BUSINESS DESIGN IN THE ENTERPRISE LIFE-CYCLE

The purpose of this paper is to facilitate systematic management of the design of Enterprises throughout their life-cycle by identifying the events (requirements) which should initiate (rejdesign. It identifies the high level capabilities required to execute the design and also provides suggestions about the allocation of design responsibilities to organisational elements. 27 http://sajie.journals.ac.za


Introduction
With the ever-accelerat ing rate of change in the business environment business leaders are becoming increasingl y aware of the need to stay ahead of their competition.This realisation leads to initiatives to improve the efficiency of their enterpri ses often in an empirical and haphazard fashion .Enterprises are in fact comple x systems and as such should be designed in a structured manner.Due to internal factors and changes in the environment business, designs age and need constant refurbi shment.
Competitive pressures on companies are continuously increasing with the growing trend towards gJobaJisation.This necessitates companies to become competitive on a ' global scale i.e. world class compan ies.Wireman [1] states that : "World class requires the elimination ofcomp lexity.It requires simplicity in design and .,.... processes./I Elegantly simple designs very seldom result from an approach that adopts the first feasible .design that presents itself.It generally requires the generation of a set of alternatives and sound evaluation and decision-making practices to arrive at a good solution i.e. systematic structured design is required .This paper places the need for business design in a life-cycle context and suggests how the design of an enterprise may be approached.

Enterprise objectives
Enterprises are created to contribute to the objectives of their owners over the long term (generate wealth) through satisfying needs for products or services .An Enterprise can satisfy the need for products /services by adding form, place, time, ownership or perceived value to the elements of the product/service or the complete product/service .

The life cycle of an enterprise
Enterprises have the nature of self-sustaining systems, which implies that they can adjust to the environment and repair themselves.As shown in figure 1 the life cycle of an enterpri se contains a number of loops similar to a closed loop control system [2].
In figure 1 only a single instance of a product life cycle is illustrated by processes 3.2 through 3.10, where one product is initiated by process 3.6 and terminated by process 3.10, whereas in real life many such instances will occur.
The important events in the enterprise life cycle are: ~The initial establishment of the enterprise when the entrepreneur identifies an opportunity gathers an entrepreneurial team and develops a new enterprise capability shown as process 2 in figure 1.
~This capability when operational needs to be maintained to ensure that it continues to operate as intended despite external impacts.These impacts may be resource impacts e.g.personnel resignations and throughput impacts such as changes in production volumes or  ~The development of new products and services in response to market that changes have to be made to the delivery processes for products and their SU~)POlt: " ' >Wj';'t; ~The operational processes are also subject to internal deterioration with respect quality and productivity that must be attended to, to remain competitive.
~Changes in the scope of products and services over time can accumulate to the enterprise capabilities can no longer effectively deliver the changed mix.
~Alternatively changes in business and information technology (IT) as well improvements at competitors may degrade the enterprise's competitive nn,~;+; .... n • +rv extent that re-engineering becomes imperative.
~Whereas it is seldom possible to design all aspects of an enterprise analytical way, ample opportunity normally exists to improve the design in an incremental way.This is achieved through continuous programs.
Business Design thus has to cater for all these situations to be effective in providing and ' sustaining a capability to meet the enterprise objectives.
Sections 4 to 10 of this paper describe the above events and their implications in terms of requirements for Business Design in greater detail.

Creating the enterprise
In creating the enterprise, an entrepreneurial team has identified a business opportunity, which has to be developed from scratch.In its most extreme case this may include everything from market research, through product and process development, implementation, start up, operations, sales and support.
The creation of a new enterprise poses a special challenge to the entrepreneur in that he has to first establish a design capability before the enterprise can be designed.In reality this need is seldom recognised.This leads to a situation where most enterprises grow from humble beginnings and incrementally develop their own design either : ~In a bottom up manner by combining various elements in an empirical manner and learning from experience what does not work, or ~by copying their design (through benchmarking) from enterprises perceived as good role models.
For those fortunate enough to have the insight to realise the need for enterprise engineering and the opportunity to embark on a green fields design it is crucial to thoroughly understand the requirements for their envisaged enterprise [3].This requires proper market research to ensure sound positioning in viable market segments and an insight into the realisation environment to mobilise the appropriate resources to design a capability which is optimally hed to the needs and trends in the target markets.The entrepreneur with no previous H enceof enterprise engineering would be well advised to employ proven experience to se.i hd guide the endeavour.In this situation the Enterprise Designer has to fully design products and services and their support as well as the whole delivery system for the .~et,and support and all the resources by which it is implemented .
;rlesign is therefore less constrained in that there is no current enterprise system into which i t o integrate and that there is no current design capability, which has to be applied to i~e the enterprise.
. itionally the Business Designers have the opportunity to determine an optimal cultural ign~md select people that match its profile.The risk in such a development can be remely high due to the complexity and scope of the problem and the lack of experience of st entrepreneurial teams.
Re-eugineering the enterprise nder re-engineering we handle the case where the internal design of the enterprise as a hoie is, or has become inadequate to deliver and support the product portfolio to market i.e. 4~enterprise has become non-viable.This situation could arise, inter alia, because : The initial design was inadequate (probably as result of an empirical approach), the resource technology has become obsolete, availability has become a problem, or resource cost have become unacceptable.
re-engineering exercises seek a breakthrough change from the existing design, which major upsets for the current organisation.
AOCOr'01l1lg to Hammer [4] (who is widely acclaimed as the father ofre-engineering) there are commandments for a re-engineering program : Make sure that you know what re-engineering really is before you attempt to do it -and then do it, not something else.
Only processes can be re-engineered.Before you can re-engineer your processes, you must identify them.
Understanding your processes is an essential first step in re-engineering, but excessive analysis of those processes is a destructive waste of time.You must place strict limits, both on the time you take to develop this understanding and on the length of the description you create.
}> If you proceed to re-engineering without the proper leadership, you are making a fatal mistake.If your leadership is nominal rather than serious, and is not prepared to make the required commitment, your efforts are doomed to failure.
Y Re-engineering requires radical, breakthrough ideas about process design.Re-engineering leaders must encourage people to pursue stretch goals and to think out of the box; to this end, leadership must reward creative thinking and be willing to consider any new idea.
~Before implementing a process in the real world, create a laboratory version in order to test whether your idea works.You will inevitably discover shortcomings and mistakes in your design, which you can then repair.Proceeding directly from idea to real-world implementation is a recipe for disaster.
~You must re-engineer quickly.If you can not show some tangible results within a year, you will lose the support and momentum necessary to make the effort successful.To this end, "scope creep" must be avoided at all costs.Stay focused and narrow the scope if necessary in order to get results fast.
~You cannot re-engineer a process in isolation.Everything must be on the table.Any attempt to set limits to preserve a piece ofthe old system will doom your efforts to failure.
~Re-engineering needs its own style of implementation: fast, improvisational, and iterative: ~Any successful re-engineering effort must take into account the personal needs of the individuals it will affect.The new process must offer some benefit to the people who are, after all, being asked to embrace enormous change, and the transition form the old process to the new ones must be made with great sensitivity to their feelings.
In re-engineering it is crucial to establish the current reality, find innovative methods to change paradigms, processes and implementation to really establish the most effective and flexible value stream for performing the business.In this situation the whole enterprise has to be re-engineered to become re-aligned with the current demands and trends in its markets.
This design is normally severely constrained in that the existing enterprise and its current • interfaces with the existing operating environment imply a host system into which the reinvented enterprise has to fit.The enterprise may have an existing realisation environment for Business Design with certain constraints, and the current resources may have to be re-used in the new design.
The emphasis in this situation is to understand and predict the requirements of the current and future markets -to understand and evaluate the constraints and capabilities offered by the current design, obtain the buy-in of the existing organisation, and implement the structural and cultural transformation.The design of the business transformation also poses a major challenge.

Changes in strategic intent
Strategic intent initially guides Business Design in the creation of the enterprise .This intent should ideally evolve over time to track trends in the market, competition, technology and the business and operating environment -sometimes through neglect or lack of insight this does not happen.
If an enterprise suddenly awakens to the need to re-asses its positioning in its field of endeavour drastic changes may be required to the strategic intent.Such changes have a crucial impact on the Business Design in that the whole product portfolio and all the capabilities may have to be revised to fit the new intent.This creates the most complex challenge for the Business Design where companies with this type of problem have normally not paid much attention to Business Design and do not have a capability for Business Design.These companies nevertheless suddenly have to re-engineer their product portfolio, total .business .capability and probably the enterprise culture as well, whilst being severely constrained by the existing product range.Support of the existing products has to be maintained even though the products may be discontinued and replaced by new products.The process design is severely constrained by the existing host environment into which it may have to fit and the resources that are currently employed and have to be transformed to the new design.
This challenge requires the Business Designer to: ~Establish a design capability, ~assess the current reality, ~interpret a revised strategic intent, ~develop a new integrated portfolio of products and services, ~plan integration and migration of the new and old products and services, ~develop a revised capability to deliver the new products, and ~migrate the existing products and or maintain support for the old products while optimally re-using the resources in the implementation of the new design.

Continuous improvement of current enterprise
Continuous improvement applies during the whole life of the enterprise and has the objective of identifying many incremental changes mostly aimed at efficiency improvements.Cumulatively these improvements may lead to substantial impacts on the cost effectiveness of the enterprise.Continuous Improvement initiatives are often limited in scope and may impact only on a single or a few activities or resources in the enterprise.The operational personnel may be able to implement these changes on their own by changing the layout sequencing or procedures by which work is performed or requesting/making localised changes to the information technology applications.The challenge to Business Design in this situation is to manage the higher-level system impacts and manage the design baseline.Business Design has to ensure that the limited Business Design resources are optimally utilised.The higher level system impact of improvements have to be managed to ensure that each proposed change is assessed to determine whether it will impact on the higher level system or interfaces with the other elements of the system.In such cases Business Design needs to become involved in the design process by managing the interfaces and integrating design efforts in the proposed and other affected areas.
In all cases the Business Design function needs to be involved with baseline management so as to execute their responsibility as custodians of the enterprise design.This implies that Business Design must have a mechanism to detect, identify and prioritise the business opporturuties and initiatives and provide capacity for management and integration of approved developments -or at least monitors for detrimental impacts of local improvements.Configuration management, design definition and integration and integration testing capability and capacity should at least be provided for.
In some organisation benchmarking of both product designs and process designs is an integral part of each managers critical performance parameters to ensure that they remain aware of best practices in the environment and their own relative performance [5]?77.It is obviously expected that continuous improvement programs must be instituted in areas where opportunities are identified which are important for the success of the enterprise and where performance is weak.

Product and Service evolution
As shown in figure 1, process 3.7 identifies new product service opportunmes from the delivery (3.8), support (3.9) and marketing (3.10) processes.Each new product or service first of all has to be designed itself and then adds to the requirements for delivery and support processes.These processes have to be designed, on the one hand to suit the requirements set by the products and the support for the products and on the other hand to fit into the existing host environment in the enterprise.The requirements for the product have to be known comprehensively i.e. cover all aspects of how the product has to fit into its bigger environment both in terms of how, where and by whom it will be sold, made, distributed, serviced and phased-out as well as aspects arising from its own life-cycle.This means that the products and services need to be integrated into the product portfolio to ensure that the overall position of the enterprise is optimised in its markets for profitability.It further means that the whole life cycle of the product or service needs to be considered, i.e. the forecast demand by channel by market over its life cycle including views of how the product and its support will be phased out, integrated into, or replaced by new/follow-on products.This is especially important where products have a long operational life like a durable system or services such as long-term insurance.
The above emphasises the importance of also providing for the design of product enhancements or a migration path from one product to another.The Business Designer faces the challenge of designing products that complement the product portfolio, devising processes that are maximally compatible with the existing processes as well as complement the demand pattern on resources and which integrate well with the existing enterprise.
These requirements imply that the Business Designer must maintain a solid knowledge base of the existing processes and implementations as well as of the total enterprise capabilitypreferably captured in formal models.Similarly the product design capability has to have insight into the whole product portfolio and its match and growth to satisfy market demands and trends.

Maintaining the capability
Maintaining the capability entails all the actions necessary to ensure that the capability remains viable and suffers no deterioration in performance due to anticipated variations in terms of both the throughput variables as well as the elements or resources by which the design is implemented .Typical examples would be : ).> Variations in demand for services in total or by channel, variant or area, ).> variations in quality of inputs e.g.source data, and ).> changes in the quality or availability of resources e.g.resignations of personnel or degradation in skill.
The responsibility is mainly one of ensuring that the continued compliance of the implemented capability versus the design baseline is monitored and that mechanisms are in place to rectify deviations.This responsibility should primarily be taken by the operational functions of the organisation.
The Business Design function must however ensure that the support infrastructure is designed and that the capability for support is implemented to enable operations to execute this responsibility.
It is also important to monitor the performance of the design in operation to ensure that any deterioration is detected and the effect of local corrective action is visible.If local action in terms of operational initiatives is not successful, Business Design should intervene in terms of providing second or third line support to immediately remedy the situation followed by eventual updates of the enterprise design if required.

Maintaining operational efficiency
When business capabilities are implemented and in operation they will only deliver the intended contribution to profit if they are operated at design ratings and the planned efficiency.
Operational efficiencies essentially depend on the scheduling of work, the productivity with which work is performed and the yield of processes i.e. how much of the output produced is of acceptable quality.These parameters need to be managed by the operational managers.
To enable the management to monitor the processes, detect deviations timely and allow them to respond appropriately, proper management information system tools are required.These tools need to be designed into the business capabilities so that management information is automatically generated as part of the operational processes.
Process controls rather than go-no-go checks are recommended to ensure that negative trends are detected before they actually exceed control limits.This will enable pro-active initiatives to prevent failures rather than to correct them.The pro-active actions may involve adjustments to the enterprise design that could involve the Business Designers.
Results from the management information system should be fed through to the Business Designer responsible for the capability design as part of an ongoing design performance feedback system.This feedback should be incorporated into the knowledge base to verify and update process and implementation standards and benchmarks.
The preceding sections have expanded the requirements of what Business Design has to attain.These requirements may be translated into how the design should be executed by investigating a methodology and process for design.

Methodology required for enterprise design
What has to be designed and the proposed methodology determine the capabilities required for enterprise design.The preceding sections have identified the various sources of needs and the types of need.
A system engineering methodology is proposed as illustrated in figure 2 with an appropriate knowledge base and tool-set to support it.
The systems engineering methodology entails a generic iterative converging process as illustrated in figure 3. Figure 3   The translations required during product development are as follows : }> The conceptual phase focuses on defining the clients' needs in an accurate and comprehensive way as well as thoroughl y understanding his value system and translating this into the functions that the product has to perform in order to satisfy the clients needs.The other steps in the framework are performed perfunctorily to establish: • The validity of the clients' needs.
• Technical feasibility of complying with the need.
• Ability of the existing/envisaged enterprise to design and deliver the product.
• An approach to develop further with the least risk.}>-In the preliminary development phase the focus is on selecting the correct system concept i.e, the translation of the functional requirements of the system from the conceptual phase to technical design requirements for subsystems -suitably partitioned to match the development organisation whether in-house or outsourced , TIns phase provides: • Development specifications per subsystem considering the support concept (supportability) and manufacturability/producib ility.• Associated development approaches per subsystem.
• Development approach for support system development.
• Firm sourceing decisions for both the production and operational phases.
• Confirmation of technical and operational feasibility.• Revised and upgraded preliminary business case.
• Revised development approach.
• Plans and budgets for the next phase.
~Experimental development is only required for system segments that pose a high risk in" detail development.In this case it is normally prudent to fully develop and qualifythis' segment of the design before it becomes a showstopper.The process followed is similar to that used in full-scale development.
~Full-scale development focuses on realising the development specifications and achieving an integrated implementation for the system.It is thus about detail structures, flows, " interfaces and optimal component selections.Here the translation is from a type of implementation element to the detail design of the element i.e. its implementation characteristics specified in detail.This phase produces : • Detail product designs.
• Detail support design.
• Revised plans for production development.
• Final business case to proceed to production.
• Test reports that prove the systems compliance.
To summarise, product development provides a design, in the form of a set of design documentation, that when built has been "proven" to perform in such a way that it will satisfy the requirements of the client.

Capabilities required to interpret needs in delivery design
During the two phases of delivery process development the following translations are required: ~Engineering development which translates product requirements, i.e. features required, into requirements for processes to create the features and deliver the products.It further translates the processes into requirements for the generic implementation elements by which the processes can be executed which establishes the conceptual design for the delivery system (either new or adaptations to the existing system).In this phase the product delivery demands are reviewed and a delivery approach developed which includes: • Selecting the type(s) of delivery systems to cope with the expected product market life cycle.• Taking of sourceing (make-buy) decisions with respect to the delivery processes.
• Refining the product design to adapt to produce-ability, manufacturability and supportability requirements overlooked during earlier development.• Design of process flows and process type selection down to activity level.
• Allocation to production/support resources.
Syntheses of conceptual designs, e.g .equipment identification, infrastructure layouts, software architectures, database architecture, delivery manpower structures and knowledge architectures.Design requirements for the detail design of the delivery elements and their integration.Industrialisation translates the design requirements into the detail design documentation the delivery elements, procures the elements according to these specifications and t;j;;~" i: ntegrates the elements into the initial delivery and support capability.This phase includes runs to pro ve the capability of the system.The output of this phase includes: Detail designs or specifications for : • Delivery equipment.
• Delivery work instructions.
The operational system : • Computer programs, populated databases and IT infrastructures for operations and support.• Buildings and facilit ies.

Capabilities to design at a level of abstraction
Each development iteration, as depicted in figure 3, consists of eight steps .This means that the Business Design must provide capability for : >-Re/definition of the requirements arising from the external environment or previous phase interpreted to the level of abstraction for the phase envisaged so that it is clear what this iteration of design has to achieve, e.g.customer wants are translated into product functions.
~Re/definition of the value system of the "client" translated and interpreted to the appropriate level of abstraction to guide and focus design effort and provide a basis for trade-off.
~Requirements/problem analysis, which partitions and cascades requirements to a level where adequate allocation of functionality to implementation, can be established for the purposes of the applicable phase.
~System synthesis -which identifies one or multiple alternative "low level" implementations and identifies possible ways in which these may be integrated to a system level.
~Modelling -which selects and develops tools to cascade and partition requirements, and assess the possible alternatives for sifting, synthesis, evaluation and trade-offs.
~Analysis, evaluation, optimisation where the alternative(s) proposed is evaluated in terms of appropriate measures for the phase.
~Decision-making and recording is where an alternative is selected, its value/worth predicted and recommendations as to whether to proceed with development are reached.
Where further development is proposed, the specifications to be achieved by the next phase and business case are recorded.
> Planning further development -reviews the development approach, determines plans, budgets and milestones for the next phase of development, which reflect the incremental risk of proceeding with further development.

Capabilities summarised
The requirements for a Business Development capability may be summarised from the above by the steps in the development cycle.These elements may then later be allocated to organisational groupings.Tables 1 to 5 summarise the requirements by development phase and development step.

Capabilities aUocated to roles
In order to implement the requirements for a Business Development capability the ailocation of tasks to organisational groupings has to be done taking cognisance of the available skillsets in the market as well as the demands placed on the management structure who have to guide and control it.A generic structure showing the allocations of functions to organisational units based on benchmarking with a number of prominent players in the authors' industries is shown in figure 4.

Conclusions
By placing enterprise design in a life-cycle context the enterprise designers are provided with a framework, which facilitates monitoring for events which should trigger re-design and which can improve focus in determining the design requirements for such a design effort.The proposed allocation of responsibility for establishing and maintaining the enterprise design can help management to structure the business development functions more effectively.The management and leaders of enterprises are accountable both for establishing, enhancing and maintaining an organisational capability for the business in which they are engaged as well as the efficient application ofthis capability.
The development and maintenance of enterprise capabilities require unique and focussed attention that does not synergise well with the day to day operations of an enterprise.
Seven situations can be distinguished which initiate enterprise design : 1) When a new enterprise is established.
2) When the strategic intent of the enterprise changes e.g. a new focus in terms of.targetmarkets; products, canals or value proposition is pursued.
3) When through organic growth or advances in business or information technology needs, opportunities arise to improve the business processes by which the enterprise achieves its outcomes.
4) When enhancements or new products or services are added to the existing products or product range.
5) When operational functions engage in continuous improvement programs.
6) When disturbances in the resource or business environment force the operational functions to adjust or maintain its capabilities.
7) When operational efficiencies decline or fall behind competitors.
These situations require different mechanisms to monitor and detect them and a different approach to handle their impact on the enterprise.The responsibility for reacting to the impacts should also be in different places.
Enterprises should provide for Business Design at the different levels in the organisation and though mainly focussed in a separate development function Business Design should also pervade the product design, operational, marketing, strategic design, sales and supporting functions.
By implementing these proposals, businesses can be structured to effectively establish and maintain the design of their capabilities.This would lead to more timely discovery of the needs for redesign, less duplication in design, lower risk of voids in the Business Design and clearer accountability. -

Figure 1 :
Figure 1: Business design in the enterprise life-cycle

Figure 2 :
Figure 2: System engineering methodology for development 12. Capabilities required to interpret needs in product design The capabilities required of the Enterprise design function are determined by the requirements implied by the phases and translation into product and delivery system development as shown in figure 3. The four product development iterations i.e. conceptual development , preliminary development, experimental development and full scale development are followed by two production development phases i.e. engineering development and industrialisation.

Figure 4 :
Figure 4: Generic structure for Business Design depicts a case where the external stimulus for development is a requirement for developing a product or service.It illustrates four cycles of development to finalise the product design and two cycles of development to implement the delivery and two cycles of development to implement the delivery capability.The multiple development cycles are based on the translations in design and are mainly aimed at managing risk at each level of abstraction.

Table 1 : High level capabilities required for strategic business design
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