In many of the conversations, you will see people swapping the words organization and enterprise to define the business unit they work within. Of course, this is not limited to the for-profit business; and could expand to a wide range of organizations, including governments and charities. So, why to differentiate the two? Well, most improbably, without having a glossary of words to reference, people could misunderstand different ideas in a “lost in translation” situation.

The differentiation is quite simple to explain. The organization is the legal entity that is created to present value to its surroundings. Of course, that includes all the resources, capabilities, functions, and services within the conferment of that legal entity. Now, once that legal entity starts to engage with external parties, by any means, then we begin shaping an enterprise at its working. So, a value presented to a client or a regulation imposed by a governing body falls among the enterprise work. Outside the enterprise boundaries, there might be entities that affect this environment, which belongs to an”extended-enterprise” scope. The extended enterprise includes all the relations between the parties scoped within the enterprise. Examples are how the anti-clients act against the organization’s benefits or how the competitors redefine their services for the organization’s clients. Defining such scope involves the analysis is hideous, and the returns diminish with more effort spent on it. Nevertheless, establishing such understanding is vital to capitalize on the extended enterprise health to ensure the organization’s existence.

One of the experts I admire, Tom Graves, uses this figure in describing the boundaries of an enterprise.

(Tom Graves / Tetradian)

I would revise this diagram to rename the market as the enterprise, and the shared-enterprise as the extended (shared implies that there is already defined relationship while the external environment has a high number of entities that might interact with the organization under various circumstance). Nevertheless, this blueprint presents an overall snapshot of any enterprise regardless of its nature. In a sense, this image can be abstracted to demonstrate that the enterprise is nothing but a body that functions with defined input, internal processes, and output with somehow situational awareness.

Now, having such a simplified view of the enterprise, what points should expect some interaction?

Going back to Graves, he identified four types of interaction points that within any organization story-telling narrative:

(Tom Graves / Tetradian)
  • Inside-Out: This is the most apparent type of communication where the organization utilizes its value stream to present a value proposition to its client. Here the focus is on the kind of services the company provides to the enterprise. 
  • Inside-In: here the different business units interact with each other in either the core value stream or the supporting function that the company needs to function as a whole (e.g., employee asking for vacation)
  • Outside-In: most of the interactions here are initiated by the third party that will trigger some process within the organization. Tom limits the outside-in to the supplier/customer. I would argue that it includes any entity that has some sort of power over the organization’s purpose, e.g., regulators and anti-clients.
  • Outside-Out: This one is one of the most ignored aspects of any enterprise or extended-enterprise definitions. This interaction is mostly related to what happens outside that might implicitly impact the organization. Thigs like competitors and disruptions are well placed here (even from a story-telling perspective). And due to the chaotic nature of such interactions, it is seldom ignored within any architecture work I have encountered (albeit from scenario planning in planning strategies)

Now, as for capturing the nature of all types of interactions and relating them to the architecture work. Well, there are ones that are obvious like value stream for inside-out, and there are ones that need improvising and refinement like the outside-out. But as long as such interactions are kept in checks, or the organization subconscious, then it will lead to a better understanding of how the organization can engage in ints soundings.