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©Syncho Research 2008 “ECM”

What is an Enterprise Complexity
Model
Raul Espejo
March 2008

It is an extension enterprise of the VSM and provides a heuristic to develop dynamic capabilities capabilities. d l) . It is based on variety engineering (see paper Enterprise C Complexity l it M Model).©Syncho Research 2008 “ECM” What’s an enterprise complexity model? • it is an ingenious form of deploying resources to bridge the complexity gap between p and environment.

©Syncho Research 2008 “ECM” K issues Key i • Explaining what is variety. revision of 5 steps as discussed in Module 3 • Enterprise Complexity Model as discussed in this Module (Module 4). . Law of Requisite ( 1)) Varietyy and Residual Varietyy (Module • Introduction to complexity management. revision of VSM as discussed in Module 2 • Viplan Method.

Nik Nike). S i Science P Park) k) • Structural models are focused both on the organisation’s transformation and the enterprise’s transformation. network. transducers and performance) • Dynamic y capabilities p .©Syncho Research 2008 “ECM” Methodological Issues • SSystem t i ffocus: di in distinguishing ti i hi organisation.g. but members do not necessarily have alignment of their transformations (e. ) which hi h iis it itself lf an organisation. t i primary i enterprise. cluster. i ti • Cluster is group enabled by institution or enterprise. i ti enterprise. • Network is a group of aligned enterprises driven by a primary enterprise t i ((e.g. • Variety engineering: variety operators and best practice (communications. extended cluster and institution.

©Syncho Research 2008 “ECM” Variety engineering • In the h ffollowing ll i slides lid we fi find d examples l off variety i operators for enterprises in the network economy (amplifiers. ( lifi attenuators tt t and d transducers) • The definition of variety operators depends on the transformation (named system) and performance f criteria i i (h (how stringent i iis these h criteria) .

pushing down autonomy t •Resource centralisation. •Blogging.g. variety Attenuators of Env variety Variety Balance Internal to enterprise In Operational Environment Enterprise •Org structure. market research producing quality textiles for retail markets In Operational Environment Internal to enterprise Performance •Internet systems to enable customers’ perform enterprise’s transactions •Operational standards •Decoding suppliers and customers performance KPI for supply chain management .Enterprise Complexity Model ©Syncho Research 2008 “ECM” Amplifiers of Ent. functional decentralisation •Internet platform to support communications i ti b between t customers and suppliers to work out e. equipment specifications Lead enterprise interacting with ith global l b l market k t th through h Regional Industrial Cluster (the Organisation) External to enterprise External to enterprise Transformation •Subcontracting manufacturing globally •Distribution network •Bar coding customers’ behaviours to support sales.

Marketing and communications offices ff Use of Web2 to target customers individually with a focused message (e.©Syncho Research 2008 “ECM” 1. Use internal communication systems to respond queries globally. future groups. Developing Dynamic Capabilities Regional and local sorting offices ff ffor Organisation postage and parcels Structure . Amplifiers 1 A lifi off Variety V i t th thatt are Internal to Primary Enterprise Strengthening the Increasing the Creating new Enterprise’s Variety resolution of the variety for the Enterprise’s Variety Enterprise Making the Enterprise’s variety time independent Website linking customers.g. suppliers and distributors. Amazon) R&D..

shares management …) Makingg the Enterprise’s variety time independent Distribution centres Call Centres .g. banks. Amplifiers of Variety that are External to Primary Enterprise Strengthening g g the Increasingg the Creatingg new Enterprise’s Variety resolution of the variety for the Enterprise’s Variety Enterprise Marketing companies supporting pp g enterprise. Outsourcing… g Post Office Branches Banks paying social services benefits (amplifying social services) Information technology companies p dealingg with enterprise’s transactions (e.©Syncho Research 2008 “ECM” 2. Customer Services Enterprises p Internet operations. 7 days a week. p . contributing to operating 24 hours network /cluster a day. Global publicity .

Amplifiers 3 A lifi off Variety V i t within ithi th the Operational Env. of Primary Enterprise Strengthening the Increasing the Creating new Enterprise’s Variety resolution of the variety for the Enterprise’s Variety Enterprise Making the Enterprise’s variety time independent Franchising: Regional enterprises selling locally the primary enterprise’s offerings Customers’ use of blogs creating public opinion about enterprise Regional enterprises adjusting the enterprise’s offerings to local requirements Manufacturing outlets in ‘cheap’ countries doing the enterprise’s designs. .©Syncho Research 2008 “ECM” 3.

liftingg constraints Atenuadored de . Attenuators of Variety within Operational Env. less residual variety Media managing information in real time and by exception Media selecting stories and constructing them Rythmun of publications and reporting Government regulations: reducing restrictions. of Primary Enterprise Weakening the strength of the environmental variety Reducing the resolution of relevant environmental variety Chopping off parts of the environmental variety Making environmental variety time dependant Self-organisation Self organisation of agents in the environment: more variety absorption at the local level.4..

5. Attenuators of Variety that are External to Primary Enterprise Weakening the strength of the environmental variety Blogging Reducing the resolution of the environmental variety Making environmental variety time dependant Atenuadored de Screening agencies Blogging Media highlighting for personnel hiring Automatic check-in of passengers in air terminal Chopping off parts of the environmental variety Market research agency doing research for enterprise stakeholders and stakeholders’ customers’ views about enterprise for a short time .

6. suppliers and competitors periods with customers and suppliers to ‘opening opening hours’ hours . Model of market research Organisational done internally structure Enterprise complexity model Operational p model of customers. Attenuators of Variety that are Internall to the h Primary Enterprise Weakening the strength of the environmental variety Internal review of blogs and other forms of stakeholders’ views Reducing the resolution of the environmental variety Chopping off parts of the environmental variety Making environmental variety time dependant Atenuadored de Clustering Defining purpose Reducing contact environmental for enterprise agents in categories.