lse complexity group business process modelling & system evolution 11 january 2001 co-evolution...
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LSE Complexity Group
BUSINESS PROCESS MODELLING & SYSTEM EVOLUTION
11 January 2001
Co-evolution of the business process and IS development:
A complexity perspective
Eve Mitleton-KellyComplexity Research Programme
LSE
www.lse.ac.uk/lse/complex
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LSE Complexity Group
Theories
Natural sciences
Dissipative structureschemistry-physics (Prigogine)
Autocatalytic setsevolutionary biology (Kauffman)
Autopoiesis (self-generation)biology/cognition (Maturana)
Chaos theory
Social sciences
Increasing returnseconomics (B. Arthur)
self-organisation
emergenceconnectivityinterdependencefeedback
far from equilibrium
space of possibilities
co-evolution
increasing returns
Genericcharacteristics
of complexadaptivesystems
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LSE Complexity Group
Application to Human Systems
• Generic characteristics of CAS used as a starting point
• What is relevant and appropriate?
• Use term CES (Complex Evolving System) or CSS (Complex Social System)
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LSE Complexity Group
Familiar termsFractals
AttractorsParadoxes
Edge of chaosetc
CHAOS THEORY
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LSE Complexity Group
Systems Theory• Emphasises the whole• and the inter-relationship of parts within that
whole• Emergent properties or qualities• Feedback• Connectivity & interdependence
Complexityenriches
builds on extends Systems Theory
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LSE Complexity Group
Complexity• Articulates and clarifies the principles or
characteristics not articulated by systems theory
e.g self-organisation, far-from-equilibrium, co-evolution, exploration of the space of possibilities, increasing returns, etc.
• Provides a different language and perspective or way of thinking.
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LSE Complexity Group
PRINCIPLES
• Co-evolution within a social ecosystem
• not just adaptation to the environment
• One domain changes in the context of the other.
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LSE Complexity Group
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LSE Complexity Group
Co-evolution within an ecosystem
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LSE Complexity Group
Co-evolution and time
• Co-evolution, strictly speaking, takes place when entities change at the same time
• Consider short-term adaptation and long-term co-evolution
- Discussion with Prof. Uzzi Sandler, theoretical physicist
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LSE Complexity Group
Co-evolution takes place within an ecosystem
• Ecosystem (in biology): “each kind of organism has, as parts of its environment, other organisms of the same and of different kinds” Kauffman 1993
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LSE Complexity Group
Co-evolution in a Social Ecosystem
• A social ecosystem includes:social
culturaltechnical
geographiceconomic milieu
• In human systems, co-evolution places emphasis on the ‘evolution of interactions’– on the relationship between co-evolving entities
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LSE Complexity Group
e.g. a firm
• Each firm is seen as a fully participating agent which both influences and is influenced by the social ecosystem.
• Question: what changes when an organisation evolves?
or• What does evolution mean in a social context?
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LSE Complexity Group
Why are relationships important?
• Medium through which information is passed
• A healthy system is one in which information is flowing freely (??)
• Relationships – key to continuous improvement
• “Communications and relationships are a vital part of complexity theory” Tom Irons MD, Prof of Paediatrics, East Carolina University School of Medicine.
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LSE Complexity Group
• A complex co-evolving ecosystem is one of intricate and multiple intertwined interactions and relationships.
• Connectivity and interdependence propagate the effects of actions, decisions and behaviours throughout the ecosystem.
• Depend on degree of connectedness.
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LSE Complexity Group
Connectedness Diversity
Density Intensity Quality
of interactions between human agents
Determine network of relationships
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LSE Complexity Group
Connectivity & interdependence
• In human ecosystems there are networks of relationships with different degrees of connectedness– strength of coupling– epistatic interactions
i.e. the fitness contribution made by one individual will depend upon related individuals
• Essential element of feedback
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LSE Complexity Group
2 Feedback mechanisms
• Reinforcing (amplifying) – a driver for change
• Balancing (moderating or dampening) operates whenever there is goal-seeking behaviour - creates stability
Processes not mechanisms– need time dimension
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LSE Complexity Group
Feedback Process not Mechanism to avoid the machine metaphor
A machine is a system, which we can:– understand– design– plan its operation in detail– predict its behaviour and – control
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LSE Complexity Group
A machine:
• Is a complicated system
• With many inter-related parts
• Relies on feedback
• Can be thought of as an object
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LSE Complexity Group
• Not sufficient to describe all the feedback processes in complex systems
• “Multi-loop, multi-level feedback systems”– Lehmans’ VIIIth Law
• Link the micro and macro processes– The microscopic events and the macroscopic
emergent structures or patterns change and evolve and in so doing influence each other through feedback processes.
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LSE Complexity Group
• Feedback in this context is taken to mean influence, which changes potential action and behaviour.
• Influence– Not uniform– It depends on the degree of connectedness– Actions and behaviours vary with different
individuals– With time and context– Reciprocal
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LSE Complexity Group
Exploration of the space of possibilities
• Exploration of new options, different ways of working and relating.
• The search for a single 'optimum' strategy is
neither possible nor desirable, in a turbulent environment.
• But variety alone is not enough. New connections or contributions also need to be ‘seen’.
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LSE Complexity Group
Examptation
• Often not expensive R&D which produces major innovations, but ‘seeing’ a novel function, in a new light.
• “Exaptation is the emergence of a novel function of a part in a new context. … Major innovations in evolution are all exaptations. Exaptations are not predictable”. [Kauffman]
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LSE Complexity Group
Self-organisation
• Spontaneous ‘coming together’ • Not directed or designed by someone
outside the group• The group decides what needs to be done,
how, when • Can be a source of innovation e.g. new way
of providing information in an aerospace company
• Consider what facilitates self-organisation
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LSE Complexity Group
Complex System
• 2 or more intelligent interacting agents
• Is capable of adaptation and evolution
• Can create new order• Its behaviour cannot be accurately
predicted
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LSE Complexity Group
Complex System
• Can change its rules of interaction
• Can act on limited local knowledge
• Is self-repairing and
self-maintaining
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LSE Complexity Group
Complexity thinkingChange of emphasis
from objects
to relationships between entities
from control
to enabling infrastructures
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LSE Complexity Group
Why complexity thinking?
• Unstable evolving environmentsDynamic ill structured environments and learning
opportunities become the basis of competitive advantage if firms early in their industry can recognise the new patterns as they are emerging.
• New knowledge & learningStrategic advantage lies in developing new useful knowledge
from the continuous stream of “unstructured, diverse, random, contradictory data” (Ogilvie 1998) swirling around firms.
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LSE Complexity Group
Principles of complexity or generic characteristics
• Framework used as:
– a method of analysis
– to help identify and develop enabling infrastructures
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LSE Complexity Group
• Two applications:
• Facilitating co-evolution between the business process and IS development.
• Creation of an inter-organisational trusting environment in IPTs (integrated project teams) in the Aerospace industry.
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LSE Complexity Group
IT Legacy Systems Project:The Bank Case Study
IT legacy systems:
do not support the changing business process
Studied the co-evolution between the changing business process and information systems development – incl. the impact of legacy systems.
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LSE Complexity Group
Bank case study
Change in one domain induced change in related domains.
Some factors which introduced change, in the Bank’s socio-technical ecosystem:
a) Business and market
b) Organisation and management
c) Technology
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LSE Complexity Group
a) Business & market
Changes in business processes, products and services impacted the bank’s technological infrastructure
How?– New applications built on old
technology– Or, incremental functionality was
added onto the existing system
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LSE Complexity Group
Consequence:
Increased interconnectivity and interdependence e.g. among system components and applications
The Bank customised or engineered solutions into its systems and changed their coded components.
Over time a layered system infrastructure was created, which was tailored to service many different customers
Exacerbated the legacy problem..
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LSE Complexity Group
b) Organisation & management
Factors which contributed to the problem:
• Communication gap between developer and user communities
• Lack of skills to maintain the legacy systems
• Lack of training: organisation’s attitude in supporting change
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LSE Complexity Group
b) Organisation & management
• Personal career agendas in conflict with business objectives
• Management discontinuity:
projects not completed
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LSE Complexity Group
c) Technology factors
• Rapid technological change exerts pressure on management – offset against cost
• Existing technological infrastructure fails to meet emerging expectations and changing business requirements
• Interface between existing and new technology (new platforms, hardware, software and processes)
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LSE Complexity Group
Reciprocal influences
Technical problems Organisational changes
impacted exacerbated
Organisational Technical
issues concerns
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LSE Complexity Group
Complexity perspective: Macro-micro interaction
“One of the most important problems in evolutionary theory is the eventual feedback between macroscopic structures and microscopic events: macroscopic structures emerging from microscopic events would in turn lead to a modification of the microscopic mechanisms.” [Prigogine and Stengers]
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LSE Complexity Group
Macro-micro interaction
• Technology and organisational changes at the firm level affected the social ecosystem
• Created change at the macro level
• Affected individual organisations
• Affected the various micro levels within the organisation incl. IT systems
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LSE Complexity Group
Technical and Socio-cultural reciprocal influences
• Desire to offer standard banking to international customers
• Organisational restructuring (socio-cultural) changed the systems’ architecture (technical aspect)
• Centralisation of technology (technical aspect) affected the ways of working and organisational issues (socio-cultural)
• Both changed the relationship with the customers – but created unintended problems
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LSE Complexity Group
Organisational restructuring (socio-cultural aspect) changed the systems’ architecture (technical aspect)
• Late 70s, early 80s, each country branch in Europe had its own system ‘a bank in a box’ – it run all the local bank’s operations.
• Mid 80s, centralisation brought the h/w and s/w into central service centres – branches run remotely
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LSE Complexity Group
Centralisation of technology (technical aspect) affected the ways of working and organisational issues (socio-cultural) and created unintended problems
e.g. multi-ownership of common components - issue did not arise with systems that were managed and owned locally in a single country
• achieved standardisation of customer accounts - but, loss of local technical knowledge - degradation of personal relationships with customers
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LSE Complexity Group
Complexity perspective
• Adaptation – of the social to the technical and vice versa
• Increasing connectivity & interdependence• Multiple feedback processes• Imposition of a single solution (e.g.centralisation) • No local exploration of possibilities and
development of local optima• Loss of variability (technical), skills (social),
modes of interaction with the customers (socio-cultural)
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LSE Complexity Group
• Top-down design, &• single solution approaches • tend to constrain:
self-organisationemergenceinnovationco-evolution
• Looked for evidence of above – found a ‘natural experiment’ – identified enablers and inhibitors
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LSE Complexity Group
Enabling Conditions in the
Natural Experiment
• Monthly meetings – enabled good networking, trust, a common language
mutual understanding
autonomystabilityco-location
integrated team effort‘interpreter’
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LSE Complexity Group
Some inhibitors• Charging for system changes
• Management discontinuity projects not completed
• Differing perceptions – e.g. improving legacy infrastructure seen as a cost by business managers
• Loss of system expertise, through restructuring, downsizing, outsourcing, etc
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LSE Complexity Group
Some inhibitors
• No documentation with high interconnectivity and incremental growth
• Inaction when systems seen as “old but reliable”
• Contradiction of how legacy is perceived and what is being done about it
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LSE Complexity Group
Enabling Infrastructure
Combination of cultural, social and technical conditions which facilitate ‘x’
Conditions
enable inhibit
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LSE Complexity Group
Aerospace Project
Richer framework
• Enablers/facilitators
• Inhibitors/contraints
• Considered from a complexity perspective
• Implications & consequences
Individual level
Group level
Organisational level
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LSE Complexity Group
Enabling Infrastructures
• Only part of a possible solution– depends on individuals, their inter-
relationships and the social ecosystem (organisational, cultural, etc milieu)
• Need to explore space of possibilities/alternatives – no single optimum solution – cannot copy – allow for emergence and self-organisation
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LSE Complexity Group
Enabling Infrastructures
• Understand nature of organisations as CSS– e.g. distributed intelligence– inter-dependencies between
principles/characteristics
• Understand nature of change, adaptation, co-evolution within a social ecosystem.
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LSE Complexity Group
Some questions
• How efficiently does information percolate through the organisation?
• What is the degree of connectivity?– Too much connectivity, could lead to ‘complexity
catastrophe’
• How varied is the repertoire of behaviours?
• Does the organisation evolve new structures to adapt to changes?