Friday, January 28, 2011

A New Structure for the US Federal Government Executive Branch--A Really, Really Wild Hare

Currently there many departments and agencies with very nuanced charters within the executive branch of the US Federal Government.  Frequently these are founded on political considerations rather than consideration of the vision for government as documented in the US Constitution.

In Organizational Economics: The Formation of Wealth, I demonstrate that all governments have three and only three functions (Any other are exploitative political functions):
  1. Security
  2. Standards
  3. Infrastructure
Following an abstraction from the US Constitution, the mission and architecture based structure for the Executive Branch of the Federal Government, derived from the Preamble and the structure of the US Constitution, should have only three Cabinet level departments (high-level functions) following these three governmental functions.

The Security Department (function)
The Security Department or function have the mission of ensuring that the citizens of the United States are secure within their borders and their homes.  It would have three functions:
  1. External Security sub-divided into two categories: diplomacy and defense.  This function deals with external challenges and opportunities, that is, "foreign policies" and all of the resources, processes, and tools for successfully meeting the challenges and opportunities. It would encompass the current Department of Defense, Department of State, and Department of Veterans Affairs.
  2. Internal Security (Law enforcement).  This function deals with ensuring the safety of US citizens and organizations within the borders of the United States.      This function would encompass The Department of Justice, The Department of Homeland Security (minus the intelligence gathering functions), The Transportation Security Administration, DEA, customs, and others.  In fact, this organization may be sub-divided into border security and internal law enforcement.
  3. Intelligence Gathering function's mission is understanding the goals, objectives, strategies and tactics of competitors and allies in the global environment.  This function would encompass the CIA, the NRO, the NSA, and others.
These functions must enable and support one another (like a three legged stool???).

The Standards Department (function)
The Standards Department (function) would develop rules and regulations to enable and support the laws of the land and to ensure the inter-organizational process friction is kept to a minimum.  Minimizing inter-organizational friction includes insuring a "level economic playing field"; that is, that the rules and regulations effect all for profit and nonprofit organizations equality.  To do this The Standards Department must ensure that a) the rules and regulation do not conflict with each other, and do not conflict with the vision, mission, and strategies of the US Government--a very big job.  This job can be greatly reduced through the effective use of Enterprise Architecture (see the posts labeled Enterprise Architecture for more explanation.)

In point of fact, setting standards reduces the cost to economic organizations, that is, it creates value.  For example, setting a standard gauge for railroads greatly reduced the need to "trans-ship" between rail lines as was done before the Civil War in the United States--thus reducing the cost and creating capacity value.  Some of this added value should pay for the setting, enforcing, and otherwise maintaining these laws and standards.  That is the real reason for taxes.  Beyond that, these taxes can pay for a significant portion of what I termed the Infrastructure (discussed next).

The Standards Department (function) is at the intersection of Policy Management and many technical, financial, and socio-cultural disciplines.  Traditionally, each of the regulatory functions has been grouped with the federal organization that is supporting the functional discipline.  Whereas in this organizational structure, departments that currently have both regulatory and mission-based functions, the regulatory functions would be spilt between the Standards Department and the Mission-based function to the Infrastructure Department to ensure minimum conflict of interest.

This function would encompass NIST, FDA, EPA, FCC, SEC, NRC, The Department of Commerce, The Department of labor and many others.

The Infrastructure Department (function)
The Infrastructure Department (function) supports most of the governmental activities associated with contributing to the "general welfare" or as some term it, to the "public good" (see the post entitle "The Purpose of Government" with its associated comments).    Items, generally considered as part of the "common welfare" include  the physical infrastructure like roads, bridges, railroads, airports, ports, basic research of all types, education at all levels, and communications.  In fact, the one piece of infrastructure identified in the US Constitution was that the Federal government is responsible for the postal system--the best method for communications at the time.

One of the mission statements embedded in the vision statement for the United States (the Preamble to the US Constitution) is to "promote the general welfare".  This mission statement for "general welfare" is "squishy", that is, there is no clear definition for this requirement--it's wide open to interpretation--and therefore, there is no way to measure when the US Federal Government is achieving this mission.

Consequently, politicians have interpreted the mission of Infrastructure to suite their constituency.  Prior to the first term of Franklin D. Roosevelt, the "general welfare", this term was interpreted in a fairly narrow sense.  However, Roosevelt greatly broaden the definition to include a "safety net".  President Johnson extended it much, much further through "entitlement".  These lost sight of the fact that the infrastructure government supports is paid out of the value created by the use of standards (as briefly discussed above).  Taxing beyond that value to additional "benefits" for the "public good" is risky in that it can destroy the economic engine.  While improvement in the physical infrastructure and skill base (education) can be considered as real governmental investment, many of the entitlements are really expensive non-value added items.  Even though they help the people they serve, if they bring the economy to a near halt, are they worth it?  I will write more about this connundrum in future posts--and it is the most difficult question in government.

The Infrastructure Department (function) encompasses Department of Interior, The Department of Education, The Department of Housing and Urban Development, The Department of Energy, the Social Security Administration, NIH, NASA, NSF, The Postal Service (which is mandated by the Constitution), and many more.

Miscellaneous Organizations
In addition to the three major functions of the executive branch there are some "headquarters" control functions that the executive branch of US Federal Government requires to operate.  These functions include strategic planning, resource management, mission alignment, and auditing functions.  This would encompass functions like OMB and IRS (part of resource management), and others.

Swarming Strategy and Process Groups
During "normal" times the three departments would work on supporting their particular function.  However, when facing a challenge the departments would assign personnel to a swarming team.  This is where this structuring becomes a real wild hare of an idea.

In nature there are many examples of the swarming behavior within groups.  Ants, bees, and wolf packs are prime examples.  Wolf Packs tend to work separately to identify the weakest member of a herd, then swarm to kill the animal.  Consequently, while one wolf would stand little chance of killing a bull elk, there is almost a guarantee that a pack will.  Likewise, the white blood cells in an animal will swarm to fight an infection.

This same tactic should be used by the executive branch of the US Governement for efforts supporting a major strategy or mission change.  The executive branch would create tigger teams, or task forces.  If the effort is sufficiently important, the team lead could have a seat at the cabinet table for the duration of the project as an advisor, or a member--but only for a limited period.
My suspection is that this would produce both a more effective and cost efficient executive branch.

Tuesday, January 25, 2011

Economic Equilibrium: A Silly Concept, Sort of

In 1775 James Watts and Matthew Bolton formed the first successful steam engine company.  At about the same time, 1776, Adam Smith was writing, An Inquiry into the Nature and Causes of the Wealth of Nations.  In that very well known treatise, one concept he wove into his theory was the concept of economic equilibrium in a competitive environment.  That these two events in economic history should occur so close together is interesting, and together with other inventions and innovations caused the "industrial revolution".

There are fundamentally two ideas interwoven into the idea of economic equilibrium.  The first is the concept of economic equilibrium itself.  Fundamentally, it is over time, the supply of a good and the requirements for a good come into balance, a steady state, and will stay in that state until and unless external changes causes a change in the amount of the good that the customer requires.  Moving to this state is caused by the "invisible hand".

At that time, Adam Smith's writing, the use of the concept of equilibrium was reasonable since in all the millenia prior to the 1800 economic progress could be measured in decades to centuries between any substantial change in technology or the ability of goods and services to travel any distance--even ideas prior to 1455 and for 50 years thereafter.  Progress moved very slowly.

In the hundred years following the publication of The Wealth of Nations, the velocity and acceleration in the growth of knowledge, of manufacturing capacity, and the increase in both the follow of information and goods, meant that the "steady state" for economic equilibrium to be reached could be measured in years and decades rather than decades and centuries. In the 1900s these trends continued.  For example, in the 1960s, manufacturers of operating systems took 2 to 5 years to release a new version of their product.  In between these releases they would release patches at a block point release every three to six months.  By the mid-1970s, software suppliers were releasing new versions every six months to a year; which accelerated by the late 1970s to every three to six months.  Today, when you purchase a new PC, the first thing that happens when you first connect it to the Internet is that it downloads a series of updates.  The reason for this is that software suppliers are releasing fixes continuously into their operating systems.  Therefore, by the time the PC is purchased its operating system and other utility software is out of date.

Alvin Toffler in his 1970 book, Future Shock, noted this acceleration in change in all aspects of technology-based societies.  He felt that the acceleration in amount of data and information, and the changes that would result would cause global civilizations an enormous amount of stress.  Part of the growth in radicalism globally is a reaction to this stress.

Another concept first denoted by Adam Smith was "The invisible hand" of economics (see for more information).  This invisible hand is the economic analog of gravity in Newtonian mechanics.  It is a series of forces inherent in all human economics that it is not wise to ignore.  These are the "market forces" that cause economic equilibrium.  Adam Smith indicated that greed --in a positive sense--would cause suppliers to get into a profitable market until there was no more profit to be made.  Then the market for the good or service would be in equilibrium.  Nice but it never happens.  This makes the concept "silly", because, like Newton's model of gravity, we know the "invisible hand" is there, but don't know why.

In my book, Organizational Economics: The Creation of Wealth, I discuss an alternative model.  Integrating and synthesizing concepts from multiple disciplines, this model is based on a new concept of value (a brief description is found in the post entitled "The Concept of Value").  The forces the price/supply/demand within organizational economics are nearly the same as in Adam Smith's work, but more inclusive and process/model oriented.  This should make them a better predictor of the costs, and profit or the ability to achieve the organization's vision.

Initially, an organization creates new knowledge (see the post entitled "The Concepts of Knowledge and Wisdom" for the definition of knowledge).  At some point in the knowledge creation process the idea for a new product or service using the knowledge gained takes place.  This leads to innovation, converting the knowledge into a potential product or service.  Because the product or service is innovative (possibly disruptively innovative) it has very high knowledge value (see the post entitled The Concept of Knowledge Value--From Organizational Economics: The Creation of Wealth for a definition and description) and therefore is highly effective, which creates high profits.  As the knowledge disseminates on the product or service the type of value moves from knowledge value (invention of product and innovation of process with increased effectiveness) to capacity value (a consistently dependable product, routine process, and increased cost efficiency).  With cost efficiency the value created for each unit of a good or service increases, while at the same competition for customers forces a decrease in price, so that the marginal returns approaches zero.  This marginal rate of return on the investment wobbly because of changes in demand (with changes in the overall economy and "continuous (minor) improvements" in processes and technology).  Wall St. consider organizations with the wobbly ROI to be "cyclic"; though it seems to be like a clock with a pendulum that is constantly changing length and therefore not really predictable.

Except at the level closest to the raw material in a supply change, once the product is only producing capacity value--like the current generation of PCs--it is a commodity.  Note the even the stock markets refers to those parts of the supply chain closest to the raw materials, as commodity producers. To forstall the conversion from knowledge value to capacity value organizations will attempt to use one of three types of product differentiation.  The first is to patent some inventive or innovative function or component.  This forestalls others producing a product with identical functions or components for a long, but limited, period.  The second is to add "bells and whisles", that is, functions that other products or services done have, which may be of value to the customer.  Dell did this with its support services, and in doing so, gained brand loyality.  The third way is through advertizing to create "brand loyality".  In this, there may or may not be any extra value actually created, but there is a perspection of value in the customer's mind--which is all that counts.

However, even with raw materials, there is continously changing demand and material substitution--just asked the bronze-age warrior facing an iron-age warrior for the first time.  So that economic equilibrium is really a fiction produced by an abstraction of economic data, which can be explained in a better way by this model of value (again see the post "The Concept of Value").

Thursday, January 20, 2011

The IDEF0 Model and the Organization Economics Model

A model is an abstraction of the salient characteristics and attributes of a, generally complex, phenomenon, which helps a person better understand its current state and predict its future state.  The IDEF0 model is such a model.  This model was originally created as an abstraction of characteristics of a workstation on an assembly line.  For more background on the IDEF0 model see:

The IDEF0 model defines a workstations as having five architectural components:
  1. Inputs
  2. Outputs
  3. Control
  4. Process
  5. Mechanisms
The structure of these functions is shown in the following figure.

This model is an exact abstraction of any and all organizations, whether political or not.  Key to this discussion are the last three components, control, process, and mechanisms.

All organization's have some form of formal or informal control.  Control allocates and manages the resources of the organization to optimize ability to achieve its vision and mission through its strategies, processes, and mechanisms.  This includes ensuring that the organization's policies, standards, and rules do not inhibit achieving the these, but help reduce the organization's internal process friction and the process friction with external organizations.

To make progress toward their vision (and or goal), all organizations require processes.  "A process is a set of activities, ordered or structured to achieve a goal."  One key contribution by Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by the short title The Wealth of Nations from the first chapter of book 1, is a model of process; the example he uses is of the production of pins to demonstrate that separating activities within a process streamlines the process, greatly increase the quality of the product produced while at the same time increasing the throughput of the process (This is one of the taproots of the assembly line and mass production).  So the process must align with the organization's mission and strategies.  This is the functional interface between process and control in the IDEF0 model.

As Adam Smith noted in his pin example, mechanisms or the tools that enable and support the process are process multipliers.  The military considers tools, like 16" artillery pieces on Battleships--known as "Convincers"--to be force multipliers; they are tools of the process known as war.  In the construction industry, the Steam Shovel replaced any number of laborers with picks and shovels, greatly multiplying the through of the digging process.  And, in the "Information Age" computers initially enhanced the finance and accounting functions of the organization and has transformed nearly all financial transaction management, as witnesses by the speed and sheer throughput on Wall Street and other major markets globally.

While in Adam Smith's time, tools (mechanisms) only enabled and supported some of the processes, with the coming of automation and data networks (e.g., the Internet for one) tools have started to enable and support both the process and the control of the organization.  Likewise, the choices made by management with regard to resources and policy, and the requirements of the processes directly affect the optimality of the investment in tools--which are the other interfaces in the IDEF0 model.

Monday, January 17, 2011

The Definition of a Silly Concept

A silly concept is a concept wide open to wild interpretation.  Except in special situations, examples demonstrate that the concepts are meaningless.  It can mean almost anything the person wants it to mean.  It is not clearly definable or measurable.  Since it wide-open to interpretation, politicians of every stripe and religious bigots can use it to support any going any direction in the cultural/political sphere, from requiring holy harlots in the temple to requiring women to wear the burka--all as God's will.

"Perfect" is one of these concepts.  How can anyone identify when anything has reached perfection?  That is the thesis of the book and movie The Black Swan.  In the plot the protagonist did it by killing herself--not many people's way of thinking about being "perfect".

There is much more say and, likely, I will discuss the concept of a silly concept this further in future posts.  I know I will discuss many examples from the socio-cultural/political/economic/historic/geographic discipline in posts in the near future.  Some of these will strike at the foundations of some political theories, yet if the reader thinks about it, they will find that they are silly concepts, based on the definition above.

Sunday, January 16, 2011

Utopia: A Silly and Deadly Concept

Like many fantasies and myths, Utopia is a silly concept when you really think about it.  According to "Wordnet" the definition of a Utopia is:
  • a book written by Sir Thomas More (1516) describing the perfect society on an imaginary island
  • ideally perfect state; especially in its social and political and moral aspects

The word "perfect" is the operative silly word in both definitions.  It is silly because there is no way to define "perfect" and therefore no way to define or delimit "Utopia".  Given the millenniums-long violence among adherents of religious organizations over what constitutes a "perfect" way of living, organization, or even whether nudity constitutes pornography (another silly concept), there is nothing that is always perfect in space and time, only "more perfect" as stated in the Preamble of the US Constitution.

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

Bigots of every stripe (religious, scientific, or political/economic) claim to know what is right for everyone of all abilities accross every age and are willing to kill or otherwise destroy or enslave all non-true believers to institute what they consider their Utopia; note the definitions of a bigot.

  • A bigot is prejudiced person who is intolerant of any opinions differing from his own.

  • A bigot is a person obstinately or intolerantly devoted to his or her own opinions and prejudices.

  • This makes the concept of a Utopia very deadly--more people have died for their beliefs in various types of Utopia, than for, perhaps, any other reason.

    So beware of any and all Utopians.  More more see my book, Organizational Economics: The Creation of Wealth, forthcoming.

    Innovation and Utopias

    Innovation strikes at the heart of all Utopias, be they religious, scientific, or political/economic.

    Initially implmenting an Asset and Enterprise Architecture Process and an AEAR

    As discussed in a previous post, one key problem with using Enterprise Architecture is initially implementing the process and the AEAR.  Most US Federal government departments, bureaus, and agencies have enterprise architects and a Chief Architect because of the Clinger Cohn Act, mandating that they have them.  Most of the agency and department Chief Architects understand the role of an Enterprise Architect, as I've described in this blog, and yet they are singularly ineffective for two reasons.  First, as I've discussed in several previous posts (see those labeled Enterprise Architecture), operating with an enterprise architecture process and repository is a organizational cultural paradigm shift.  It requires a champion at the highest level leadership Dr. Michael Hammer repeatedly made this point in his writing on Business Process Reengineering--BPR.  However, even with a champion and adequate resources, an Enterprise Architect's role as the key advisor on process, tooling, and IT investment--as least the equal of the CFO (a radical idea in itself)--will fail, unless three other challenges are understood and met.  The results of the first iteration will always be poor--unless the Enterprise Architect lucks out, Big Time.  Critics of the enterprise architecture process will attempt to denigrate it, using the first results of the first iteration.  There are at least three reasons for poor results that have nothing to do with the design of the process; the learning, minimum data available, and poorly defined metrics.

    The Learning Curve
    Simple unfamiliarity of the process complexity of the process and organization cultural/political resistance to any change, let alone one that changes the balance of influence within the organization all mitigate against good results in the first iteration. 

    The causes and affects of the learning curve are well known and documented.  In one study Robert L. Corman and I showed that it took 6 months after new technology and process insertion for the routine tasks of a work processing center to really improve--but boy, once they did, they really did (see for the complete PDF.)  Since word processing is a relatively simple process (or set of processes) rather than a completely new process and since the word process center had been established well before the technology insertion we documented, and since we encountered a significant learning curve with that, I suspect and have evidence that indicates that there will be a very significant learning curve for the Enterprise Architecture process.

    The understanding that change creates resistence is also well known.  For example, many mid-level managers and not a few well placed Subject Matter Experts (SMEs) use the tactic of passive agression, that is, "I'll do it when I get around-to-it"; then never can a "round-to-it" anywhere in the office.  So they just "Yes it to death."

    Minimum Data in the AEAR
    The second reason for poor results in the first cycle through an enterprise architecture process is, that if it's executed at the proper time.  Frequently, inexperienced (and even experienced) Enterprise Architects attempt to collect all of the data required for an enterprise architecture before starting the process.  For any medium or large organization, say over 1000 employees, this is an exercise in futiliy because by the time "all of the data" has been collected, its out of date.  So if an Enterprise attempts to collect complete and correct data for the organization, he or she will never finish.

    If the initial Enterprise Architecture process cycle is properly timed and executed the data in the Asset and Enterprise Architecture Repository (AEAR) will contain less than 10% of the data that a complete AEAR would need.  However, the Enterprise Architect will define the data required to create the Enterprise Architecture for a small sub-organization of the organization and start from there, then there is a good opportunity to "pilot" the process and repository for that small portion.  Then the Enterprise Architect can grow the data store in the AEAR through time. 

    Or the Enterprise Architect can start with inserting "as-built" data from all current programs and projects of the organization, without reference to the current "as-is" architecture.  This is not as silly as it may sound, since, most large organization refresh, update, or upgrade most of their IT systems every 3 to 5 years; in the past creating an AEAR for a large organization may take that much time by itself.  Consequently, gathering data from current proejcts to build the AEAR takes the same time as simply attempting to construction a "complete" set of data for an AEAR.  However, the data that in the AEAR from programs and projects can be much more useful than data gathered simply to create an AEAR because its from the areas the organization's management and leadership is focused on transforming and will provide up to date data in those areas.  This enables the complete Enterprise Processes of Mission Alignment and Governance and policy management to be piloted early on projects management feels are "the right" areas of focus.  The Enterprise Architect can then adjust and refine the processes as he or she creates the AEAR and the organizational culture in which Enterprise Architecture has a key support role in investment decision-making.

    Poorly Defined Metrics for the Functions and Linkages
    Frequently, the metrics for the process, for the functions, and for the linkages employed by an organization, don't measure what the management intended them to measure or are simply missing.  This includes financial metrics that are either missing or don't measure what management intends them to measure.  Finally, there are metrics that measure what they are intended to measure, but either are measuring the wrong things (things that are counter to the vision, mission, and strategies of the organization) or don't measure all of the consequences of leadership and management decisions.

    As organizations grow in complexity, the consequences of poorly defined metrics can beinsidiously devastating--much like putting frogs in a pot of cold water, then turning up the heat until the water boils, these organizations never knew what is hitting them.  This is one key reason to implement an AEAR. 

    It is in the interest of the organization for the Enterprise Architect to start the AEAR by basing the functional and linkage metrics on the current metrics of the organization for three reasons.  First, it lends a feeling of continuity.  The leadership and management see the data they are expecting; though the Enterprise Architect should expect to suppliment the current metrics with additions for those functions and, in particular, links, without current metrics.  Second, using the current metrics provides an immediate baseline of data for those metrics that do not need immediate revision--yes, there will always be some good metrics.  Third, inserting the current metrics into an architectural structure, especially if linked to good visualization tools, will allow the leadership and management to "see" at least some of the poor metrics--poor from the standpoint that they do not measure what they are supposed to measure.

    Never expect or promise much for the first iteration.  Remember the Law of Superiority: "The first example of a superior principle is always inferior to the developed example of a inferior principle."  Always expect the start working with a very partial repository; it's the only way to get the Enterprise Architecture process and AEAR operating.  Start with a reasonable scope paying particular attention to sizing and use as many of the organization'a current metrics as possible.  Remember that for all but the simplest systems, the initial set of metrics will never measure what they are expected to measure.  Finally, be sure to educate the organization's leadership on these before you start.

    Tuesday, January 11, 2011

    Out of the Warehouse Thinking and the Transactional Educator

    I found this in a folder of mine whose title is "When Needed".  I'm not sure where it came from, or who wrote.  But it does accurately portray "Out of the Warehouse thinking", of which I've been accused.  This parable  is certain to warm the hearts of engineers and freeze the hearts of transactional managers and orthodox SME's and teachers everywhere.  Here's the story:
    The following concerns a question in a physics degree exam at the University of Copenhagen:
    "Describe how to determine the height of a skyscraper with a barometer." One student replied:
    "You tie a long piece of string to the neck of the barometer, then lower the barometer from the roof of the skyscraper to the ground. The length of the string plus the length of the barometer will equal the height of the building."
    This highly original answer so incensed the examiner that the student was failed immediately. The student appealed on the grounds that his answer was indisputably correct, and the university appointed an independent arbiter to decide the case.
    The arbiter judged that the answer was indeed correct, but did not display any noticeable knowledge of physics. To resolve the problem it was decided to call the student in and allow him six minutes in which to provide a verbal answer that showed at least a minimal familiarity with the basic principles of physics.
    For five minutes the student sat in silence, forehead creased in thought. The arbiter reminded him that time was running out, to which the student replied that he had several extremely relevant answers, but couldn't make up his mind which to use. On being advised to hurry up the student replied as follows:
    "Firstly, you could take the barometer up to the roof of the skyscraper, drop it over the edge, and measure the time it takes to reach the ground. The height of the building can then be worked out from the formula H = 0.5g x t squared. But bad luck on the barometer."
    "Or if the sun is shining you could measure the height of the barometer, then set it on end and measure the length of its shadow. Then you measure the length of the skyscraper's shadow, and thereafter it is a simple matter of proportional arithmetic to work out the height of the skyscraper."
    "But if you wanted to be highly scientific about it, you could tie a short piece of string to the barometer and swing it like a pendulum, first at ground level and then on the roof of the skyscraper. The height is worked out by the difference in the gravitational restoring force T 3D2 pi sqr root (1/ g)."
    "Or if the skyscraper has an outside emergency staircase, it would be easier to walk up it and mark off the height of the skyscraper in barometer lengths, then add them up."
    "If you merely wanted to be boring and orthodox about it, of course, you could use the barometer to measure the air pressure on the roof of the skyscraper and on the ground, and convert the difference in millibars into feet to give the height of the building."
    "But since we are constantly being exhorted to exercise independence of mind and apply scientific methods, undoubtedly the best way would be to knock on the janitor's door and say to him 'If you would like a nice new barometer, I will give you this one if you tell me the height of this skyscraper'."
    The student was Niels Bohr, the only Dane to win the Nobel Prize for Physics.

    Monday, January 3, 2011

    Using Enterprise Architecture to Reduce the Federal Debt

    The Federal debt is caused, in part, by laws and regulations that are cumbersome, obsolete, and conflicting with other laws and regulations and with the charters of the enforcing departments and agencies.  These are the "Catch 22's" that infect all governments.  This problem makes the departments very cost inefficient.  In my experience as a process engineer and from observations of organizations in operation, an organization uses a minimum of 10 percent of its resources in causing and fighting this process friction (sometimes it can be much more). 

    There have been many times when the US Federal government has "addressed" this cause with one time programs over the years, with varying degrees of success.  The unfortunately the operative phrase is "one time".  To be successful, all laws, regulations, policies, and standards have to be structured and there must be a process to revisit each to ensure that the are measurably performing as expected.

    If properly used an Enterprise Architecture process and repository in the form of the Federal Enterprise Architecture Framework (FEAF) can reduce or minimize the conflicts among laws, regulations, policies, and standards over a 2 to 10 years period--depending on the size of the organization.  This does not mean that there will be no benefits for 2 to 10 years, in fact management may notice some within 3 to 6 months.  What it does means is that the complete transformation and acceptance of the the Enterprise Architecture process to help with investment and policy decision-making will take that long to be fully accepted by and inculcated into the organization.  Unfortunately, without a champion at the top of the leadership, working with a top-notch transformational enterprise architect, it will never happen...due to the many reasons, excuses, and loss of influence by various levels of management and their constituents.

    A second cause is that the departments, bureaus, and agencies are running more on their management's agendas than on the organizations' charters.  This means that a single organization may have many duplicative processes procedures and tools, which greatly reduces the cost efficiency of the organization.  These are cause by private managerial agendas.  Private managerial agendas are caused by conflicts of policies/regulations, the NIH (that is, the Not Invented Here) syndrome, or the manager's personal empire building.

    Sometimes the managers' private agendas are caused by conflicts in or obsolesence of regulations and rules preventing the managers from achieving their mission.  A good Governenace and Policy Management process coupled with a good Enterprise Architecture process will greatly reduce this cause for private agenda's.

    Other times, the sub-organizations of an organization will decide that the organization does not understand their requirements for a particular function and therefore, they feel the need to create their own. Or, it may simply be that they do not trust the organization designated to perform the function to perform it in the manner they would prefer, and therefore, it needed its own.  A more malicious version of this, is managerial empire building, where the manager wants to enhance his or her own status by controlling all of the functions required to perform a given process, and additionally, takes a very wide interpretation the his or her mission or charter, and strategies, policies, procedures, and tooling.

    In all of these instances the manager has a case of the NIH syndrome; which causes much waste of the organization's resources.  Enterprise Architecture can ameliorate the cause by mapping all strategies and processes to the organization's mission as recommended by the FEAF, providing measurable line-of-sight from the mission to the processes and tools.  For example, one in US Federal department, one organization had been charter to perform the reservation function for the entire department.  As of 2007, team of Enterprise Architects had found at least 50 sub-organizations with independent reservation functions.  Simply, by consolidating many of these functions into a single system, the department was able to save 10s of millions of dollars per year in development and operating costs.

    A third cause is "Political Correctness" (PC).  This boils down to various political constituents getting a piece of the pie, irrespective of their knowledge, skills, and capabilities.  Part of this is due to organizational networking (which "PC" lobbists characterize as the "good ol'boy" network--which may have some validity).  DARPA, NSF and other Federal R&D organizations tend to award contracts to organizations that have performed well in the past--not a bad way to chose.  But, it leads to these agencies overlooking organizations with no track record; thus, they may miss good ideas.  Therefore, it stratifies organizations, giving organizations with a track record an advantage--their abilities are known--over other organizations--whose abilities are unknown.

    Therefore, the US Congress, in its inimitable wisedom mandated that various "special constituents" get a piece of any large program irrespective of competence to ensure "fairness", and "equality."  However, requiring all large programs, especially those with high knowledge and R&D skills to include "PC" firms simply to win the contract, whether or not these firms have any skills at all, is very costly and frequently causes major cost overruns and program failure.

    While Congress's objective was noble, the unintended consequences causing negative externalities have been very expensive to both the government and the long-term ability of the United States to compete in the global economy.

    Layers of management, problems of coordination, and private agendas among the "teaming" partners--each vying for a larger piece of the project, even after it's been awarded.  When these "disadvantaged" firms fail to perform, there is a major risk of a cascade affect, that without quick transference or mitigation cause the program to fail.  But, process of transferring is tangled in contractual and inter-organizational political problems that slow the process to a creep or stall it altogether.

    The "PC" regulations together with their affects creates dysfunctional Virtual Extended Enterprises (VEE).  Note that VEE's are business versions of SOA's Composite Applications, in that they are composed of many small, but highly skilled and knowledgeable organizations.  Through the life cycle of a product these component organizations can be introduced into and let go from the VEE in a manner similar to that of Service Component replacement for purposes of technology insertion.  The "PC" regulations militate against these changes, creating a high risk of failure for programs trying to produce unprecedented complex systems.  This adds greatly to waste of Federal resources.

    Enterprise Architecture can provide a method for sorting out the best and brightest organizations from both "advantaged" and "disadvantaged" but incompetent organizations, if the enterprise architecture processes and repository are properly organized and the processes are correctly executed.

    Longer term, this waste of resources from all of these causes will cause the US to both lose its competitive edge militarily and economically.  Again, over time, the proper use of the enterprise architecture processes and repository will enable a competitive advantage.

    Also see the post entitled "Thoughts on Solving the Federal Debt Issue", and "Rebuilding Jobs in the United States".