Modelling Governance within Business Architecture using Topic Mapping

Dr Peter Bryant Logica UK peter.bryant@logica.com

Copyright 2012 by Peter Bryant. Published and used by INCOSE with permission.

Abstract
This paper uses an industry case study to demonstrate how to guide executive decision makers through an organization design process as part of a transformation planning activity. The key idea is to derive a set of business-specific topics from mission statements and strategies and then use these to create an aligned set of organisation structures (role definitions) and governance structures (governance body terms of reference). For example, the topic of legislative compliance reflects a business concern for which a member of the executive team will usually be accountable. To address this concern, and ensure there are no surprises during external audits, a governance body may be identified (or newly established) for which this topic is one of the agenda items. The technique uses a simple modelling approach that enables Terms of Reference to be derived for both individual roles and management bodies in a coherent manner. The case study will reference the Governance Framework developed using this method. This paper extends existing practice within Enterprise Systems Engineering, the application of Systems Engineering methods to enterprise design and management. Specifically the model-based technique enables logical analysis of this organisational design problem. In summary Using Topic Mapping leads to a richer, and more integrated, Business Architecture. As business drivers change, the logic leading to current organisational structures can be reviewed and revised to align with the new situation. Topic Mapping helps to ensure that there is effective ownership (in the RACI sense) of the business-critical concerns within the organisation.

Peter Bryant

Page 1

Modelling Governance (Logica)

Introduction
Modelling methods in support of Business Architecture (particularly organizational design) remain relatively informal, partly due to anxiety that senior stakeholders will not engage with formal modelling methods. For example, Terms of References are frequently written with minimal reference to the Enterprise Architecture and it can often be difficult to demonstrate compatibility with the Business Architecture, which is important to link role responsibilities to business processes and services. When Enterprise Systems Engineering 1 is used to provide a high-level design for the Enterprise, then designing corporate governance as well as the future organization - within the context of the Target Operating Model is often in scope (although it must be assumed some governance is in place to agree the design!)2. There do not seem to be existing techniques that enable such a design to be done within a formal architecture model of the associated Enterprise, i.e. one that conforms to an enterprise architecture meta-model. This paper describes a technique Topic Mapping that closes this gap, building on model-based systems engineering (MBSE) practice. The modelling first addresses the business requirements for the organisation design (i.e. a model of the problem domain) then enables one or more organisational solutions to be considered against these requirements.

Figure 1: Topic Mapping Triple

This paper uses an industry case study to demonstrate how the modelling technique can be used to provide rationale for the design of a future state organisation.

Enterprise Systems Engineering, the application of Systems Engineering methods to enterprise design and management. This point seems to be missed, e.g. in TOGAF, which appears to make the assumption that corporate governance is always outside the remit of Enterprise Architecture.
2 1

Peter Bryant

Page 2

Modelling Governance (Logica)

Topic Mapping
An Enterprise Architecture Framework will typically prescribe viewpoints relating to organisational design (usually meaning the key management roles and the relationships between them) see for example MODAF Operational View OV-4 [MODAF]. However, management control structures such as Control Boards which are vitally important elements of an effectively functioning enterprise, do not seem to have attracted even this level of detail. In neither case does there exist an effective technique that enables an Enterprise Architect to justify an organisational design, e.g. to provide evidence that the proposed organisation consists of a set of roles that: Are necessary, i.e. do not contain roles that can be lost without impact on the business Are complete, i.e. are the minimal set of roles necessary to manage the business Are effective, i.e. together address all the concerns that a business has in a cohesive manner.

Of course the organisational structures should be compatible with the wider Business Architecture. The question is how to choose (and justify) the most suitable organisation. The solution to this problem has inspiration in two sources: In the architecture field, ISO/IEC-42010 (the new international standard on architecture description) emphasises the importance of identifying the principal stakeholder concerns3 In the outsourcing field, Logica has developed an approach called the Dynamic Client Governance Model which has at its heart a set of management topics which are the subjects that the proposed governance bodies discuss during their meetings.

So the idea is to introduce Management Topics into the Enterprise Architecture model. These seem necessary ingredients for a justification of completeness in respect of the design of an organisation or Governance Framework. The key idea is that Terms of Reference for a management role or management body are directly related to these management concerns therefore they need to be explicitly modelled and agreed by the business. In effect, the concerns act as the business requirements for the organisational design activity and, as such, need to be signed off at the executive level.

According to ISO/IEC-24010, the key organising principle for architecture definitions is the set of relevant stakeholder concerns. In principle, each such concern gives rise to an architecture viewpoint and every conformant architecture description will then contain a populated view responding to that concern. Using the agreed set of concerns, the completeness of an architecture description can then be evaluated.

Peter Bryant

Page 3

Modelling Governance (Logica)

The following diagram provides a conceptual model that underpins the Topic Mapping technique.

Figure 2: Topic Mapping Conceptual Model

The key organisational elements to be modelled are: Management Role, Management Body. The design of an Organisation consists of the Management Roles and their relationships. Similarly a Governance Framework consists of Management Bodies and their relationships. It is often convenient to have higher level group of the logical organisation which I have here called Business Domains. Within an EA model it is typical to find relationships between Management Roles, Business Functions and Products similar to that shown above (sometimes Business Process is used instead of Business Function). The new elements that are introduced above are: Management Concern, a topic that has significance for the business; examples are Operating Margin, Complaints and Shareholder Value. Management Body, a formally composed body that is able to make empowered management decisions.

The new relationships are as follows: Management Role has specific role on Management body (this covers relationships like is chair, participates in which are often referred to in the ToRs of both) Page 4

Peter Bryant

Modelling Governance (Logica)

Management Role has specific responsibilities with respect to Management Concern (e.g. Chief Operating Officer is accountable for Operating Margin) Business Objective is reflected in Management Concern (this brings into play the business goals modelled elsewhere in the EA model) Management Body is concerned with Management Concern (e.g. Control Board is concerned with Initiation of Change) Management Body provides governance for Business Function (often a body is set up to provide governance control steerage - on the operation of a critical area of the business, e.g. Finance) Management Body changes status of Product (the type of decisions that a Management Body makes is often approval or rejection of a submission or sanctioning of a mitigation action plan associated with an identified risk; they only sometimes create information products directly) Management Concern reflected in need for Product (the purpose of this relationship is to identify Management Information Products whose primary purpose is to inform some Management Body).

The logic is that business objectives are reflected in management concerns that are in turn reflected in the ToRs for either (or both) management roles and management bodies. The analysis process is defined through the following sequence of steps: 1. Define and agree the enduring set of management topics. 2. Propose a set of future organisational roles and management bodies that reflect the Target Operating Model. 3. Map the topics to the roles and bodies. 4. Test for necessity and completeness. 5. Iterate as necessary. Steps 1 and 5 are typically performed using workshops with a carefully selected group of stakeholders (which may require executive authority). Step 3 can be performed using an architecture model tool (or simply a set of spreadsheets) that encapsulate the relationships within the conceptual model shown at Figure 1. Application of the technique is illustrated in the case study below, which first demonstrates its utility in determining the Terms of Reference for a governance body4.

We make no specific distinction between a governance body and a management body. In this paper, these terms refer to groupings of individuals who set direction or make decisions, usually on the basis of information provided in advance by a nominated secretariat.
4

Peter Bryant

Page 5

Modelling Governance (Logica)

Established management practice suggests the following template for the Terms of Reference for a governance body: A. Purpose of Body B. Position within Management Framework C. Membership D. Terms of Reference (Responsibilities, Authority, Reporting) E. Key Stakeholders F. Information G. Meeting Frequency H. Agenda Specifically the claim is that the following ToR template items can be derived almost entirely from the EA model including the supporting organisational analysis: A, B, C, D, F. The remaining three elements necessary to complete the population are relatively easy to complete by conventional means (this will be illustrated in the case study below). Fortunately, these three elements (E, G, H) have only limited cross-dependences across the business. Similarly a template for the Terms of Reference for a management role is as follows: A. Business Domain B. Functional Responsibilities C. Position in Organisation D. Participation in Management Framework E. Terms of Reference (Responsibilities, Authority, Reporting) F. Product Responsibilities The claim is that all of the ToR template items can be derived from the EA model (albeit there will always be a need for some hand-crafting to provide the finished product). The role definitions are therefore traceable to the Business Architecture.

Case Study
Background This case study is based on a Logica engagement within an industrial consortium that is engaged in a complex joint endeavour within the IT service sector. Logica is a member of the consortium and the author acted as the Enterprise Architect for a 4 month period. During this Peter Bryant

Page 6

Modelling Governance (Logica)

period an initial Enterprise Architecture product was created in response to a transformation vision that had been approved by the Partnership Management Board that was recognised to require substantial change to the business operating model. Specifically the architecture work developed a Target Operating Model. The question to be answered was: how should the existing organisational structure, and the supporting Governance Framework, be amended to support the strategy? Management Topics Through systematic engagement with executive stakeholders within the business, the set of management concerns shown below was agreed as sufficient for the purpose of designing the future state organisation. This was generated by iteration from an initial set provided from the Logica Dynamic Governance framework, taking into account the actual topics for existing management bodies within the business and future strategic direction.

Figure 3: Worked Example Strategic Concerns

The Case Study considers the Sponsors Board. Based on the Target Operating Model the intended purpose of the Sponsors Board is to To ensure Partner sponsor approval of key strategies and plans including approving the initiation of strategic changes. This fulfils [A]. The future state Management Framework (contained within the EA Product but not reproduced here) itself provides the orientation [B]. The following roles were identified as being relevant to this governance body [C]: CEO Chair Partner Representatives Participants Strategy & Transformation Director Participant.

Peter Bryant

Page 7

Modelling Governance (Logica)

The following management concerns were judged as being relevant to this management body: Account Strategy Approval of New Activities Business Alignment Business Strategy Client Challenges. Collective Business Orientation Consortium Management Partner Aspirations.

Each of these topics should provide a line item within the ToRs to fulfil [D]. For instance, the responsibility in respect of the first of these was To provide steerage to the business in respect of Account Strategy, taking account of Partner future plans. In this example, key stakeholders [E] for the Sponsors Board are the individual partner Companies themselves as well as the business (specifically the Management Board). Regarding information flows [F], the following model was created to address this specific management body and included within the EA model.

Figure 4: Worked Example Management Information Flows

These information flows were checked for completeness against the management concerns identified as being relevant to this governance body. It is also necessary to specify the required scope, frequency and format for each of the management information flows (and this can be used as an input to a future state Management Information Strategy, with the benefit that this plan will be consistent with its Enterprise Architecture).

Peter Bryant

Page 8

Modelling Governance (Logica)

The frequency of the Sponsors Board [G] should be less than the more working level (albeit still strategic level) Management Board in order to provide the necessary direction, steerage and partner corporate approvals. The suggested frequency was Quarterly but this may need to be adjusted as the dynamics of the business changes. It will be the responsibility of the Chair to define a standing agenda for this governance body. The Agenda [H] would be expected to be derived from the identified management topics (cf [D]). This completes the demonstration of ToRs for this governance body. Next we follow the same process relating to a management role. To emphasise, the same topics are used in each case. Management Role We illustrate application of the Topic Mapping technique to the role of Strategy & Transformation Director, who operates within the Strategic Planning domain [A]. The EA model allocates the following functional responsibilities to this role [B]: A (accountable) - Benefits Planning A (accountable) - Change Portfolio Management R (responsible) - Business Strategy Generation R (responsible) - Investment Selection/Decision-Making. The position within the organisation is inherent in the future state organization chart (not reproduced here) [C]. The Strategy & Transformation Director will participate in the following management bodies [D]: Strategic Planning Board [Chair] Sponsors Board [Participant] Management Board [Participant] Strategic Change Board [Participant]. Based on the management topics judged to be relevant to this role, the ToRs would be based around the following lead responsibilities [E]: Lead Approval of New Activities Lead - Benefits Lead - Opportunities / Strategic Change Lead - Business Maturity Peter Bryant

Page 9

Modelling Governance (Logica)

Lead - Service Portfolio. The Strategy & Transformation Director leads the Strategic Planning function. The only product for which this role is directly accountable [E] is the Transformation Strategy although he would expect to be consulted on all business products of a strategic nature. This completes the demonstration of ToRs for this role and the business commented favourably on the more systematic development of Terms of Reference that was possible as a result of employment of this technique. This concludes the worked example.

Conclusion
This paper has used an industry case study to demonstrate a modelling technique that guides executive decision makers through the process of deciding on a new organisational or governance structure as part of a transformation planning activity. The technique uses a simple modelling approach that enables Terms of Reference to be derived for both individual roles and management bodies in a coherent manner. The benefits of this technique are Using Topic Mapping leads to a richer, and more integrated, Business Architecture with good rationale for the future state organisational design. As business drivers change, the logic leading to current organisational structures can be reviewed and revised to align with the new situation. The technique can be used with senior stakeholders. The model-based technique makes an innovative contribution to Enterprise Systems Engineering. Specifically the model-based technique enables logical analysis of this organisational design problem by clearly separating the business drivers and requirements from the organisational solution or solutions being proposed.

References
Open Group 2009. The Open Group Architecture Framework, version 9. http://www.opengroup.org/togaf/ UK MOD 2010. MOD Architecture Framework, version 1.2004, May 2010. http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/InformationManage ment/MODAF/

Biography
Dr Peter Bryant is a TOGAF-certified Enterprise Architect working for Logica who is a co-chair of the INCOSE UK Architecture Working Group. He has been involved with a number of international standards including the MOD Architecture Framework.

Peter Bryant

Page 10