economy of scale

Operating Model – Have Fed Agencies abandoned creating “Enterprise Transition Plan” ? ETP is challenging for the OCIO

Enterprise Transition Plan – Line Of Sight – Operating Model

Ref:- FEAC Institute, FEA Guidance, INGINE INC, Srinidhi Boray[/

Conceiving a coherent modernization plan and executing them has always been a challenge for OCIO. Enterprise Transition Plans generally documents the visions, goals, capabilities at the strategic level and then progresses to envisage “target conceptual architecture”, while planning for tactical efforts working through the mechanisms of architecture lifecycle needed to transition towards the target enterprise conceptual architecture. This results into creating the “roadmap”. The documents that holistically speaks to organizationals capability in reaching such a roadmap is the “Enterprise Transition Strategy”.

Reading the Enterprise Transition Strategy following should be evident:

Organization’s maturity and competence to perform and embrace the future capabilities

Organization’s present constraints in delivering the needed “capabilities”

The profile of the architecture cross sections (segments) needing modernization to develop the intended “portfolio of capabilities”

Investment Profile – planned to executive segment modernization

The governance structure and mechanism that engages the different functional capabilities, such as leadership – management, lines of businesses, enterprise architecture, capital planning and program management. This group together develops and vets – strategic plans, tactical plans and implementation plans governed by following  life cycles

  • Performance Management (Architect, Invest, Implement)
  • Architecture Segment (Notional, Planned, In-Progress, Completed)
  • Release Architecture (sadly mostly do not plan this – it is here interdependence of architectures or capabilities are realized and maintained)
  • Capital Planning (Preselect, Select, Control & Evaluate)
  • Investment (mixed, steady state, Development, Modernization & Enhancement -DME)

A “Sequence Plan” along with “Implementation Plan” is developed to reach the desired Target Architecture (temporal perspective)

Finally Operating Model – The most important component – it assimilates all the decisions chosen for creating an operating leverage, that creates degree or order of leverage to deal with inherent systemic complexities against the efforts of creating economy of scale in delivering the enterprise capabilities essential for delivering the enterprise mission.

More discussion in below link in creating Enterprise Transition Strategy

Transformation Framework Capturing an Operating Model


Game Theory : The essence of Enterprise Architecture is about establishing a “Dominant Strategy”

There is Darwinian in the below idea; however more congenial idea is Generative having more systemic congruent results

Same ideas can be repurposed in a better way.

The essence of Enterprise Architecture is about establishing a “Dominant Strategy”, that best achieves ‘economy of scale’. The economy of scale will apply to each of the architecture design decision selected. The set of design decisions that leads the architecture planning from strategy to tactical and from tactical to execution needs to converge to a dominant strategy engaging all the stake holders led by a cohesive mechanism of Governance.

Note: EA is about discussing the largest picture of the enterprise. Hence, any decision made must ensure that it lends sufficiently across the enterprise while increasing its “reuse”. This means ‘economy of scale’. All decisions, including the technical design decisions must yield a better ‘return on investment’ from optimized ‘performance vs cost’ perspective.

The main goal of the Governance, is to lead the dialogue that an enterprise riddled with complexities is engaged in,  towards a –“Dominant Strategy”. In many ways the array of events that Governance trigers, while working towards converging the decisions to a cohesive set of results, is similar to the behavioral probabilities  studied in Game Theory.

When a system is riddled with constraints, especially when  ‘money’ as  a resource is scarce, then it dominates the decisions needed to achieve the strategy. A system’s behavior  is governed by both micro and macro considerations. There is a threshold until which the system is probabilistically stable and is not affected by the micro behavior. After a certain threshold the micro behavior is unable to sustain the desired macro outcomes.

When Scarcity arises – Economics is Hot

Dominant Strategy

A strategy is dominant if, regardless of what any other players do, the strategy earns a player a larger payoff than any other. Hence, a strategy is dominant if it is always better than any other strategy, for any profile of other players’ actions. Depending on whether “better” is defined with weak or strict inequalities, the strategy is termed strictly dominant or weakly dominant. If one strategy is dominant, than all others are dominated. For example, in the prisoner’s dilemma, each player has a dominant strategy.

Introduction to Game Theory

Enterprise Architecture Framework for Transition Planning (Line of Sight based)

- FEAC Institute, FEA Guidance, INGINE INC, Srinidhi Boray

Ref:- FEAC Institute, FEA Guidance, INGINE INC, Srinidhi Boray

Most challenging issue that confronts CIO is Modernization Planning. All-most all of them fail in envisaging a plan that accurately considers and tackles the issues in spatial, temporal and finally with budgetary aspects. Economics will prove to transcend all skills in Enterprise Architecture Planning. Combining integrative disciplines – EA – Economics – Program Planning and Management – one must strive to achieve “degree of operating leverage” on the available / created economy of scale. Only this ensures best value return on investment. In such thinking – ideas such as – operating leverage, degree of leverage, economy of scale and these discussed in the operating model as part of the transition plan is vital.