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Building Organizational Agility into Large-Scale Software-Reliant
Environments
Philip Boxer
March 25th 2009
Copyright © Philip Boxer 2009 1
Agenda
The divergence of acquisition & demand tempos (3)
The need for three modeling perspectives (2)
Four issues arising in building agility (4)
Valuing flexibility of component systems (5)
Copyright © Philip Boxer 2009 2
Speech by Secretary Gates: There are two paradigms that must coexist
The need for state of the art systems – particularly longer range capabilities – will never go away…
We also need specialized, often relatively low-tech equipment for stability and counter-insurgency missions.
– How do we institutionalize rapid procurement and fielding of such capabilities?
– Why do we currently have to go outside the normal bureaucratic process?
Our conventional modernization programs seek a 99% solution in years.
Stability and counter-insurgency missions require 75% solutions in months.
– The challenge is whether in our bureaucracy and in our minds these two different paradigms can be made to coexist.
Extracted from speech delivered by Secretary of Defense Robert M. Gates, National Defense University, Washington, D.C. September 29, 2008 http://www.defenselink.mil/speeches/speech.aspx?speechid=1279
Copyright © Philip Boxer 2009 3
The three tempos: analyzing the impact of the client’s relation to customers’ changing demands
Client (defense) Enterprise
users
users Supplier 1
Supplier 2
supports
supports
The customer’s demand/threat
The client enterprise aligns to the demand/threat of the customer
The rate at which new forms of demand/threat need to be
satisfactorily addressed
Demand/ Threat Tempo
The rate at which the defense enterprise is able to support new
forms of mission capability
Readiness Tempo
Customers of the Client Enterprise
Supplier Client (defense) Enterprise
The ‘beyond’ of the Client (defense) Enterprise
1 2 3 4 5 6
orc
he
str
atio
n
Syn-chron-ization
Demand/ Threat
Acquisition Tempo
The rate at which new requirements can be
met
The supplier responds to the client enterprise aligning to the demand of
the customer
Copyright © Philip Boxer 2009 4
And So…
• The two paradigms are about diverging acquisition and demand/threat tempos
– Their coexistence depends on managing the readiness tempo in its own right
• To do this, the defense enterprise must:
– sustain multiple collaborations able to address concurrent types of demand/threat
– build organizational agility into large-scale software-reliant environments, based on the flexibility of individual capabilities
• In support, the supplier has to be able to price flexibility of component systems
– By valuing its impact on the overall agility of the defense enterprise
Copyright © Philip Boxer 2009 5
Agenda
The divergence of acquisition & demand tempos (3)
The need for three modeling perspectives (2)
Four issues arising in building agility (4)
Valuing flexibility of component systems (5)
Copyright © Philip Boxer 2009 6
The Supplier’s perspective on the client enterprise: the focus is on the SoS
A defined value-creating relationships enables the
other two vertices to be approached from the
infrastructure perspective
Value proposition in
response to Demand
Governance
Value-creating (threat-reducing) relationship
Collaboration Socio-Technical Governance of
the infrastructure
Supporting Infrastructure
Demand for value-creating (threat-reducing) relationship
Behaviors supporting the collaboration
Copyright © Philip Boxer 2009 7
The need for three modeling perspectives: making the demand-side perspective explicit
Demand for value-creating (threat-reducing)
relationships
Collaborations Socio-Technical
Value propositions in
response to Demand
Behaviors supporting the
value propositions
Governance of the
infrastructure
The (supply-side) infrastructure
perspective on the behavior of systems
of systems
The demand-side perspective on the value-
creating relationships to demand
Multiple Collaborations Supporting
Infrastructure
Governance
Value-creating (threat-reducing) relationships
Complex systems of systems: all three modeling perspectives become necessary
Copyright © Philip Boxer 2009 8
Agenda
The divergence of acquisition & demand tempos (3)
The need for three modeling perspectives (2)
Four issues arising in building agility (4)
Valuing flexibility of component systems (5)
Copyright © Philip Boxer 2009 9
1: The Double ‘V’ presents a Double Challenge
Requirement Solution
System components
Design decomposition
System integration
Multiple Collaborations supported by Collaborative
SoS
This cycle must drive the client (defense) enterprise.
1
2
3
4
5
6 Military Effects
Composite Capabilities
Mission Command
Force Structure and Composite Capabilities
Scenarios and Campaign Plans
demand-side
supply-side
Boxer, P.J. (2007) Managing the SoS Value Cycle, January 2007, http://www.asymmetricdesign.com/archives/85
Operational Capability
plus DOTMLPF =
Capability gap
minus DOTMLPF* =
* Doctrine Organization Training Materiel Leadership Personnel Facilities
Copyright © Philip Boxer 2009 10
demand-side
supply-side
2: Alignment to demand has to be stratified
* Framework Architectures, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, June 2008
6 Decisive Points
Effects
Campaign (Demand) Tempo
4
5 Mission Command
Force Structure Operational Capabilities
Composite Capabilities
Synchronization
Readiness Tempo
1
2
3 Operational Capabilities
Fielded Equipment
Equipment
Equipment
Fielded Equipment
Acquisition Tempo
Copyright © Philip Boxer 2009 11
0
1
2
3
4
5
0
1
2
3
4
5
Materiel & technology
Doctrine & operational concepts
Facilities & infrastructure
Leadership & education
Driven from ‘center’ of the Client Enterprise
Edge organization
Force composition & collective learning
Situational understanding
Personnel & culture
Driven from the ‘edge’ of the Client Enterprise where it
meets demands
needed
planned
execution
3: Alignment processes have to be edge-driven
Copyright © Philip Boxer 2009 12
4: Force cohesion depends on analyzing the relationships between all three perspectives
Demand for value-creating relationships
Collaborations Socio-Technical
Value propositions in response to Demand
Behaviors supporting the value proposition
Governance of the
infrastructure
Shape granularity/modularity and alignment of supporting behaviors
Multiple Collaborations
Constrains possible value
propositions of collaborations
Supporting Infrastructure
Analysis of model needs to examine the way all three
modeling perspectives constrain each other
Analysis of model needs to examine the way all three
modeling perspectives constrain each other
Analysis of model needs to examine the way all three
modeling perspectives constrain each other
Copyright © Philip Boxer 2009 13
Agenda
The divergence of acquisition & demand tempos (3)
The need for three modeling perspectives (2)
Four issues arising in building agility (4)
Valuing flexibility of component systems (5)
Copyright © Philip Boxer 2009 14
The defense enterprise: its ‘revenue’ comes from the state
Suppliers of
Capability
The Defense
Enterprise
Lower ‘V’ Flexibility
here
Suppliers Client Enterprise
Campaigns in
Theatre
Upper ‘’ Agility here
Customers of the
Client Enterprise
Capability
Costs Funds Flow
Acquisition costs of the Defense Enterprise
Defense
Expenditure
Revenue to the Defense Enterprise
Client (defense)
Enterprise
users
usersSupplier 1
Supplier 2
supports
supports
orc
he
str
ati
on
Syn-chron-ization
Demand/ Threat
1 2 3 4 5 6
Copyright © Philip Boxer 2009 15
‘Real Option’ analysis: valuing the impact of changes in component system flexibility on force agility
The value of an incremental investment in some new capability is its impact on both the tradespace and the spread/variance in expenditure
Probability
Levels of defense expenditure on Campaigns
The cost of operational approach ‘b’ across the
variety of scenarios
b
a
The cost of operational approach ‘a’ across the
variety of scenarios
Benefit 1: Reduction in average level of expenditure through
impact on tradespace.
Benefit:2: Change in spread/variance in levels
of expenditure
Benefit 2: Change in spread/variance in levels
of expenditure
Copyright © Philip Boxer 2009 16
Two kinds of benefit: impact on the tradespace, and change in spread/variability in defense expenditure
Suppliers of
Capability
The Defense
Enterprise Campaigns in
Theatre
Defense
Expenditure
Capability
Costs Funds Flow
Funds Flow deltas
Substitution
Cost delta
Saving
from
substitution
Lower ‘V’ Flexibility
here
Upper ‘’ Agility here
Customers of the
Client Enterprise Suppliers Socio-technical
Client Enterprise
Saving from reduction in variability of expenditures
+ value of impact on variability
Probability
Levels of defense expenditure on Campaigns
b
a
Saving from doing
more with same (or less)
Copyright © Philip Boxer 2009 17
Modeling socio-technical SoS of multiple collaborations
Analyzing alignment of strata to demand
5-6
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outcome\border_hale_on_station 1 1 1 1 1 1
outcome\border_male_on_station 1 1 1 1 1 1
outcome\border_male_strike 1 1 1 1 1 1
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Costing Cohesion of Mission Capabilities
Defence Expenditure
Scenario 1
Alternative
Large Scale
Small Scale enduring
Scenario 2
Scenario 3
Medium Scale enduring
Small Scale enduring
Small Scale one-off
Medium Scale enduring
Small Scale limited
Small Scale one-off
Monte Carlo analysis of impact of variations in demand on spread of possible defense expenditure
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0 75 150
225
300
375
450
525
600
675
750
825
900
975
1050
1125
1200
1275
1350
1425
Scaled Cost1 Scaled Cost2 Scaled Difference
Real Option Valuation of impact on expenditure spread
Value for Defense: Impact on Capability Tradespace + Economies of Alignment
Valuing adaptability: the value of creating economies of alignment for the defense enterprise
What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, September 2008
Copyright © Philip Boxer 2009 18
Conclusion
The diverging tempos change the nature of the problem space
– Involves modeling demand-side as well as supply-side perspectives
– Raises four issues in building agility:
• the double ‘V’, stratification, edge-driven perspective, and force cohesion
Building agility into large-scale software-reliant environments depends on:
– Costing the way force cohesion is created around particular demands
– Establishing the impact on agility of new flexibilities in component systems
– Identifying the value of that impact
To manage both paradigms, the defense enterprise needs to be able to value impact on tradespace and on the spread/variance in expenditure
Copyright © Philip Boxer 2009 19
Socio-Technical
Modeling the ‘beyond’ of the Client Enterprise: three modeling perspectives
Demand for value-creating (threat-reducing)
relationships
Collaborations
Value propositions in
response to Demand
Behaviors supporting the
value propositions
Socio-technical
Multiple Collaborations
Supporting Infrastructure
(accountability, synchronization,
situational data fusion)
(demand organization, customer situations and drivers)
(structure-function, trace/state)
Copyright © Philip Boxer 2009 21
Complex systems of systems: socio-technical
Structure-function view –
design dependencies
Copyright © Philip Boxer 2009 22
Complex systems of systems: socio-technical
State/trace view – state
variables and controls
Copyright © Philip Boxer 2009 23
Complex systems of systems: collaborations
Hierarchy view –
vertical accountabilities
Copyright © Philip Boxer 2009 24
horizontal synchronization/
data fusion view – cross-
cutting processes
Complex systems of systems: collaborations
Copyright © Philip Boxer 2009 25
Effects/Demand view –
horizontal
accountabilities
Complex systems of systems: demands
Copyright © Philip Boxer 2009 26
Complex systems of systems: all three modeling perspectives become necessary
Full analysis =
Socio-technical:
Structure-function
+ Data/Trace
Collaborations:
Hierarchy
+ Fusion/
Synchronization
Demand:
+ Demand/Effects
These perspectives and their relationships
generate a knowledge base, the properties
of which can be analyzed
Copyright © Philip Boxer 2009 27