Normalized Systems and innovation

Fine-grained modularity in a system is the way to master the complexity that emerges when striving for evolvability in a system. Normalized Systems Theory (NST) explains how modularity of a system should be designed in order to establish evolvability, to accommodate change and therefore to enable innovation. NST is part of the ‘Masterclass Agile Enterprise Engineering & Architecture, introduction and advanced topics’.

The need for integration and innovation

Many issues of contemporary organizations are characterized by a need for integration and innovation in a context of complexity and change. Often, this results in industry disruptions in which organizations which can thrive in such contexts come out on top. The need for change and innovation in various industries, and the kind of organizations which thrive in these industries, can be illustrated by the following examples:

• In the music industry, the product itself got digitized first with the introduction of the cd. While this led to innovations and changes, the industry leaders remained in charge. However, this enabled a second wave of digitization (i.e., streaming services), which disrupted the market: now, IT-companies such as Apple, Google, Amazon and Spotify enter a large share of the market.

• In the car industry, digitization of certain systems is wide-spread. Starting with features such as cruise control and parking sensors, increasing automated control was added. This enabled IT companies to include additional sensors and develop advanced algorithms, which could even result in self-driving cars. Again, IT companies such as Google play a prominent role in this evolution, rather then car industry giants.

• Changing legislation regarding efficiency requires producers of purely mechanical ventilation systems to include electronic control systems in their products. This requires investments in new production machines. Moreover, many producers lack the knowledge of such systems, necessitating the outsourcing design activities. This shifts the balance of power in the industry.

• The Internet of Things proposes to add sensors, computation and communication to physical objects. By making these objects smart, they can be controlled digitally by their owners, but can also be monitored and serviced remotely. The vast amount of devices and the various incompatible platforms result in a need for integration on a previously unseen scale.

Challenges of evolvability

What the challenges of these various industries have in common is the large-scale, complex integration of changing components or modules. NST is a theory on the evolvability of modular structures, which identifies the root cause of evolvability issues as combinatorial effects. A combinatorial effect occurs when the effort to apply a certain change to a system is not only dependent on that change itself, but also on the size of the system. In other words: the effect of a change aggravates when the system grows, and becomes unmanageable at a large scale.

In order prevent the occurrence of combinatorial effects, NST formulates a set of design principles. By applying these principles, the effort required to apply a certain change becomes predictable and, in most cases, feasible, even when the system becomes very large. This is a characteristic of large systems which is not common: many systems are considered "too big to change''. NST is documented in two books (that you can order here) and 60+ academic papers, and various real-life projects are being executed by a University of Antwerp spin-off (NSX).

Normalised Systems for organizations

While NST has currently been primarily applied to software, it has been shown to be valuable on the organizational level as well. For example, the applicability of NST to business processes and enterprise architectures has already been researched in several PhD projects. Research on the applicability of NST, and in more general terms of engineering approaches, on the organizational level is further conducted in the Enterprise Engineering research group, an international collaboration of universities from the Netherlands, Belgium, Portugal, Germany, Czech Republic, Russia and Japan.

The current research focuses on the combination of domain-specific knowledge with insights from NST. Such a combination enables specification of concrete projects with tangible business impacts.

Antwerp Management School has enabled the NS researchers to organize several domain-specific ‘round tables’ with thought leaders in each domain. We are proud to mention significant interest in the many domains, ‘Documents and Documentation’, ‘Insurance and Claims Processing’, ‘Logistics and the Physical Internet’, ‘Marketing and The Segment of One’, ‘R&D and Personalized Medicine’, ‘Engineering and Servitization’, Accounting and GAAP reporting’.

About 25 Belgian and international companies have already participated in the domain-specific round tables. Our adventures and some results will be published regularly in these blogposts. Any company, willing to walk the complexity mastering talk, is welcome to participate and can contact us.

The theory of Herwig Mannaert, Jan Verelst and Peter De Bruyn stems from research at the University of Antwerp. The book Normalized Systems is the preeminent work used in the Masterclass Agile Enterprise Engineering & Architecture, introduction and advanced topics.