The tempo at which an enterprise creates new uses for its systems is different from that of its acquisition or systems development processes. The military continues to confront the issue of how fielded systems can support the agility needed by its deployed forces. This problem of diverging tempos applies to a variety of large-scale, software-reliant enterprisessuch as those found in healthcare and digital communications. This paper posits four realities underpinning an approach to this problem space: the governance-demand double challenge, edge-driven perspective, stratification, and demand cohesion. It uses a particular case example to show how these concepts support the modeling and analysis of the enterprise as a socio-technical system of systems. The paper argues that analyses based on this approach are necessary for making this problem space tractable.

1. Building Organizational Agility into
Large-Scale Software-Reliant
Environments
Philip Boxer
March 25th 2009
Copyright © Philip Boxer 2009
1

2. 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

3. 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
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4. The three tempos:
analyzing the impact of the client’s relation to customers’ changing demands
Client (defense) Enterprise
users
usersSupplier 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
orchestration
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
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5. 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

6. 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

7. 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
CollaborationSocio-Technical
Governance of
the
infrastructure
Supporting
Infrastructure
Demand for value-creating
(threat-reducing) relationship
Behaviors
supporting the
collaboration
Copyright © Philip Boxer 2009
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8. The need for three modeling perspectives:
making the demand-side perspective explicit
Demand for value-creating
(threat-reducing)
relationships
CollaborationsSocio-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
CollaborationsSupporting
Infrastructure
Governance
Value-creating (threat-
reducing) relationships
Complex systems of systems: all three
modeling perspectives become necessary
Copyright © Philip Boxer 2009
8

9. 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

10. 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
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11. 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
6Decisive Points
Effects
Campaign
(Demand) Tempo
4
5Mission Command
Force Structure
Operational Capabilities
Composite Capabilities
Synchronization
Readiness Tempo
1
2
3Operational Capabilities
Fielded Equipment
Equipment
Equipment
Fielded Equipment
Acquisition Tempo
Copyright © Philip Boxer 2009
11

12. 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

13. 4: Force cohesion depends on analyzing the
relationships between all three perspectives
Demand for value-
creating relationships
CollaborationsSocio-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

14. 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

15. 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
orchestration
Syn-
chron-
ization
Demand/
Threat
1 2 3 4 5 6
Copyright © Philip Boxer 2009
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16. ‘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

17. 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
CostsFunds
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

18. Modeling socio-technical SoS of
multiple collaborations
Analyzing alignment of
strata to demand
5-6col1x5
unitorderborder_isr_cell
unitorderborder_reaper_strike_cell
unitorderborder_sf_cell
unitorderafghan_border_strike
unitorderborder_caoc_atc_sync
unitorderborder_hale_bm
unitorderborder_male_bm
traceventborder_male_outputs
traceventborder_hale_on_station
traceventborder_male_on_station
traceventborder_male_strike
traceventafghan_report
traceventborder_sf_on_station
traceventindividual_in_afghan-pakistan_border
channelborder_hale_bm
channelborder_male_bm
channelborder_isr_cell
channelborder_reaper_strike_cell
channelborder_sf_cell
c_sitnindividual_in_afghan-pakistan_border
orchnafghan_border_strike 1 1 1 1 1 1 1 1 1 1 1
outcomeborder_hale_on_station 1 1 1 1 1 1
outcomeborder_male_on_station 1 1 1 1 1 1
outcomeborder_male_strike 1 1 1 1 1 1
outcomeborder_sf_on_station 1 1 1 1
khowborder_sf 1 1 1 1 1 1
khowborder_male_strike 1 1 1 1 1 1 1
khowborder_hale_global_hawk 1 1 1
designborder_hale_global_hawk 1 1
designborder_male_operator 1 1 1 1 1 1 1
capyborder_hale_global_hawk 1 1
capyborder_male_reaper 1 1 1 1 1
capyborder_sf 1 1 1 1 1
systemborder_hale_global_hawk 1 1
systemborder_male_reaper 1 1 1 1 1 1
systemborder_sf 1 1
processborder_hale_global_hawk 1 1
processborder_male_reaper 1 1 1 1 1
processborder_sf 1 1 1 1 1
dprocessborder_hale_global_hawk 1
dprocessborder_male_reaper 1 1 1 1
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
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19. 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
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20. END
Copyright © Philip Boxer 2009
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21. 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
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22. Complex systems of systems:
socio-technical
Structure-function view –
design dependencies
Copyright © Philip Boxer 2009
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23. Complex systems of systems:
socio-technical
State/trace view – state
variables and controls
Copyright © Philip Boxer 2009
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24. Complex systems of systems:
collaborations
Hierarchy view –
vertical accountabilities
Copyright © Philip Boxer 2009
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25. horizontal synchronization/
data fusion view – cross-
cutting processes
Complex systems of systems:
collaborations
Copyright © Philip Boxer 2009
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26. Effects/Demand view –
horizontal
accountabilities
Complex systems of systems:
demands
Copyright © Philip Boxer 2009
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27. 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
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