Engineering The Sustainable Business:
An Enterprise Architecture Approach
ovidiu Noran
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Engineering The Sustainable Business:
An Enterprise Architecture Approach
Short Biography:
Ovidiu Noran holds a PhD in Enterprise Architecture, a Masters in Information and Communication Technology and an Engineering degree in Building Services and Automation. He has worked as an engineer and business architecture/management consultant for companies in Europe and Australia and is currently lecturing Enterprise Architecture and Systems Engineering at Griffith University. He is a member of several professional bodies (Engineers Australia, Australian Institute of Management, etc) and standardization committees ISO/IEC/SC7/WG42and ISO/TC184/SC5/WG1. His seminars, publications and regular involvement in conferences and journals highlight research interests in Artificial Intelligence, Software Engineering and Enterprise Architecture and a preference for Action Research.
Manuscript Exceeding 5000 words. Reasons:
1) the chapter presents the use of two highly complex concepts : an Enterprise Architecture Framework and a Meta-methodology that required proper introduction. In addition, explanation of other essential environmental-specific concepts (necessary in an EA-oriented book) make up to around 850 words.
2) the proposed chapter is thoroughly referenced. The references alone constitute almost 1000 words.
The manuscript has not been presented at any conference. However the EA concepts presented have been validated in several published case studies (referenced in the proposed chapter).
Engineering The Sustainable Business:
An Enterprise Architecture Approach
Abstract:
Sustainability has always been an essential issue for theprofitable business. Nowadays however,environmental responsibility is fast becoming just as important as economic viability as climate change theories turn into a grim reality and relevant regulations are expected to tighten significantly in the near future. Businesses typically react to this challenge by implementing environmental reporting and management systems; however; often the company does not reap the full benefits from such initiatives, mostly because the environmental approach is not integrated in the overall strategyand management is not supported by appropriately aggregated and available environmental information. This chapter argues for the necessity and benefit of integrating the proposed environmental management (EM) project into the ongoing ‘extended’ enterprise architecture (EA) initiative present in all successful companies. This is done by demonstrating how a reference architecture framework and a meta-methodology using EA artefacts can be used to co-design the EM system, the organisation and its information system in order to achieve a much needed synergy between the business and environmental strategic management.
Keywords: Enterprise Architecture, Enterprise Engineering, Sustainability, Sustainable Development, Environmental Management System, Meta-methodology, GERAM, ISO15704, ISO14001
Engineering the Sustainable Business: an EA Approach Author
Engineering the sustainable Business: An EnterpriseArchitecture Approach
Environmental Sustainability – the Other issue of the new century
One of the main concerns of businesses of all times has been their capacity to survive and adapt to changes in the commercial environment and thus to remain productive for their entire envisaged life span – hence, to be aneconomic sustainable business. History has shown however, that the continued existence of businesses also strongly depends on their impact on the natural environment and the way they treat theirworkers. This basic truth was emphasized by Elkington’s(1998) Triple Bottom Line (TBL) approach to business sustainability: one must achieve not only economic bottom-line performance but environmental and social performance as well. Blackburn (2007) compares economic sustainability to air and environmental and social sustainability to food:the first is more urgent but not more important than the second.Blackburn also rightfully asserts that ‘the 2Rs’ – Respect for humans (and all life) and judicious management of Resources – form an essential component of overall sustainability of the business (in this chapter also called ‘enterprise’, ‘company’ or ‘organisation’).
Hence, asuccessful enterprisemust take a whole-system, integrated approach towards sustainability, understood in this chapter as an abbreviation for the Brundthal Reportnotion of sustainable developmentthat “…meets the needs of the present without compromising the ability of future generations to meet their own needs.” (UN World Commission on Environment and Development, 1987).
Tackling Environmental Sustainability Challenges
The current mainstream consensus is that climate change is real and happening at a rate faster than initially thought. In these conditions it is to be expected that environmental legislation will become considerably more restrictive, customer and stakeholder expectations will be much higher and environmental damage clean-up and prevention expenses will increase substantially. On the opportunity side however, sustainability will become an even more effective device to manage intangible but essential assets such as corporate image, brand and reputation (Aust. Dept. of Environment and Heritage, 2003).
Presently, it appears that the main challengesbrought by sustainability are integration and coherence. Thus, environmental responsibility must permeate all aspects and levels of the business and the environmental constraints must be consistently understood and managed across the organisation, in an integrated manner, in order to preserve the coherence of the business units.
Meeting these challenges requires setting up an environmental management (EM) project with:
a) top-management support for the project champion(s) (CEO can be one, however not the only one);
b) sufficient authority and appropriate human / infrastructure resourcesallocated;
c) a suitable environmental strategy, integrated in the general company strategic direction;
d) a cross-departmental approach, horizontally and vertically;
These prerequisites are essential if the project is to trigger organisational culture change (to determine permanent changes in the way people do things) and to include changes in the enterprise’s information system (IS) for effective access to environmental informationfacilitatingthe decision-making process(Molloy, 2007; Nilsson, 2001).
The above-mentioned issues match to a good extent the scope of a typical ‘extended’ (i.e. applying to the entire organisation, not only to its IS/IT subsystem(Doucet et al., 2008)) enterprise architecture (EA) project. This matchmay provide a solution to an integrated, coherent approach to the introduction of environmental issues in the management and operation of all business units. This is desirable because a company whose architecture includes environmental management, competencies and responsibilities in an integrated fashion willhave the necessary agility and preparednessnot only to cope with, but even thrive on the challenges brought about by climate change and global warming, thus turning a potential weakness into a strength.Hence, changes in the economic, natural and/or social environment will produce less knee-jerk, interventionist management behaviour and organisational turbulence, since the capacity to cope with change will be built-in rather than imposed. The company willbe able to adapt promptly and naturally, according to well-defined and effective policies including environmental adaptability.
Environmental Sustainability and Enterprise Architecture
The quest to evolve a business towards environmental sustainability occurs in a complex environment: there are risks, legal and financial constraints, government agencies, non-governmental organisations (NGOs), public opinion, stakeholders and corporate social responsibility (CSR) considerations. On the other hand, there is also a growing body of specialised literature, current and emerging standards, reporting frameworks and consultant companies, all offering to help and guide towards business sustainability assessment, design, implementation and reporting/ monitoring in various degrees of detail. This has the potential to assist but at the same time compound what already constitutes a complex enterprise engineering (EE) task.
The project to create or evolvethe environmentally sustainablebusinessinvolves several typical steps, such as: identifying the business processes and understanding their impact on the environment (the AS-IS), defining a vision and concept(s) for the future state (the TO-BE), eliciting and specifying requirements to reach the selected TO-BE state, (re)designing the processes, policies and often the entire organisation according to these requirements, implementing them, continually monitoring the effects and applying some of the previous steps for correction and enhancement. These phasesreflect the continuous improvement Plan-Do-Check-Act cycle(Shewhart, 1986) which is underlying the majority of the mainstream environmental sustainability support artefacts available nowadays.
As in any project start-up, the stakeholders and project manager are faced with several immediate problems. What is the state of the business now (AS-IS), and how sustainable(TBL-wise) is it? What are the requirements and the baseline? What is that the business wants to achieve (TO-BE state): minimum compliance with the law in the short term, or forward-looking policies and processes, with the afferent risks and unknown productivity effects in the short term? How are they going to get to the desired TO-BE state, namely what do they actually do next? And if help is available, which artefacts can be used, when and where?Should they require outside help (e.g. sustainability consultants) - and then what to ask for?
This chapter argues for the necessity and benefit of integrating the proposed EM project into the ongoing extended EAinitiative present in all successful companies (note thatin this chapter, EA is understood as extended EA unless otherwise stated). For example, strategic integration of EM is only achievable if necessary information is quickly available and is of high quality (Molloy, 2007). Thus, information must be at the fingertips of managers in the form and level of aggregation they need as agility is not compatible with delays due to digging out and filtering suitable information separately for each request. Moreover, companies need the environmental aspect to be present on all levels of management, which effectively calls for anenvironmental decision support system. For such reasons, the ongoing EA project needs to be fully aware of the environmental sustainability project so that all information / process / organisational / technical aspects are taken care of in an integrated manner.
Current problems and some proposed solutions
While initially environmental activities were mostly triggered by legal action and involved addressing the effect (compensation, treatment, etc) rather than the cause, climate change, changing regulations and growing public awareness and pressure have resulted in the environmental aspect being considered in all life cycle phases of the company and its products. In addition, the intended environmental scope has gradually extended from the operational level (reflex reactions to regulations and law suits) to tactical and strategic level. However, to date most of these efforts are still disjointed,i.e. specific to business units and not properly supported by the ICT infrastructure. This means that a) the company loses coherence as different units approach environmental sustainability in different levels of detail and at a different pace and b) top management cannot effectively use the information generated by the environmental reporting functions due to language, format, level of aggregation etc.
The Environmental Management System: A Silver Bullet?
Companies typically address themandated and / or perceived requirement to introduce environmental responsibility in their business units by attemptingto implement some type of environmental reporting and environmental management system (EMS). An EMS is intended to be part of an organization's management system that is used to develop and implement its environmental policy and manage its environmental aspects (ISO, 2004). Thus, it is typically seen as an add-on to the existing management that also enables the organisation to benchmark its environmental performance and evaluate its performance and improvement(note that in this chapter, environmental measurement and reporting are seen as functions of the EMS acting as a decision support system).
While an EMS is a significant step in the right direction, when implemented in isolation it will not trigger the cultural change necessary to make environmental responsibility ‘stick’ in the company. Some authors (Coglianese and Nash, 2001) argue that the implementation of an EMS alone (especially if imposed on the organisation for various reasons), is irrelevant if the company does not have a real commitment to environmental improvements as a prerequisite. For example, ISO 14001:2004 only requires that EMS-s be designed in such a way that companies can work toward the goal of regulatory compliance and seek to make improvements, not that the company actually achieves environmental excellence or even full compliance with existing laws!Hence, it appears that to be effective, EMS-s must be backed by regulation and enforcement by e.g. environmental protection agencies (EPAs).
Various reference models (frameworks, methods etc) for EMS design have emerged. However, each company is different and therefore EMS implementations using such reference models require their customisation - which needs knowledge of those artefacts and may result in ‘locking’ the company in a particular proprietary solution.
Methods,Frameworks, Standards … and other Artefacts
Generally, the available definitions of sustainability do not provide enough detail to translate into action effectively. (Blackburn, 2007)addresses this problem by proposinga‘Sustainability Operating System’(rather than an EMS) which is in fact a management method to achieve sustainability based on the Brundthal report, the ‘2R’s and the TBL approach applied to sustainability.Willard (2002) also recommends a TBL-based approach encompassing economy / profit, environment / planet and equity / people with seven benefits: easier hiring and retention, increased productivity, reduced manufacturing / commercial sites expenses, increased revenue / market share and reduced risk. Clayton and Redcliffe (1998) propose a systems approach to integration of sustainability aspects into the business and define the concept of environmental quality as capital (and thus the feasibility of ‘tradable pollution’).
EM frameworks aim to provide a structured set of artefacts (methods, aspects, reference models, etc) specialised for the EM area. Some examples are The Natural Step (TNS) Framework, using a systems-based approach to organisational planning for sustainability(Upham, 2000), The Natural Edge Project(TNEP, 2007)which proposes a holistic approach (‘Whole System’)taking into accountsystem life cycle and Life Cycle Management, a framework of concepts, techniques and procedures aiming to achieve continuous environmental improvement from a life cycle perspective. (Hunkeler et al., 2001).
Assessment and reporting frameworks aim to assist the measurement and reporting functions of the EMS. For example, the Life Cycle Assessment (LCA) method measures the environmental impacts of products or services relative to each other during their life cycles (EPA, 2008). The Global Reporting Initiative’s Sustainability Reporting Framework (GRI, 2002) contains reporting principles, guidance and standard disclosures that are claimed to be applicable to all types of businesses.
International Standards also cover the EM issue. ISO 14000 is a set of reference models for setting up EMS-s, life-cycle assessment, environmental auditing of processes, environmental labelling and environmental performance evaluation. ISO 14001:2004 deals specifically with EMS-s, aiming to provide a framework for a holistic and strategic approach to the organization's environmental policy, plans and actions (ISO, 2004). Standards provide a good starting and reference point for design and assessment; however, current EM standards do not define EM performance levels that the company should meet.
As can be seen, many frameworks, methods, etc recognize the need to analyse the life cycle of the products. However, often there is a need to take into account the life cycle of the host company, the project set up to create the EMS and especially of the EMS itself and analyse the interactions between these entities in the context of their life cycles. This approach provides a holistic approach allowing to represent and clarify business, EM project, EMS and product AS-IS and TO-BE states and identify potential problems and aspects that may not be otherwise obvious. Suitable frameworks describing systems during theirentire life (not just at particular points in time), or life cycle architectures are commonly used in EA. Therefore, in this chapter we argue that EA artefacts can systematize and provide guidance and coherence in implementing an EMS,while at the same time creating a synergy between EM and EA and providing am integrated solution for environmental, social and economic sustainability.
Enterprise Architecture Frameworks, GERAM and GERA
Enterprises are highly complex systems.Therefore, sets of models (sometimes aggregated in architectural descriptions corresponding to viewpoints(ISO/IEC, 2007))are produced using various languages in order to control this complexity and allow the enterprise architect and other stakeholders to focus on various aspects of the business.As models themselves can get complex, modelling frameworks (MFs) are often used to structure them according to various criteria. In addition, several other types of artefacts are commonly used in EA practice, such as methods, reference models (synonymous with ‘partial models’ in this chapter), ontologies, meta-models, glossaries, etc. All these are typically organised in architecture frameworks (AFs), some of which have underlying metamodelsformally describing their structure.Currently there are several mainstream AFs, generic (e.g. PERA (Williams, 1994), or TOGAF (The Open Group, 2006))or aimed at various domains such as manufacturing (CIMOSA (CIMOSA Association, 1996), ARIS (Scheer, 1999), GRAI (Doumeingts, 1984)), defence(DoDAF (DoD Architecture Framework Working Group, 2003)) and information systems (Zachman (Zachman, 1987)) to name a few.
Figure 1. A possible high-level meta-model of GERAM(based on (ISO, 2000))
In this chapter we have selected a reference AF obtained by generalising other AFs and thus considered to be expressive enough to contain all the elements necessary for the EE task at hand, namely achieving environmental sustainability using EA artefacts. This AF is GERAM (Generalised Reference Architecture Framework and Methodology), described in Annex C of ISO15704:2000. Despite its name (owing to historical reasons), GERAM contains several other elements in addition to its reference architecture (GERA) and methodologies (EEMs, see Figure 1). Among others, GERAM has been used in practice to guide EE projects (Bernus et al., 2002; Mo, 2007; Noran, 2004c) and in theory to assess other enterprise AFs (Noran, 2003, 2004a, 2005a; Saha, 2007) and to build a structured repository of AF elements for a proposed decision support system (Noran, 2007a). GERAM is fully described in (ISO, 2000).