When creating a business prototype for our client’s business, we use the enterprise metamodel as an initial blueprint to guide our work.
Especially during the early phases of a transformation project (i.e. during initial business exploration) we find that one source of confusion and misunderstand is that everyone uses different terms to refer to identical concepts. We use the enterprise metamodel to reach agreement about which concepts are relevant to the task at hand and how to name them. The resulting, adapted metamodel then provides a common language to talk about an enterprise at various levels.
The enterprise metamodel is a high-level abstraction of an enterprise. However, since it is a metamodel, it is not simply an example of a model of a real and existing enterprise, e.g. a production facility, a utility company or an IT service provider. It is rather a model of what more or less most of the models of an enterprise have in common: it captures the essential concepts of a wide variety of enterprises and simplifies and abstracts them to an extent which allows us to recognize their common features.
Important principles of metamodeling
When defining a meta-model it is very easy to fall into the trap of over-elaboration. To avoid this, this article obeys the following principles, with the goal of creating a minimal, coherent metamodel that can be extended if needed.
- principle of parsimony: Be parsimonious, start small and add
- principle of divide and conquer: Divide and conquer, avoid mega-models
These principles and many more great ideas on modeling can be found in Tools for Thinking – Modelling in Management Science by Michael Pidd. Please also read our pages on Models and Metamodels and the Unified Modeling Language (UML).
When prototyping an enterprise, we find it useful to distinguish between three layers: the business model layer, the organization layer, and the technology layer. The diagram below gives an overview of the Enterprise Metamodel.
- Activity: A measureable amount of work performed by a role which converts inputs into outputs.
- Application: Software, that makes a computer perform tasks that provide a service (to business
processes via IT services)
- Application Service: A service offered by an application.
- Artifact: Something created by a human for a practical purpose. Specifically in this context, an artifact is anything exchanged during a transaction besides the products themselves, e.g. a proposal, a product description sheet, or an invoice.
- Asset: Generalisation of resources and capabilities. An asset is a resource (e.g. physical property, intangible right) or capability that has economic value. Important examples are plant, equipment, land, patents, copyrights, and financial instruments such as money or bonds.
- Business Object: An entity that is handled by a business process, either as an input our an output.
- Business Process: A set of interrelated or interacting activities which transforms inputs into outputs at the organisational level.
- Channel: A conduit by which a firm offers its product. These products are exchanged via a transaction.
- Contact: A person that is not from the party in focus who fulfills a role in this one. For example this
could be a client or a sub-contractor.
- Employee: A person that works for the party in focus.
- Good: A material product.
- Information Object: Information that is exchanged between application
services and represents a business object at the technological level.
- Infrastructure Component: An IT system that applications can be deployed on.
- Infrastructure Hardware: Hardware like a specific CPU, harddrive or network equipment.
- Infrastructure Software: Software that is needed to realize
an application, e.g. an operating system or application server.
- IT Service: A service offered by the technology layer to support the activities of a business process.
- KPI: A key performance indicator (KPI) is a metric used to measure the performance of a business
process, an IT service or an organization unit.
- Location: A physical location or address.
- Market: A party operates within a market. A market is an arrangement whereby buyers and sellers interact to determine the prices and quantities of a product. Some markets (such as the stock market or a flea market) take place in physical locations; other markets are conducted over the telephone or are organised by computers.
- Organization Unit: A set of positions and employees that work together towards a common target setting together and share the same management. Each unit can be divided into subunits.
- Party: Any legal entity engaged within the business model. Examples for other parties besides firms are public authorities and private households (“end-consumers”)
- Position: The smallest building block of an organization unit that bundles roles and is enacted by an employee. A positions may be vacant, i.e. there is a slot in the organization unit that has not been filled by an employee yet.
- Product: A product is any good or service produced by a business. Businesses are characterized by the fact that they produce goods or service beyond their own need and can therefore offer them to other parties via a market. A product whose wide availability typically leads to smaller profit margins and diminishes the importance of factors other than price is referred to as a commodity.
- Role: A role represents a person that performs an activity.
- Service: A service is a non-material product that may only be exchanged once between the parties within a transaction.
- Skill: Having a skill enables an employee to do related work with a minimum of required time and energy.
- System Process: A set of interrelated or interacting application services that realizes an IT service.
- Target: A specific target that has been set for a KPI.
- Target Setting: A collection of KPIs and targets that are set for a business process, IT service or organisation unit.
- Transaction: Firms interact via transactions, which are supported or enabled by channels. A transaction takes place when a product is exchanged across the (legal) boundary of a firm.