=Paper=
{{Paper
|id=Vol-1989/paper71
|storemode=property
|title=Enterprise architect model of digital small and medium business
|pdfUrl=https://ceur-ws.org/Vol-1989/paper71.pdf
|volume=Vol-1989
|authors=Andrey Kim,Dmitry Kozhevnikov
}}
==Enterprise architect model of digital small and medium business==
https://ceur-ws.org/Vol-1989/paper71.pdf
Enterprise architect model of digital small
and medium business
Andrey Kim
Postgraduate student
National Research Nuclear University “MEPhI”, +7 985 2525383
Adkim1194@gmail.com
Dmitry Kozhevnikov
Lecturer, National Research Nuclear University “MEPhI”, +7 916 135 9418
dekozhevnikov@mephi.ru
1 Introduction
Nowadays economic subjects of small and medium business (SMB) playing a huge
role in the economic development, . giving up to 40% of the GDP and 80% of em-
ployment in developed countries [1]. At the same time the micro economical aspect of
SMB in digital economy is not evaluated so far. The whole phenomena of digital
economy is poorly described, there is even no common definition of such activity [2,
3, 4].
We will take the definition of digital economy unit (digital enterprise) as an or-
ganization creating value and profiting from use of digital technologies as the instru-
ment of automation of the current activity and realizing transformation old or creation
of essentially new business models on its basis[5].
The analysis of the digital enterprises [5], reflects the proliferation of large players,
due to access to financial, organizational and intellectual investments. Therefore, the
digital technologies allow them to reach the flexibility inherent in SMB, having at the
same time huge economic, institutional, technological and intellectual potential.
Large industrial digital solutions, analytical systems and real time decision support
systems, based on big data and the IoT, are costly and excessive for small and medi-
um entrepreneurship. Currently, the vast majority of SMB uses the digital sphere only
for social media [5], in the following areas: Building the client relations without
CRM [6];
• The effective marketing campaigns in social media;
• Basic (mostly built-in) analytical and SMM instruments;
• Business opportunities for providing services and consumer goods connected to the
social media;
• Attraction of the social capital, intellect and production capabilities in the forms of
crowdsourcing, crowd funding, idea generation, etc.
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It should be noted that in a paradigm of digital economy, social community members
become both participants of business and consumers of its products [20]. Therefore
the majority of digital SMB represents the community-linked business form designed
and realized by members of certain communities for themselves. The community can
be formed as within existing social network (Facebook, Instagram, VK and etc.), as
on the specially developed web platform on SMB side.
In 2016-2017 we analyzed 37 organizations of SMB as in traditional industries
(trade, advertising, tourism and leisure, education, manufacturing), and in the digital-
ly-enabled areas (crowdsourcing, crowdfunding, text, video and graphic content crea-
tion, web development) to discover the role of social media in the corporate functions
realizationf: business and personal communication, decision-making processes, mar-
keting and lead(client) generation, task management, knowledge management, moni-
toring of various analytical metrics.
As a result the following functions appeared to be strongly (more than 30%) con-
nected to the social media functionality: registration (68%), description of product
and service offers (60%), processing of purchase (37%), quality feedback (52%),
proposition delivery (39%), product delivery (32%), pre-sale (31%).
However, social networks act only as a platform of communication for organiza-
tional subjects. The majority of corporate functions automation is realized as cloud-
based or in-house services and applications. Therefore, at the organization of digital
SMB or attempt of transition to "digital", entrepreneurs face significant barriers, that
we investigated in the research. We identify 3 groups of the barriers - technologic,
organizational and legal-based. As a result, the business poorly designed, the output
does not meet the needs of the community, or business is critically ineffective.
The legal issues are out of scope of this paper. We are going to propose a model of
SMB architecture that is capable to reduce the organizational and technologic barriers
to the formation and transformation of SMB unit to the digital form, to increase its
survival rate, and grow its operation efficiency in the digital economy.
2 Service view for general architecture of digital SMB
The key to the effective business engineering is the proper selection of the points of
view, that provide us with working managerial and organizational models and strate-
gy. In other words, to be efficient in SMB design we need to implement enterprise
architecture approach. To reduce the cost of this implementation one can use one of
numerous reference architectures and frameworks The implementation and interpreta-
tion is well described in works of such experts of architecture of the enterprise as J.
Zachman[11,12], M. Lankhorst[21], E. Zinder[22], J. Ross[23].
In a digital century, activity of SMB during the forming and/or transition to digital
space begins to gain the characteristics of an online service:
• For customers:
• finding the most relevant service quickly, just specifying the set of require-
ments;
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• providing re-defined information set as an input, receiving pre-defined configu-
ration of the product in return;
• Availability of the service via wide range of channels and at any time.
• For digital SMB;
• real-time collaboration with other business units to integrate the unique business
process to provide a complex system of goods and services, requested by the
customer, with manageable quality;
• providing "minimum viable product", with iterations, for faster implementation
of digital goods.
Taking in account the brief analysis of the popular architectural approaches made in
[7], Service Oriented Business Architecture concept appears to be one of the most
relevant to the described problems and current specifics of SMB.
This concept is based on the understanding of business as a set of services, provid-
ed by the business units, with pre-defined business interfaces (channels, information
exchange formats, prices, etc) and the results in a clearly defined format. In addition,
one of the principles is that the existing service cannot predict when customer will
call it. In turn, the customer of service has no idea of its internal organization [8].
Figure 1 illustrates the suggested architectural model. Each service is presented by
digital business unit of small and medium-sized businesses, which provides specific
digital product to the end customer through various digital channels. In essence,
each service is a certain small business in the digital ecosystem. This approach
allows aggregation of various services to provide more complex product to the con-
sumer, by the service cluster structure organization.
One of the key elements of the offered architectural model the digital platform
which provides digital space for designing, transformation and an arrangement of the
digital businesses, and providing of the integrated workspace for the participants of
such activity. The functionality of this platform is defined on the organizational basis
described below.
One of the most important architectural features for digital SMB is ability to inte-
grate with various third-party digital services, such as electronic government, state
registers, services of smart signature. The key advantage of the proposed architecture
for the SMB is the combination of high cohesion and loose coupling principles, inher-
ited from SOA programming as the key for proper organizing if the interactions. To
get this advantage participating SMB should agree on the well-specified protocol of
Digital ESB as on the business layer as well as on the technological and the organiza-
tional ones.
At the realization stage there appears another role - IT supplier – whose main func-
tions are:
• Technological realization of the offered architectural model (platform);
• Maintenance of the provided solution implementation.
While our focus is not targeted to the business of IT supplier, we take it into the con-
sideration only at the functional level.
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3 Architecture of digital SMB unit
Based on the research result and taking into account the ideas from the previous chap-
ter, we should offer a descriptive means, as complex as it is necessary to provide strict
and clear definition of the business service interface. At the same time, as simple as it
possible, taking into consideration lack of special professional knowledge and skills
of the community members involved in the business service engineering. Digital na-
ture of the service requires a model of the service providing process to be presented.
One more requirement is the trace of changes between enterprise models, allowing
participants easily manage changes in architecture, and allowing IT supplier to put
logic into the software.
Fig. 1. Enterprise model of digital SMB
From the EA methodologies presented today, Zachman framework allows keep in
mind all above requirements [11, 12, 13]. Considering that SMB has not so compli-
cated business architecture, the application of the framework is not a sophisticated
quest.
Let us briefly go through Zachman Framework layers in the given context.
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4 Contextual layer
Normally, the contextual layer gives description of the main terms of business: ser-
vices and products, clients, channels, structural owerview, and strategy of business
[12]. In the offered model, we need some additions:
• This layer is a reference point of the organization design describing the structure of
business services;
• The layer should provide a description for the service modeling function, including
models of service function, data, motivation, time, location and people involved;
• The contextual layer should set the standard for the service catalog for the subse-
quent search and interaction.
5 Conceptual and system layers
The layers determine the design and behavior of the individual service. In the context
of modeling of the service organization, these layers should be enriched with the fol-
lowing features:
• The provided artifacts should be created in digital form on digital platform and, in
the final stage, be directly interpreted to generate service application;
• Resulting set of architectural artifacts should be a reference for all the services in
the given business context.
• The modeling instrument should have version tracking feature to provide an oppor-
tunity reverse and forward business model switching
The described layers define a skeleton of the organization. Therefore, the proper arte-
facts definition process here is really important and should be supervised and con-
trolled by the platform supplier, but performed by participates of SMB.
Technology layer.
This layer is rather traditional, except for the point that the technological layer
should be designed once for all SMBs and provide a common set of architectural
artifacts.
6 Managing changes in architecture of digital SMB and reusing
existing business and system models
A successful organization adapts to changes in the external economic, social, political
and technological environments quickly. This ability is a consequence of its architec-
ture, is it conscious or not, the change management process, and the organizational
unit managing architectural changes. The instrumental set is of great help here, which
should be carefully selected, taking into account the discussed requirements. Most of
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the basic enterprise architecture methodologies concentrate on the architectural arte-
facts [14] or the cascading architectural process [15,16].
In contrast, for the digital SMB organization, an agile approach could be recom-
mended. Purposed for information systems development initially [17], this approach
is currently implemented to the business transformation area [18]. A practical exam-
ple of agile approach implementing is dynamic case management (DCM). It is well
described [19] and implemented in the software products of Pegasystems Inc. One of
the basic features of this approach is the ability to implement ad-hoc changes in the
business model / case at the operation time.
The flexible change management model in the architecture of each service based
on a dynamic case management, with the chosen simplest architectural meta-model
and its implementation in the form of software components, also include strong de-
gree of connectivity, provides members of the digital SMB with sufficient set of tools
to make business agile and successful.
7 Conclusion
Our main task was to propose an architectural concept to make a process of SMB
digital transformation smoother. Step-by-step walking through the SMB digital trans-
formation we investigated the agile enterprise architecture approach, that helps us
meet the requirements and overcome the barriers, found in the research of SMB in
pre-transformation stage. The limits of the publication dictate the brief style of this
description. The development of models of the architecture of digital enterprises of
small and medium-sized entrepreneurship and their transformation into software
components, on the other hand, requires from community members a certain level of
system thinking, and implementing the digital platform by the qualified IT provider.
The last point requires a separate study of the problem of organization activities and,
in general, the EA of the IT provider itself. The above conditions and the complexity
of the work entail a vector of transformation of the architects of system integrators
and vendors of product solutions to the organization of a sustainable service model of
business.
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