among actors. These relationships areintentional in that they deal with the desires, expectations, andcommitments among organizational players. They are alsostrategic in that they indicate the opportunities that are availablefor actors to take advantage of – by making use of the abiliti esof other actors, and at the same time, the vulnerabili ties that theactors will be exposed to, if the dependencies fail . Actors canassess the desirabili ty of alternate configurations of relationshipswith other actors according to what they consider to besignificant to them. The viabili ty of a dependency can beanalyzed in terms of enforceability (Does the other actor dependin return on me for something, directly or indirectly?),assurance (Are there other dependencies on that actor thatwould reinforce my confidence in the success of thatdependency?), and insurance (Do I have back-ups or second

actor

goal dependencytask dependencyresource dependencysoftgoal dependency

LEGEND

Figure 1: A Strategic Dependency model

sources in case of failure?). Strategic dependencies can beanalyzed in terms of loop and node patterns in the graph.Examples have been given in [Yu97b].

The generic concept of strategic actor outlined above can befurther differentiated into the concepts of role, position, andagent [YM94]. A role is an abstract collection of coherentabiliti es and expectations. A position is a collection of roles thatare typicall y occupied by one agent. An agent is an actor thathas concrete manifestations such as human, hardware, orsoftware, or combinations thereof. Agents, roles, and positionsmay also be composed into aggregate actors.

Majchrzak et al [MW96] describes the importance of workerand management mind-set in changing from functionalorientation to process orientation. They studied a number ofU.S. electronics manufacturers to identify success factors inreengineered process organizations. Their results indicated thathuman, social, and organizational factors were critical. Oneexample was the need to base rewards on unit or groupperformance rather than on individual performance alone.Figure 2 shows how the successful reward structure of oneorganization can be depicted in an SD model. The plantoperator – modelled as a position – covers the two roles ofPerforming Task and Improving Performance. Performance isidentified by management as including individual performance,group performance, plant performance, and customersatisfaction. All these components are reinforced by havingmonthly bonuses tied to each of them separately. Note that it isthe physical agent – the human employee – who depends on

management for the bonuses. In order for the workers toeffectively improve performance, they need to haveperformance indicators available on each of these fronts. Theseinformation need to be accurate and up-to-the-minute, so thatworkers can take corrective action quickly. Management alsodepends on performance information, but they can be in moreaggregate form for the purpose of monitoring and bonuscalculation. This example illustrates how the modelli ng ofhuman and organizational issues can lead to requirements oninformation systems – both functional requirements (e.g., whatkinds of information to collect and to send from whom towhom) and non-functional requirements (accuracy, timeliness,etc.).

The strategic and intentional nature of relationships withexternal actors such as customers and suppliers can also behighlighted and analyzed using i* modelli ng. For example,IKEA’s reliance on customers to do final assembly at home andto do their own delivery involves not only changes in workflow,but also new expectations on each others’ roles. In particular,this arrangement would not work unless Ikea’s products are easyto assemble and easily transportable by the customer (Figure 3).

2.2 Modelli ng the reasoning behind strategic relationships –the Strategic Rationale model

Whereas the Strategic Dependency model focuses onrelationships between actors, the Strategic Rationale (SR) modelprovides support for modelli ng the reasoning of each actor aboutits intentional relationships. The SR model is a graph whosenodes are goals, tasks, resources, and softgoals. These may beconnected by means-ends links or task-decomposition links. Agoal may be associated, through means-ends links, withmultiple, alternative ways for achieving it, usually representedas tasks. The means-ends links for softgoals, however, requiremore differentiation because there can be various types ofcontributions leading to a judgement of whether the softgoal issufficiently met (“satisficing” ). These include make, break,help, hurt, positive, negative, and, or, unknown, and equal[Chung98][Mylopoulos92]. (In the graphical notation of thecurrent prototype tool in Figure 4, the first six contribution types

agent

position

role

LEGEND

Figure 2: A SD model showing reward structure for improvingperformance, based on an example in [Majchrzak96]

Figure 3: Some strategic dependencies between IKEAand its customers

are indicated as +sup, –sup, +sub, –sub, +, and –). Task-decomposition links provide hierarchical decomposition of tasksinto subtasks, subgoals, resources, and softgoals that make upthe task.

Figure 4 is an SR model showing some of the reasoningbehind possible ways of operating a furniture business. Thebusiness is taken to consist of three parts – marketing,manufacturing, and design and engineering, modelled as threeroles. The overall task of marketing is decomposed into threesubgoals. These subgoals can be met in different ways. Aconventional furniture store might advertise on television or innewspapers about the attractiveness of the store and its products.Another way – central to the Ikea concept – is to distributecolourful catalogues widely so that they not only promote theimage of the store, but provide detailed product information tohelp customers visualize their homes with selected productseven before they visit the store. To achieve the goal thatProducts Be Sold, a conventional store might hire sales peopleto persuade customers of their products desirabili ty andsuitability to the customers needs. Another way is simply toprovide detailed information about products to enable customersto make choices.

To get products transported to customers’ homes, the storecan offer a delivery service, but then must meet customers’desire for convenient delivery times since someone needs to behome to receive the delivery. Alternatively, the store canpromote the concept of self delivery by the customer. From thecustomer viewpoint, either Delivery By Store or Pick Up BySelf can meet the goal that the Product Be Transported Home.Self Pick Up contributes positively to Lower Service Cost, andalso decidedly offers Quick Availabili ty of the product at home.For Self Pick Up to work, the product needs to be transportableby the customer. This is something that can be offered byDesign and Engineering. One approach is to let the customer dothe final assembly at home. This contributes to lower productcost, which contributes to lower overall cost to the customer.Successful home assembly, however, depends on clearinstructions and ease of assembly of the product.

Furthermore, it has been argued that self pick up and homeassembly increases satisfaction by giving customers a greatersense of involvement in the process of setting up their homeenvironment [Normann93]. The success of the Ikea concept isattributed to a radical rethinking of the dependency relationshipsbetween furniture maker and furniture buyer. Ikea depends onits customers to perform two key tasks traditionally done for

Figure 4: A Strategic Rationale model of some reasoning behind relationships between IKEA and customers

customers – final assembly and transportation. The two tasksare now shifted to the customer side, resulting in lower costsand higher customer satisfaction. However, this shift isworkable only if accompanied by other requisite dependencies,such as ease of assembly and transport. These issues can beidentified and analyzed using the SR model.

An SR model provides analysis in terms of notions of abili ty,workabil ity, and viabili ty. It supports the raising of issues, theidentification and exploration of alternatives, recognition ofcorrelated issues (good and bad side-effects), and the settling ofissues. Generic knowledge codified in terms of methods andrules provide semi-automatic support from a knowledge base.An additional component supports the identification ofassumptions and their justification [Yu95a].

3 Related Work and Discussion

Existing enterprise modelli ng languages are surveyed in[Vernadat96] and [Vernadat97]. The need for a goal/objectiveconstruct was recognized in [Smart97]. The Action Workflowapproach [Medina-Mora92] [Schael97] also pays attention to thesatisfaction of “customers” , but does not analyze the network ofstrategic relationships or assists in the exploration of alternatives[Yu95b]. The incorporation of i* into an overall enterprisemodelling framework such as CIMOSA is being investigated[Petit97].

Unlike in most other enterprise modell ing techniques, the SDand SR models need not be complete. For example, a taskdecomposition does not need to exhaustively enumerate itsconstituents. The purpose of the model is to highlightstrategicall y significant elements and issues that would have abearing on choosing among alternatives from an actor’s point ofview.

Strategic modelli ng and analysis can be applied at variouslevels in an enterprise. At the business process level, the variousactivity steps and their dependencies can be analyzed, not onlyin terms of information and material flows and temporalrelationships, as is usually done in conventional models, but alsoin terms of their strategic relevance to overall end-to-endbusiness process objectives [Yu96]. Strategic modelli ng thatexplicitly deals with goals and motivations are especiallyimportant for understanding human and organizational issues[Yu97b]. Degrees of freedom and control, discretion andinitiative, incentives and rewards -- these are important factorsthat contribute to the success and failure of business processes.

Strategic modelli ng at the individual and work group levelallows these issues to be explicitly identified and reasonedabout. Strategic modell ing and analysis applied to theinformation systems requirements level would allow systemsdecisions to be related more effectively to the goals ofstakeholders and business objectives [Yu97a].

At the enterprise level, the strategic relationships amongdifferent potential configurations of players in a value chain ornetwork can be modelled and analyzed. A producer consideringdisintermediation by bypassing distributors or retailers mightconsider the roles played by these intermediaries and why they

have been effective in the past, and to recognize emergingopportunities.

As Internet technologies and electronic commerceinfrastructures become more established, many businesses arereexamining their boundaries and relationships with theircustomers, suppliers, and other constituencies. The i* modelsoffer a systematic approach for examining and analyzing theserelationships.

4 Conclusions and Ongoing Work

This paper has argued that modell ing the intentional andstrategic relationships among organizational actors offers a wayfor understanding and analyzing complex organizational issues.The i* framework provides a set of concepts that complementexisting approaches to organization modell ing.

In this paper, the i* models have only been presented in termsof a graphical notation. The modelling framework is alsosupported by the Telos modell ing language which providesknowledge base management facili ties, including structuringmechanisms such as classification, generalization, aggregationand time [Mylopoulos90]. A software tool to support i*modellng and analysis is being constructed. The i* approach isbeing tested in the field at a telecommunications company.

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