For almost 20 years I have been working on the development of the foundations of what I call Business Engineering, with the aim of providing tools, as other engineering disciplines have, for the design of businesses. This effort has been directed to show that enterprises can be formally designed and that their architectures, including processes, personnel organization, information systems, IT infrastructure, and interactions with customers and suppliers should be considered in a systemic way in such design. This Enterprise Design is not a one-time effort, but, in the dynamic environment we face, organizations have to have the capability to continuously evaluate opportunities to improve their designs. Other researchers have recognized this need, as the ones who have worked under the idea of Enterprise Architecture (EA), but they have mostly concentrated on the technological architecture and just touched on the business design issues. Our work resulted, in 2003, in a graduate program of study, the Master in Business Engineering at the University of Chile,1 which has been taken up by several hundreds of professionals. Such Master has been the laboratory where many of the ideas we propose have been tested and many new ones generated as generalization of the knowledge and experience generated by hundreds of projects developed in the theses required by this program.
I have published books (in Spanish and English) and papers (in English), all detailed in the references, that touch on different topics of my proposal. In this work I give a compact summary and show how my proposal can be applied to health care, based on work we have been doing in this domain for at least 15 years, where we have carried out research and development efforts by adapting our approach to provide working solutions for a large number of Chilean health institutions. These solutions are already implemented and showing that large increases in quality of service and efficiency in the use of resources can be attained.
Our approach includes the integrated design of a business, its service configuration (architectures) and capacity planning, the resource management processes, and the operating processes. Such an approach is based on general patterns that define service design options and analytical methods that make possible resource optimization to meet demand. This is complemented with technology that allows process execution with Business Process Management Notation (BPMN) and Business Process Management Suites (BPMS) tools and web services over a System Oriented Architecture (SOA). In summary, we integrate our business design approach with Analytics and supporting IT tools in giving a sound basis for service design.
General patterns provide reference models and general process structures, in given domains, as a starting point to design the processes for a particular case. The key idea is to formalize successful design knowledge and experience in these models, reuse such knowledge when designing, and avoid reinventing the wheel. Patterns are normative in that they include what it is recommended as best practices and the ones we have found that work in practice in hundreds of projects, as it has been remarked before. So they contain specific guidelines on how a process should be designed, allowing reuse of such patterns, thus avoiding to start from very expensive “as is” process documentation, proposed by methodologies such as Business Process Management (BPM).2 It is our experience that “as is” documentation is very expensive, running into the millions of dollars for large organizations, and there is a low to medium probability that the effort ends in failure, because of killing of the project without any result whatsoever. This has been the case of two large government agencies in Chile, which spent more than one million dollars each on “as is” studies and eventually decided to terminate the projects because of lack of results, and two large private banks and one of the leading holdings companies of the country, which have had similar experiences.
There are two key concepts that characterize our proposal for Business Engineering: Ingenuity and Form. We posit that good engineering requires Ingenuity to design the innovative solutions businesses require in the extreme competitive environment that organizations currently face. Thus our emphasis on systemic, integrated, and innovative business design explicitly oriented to make an organization more competitive in the private case and more effective and efficient in the public case. On the other hand, the design has to materialize in a Form, in the traditional architecture sense proposed by Alexander,3 which can follow certain patterns based on existent knowledge that provides a starting point for such design. Software engineers took their pattern ideas4 from Alexander and this is also the inspiration for our patterns proposal.
One particular characteristics of this book is that it illustrates all its ideas and proposals with many real cases, coming from projects that have been implemented in practice and provided very impressive results, which are detailed in the text. The cases show how the same design guidelines we will present successfully provide good results in very different situations and environments.
As Spohrer and Demirkan propose in the presentation of the series in “Service Systems and Innovation in Business and Society,” of which this book is part, I embrace the idea of integrating scientific, engineering, and management disciplines to innovate in the services that organizations perform to create value for customers and shareholders that could not be achieved through disciplines in isolation. The integration developed in this book can be located in the Spohrer and Demirkan’s System-Discipline Matrix, included in the following, as centered on “Systems that support people’s activities” that are designed with the participation of most of the disciplines defined in the matrix. Thus, for example, as it will be presented in this book, quantitative marketing—with the tools of Data Mining—is used to model customers needs and options; Management Science allows characterizing providers’ logistic; Economics theory permit to model competitors’ behavior; knowledge management and change management define people roles in service change; Industrial Engineering and Information Sciences provide the tools for information analysis and supporting tools definition; and all these disciplines plus Strategic Planning, other Analytics—as Optimization Models and Business Analytics—process modeling and design, project management, and others serve as a basis to generate ideas to produce and implement a design that realizes the value for the customers and stakeholders.
Hence, this book is completely aligned with the purpose of this series and its contribution is to provide an original Business Engineering approach that emphasizes service design and derives an integral and systemic solution that starts with Strategy and Business Model definition, follows with business design, processes design, and information system design, and finished with well-planned implementation.
This is a revision of a previous book with Business Expert Press, Business Engineering and Service Design with Applications for Health Care Institutions, which is being published in two volumes: Business Engineering and Service Design and the one we are presenting now. In this revision we restructure the original chapters dedicated to health services, creating four new ones dedicated to present cases for the different design level we propose in our hierarchical approach: Business Design that defines the new Capabilities a health service requires to be more competitive; Configuration and Capacity Design that provides the EA and its components with the required resources to make operative the health Business Design; Resource Management Process Design dealing with the resource levels that are necessary to process demand according to given Service Level Agreements (SLA) in the routine operation of a health service; and Operating Management Process Design which determines the practices, with proper IT support, and the flows that should be followed in running the health service. These chapters include new real cases that show how these design ideas are implemented in practice and the results they provide. The original chapter “Foundations For Health Care Institutions’ Design” is maintained but complemented with several new ideas: “Health Network Architectures,” a proposal for patterns that can guide the design of complex multilevel structures of health services is presented; a design methodology for the design of health services is also included; and to make this book more self contained, several topics detailed in the previous volume Business Engineering and Service Design are summarized here, including “Summary of Relevant Disciplines,” “Intelligence Structures and Business Patterns,” “General Architectures,” “Hospital Architecture,” and “Health Network Architecture.”