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Managing information supply chains

Ubiquity, Volume 2000 Issue December, December 1 - December 31, 2000 | BY Patrick Walsh , Adamantios Koumpis 


Full citation in the ACM Digital Library

Europe's position in the ever more competitive marketplace depends upon the improved performance of European enterprises. The ADRENALIN project, funded by the European Commission's Information Society Technologies (IST) Programme for Research and Development, approaches this task in a novel way by tackling two key areas where the most significant improvements may be obtained, namely, optimisation of information management and changing the current function-oriented approach to process orientation.

Management of information flow in the enterprise uses the Information Supply Chain concept, while our drive towards process orientation is tackled using the Fractal Company approach. These two "pillar" concepts of the project are briefly described further below.

Key Concepts

Conventional supply chains concern all material-management stages from the supply of raw material through to the sale of final product to the end customer. The Information Supply Chain, in contrast, is the parallel communications route, ranging from supplier through the enterprise itself to (and including) the customer. Enterprise Information Supply Chains are important entities in Fractal Companies, the performance and optimisation of which will have a significant effect on the design and performance of the enterprises concerned (and in particular on networked organisations).

The Fractal Company is defined as a set of individual (corporate) fractals. Each fractal is an independently acting corporate entity (e.g. department, factory) whose goals and performance can be precisely described. The essential features of a Fractal Company are self-similarity (between fractals), self-organisation with self-optimisation, goal-orientation, and dynamicism. A fractal's performance is subject to constant re-assessment, evaluation and improvement -- and therein lies a key advantage for continuous enterprise development. The concept relies on the manner in which corporate entities within a company tend to replicate themselves and their characteristics from the micro (working cell) level through to the (macro) corporate enterprise.

Traditional architectural efforts require a substantial initial investment in time and money. First, the current baseline must be captured, and then a target architecture must be developed. Only after these efforts are completed is it possible to implement the relevant architecture changes. Yet, today, many initiatives are underway for implementing new enterprise IT architectures. These initiatives -- both at European and international levels -- are important for supporting existing as well as emerging business needs and cannot be stalled pending the development of current and targeted enterprise IT architectures.

It is commonplace in the world of IT developers for only 20 percent of an enterprise architecture to be strategically valuable, which means that 80 percent of this costly effort yields little reward. To achieve the greatest return from an effort addressing architectures, it is important to target the worthwhile 20 percent of architectural activities. The challenge then for a successful enterprise IT architecture is to allow, indeed encourage initiative, while providing the organisational framework that integrates the initiatives into a cohesive, holistic picture.

Early work carried out by the authors' organisations prepares the ground for the development of a simple -- but usable! -- high level IT framework. This consists of diagrams and definitions for communicating the overall organisation and relationships of all architecture components required to develop and maintain a fractal enterprise architecture. The diagrams are modular while allowing for decomposition into more detailed levels.

The framework is flexible to allow easy addition of new business activities that might arise over time, while also allowing easy integration of existing agency architectures as well as existing (operational) ERP systems and applications. Additionally, and most importantly, the model focuses on common fractal enterprise architecture activities that address realities of the fractal enterprise workplace, without being unduly burdensome to instantiate.

The Research Agenda

Networked enterprise structures, whether limited to the intra-enterprise context or going beyond this to include inter-enterprise value chain partners, must continuously address both sides of the same dilemma, namely:

n whether a "node" in the chain should be given access to information resources and any related functions, such as those of a decision making nature, thus empowering a network node to affect a business process;

n -- or to exclude that respective "node" from access to information resources and any related functions (e.g. those of a decision-making nature), thus reducing the impact of that specific network node on the business processes, but also keeping communication and coordination costs (and efficiency levels) lower.

Of course the risks associated with an inferior structure may accompany this decision. In other words, if a critical node for any particular business process is excluded for business or other reasons, then the decision process will work faster but its quality is likely to be doubtful. An architecture whose IT mechanisms takes into account such Info Chain trade-offs should bring valuable benefits to the enterprise concerned.

Networking enterprises across the Supply Chain to share knowledge about the underlying technologies etc. involves a quite different scale of objectives to setting up the same structure for a purely business objective (e.g. minimising time overheads).

Although the same networked structure might be adopted in both cases, involving the same partners and the same IT systems and applications, there will be a strong differentiation in the targeted usage, and hence in the results.

Based on these observations, we will revisit the previous statement to evaluate the differentiation in usage in the following way: though the same partners and the same IT systems and applications are used, the differentiation in the (business) objective of a networked structure should drive us to adopt a quantitative mechanism for introducing these differentiations in respect of the outlook and the basics of our networked schemes.

The ADRENALIN project has made a start at defining important architectural principles for Information Supply Chains within next generation enterprises. Fractal Company concepts have been introduced as a key enabler for moving from function orientation in enterprises towards the more powerful approach of process orientation. However, these are still early days and much work remains to be done. The project will disseminate its approaches and experience to others through its Industrial Reference Group, while collecting valuable feedback in the process. In order to increase the potential uptake of work carried out in the project, we foresee collaborations on the joint specification of shared business models to integrate front- and back-end business and commercial ERP systems.

In the world of business, changes in the working environment of enterprises are now driven by the needs of industry to respond in an agile manner to market forces, such as customer demand, increased competition and shifting patterns of global trading, etc. This also requires a clear identification and redeployment of traditional business functions; a major challenge for companies in that respect is the integration of organisation structures, advanced information and communication technology, and people. There also remains a need for greater understanding of how enterprises will operate in a "shared data / information / knowledge environment," through distributed working approaches, and based on the paradigm of an Information Supply Chain.

Furthermore, IT developers will need assistance to invest technologically intensive resources in the research and development of those essential building blocks that will form the new evolutionary Information Society services of the enterprise world. The work of ADRENALIN will play its part in facilitating that task.

Patrick Walsh is managing director of Prutech Innovation Services Ltd., Ireland: [email protected]. Adamantios Koumpis heads the Research Programmes Division at Unisoft S.A., Greece: [email protected]. Together they introduced the concept of Information Supply Chains as a means for supporting complex information operations at intra- and inter-enterprise levels.


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