The first edition of this book was focused on service-oriented architecture (SOA), business process management (BPM), and model-based management (MBM). At that time, I was a fellow at EDS and was engaged in advancing technology for better business solutions, improving application development methods, and developing industry standards related to SOA, BPM, and MBM.

The first edition was the culmination of a many years of technical and business consulting along with work on industry standards as the EDS representative to the Object Management Group (OMG). Throughout my career, I have had the opportunity to be on the forefront of emerging technologies and participated in applying the technology to business solutions. My experience and insights grew further through collaboration with industry leaders in my role as cochair of the OMG task force that is currently the Business Modeling and Integration Domain Task Force (after several name changes as it has evolved over the last 17 years).

When I undertook writing of the first edition, it was clear to me that SOA could help better align information technology to business needs for business systems since businesses have used shared services for accounting, purchasing, human resource management, and other shared capabilities for many years before computers—it is a basic business pattern. I participated in the development of SoaML, a modeling language for specification of computer-based services and component-oriented design of business systems. During this time, I also participated in a joint effort of EDS and Oracle to develop a SOA maturity model that defined the typical five levels of maturity for business and technology to implement a service-oriented business/enterprise architecture.

During the same years, BPM had become an established business practice that was becoming strongly influenced by business process management systems (BPMS). This was important for putting business people more directly in charge of their business processes, whereas earlier systems embedded business processes in large applications where only computer programmers could understand and adapt the processes to business needs and changes. I participated in the development of early specifications for automation of workflow management and later specifications for modeling business processes. The end result was the OMG specification, BPMN (business process model and notation) that brought together business process modeling efforts of OMG, and business process modeling graphics of the Business Process Management Initiative (BPMI) after BPMI merged with OMG.

Finally, modeling tools emerged to assist business leaders in support of strategic planning (the OMG business motivation model—BMM) and the capture of business rules along with associated terminology and semantics (semantics of business vocabulary and rules—SBVR). BMM came to OMG as a draft specification developed by collaboration of a number of consultants who had supported strategic planning and had developed a shared framework. SBVR was developed through the OMG process involving a diverse group of consultants, academics, and industry experts driven by a desire to provide business people and consultants with a robust capability to capture and express business rules with consistent, well-defined business concepts.

My goal with the first edition was to bring together business people and information technology people with an understanding of how information technology should serve business and how a number of information technology standards can come together to meet business needs. I believe it reflected the then current state of business and technology.

I recently undertook writing of this second edition to reflect more recent advances. I expected to make some refinements to some of the chapters and add the impact of CMMN (case management model and notation) and VDML (value delivery modeling language). However, as I got into the detail, I realized the full significance of these new standards and other industry advances, and this second edition was a lot more work than I anticipated.

Essentially, the current potential for enterprise agility has evolved. Beyond the advances in modeling, smart phones have connected hand-held computers and personal interactions to the Internet. Social media have engaged people everywhere, driven changes in awareness and attitudes, and extended the reach and exposure of business information systems. The Internet is being connected to a wide range of sensors, devices, appliances, and vehicles—the Internet of Things. Cloud computing is gaining tractions as a computing and communications utility, and distributed computing developed for Internet searches and the cloud have enabled massively parallel, distributed computing applied to “big data” for “analytics,” the analysis of correlations, events, and emerging trends.

In Chapter 1, I expand on the evolution of technology, where we have been and where we are today with an introduction to a new way of thinking about how the enterprise should work.

In Chapter 2, I introduce VDML as a modeling language to bridge the gap between strategic plans, business requirements, the transformation of business operations, and design of operational systems of an agile enterprise. VDML brings a focus on creation of value in the enterprise as a network of collaborations applying capabilities to create value and delivery of values in customer value propositions. VDML provides an abstraction of the business that is more suitable for consideration by business leaders and analysis of operating performance from an enterprise perspective.

In Chapter 3, I describe a business architecture composed of capability building blocks and present some techniques for analysis of an existing enterprise to discover the inherent capability building blocks. The building blocks can be configured to consolidate capabilities shared by multiple value streams that deliver different products and value propositions to different market segments as well as internal consumers. The sharing of capabilities drives information technology infrastructure requirements as well as organizational change, discussed later. VDML provides the modeling structure to configure, analyze, and optimize the implementations of shared capabilities from an enterprise perspective. The chapter then expands on requirements for service units (introduced in the first edition) that are the operational implementation of sharable capabilities.

In Chapter 4, I go deeper into business design with a focus on business processes. It provides an overview of BPMN and CMMN modeling languages. In the first edition, the business process focus was on prescriptive, repeatable processes of BPMN. CMMN brings automation support for adaptive processes that are defined and adjusted by the participating knowledge workers as the situation evolves, and it supports collaboration, coordination, and adaptation that were not automated when the business processes were predefined by BPMN. CMMN brings the potential for automation support to the work of knowledge workers and managers to support collaboration, coordination, and timely response to changing circumstances. In this chapter, we propose a discipline that goes beyond current BPM practices to address the integration and support of the network of collaborations by which the enterprise actually works.

In Chapter 5, I focus on business rules. Rules define required relationships, actions, and constraints and are of particular concern where they implement policies that may express management intent or government regulations. Rules are also important to support decision making and analysis, including rule-based systems that may support complex planning, configuration, search, and diagnosis.

In Chapter 6, I describe a data management architecture to support the agile enterprise. The chapter begins with some general patterns and principles and then discusses the architectural components that include the distributed management of master data (the enterprise records), the capture of performance data, the capture and management of business knowledge, the coordination of data updates, and support of business intelligence and analytics. The chapter concludes with an overview of data modeling and highlights of implementation of the data management architecture in the context of the Value Delivery Maturity Model of Appendix A.

In Chapter 7, I discuss information security issues and technology. Information security is essentially about mitigation of risk. Exposure of data and systems is a major concern for business leaders both with global exposure through the Internet, and the integration of capabilities of the agile enterprise that requires increased accessibility across organizational and enterprise boundaries. This chapter begins with perspectives on the risks of information security and then provides an introduction to key security technologies and management of authorization.

Chapter 8 is about identification and response to events that drive the operation of the enterprise. These are identified as exceptions or controls in formal business processes, changes of business state that are relevant to oversight or corrective action, and other less predictable and more disruptive events that may cause operational failures. The chapter discusses the various forms, sources, consequences of events, and mitigation of failures and describes the required notification service of the information infrastructure.

In Chapter 9, I focus on sensing and responding to events and circumstances that may require changes to the enterprise. An agile enterprise must recognize and respond to relevant events, particularly events in the ecosystem as well as internal insights or innovations. These events are primarily recognized in business intelligence and analytics, or by observations of individuals. The chapter proposes a sense and respond directory to record events, resolve duplication of alerts, alert appropriate responders, and track efforts for resolution. It also recommends escalation of responses based on the scope and severity of impact. The chapter then turns to consideration of transformation planning and management and product lifecycle management that are driven by strategic planning and supported by services for business development and transformation.

In Chapter 10, I focus on a management hierarchy for the agile enterprise. This begins with the general design requirements of service units—the operational equivalent of sharable capabilities and the organizational grouping and management hierarchy for management of shared services. Next, we consider governing board support services, executive staff services, administrative support services, and business operations services that are divided between line of business capabilities and shared capabilities. The chapter closes with a brief discussion of the organizational transition as it increases in levels of maturity (Appendix A).

Chapter 11 concludes the book with a focus on enterprise leadership. It starts with consideration of the supports that should be available to business leaders. It then examines leadership roles in four categories: the governing board, top management, capability management, and knowledge workers.

There are several themes. The governing board should be more involved in ensuring that the enterprise is doing the right thing and doing it well from an investor’s perspective, it should ensure objective risk assessment and an acceptable level of risk, and it should monitor performance for business transformation and customer expectations of values. The top management must provide industry leadership, conduct continuous strategic planning, drive the sharing of capabilities that are optimized from an enterprise perspective, and provide the cultural environment that inspires and empowers employees to contribute beyond routine responsibilities—a conceptual model of culture is discussed in Appendix B. The capability managers, within the scope of their responsibility, must contribute to risk assessment and mitigation, optimize capability performance, manage and protect enterprise master data, and enable and provide incentives to empower and inspire knowledge workers. Knowledge workers should be a key source of alerts and solutions for sense and respond, they should contribute to optimization of their capability units, and they should contribute to innovations and collaborations across organizational boundaries to bring solutions and new ideas, bottom-up.

The chapter then turns to the challenge of making the enterprise an industry leader through strategic initiatives, industry advances, influencing government regulations, and development of industry standards. A list of potential industry standards is outlined as opportunities to further improve business agility as well as efficiency and customer value.

This book is not a product of research, per se, because it is about how things could be done, not how they are done. It is the product of many years of systems development, technology transfer, business and technology consulting, and collaboration on industry standards that change the state of the art. There will be new ideas, but the inherent conceptual model of this book is based on industry standards, successful business practices as well as challenges and opportunities that call for both a better understanding of the way the enterprise actually works, and the means to formulate and implement better solutions. I hope it will help business leaders appreciate the potential of the technology and the value of industry standards, and encourage participation in the development of future industry standards as well as government regulations to bring greater value to customers and opportunities for the enterprise.