With thanks to John Morris (@JohnHMorris) and Michael Poulin (@m3poulin) for their valuable comments.
An updated version of the article is available at https://bpm.com/blogs/post-platform-enterprise-pattern-faster-and-cheaper-inter-enterprise-ecosystem-business
WHY
In the modern business world, the vast majority of work is done by joint efforts of two or many enterprises. Inter-enterprise “working together” is a norm right now. It may have different longevity: one-off or sporadic or permanent (as B2B partnership). Can such “working together” be used systemically? For example, a modern enterprise is trying to get competitive advantage by
- perfecting, digitizing and innovating its core-business capabilities, and
- using the best “other” enterprises for provisioning “other” capabilities needed to achieve the particular goal (even its mission); note that, those “other” capabilities for the enterprise point of view are the core-business capabilities from “other” enterprises point of view.
In other words, an enterprise may combine its own “internal” capabilities with “external” capabilities obtained from other enterprises to achieve the particular goal.
Thus every enterprise involved is carrying out only its core-business capabilities! This is a big difference with the current situation in which some of enterprise’s capabilities (i.e. core-business) must compete in the world-wide market and some of enterprise’s capabilities (supporting) have no competitor at all.
The economist Ronald Coase - said that “Firms exist when the transaction cost of doing something within the firm, even with all its overhead, is lower than cost of doing things through a marketplace of free agents”. At present, an enterprise possesses core-business capabilities and supporting capabilities. Historically, the cost of intra-enterprise transactions is lower than the cost of inter-enterprise transactions. At the digital age the costs of inter-enterprise transactions are constantly dropping as digital technology develops (the so-called "API economy" is a good example of this). Of course, the cost contracting out versus direct management is only one of many factors such as risks, time lag, security, etc. to be taken into account.
Thus, the famous classic representation of an enterprise may be redrawn as shown in the illustration below. Note: Also logistics, marketing and sales may be considered as non core-business capabilities and be provided by “other” enterprises.
Ability of several enterprises to work together with maximum synergy and minimum overhead (thus much better than a classic enterprise) is critically important. Potential list of common activities to achieve that is not long but daunting:
- formally define a work to be done ;
- find the best other enterprises for this work to be done;
- contract selected other enterprises;
- activate and configure a trusted working environment for all participating enterprises;
- carry out the work with secured sharing some data and information among participating enterprises and
- complete all contracts related to this work to be one.
Explicit, formal, machine-readable and machine-executable processes can act as a neutral and natural referee for coordinating inter-enterprise work. A potential implementation is an BPM-suite tool. A target is to position a BPM-suite tool as an independent and trusted 3rd party (a referee or a coordinator) to execute legally-bound processes for 2 or more mutually non-trusted parties. See http://improving-bpm-systems.blogspot.com/2016/07/digital-contract-as-process-enables.html
Of course, when many enterprises contribute into some common work, records management must be centralized (i.e. accepted by all the participants) and suitable for digital way of working. A digital archive with good availability and integrity can act as an escrow for some transactions and documents. Potential implementation is the blockchain technology.
An example of such a “disaggregation” of a classic enterprise – https://news.cgtn.com/news/35636a4e33637a6333566d54/share_p.html
HOW
Working together for the same goal requires sharing some things (business and technical artefacts) and, probably, some agreed means. Such a sharing is lesser for cooperation (different enterprise for different activities) and greater for collaboration (different enterprises for same activities).
Imagine that 10 enterprises have decided to work together. Shall each of them implement business processes required for this engagement? Add complex EDI infrastructure for communicating between processes from different enterprise? Keep everything within each enterprise? It looks a bit difficult. If something that must be shared is done once for everyone then everyone will gain. Thus some processes related to this engagement may be implemented once at an independent provider and linked to existing processes in each enterprise.
WHAT to share
|
Examples
|
Reason(s)
|
Supporting means
|
Data
(see the DIKW pattern)
|
hashes,
cryptographic keys
|
Security
|
common
immutable storage
|
Information
(see the DIKW pattern)
|
business
objects
|
Interoperability,
e.g. in interfaces
|
common
immutable storage
|
Facts
|
audit
trails, signed documents, agreed goals, demonstrated KPIs, inputs &
outputs of inter-enterprise transaction
|
Traceability
|
common
immutable storage
|
Events
|
some
facts important for business
|
synchronization
of work
|
common
event queue
|
Rules
|
agreed
business logic
|
regulation
of work
|
common
decision mechanism
|
Activities
|
agreed
procedures, agreed SLAs, agreed protocols
|
automation
|
common
scripts in domain-specific languages
|
Processes
|
agreed
testing methods
|
coordination
of work
|
common
coordination mechanism
|
KPI
calculations
|
agreed
formulas and results of calculations
|
common
view on performance
|
common
dashboard
|
Intelligence
|
agreed
algorithms and results
|
common
view on planning
|
common
prediction mechanism
|
Improvements
|
some
proposals for better working
|
better
joint performance
|
common
set of digital models and agreed scenarios
|
Estimations
of uncertainty which are evolving along the time
|
participants’ opinions on some factors
|
non-biased
corporate security for all the enterprises involved
|
common
immutable storage
|
Estimations
of risk which are evolving along processes
|
participants’ opinions on adverse impacts
|
non-biased
corporate security for all the enterprises involved
|
common
immutable storage
|
Finances
|
payment
mechanism
|
minimizing
transactions with banks
|
own “local” currency
|
- the transactional cost for inter-enterprise transactions,
- risks,
- time lag,
- security,
- manageability,
- etc.
WHAT
New application architecture for inter-enterprise agile engagements can be built on the following pillars:
- Immutable common digital archive (FACTS) to store all versions of all the artefacts.
- Microservices (ACTIONS), potentially in a serverless computing environment (because a digital archive is used as a common immutable storage). Please note that microservices are normal services (according to OASIS) except that one unit-of-functionality is one-unit-of-deployment is one-unit-of-execution.
- Machine-executable processes (COORDINATION).
See also http://improving-bpm-systems.blogspot.com/2018/06/architecting-modern-digital-systems.html
Some hurdles – processes modelling
Modelling of inter-enterprise processes is not easy because such processes are distributed (each of them may be executed in its own computing environment) and they communicated by exchanging of messages thus it is necessary to handle exceptions in communicating processes. Good modelling styles and process patterns will help.
Some hurdles – process execution
Some BPM-suite tools are already connected to the blockchain which is used as a common immutable storage.
1) Ultimus can use blockchain as a data storage - "Ultimus uses Tierion to create an audit trail for business processes and prove the integrity and timestamp of documents." See https://medium.com/tierion/ultimus-integrates-tierion-for-blockchain-digital-process-automation-f8331d76216a
2) Bonita can use blockchain – https://www.youtube.com/watch?v=lkwvko2Uy24
3) ConsenSys uses Camunda BPM-suite to use blockchain as a data storage, creating new users and executing smart-contracts https://www.youtube.com/watch?v=oww8zMzxvZA&feature=youtu.be
Some hurdles – process execution as a smart contract
One of the option to bring process to existing blockchain implementations is to implement a BPMN-like interpreter as a smart contract in the blockchain technology.
Some hurdles – blockchain mentality
People from the blockchain domain follow the “if you have a hammer then everything is a nail” negative pattern. https://blog.apla.io/report-of-the-egaas-team-556e5e4717bd
Conclusion
This pattern opens new perspective for the traditional Business Process Management which becomes also Inter-Enterprise Ecosystem Business. In other words, processes will expand outside enterprises to enable faster and cheaper “working together” for enterprises.
And a quote from Alberto Manuel (@AlbertoManuel) "Architecting expanded Value chain in the era of digital ecosystems and shared capabilities."
Thanks,
AS
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