Business engineering (BE) is the development and implementation of business solutions, from business model to business processes and organizational structure to information systems and information technology (cf.).
Business engineering focuses on developing innovative business solutions that take a sociotechnical systems (STS) approach. The STS approach addresses an enterprise as a total system in the same manner as an airplane system or an industrial facility, since they possess a similar level of complexity.
Business engineering combines knowledge in the fields of business administration, Industrial Engineering, as well as information technology and connects it to all aspects of transformation, from means of presentation to process models to cultural and political considerations (cf. Baumöl/Jung).
- 1 Overview
- 2 Approaches
- 2.1 ARIS (Architecture of Integrated Information Systems)
- 2.2 Business Engineering St. Gallen
- 2.3 Semantic Object Model (SOM)
- 2.4 The Open Group Architecture Framework (TOGAF)
- 2.5 Integral Design of Organizational Structures and Information Systems
- 2.6 The3rdgear Business Engineering Model
- 2.7 Business Engineering IBE Hong Kong
- 3 Education
- 4 See also
- 5 References
- 6 Further reading
- 7 External links
Business engineering focuses on challenges arising from the transformation of the industrial society into an information society (cf. Winter), that is the digitization of enterprises, economy, administration and society. Through the ongoing consumerization digital services for individuals have also become a crucial part of research (cf. Hess/Legner). Because of the major importance of information technology, business engineering is often held to be a subfield of Business Informatics, although it is also sometimes regarded as a form of Organization Development for its emphasis on Change Management.
Engineering Management is a very close discipline which overlaps significantly with Business Engineering; the main differences are that Industrial Engineering focuses primarily on the goods sector (less on services), on technical systems and the interface between those systems as well as the users from a production point of view.
- Beside the technical design, business engineering includes the political and cultural dimensions of a new business solution. The political and cultural dimensions and change management are crucial factors for the success or failure of a transformation (cf. Baumöl). Therefore, business engineering is an interdisciplinary approach. It divides the design levels of a company.
- Business engineering distinguishes between a strategic, an organizational and a technological design level. Contemplating different design objects on different levels enables a focused view of the individual dimensions of transformation (, S. 191). Segmenting task at hand into different levels provides for security and helps reducing the complexity of the transformation process.
- Business engineering ensures a holistic view of all dimensions. It supports not only the design of new business models, business processes and information systems, but also their implementation. Therefore, it contemplates all dimensions (resources and processes involved) of the transformation.
- Business engineering refers to the method and model-based design theory for companies in the information age (, S. 7). Business transformations along with their technical and socio-economic aspects are far too important and complex to be realized without applying methods and models. Methods and models not only provide for transparency during the process of transformation, they also specify the division of labor, create a foundation for communication and enable the documentation of the company’s systematic reorientation. The division of labor and application of engineering principles differentiate the "construction" in accordance with business engineering from individualistic "creation" (cf., S. 88).
- Business engineering focuses on the consumer from a business perspective. As of now, this also holds true for the deep penetration of all spheres of private life with information technology (consumerization), which is equally being treated from a business and not an individual point of view.
At the Business Engineering Forum in St. Gallen, experts from science and business annually discuss new developments within the discipline.
ARIS (Architecture of Integrated Information Systems)
The ARIS concept (cf. Scheer) distinguishes between views and levels of description. The views are the organizational, data, performance, functional and control view of processes. For every description view there are three distinct levels of description. These are the technical concept, the data processing concept and the implementation level. Through this framework, specific methods can be used to describe individual elements of the model. Those methods help depict and improve business processes, from fundamental business questions to the implementation on the IT level.
Business Engineering St. Gallen
The St. Gallen approach to Business Engineering comprises fundamentals and methods for different kinds of transformation projects. It distinguishes between the design level strategies, organization and information systems within the transformation process and, thus, reduces the complexity of the transformation.
- Strategy: Capabilities (incl. brand) and resources, business segments (products, services, customer segments), customer access, competitive position, ecosystem, and revenue and cost structures
- Organization: company organization structure and operational structure, focus on business processes with accompanying process performances, procedures, tasks and business objects
- Information system: System of applications and technical services, software and data components as well as IT infrastructure components. According to the relevance of IT in the respective organization, this level is further divided into the subcategories of "alignment", "software and data" and "IT infrastructure" (cf. Winter/Fischer).
The St. Gallen approach to Business Engineering has already been applied in more than 1.000 consultancy projects (S&T 2008). Moreover, it receives support from renowned software tools such as the ARIS toolset (Scheer 2001, S. 18), ADOben (Aier et al. 2008) or Semtalk.
Semantic Object Model (SOM)
The Semantic Object Model (SOM) (cf. Ferstl/Sinz) provides a framework for the conceptual modeling of system types. The modeling concept differentiates three levels of such systems: The strategic business plan; the operational business process models which focus on process types; and the specifications for implementing application systems. These levels can also be regarded as constituting perspectives on the system. They correspond to the external, internal, and resource perspectives. Subsequently, the levels of the model undergo a further conceptual division according to the organizational architecture, the process model, the principles of coordination or the object system.
The Open Group Architecture Framework (TOGAF)
The Open Group Architecture Framework (TOGAF) (cf. Weinberger) presents a structure for organizational architectures which offers a holistic approach to designing, planning, implementing and maintaining information architectures and, thus, covers an important section, albeit not the entire scope, of BE. When applying TOGAF, the enterprise architecture is usually modeled in the three domains: business architecture, information systems architecture (consisting of application architecture and data architecture), and technology architecture.
Integral Design of Organizational Structures and Information Systems
Van Meel and Sol (1996) define business engineering as an „integral design of organizational architectures and information systems". Dynamic modeling as well as simulation constitute the key components of their approach.
The3rdgear Business Engineering Model
With a specific focus on the demands of small business, The3rdgears' Business Engineering system has proven to be effective and relatively easy to implement for small to medium-sized businesses. Unique in that it involves the use of a specialised customisable software platform that integrates key business structures and operational performance processes. While The3rdgear system encapsulates the key areas of Strategy, Business Process, Technology and People, it has been proven to provide unusually consistent, predictable outcomes for small businesses due to the SME specific design of its improvement processes and software applications. This, combined with its ease of use for business owners and managers has made The3rdgear model popular within the SME marktet place.
Business Engineering IBE Hong Kong
There has been another notion and approach put forth since 2005 by the Institute of Business Engineers (IBE) while sharing the common vision and advocacy of multi-disciplinary and holistic business view, and targeting the addressed issues in business practice and education.
The IBE put forth some principles and framework addressing the modeling of the business in a holistic, concise and structural manner. The model abstracts distinct, clearly defined key elements, processes, functions and relations from the complex, vague and loosely coupled business concepts. With the emphasis of holistic and integrative system view, it helps structurally and concisely capture a specific circumstance of business in four tiers, which are in turn composed of smaller constituents, for strategic planning and implementation:
- Finance: an internal tier that concisely reflects the enterprise’s financial status and performance, indicating the well-being of the enterprise by the financial data presented in balance sheet and income statement.
- Business functions: an internal tier that reflects an enterprise’s composition of the core business functions that collaboratively undertake all internal processes to achieve business goals with the constraints of their allocated cost.
- Market environment: an external tier that reflects the environment that affect the micro marketing circumstance that the business is facing.
- Industry environment: an external tier that reflects the environment that affect the macro marketing or industrial circumstance that the business is facing.
Furthermore, to a certain extent, this model is claimed to provide a generic framework for filling the gap of other business engineering approaches in specifying business circumstances, serving as one of key pieces of puzzle in the full picture of business engineering.
In France, Télécom École de Management (or Telecom Business School) offers a master's degree in International Business Engineering that contains business administration, marketing, economics, finances, and IT.
In Belgium, there are numerous institutions offering bachelor and master programs in business engineering, among them the Solvay Brussels School of Economics and Management (Université Libre de Bruxelles and Vrije Universiteit Brussel), the ICHEC Brussels Management School, the Louvain School of Management (Université catholique de Louvain, Université de Namur), the HEC Management School - University of Liège, the KU Leuven, the Ghent University, the University of Antwerp and the University of Hasselt. The programs contain both management methodology, business administration, economics, mathematics, and technical elements and computer science.
In Finland, the University of Oulu offers a diploma program in Business Engineering for which a master's degree in Engineering is required.
In Mexico, there are two main colleges that offers a professional Business Engineering program Monterrey Institute of Technology and Higher Education (ITESM) seek the following competencies:
- To comprehend, model and design organizational processes defining and implementing process technologies and solutions that seek innovation and improvement of the organization, with an international perspective of the society and the culture.
- To Manage IT Projects, efficiently working in multidisciplinary teams and respecting people and their different opinions.
- Keep abreast of the rapid dynamics of technological development in the area, recognizing the need to commit to personal and professional development.
- Analyze, design and implement Information Technology applications, understanding and solving in innovative and creative ways problems of different companies, institutions or organisms, through the efficient use of Information Technologies.
In the other hand the Instituto Tecnológico Autónomo de México (ITAM) program contains business administration, mathematics, marketing, economics, finances, and IT and computer science. Students focus in entrepreneurship and business consulting.
In Germany, the Steinbeis University offers a master’s program in Business Engineering. The contents of the degree course held in English include, similar to Belgium, management methodologies as well as fundamentals of business administration and economics. As in Finland, an academic degree in Engineering is required in order to be eligible for admission.
In Switzerland, professionals can receive the degree of Executive MBA in Business Engineering at the University of St. Gallen or at the PHW Hochschule Wirtschaft Bern. The program at the University of St. Gallen lasts 18 months and includes two modules in the USA (Santa Clara University) and China (Shanghai Jiao Tong University) where students learn about the local dynamics, culture and differences in management methods compared to Europe. The program’s main focus lies on providing practical knowledge in the areas of business strategy/business model, business processes/organizational structure, information systems/information technology, and the political and cultural dimensions of economic activity. The systematic exchange of experience among the students complements the educational concept. At the end of the program, the newly received Business Engineers are qualified to actively and holistically transform their businesses and take over executive positions within their organizations. To be eligible for admission, professionals must have an academic degree and about 5 years of work experience. The program at the PHW Hochschule Wirtschaft Bern can be completed in 4 semesters and focuses on strategies of internationalization, technology management, business models and value added concepts, information management and systems, value-centered corporate governance and turnaround management.
The University of Chile offers a master’s program in Business Engineering (M. Sc.) since 2003. As in Germany and Belgium the program combines management theory, business administration, finance, economics, science and technology. The program consists of a theoretical as well as a practical part during which the students develop a project for an organization in the private or public sector. The program is designed to be completed in four semesters. Hundreds of projects have been developed since 2003, producing a validation of the proposed approach to design and a generation of knowledge that has been formalized and applied in new projects. Graduates are awarded with the academic degree "Master of Science in Business Engineering" (MBE) after taking the courses of the program and successfully completing their projects.
The University of the Pacific offers an academic degree in business engineering since 2008. The students deepen their knowledge in the three areas of Process Engineering, Project Engineering and Information Technology Engineering while additionally being able to choose from a wide variety of subjects to complement their studies, e.g. mathematics, physics, informatics, economics, philosophy, sociology etc.
In El Salvador
The Escuela Superior de Economia y Negocios (ESEN) initiated a business engineering program for professionals in 2009 which focuses on the systems perspective, the modeling and analysis of complex relationships between resources, employees and information, as well as the integration of engineering expertise with a quantitative and qualitative business understanding. The program combines elements of different disciplines, e.g. business administration, economics, management, innovation and information technology. The career has a duration of 5 years with the possibility that in the third cycle of the 4th year, the student can study in Germany, Chile, United States and Mexico as long as your CUM is up 8.0.
In the Philippines
The Ateneo de Naga University offers a bachelor program in business administration (B. Sc.) with the possibility to specialize in business engineering. The four-year program aims at training young technology-based founders and students who want to pursue a career in technology-related industries. Practice-oriented projects encourage the creativity and innovative energy needed to conceptualize and implement products and ideas while advancing the socio-economic development of the Bicol region at the same time. Moreover, the university maintains close relations to entrepreneurs and businessmen in order to enable the students to learn from "best practices".
The National University of Engineering in Nicaragua (UNI) offers the career "System Engineer" since the 90's, it focuses on the administrative field, organization, human resources management, production costs control, service marketing, project formulation and follow-up as well as other disciplines with the main objective of doing a correct and successful financial control at the private enterprise; it also gives the students the main skills and knowledge on informatics, design, data base management and information modeling to use the technology as a tool to solve problems at the companies and for the society. The career has a duration of 5 years with different completing options to get the degree of "System Engineer" or "Ingeniero(a) en Sistemas".
In China and Hong Kong SAR
The Institute of Business Engineers (IBE) has been offering executive education programs on Business Engineering in Hong Kong SAR and China since 2008. This course is designed to establish a holistic and integrative business mindset for senior executives and to build up their reasoning logics with key business components for judging and decision making in the business environment. The Business Engineering course has also been offered as a major elective course to the non-business undergraduate programs of Sun Yat-San University and as an elective course to the MBA program of South China Normal University of GuangDong province from 2007 to 2008. Recently, the course “From CPA to CPA Plus” crafted under the principles of the Business Engineering of IBE has been offered for building up the systematic business mindset of the accounting professionals of HKICPA (Hong Kong Institute of Certified Public Accountants) since 2017.
- Business process modeling
- Engineering administration
- Engineering management
- Enterprise engineering
- Enterprise modeling
- Industrial engineering
- Master of Business Engineering
- American Society for Engineering Education
- American Society for Quality
- European Students of Industrial Engineering and Management
- Institute of Industrial Engineers
- Washington Accord
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- Baldwin Hui, Andrew Siu, Gary Ching (2013). The Business “MINDFRAME”. SCPG Publishing Corporation, 2013. ISBN 978-1-938368-09-7
- IEEE Conference on E-Business Engineering
- Business Engineering Forum
- Oulu University of Applied Sciences, business engineering studies
- Master in Business Engineering, University of Chile
- The Australian Society for Operations Research
- The UK MTM Association
- The International Federation of Operational Research Societies (IFORS)
- The Operations Research Society of Japan