Organizational Transformation Requires Constructional Knowledge of Business Systems

'Organizational transformation' is a term referring collectively to such activities as re-engineering, redesigning and redefining business systems. The dominant enabling technology in transforming organizations is information and communication technology. The traditional knowledge regarding business systems, originating from such areas as business administration, management science and logistics, fails to provide the right understanding for the purpose of redesigning them. A promising new kind of understanding is brought forward by modeling approaches in the so-called language/action perspective. One of these approaches is known in the academic world, and for several years now in practice too, by the name DEMO (Dynamic Essential Modelling of Organisations). This paper presents and elaborates on one of the theoretical foundations of the DEMO methodology, namely its particular system concept and corresponding white-box model. These new notions provide a constructional understanding, as opposed to the traditional functional understanding, of business systems. It is shown in detail that such a constructional understanding, that is lacking in current methodologies, is a necessary precondition for successfully carrying o u t organizational transformation projects. 1 Introduction and problem statement The promise of the 1990's, as set forward e.g. in [39], [7] and [19], was that the potential benefits of modern information and communication technology (IT) for organizations would really be exploited now, since it was fully understood then that IT was only a means to an end, an enabling technology, and that the real issue was the re-engineering, the redesigning or even the redefining of business systems1. The term 'organizational transformation' became the appealing keyword t o denote some or all of these issues. Concurrently, it became evident, at least to a number people, that the traditional knowledge regarding organizations or business systems, was not appropriate and sufficient to go about this new issue. At several places in the world, research groups started to investigate the possible practical contributions of the theoretical achievements of language philosophy, inspired by the pioneering work reported in [12]. The particular character of this research is commonly referred to as the language/action perspective. Two international workshops have already been organized, at which researchers working in this language/action perspective are brought together [36], [37]. Several research projects and products fall in the L/A perspective. Among them are Action Workflow (cf. The purpose of this paper is to highlight one of the theoretical foundations of DEMO, namely the system concept and the corresponding white-box model, that has proven to …