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Business Analysis Core Concept Model (BACCM): Organizations and Organizational Systems

By Julian Sammy, Head of Learning and Innovation, IIBA
Bottom Lines:
  • A system is a set of interacting components that operate together to produce intended and unintended outcomes.
  • Systems are made up of subsystems.
  • An organization is a system. The subsystems of an organization are called “organizational systems” for simplicity.
  • People are the only necessary Organizational System, because Organizations are made of People.
  • Organizations generate Value through Organizational Systems.
In the glossary of A Guide to the Business Analysis Body of Knowledge® (BABOK® Guide) version 2, an organization is defined as:
An autonomous unit within an enterprise under the management of a single individual or board, with a clearly defined boundary that works towards common goals and objectives. Organizations operate on a continuous basis, as opposed to an organizational unit or project team, which may be disbanded once its objectives are achieved.
Since it is referenced in the definition of an organization, we should look at how an enterprise is defined:
An organizational unit, organization, or collection of organizations that share a set of common goals and collaborate to provide specific products or services to customers.
These definitions conflict in that an organization is part of an enterprise while an enterprise can be part of an organization. This reflects the ambiguous way these terms are used in practice. In the BABOK® Guide v2 glossary “Organization” is the primary idea so we’ll use it for this analysis. 
Taking these definitions together and substituting in a few relevant Core Concepts from the Business Analysis Core Concept Model (BACCM), we can find many generic descriptions for “organization”. Since Stakeholder includes the idea of a group or an individual, we could have:
Stakeholders working together autonomously and continuously to find solutions to a common set of needs.
Another way to describe a solution to a common need is “to realize value in a specific domain”. This gives us:
Stakeholders working together autonomously and continuously to realize value in a specific domain.
These are not the only possible definitions, of course. This is a good opportunity to use the BACCM to develop your own. You should find that all the definitions converge or cluster around a few key ideas. For example, any definition of an organization will include some sense of people working together to achieve something. This is a kind of system:
a set of interacting components that operate together to produce intended and unintended outcomes.
Systems are usually made up of subsystems (which are systems). For brevity and consistency we will call these subsystems “Organizational Systems”—but what are the subsystems of an organization?
Clearly, People are one of these Organizational Systems. Stakeholders are people with a relationship to the Change or Solution and they definitely interact in ways that are intended and unintended. But how important are Stakeholders, as a subsystem of an Organization?
Consider an “organization” without people. What comes to mind? A factory with no workers? A computer? A carwash? These are machines or tools, not organizations. Tools can be organized, but they cannot form an organization; People are a necessary part of Organizational Systems.
Now consider an organization that has one and only one Organizational System: People. People standing on a featureless plain. Desks, computers, pencils, paper, walls, and clothes are all Not People, so those people are also naked.
In the most abstract philosophical theory it may be possible to construct an organization that doesn’t include tools—but not in practice. Humans are tool-using animals and we always have tools involved in everything we do. Tools, in the most generic sense, are another Organizational System.
While a collection of people—with a common cause and useful tools—is necessary for an organization to exist, it isn’t enough. Humans are also social animals. We need to share information with each other to make a purposeful and coordinated effort to achieve something. Consider the difference between these statements:
Stakeholders working together autonomously and continuously to realize value in a specific domain.
Stakeholders acting to realize value in a specific domain.
In the first case there is agreement among stakeholders about the nature of the value and the way that this value will be realized. The second case could describe voters, consumers, investors, or an angry mob. If there is no information flowing between stakeholders, so there is no purposeful coordination. When voters (for example) share information to coordinate their actions we call them a Party—an organization.
Our count of necessary Organizational Systems is at three: People, Tools, and Information. Are there any other necessary Organizational Systems?
We have noted that people in an organization share information to coordinate action in a purposeful way. But what does coordinated, purposeful action look like? Usually, we call this a plan (when it will be done once), or a process (when it’s repeatable). We all know what an “organization” without plans or processes looks like: disorganized. Processes are the Organization System that is used by People to coordinate Tools and manage Information. Processes are as necessary as Tools and Information: every organization follows some kind of process (including the mom-and-pop-shop on the corner and the local place of worship).
This gives us four Organizational Systems that operate together to generate value: People, Processes, Tools, and Information. All four are necessary, but they don’t have the same importance.
  • People come first, because organizations are made of people. The other Organizational Systems don’t matter if the people don’t participate in them.
  • Process (usually) come second, because organizations can’t scale up past (about) six people without some standardized way of coordinating action.
  • Tools come next, because People can’t do anything meaningful without Tools. Processes—even “manual” processes and “technology agnostic” processes—almost always describe ways that humans use tools.
  • Information is absolutely necessary, but comes last in the list of Organizational Systems. In an organization, People follow Processes to use Tools. Those Tools may be used to manipulate the physical world—to build something or repair something—but many tools are used to manipulate Information.
There may be more Organizational Systems that are necessary subsystems to an organization. The people working on the BACCM and BABOK® Guide haven’t found them, but an absence of evidence is not evidence of absence. We want to know if there is another necessary Organizational System that we have missed. Please visit the IIBA Company Page on LinkedIn to critique this analysis, and to propose changes and objections.
Thank you in advance for your thoughtful and considered opinions and analysis.