Enterprise Engineering: A Design Discipline for the Modern Organisation

There’s a fundamental question that sits at the heart of how we approach organisational change:

Is an organisation something that happens to us, or something we deliberately design?

Most management practice treats organisations as evolved structures to be optimised, managed, and occasionally restructured. Strategy sets direction. Operations execute. Problems get solved as they arise.

But what if we took a different view? What if we treated organisations the way engineers treat complex systems: as purposefully designed artefacts that can be systematically understood, redesigned, and implemented?

This is the premise of Enterprise Engineering: a discipline that applies engineering rigour to the design and development of organisations themselves.

The Emergence of Enterprise Engineering

Enterprise Engineering emerged from the realisation that modern organisations face challenges that traditional management approaches struggle to address. Complexity compounds. Technology accelerates change. Interconnections multiply. The accumulated weight of decisions made over decades creates what I call organisational gravity: the force that pulls every transformation back toward the status quo.

The response from the Enterprise Engineering community, particularly the work coming from the CIAO! Network and researchers like Jan Dietz and Hans Mulder, has been to develop a rigorous theoretical foundation for understanding and designing organisations.

The core insight: enterprises are purposefully designed systems. They were created by humans to achieve goals. And if they were designed, they can be redesigned. Systematically, rigorously, and with engineering discipline.

This isn’t metaphor. It’s methodology.

The Trilogy: Ontology, Design, Governance

Enterprise Engineering rests on three interconnected pillars, each with its own body of theory and practice:

Enterprise Ontology

Before you can redesign something, you need to understand what it essentially is. Not what it looks like or how it’s implemented, but its fundamental nature.

Enterprise Ontology provides the theories and methods for understanding the essence of an organisation’s operation, abstracted from its realisation and implementation. It answers the question: what is this organisation, really?

The key distinction here is between the essential model of an organisation (what it fundamentally does) and its implementation model (how that gets done with particular technologies, people, and processes). This distinction is powerful because it reveals that many organisational changes that seem transformative are actually implementation changes that don’t touch the organisation’s essence. Conversely, small changes to the essential model can have profound implications.

Enterprise Design

Enterprise Design addresses the systematic development of organisations. It applies design principles (the same kind of rigorous thinking used in engineering disciplines) to the challenge of moving from a current state to a preferred state.

The definition from Herbert Simon captures it perfectly: design is devising courses of action aimed at changing existing situations into preferred ones.

Enterprise Design provides structured approaches for:

Understanding the current organisation (AS-IS)
Conceiving the target organisation (TO-BE)
Planning the transformation pathway between them

Crucially, this isn’t design as aesthetics or design as documentation. It’s design as engineering: systematic, verifiable, and grounded in theory.

Enterprise Governance

Enterprise Governance addresses the ideological dimension: the principles, values, and decision-making frameworks that guide how the organisation operates and evolves. It provides the normative foundation for design choices.

Together, these three pillars (Ontology, Design, Governance) form a comprehensive framework for understanding and developing organisations as engineered systems.

The Function-Construction Distinction

One of the most powerful concepts in Enterprise Engineering is the distinction between function and construction.

Function is what something does for someone: the affordances it offers, the value it creates. Function is inherently subjective; it exists in relation to a user with needs.

Construction is what something is: its structure, components, and mechanisms. Construction is objective; it exists independent of any particular user.

Consider a simple example: a hammer. Its construction is objective (a weighted head attached to a handle). Its function is subjective: it affords driving nails for a carpenter, but might afford something entirely different for a sculptor or a child at play.

This distinction matters enormously for organisations because most organisational thinking conflates the two. We describe what an organisation looks like (its construction) and assume we’ve explained what it does (its function). But construction doesn’t determine function. It enables it.

When we design organisations, we should start with function: what do we need this organisation to afford? What value should it create, for whom? Only then do we design the construction that will enable those functions.

This reversal (function before construction) is one of the most practically powerful shifts in Enterprise Engineering.

The Four Organisations

Enterprise Engineering introduces another crucial distinction: the layering of organisational production into four types.

The O-Organisation (Original)

The O-organisation comprises all the acts that create original new facts in the world. This is where value is actually created: devising things, deciding, judging, manufacturing, transporting, observing.

This is the essential organisation: the irreducible core of what the enterprise does. Original acts can only be performed by human actors because they involve genuine creation and decision-making.

The I-Organisation (Informational)

The I-organisation supports the O-organisation by providing informational services: remembering facts, computing, deriving, and sharing information.

The D-Organisation (Documental)

The D-organisation supports the I-organisation by providing documental services: saving, providing, and transforming documents and datasets.

The M-Organisation (Material)

The M-organisation supports the D-organisation by providing material services: storing, retrieving, copying, transmitting, and destroying files.

Here’s why this matters: only the O-organisation creates original value. The I-, D-, and M-organisations exist to support it. And critically, while original acts must be performed by humans, the supporting organisations can be implemented with technology, including AI.

This framework provides extraordinary clarity about what technology can and cannot do, and where human judgment remains essential.

Every enterprise information system, from this perspective, is simply a part of the I-, D-, and M-organisation implemented using ICT. It doesn’t replace the O-organisation; it supports it.

The DEMO Methodology

The practical application of Enterprise Engineering is embodied in DEMO: the Design and Engineering Methodology for Organisations.

DEMO provides three integrated components:

Way of Thinking (WoT)

The theoretical foundation: the ontological, philosophical, and technological theories that inform how we understand organisations.

Way of Modelling (WoM)

An integrated modelling approach comprising four sub-models:

Cooperation Model (CM): The construction of the organisation, transactor roles and their coordination structures
Action Model (AM): The operation of the organisation, the rules that guide actors
Process Model (PM): The state space of coordination
Fact Model (FM): The state space of production

Way of Working (WoW)

Structured methods for producing organisational models:

OER (Organisational Essence Revealing): For discovering the essential model of an existing organisation
DAO (Designing under Architecture from Ontology): For developing new organisations and systems

The power of DEMO lies in its ability to produce essential models: representations of an organisation that are abstracted from implementation details and reveal the true nature of what the organisation does.

Once you have an essential model, you can reason about change systematically. You can identify what’s truly essential versus what’s merely implementational. You can design transformations that address root causes rather than symptoms.

Why This Matters for Architecture Practice

Enterprise Engineering provides something that traditional enterprise architecture often lacks: intellectual manageability.

Traditional EA tends to produce vast models that try to capture everything about an organisation: its applications, processes, data, technology, and more. These models become so complex that they’re difficult to maintain, harder to use for decision-making, and nearly impossible to keep aligned with strategic intent.

Enterprise Engineering’s focus on essential models offers a different approach. By abstracting away implementation details and focusing on the organisation’s essence, it achieves unprecedented reduction of complexity while retaining everything needed to understand and redesign the organisation.

This isn’t just theoretical elegance. It has practical implications:

Transformation planning becomes tractable because you’re working with essential structures, not implementation complexity
Technology decisions become clearer because you understand what’s essential versus what’s supporting
Change impact analysis becomes more accurate because essential models reveal true dependencies
Architecture longevity improves because essential models change less frequently than implementation models

Organisational Concinnity

Enterprise Engineering introduces a beautiful concept: organisational concinnity.

Concinnity means the skillful and harmonious arrangement of parts. An organisation achieves concinnity when its elements work together coherently: when structure serves purpose, when technology enables rather than constrains, when governance guides rather than impedes.

This is one of the three general goals of Enterprise Engineering:

Intellectual manageability, achieved through Enterprise Ontology
Organisational concinnity, achieved through Enterprise Design
Social devotion, achieved through Enterprise Governance

Concinnity is what most organisations lack. Not because their people aren’t capable, but because the accumulated complexity of decades of change has created misalignment, redundancy, and friction.

Enterprise Engineering offers a path to concinnity through rigorous design. Not the imposition of artificial order, but the systematic development of organisations that work as integrated wholes.

The Shift in Mindset

Adopting Enterprise Engineering requires a shift in how we think about organisations:

From managing complexity to understanding essence. Instead of trying to capture and control every detail, we abstract to what’s truly essential and design from there.

From describing what exists to designing what should be. Architecture becomes generative, not just descriptive.

From technology-led change to function-led design. We start with what the organisation needs to afford, not what technology can enable.

From implementation thinking to ontological thinking. We distinguish between what something is and how it’s currently realised.

This shift isn’t easy. It requires learning new theories, adopting new methods, and often challenging assumptions that seem obvious until you examine them carefully.

But the payoff is significant: the ability to design organisations. Systematically, rigorously, and with engineering discipline.

Connecting to My Practice

I’ve integrated these ideas into how I approach architecture work, though I translate them into language that’s accessible to executives and practitioners who may not have studied the formal discipline.

When I talk about capability design and development, I’m drawing on the function-construction distinction and the focus on essential organisation.

When I emphasise the golden thread from strategy to execution, I’m applying the principle that design should proceed from function to construction, from purpose to implementation.

When I build tools like the Soaring Wings platform, I’m trying to make these sophisticated concepts practical: to give architects and strategists a way to work with essential models without needing a PhD in Enterprise Engineering.

Enterprise Engineering provides the rigorous foundation. The challenge is making it useful for people who need to transform organisations today.

The Bottom Line

Enterprise Engineering offers something profound: the insight that organisations are designed systems, and therefore can be redesigned systematically.

This isn’t just a philosophy. It’s a discipline with rigorous theories, proven methodologies, and practical applications. It provides the intellectual tools to achieve what most organisations struggle with: genuine transformation that addresses essence rather than implementation, that creates coherence rather than complexity.

The organisations that thrive in the coming decades will be the ones that develop this capability: the ability to understand themselves at the essential level and to redesign themselves deliberately.

That’s not just good practice. That’s escape velocity.

References

Dietz, J.L.G. & Mulder, H.B.F. (2025). Enterprise Design Fundamentals: Settling an Enterprise Business and Devising the Enterprise Organisation. Springer Nature. The Enterprise Engineering Series.
Dietz, J.L.G. & Mulder, H.B.F. (2024). Enterprise Ontology: A Human-Centric Approach to Understanding the Essence of Organisation (2nd ed.). Springer Nature.
Hoogervorst, J.A.P. (2017). Foundations of Enterprise Governance and Enterprise Engineering. Springer International Publishing.
Dietz, J.L.G., Hoogervorst, J.A.P., et al. (2013). The discipline of enterprise engineering. International Journal of Organisational Design and Engineering, 3.

For more information on Enterprise Engineering and the DEMO methodology, visit ciaonetwork.org and the Enterprise Engineering Institute.