Business Analysis Notes

Strategy

Soft Systems Methodology and CATWOE

5 min read · Updated

In short Soft Systems Methodology (SSM) helps when people disagree about what a business system is for. You capture each stakeholder’s view with CATWOE, build a model of the activities each view logically requires, and compare the models with reality to find gaps.

Based on: D. Paul, D. Yeates, J. Cadle (eds.), Business Analysis (BCS), 2nd ed., ch. 7 “Modelling Business Systems” and ch. 9, presenting the work of Peter Checkland.

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Key ideas#

Hard and soft situations#

“Hard” systems thinking assumes the goal and boundary of a system are clear. Peter Checkland’s SSM, developed at Lancaster University, is for “soft” situations where they are not. The BCS book uses it as the basis for modeling business systems; it is not part of the BABOK® Guide.

The overall flow: explore the situation, often with a rich picture (an informal drawing of people, concerns and conflicts) → express different world views as root definitions (the BCS book calls them business perspectives) → build a conceptual model for each → compare the models with reality → agree improvement actions.

Behind SSM is the idea of emergent properties: the whole has characteristics that none of its parts has alone. A car moves; its engine and steering wheel, on their own, do not. When you propose a change, think about which new properties, wanted or unwanted, the changed system will have.

CATWOE#

A mnemonic for describing one perspective: - C – Customer: who benefits from the system’s output. - A – Actors: who performs the activities, inside or outside the organization. - T – Transformation: the core of the system, turning an input into an output of value to the customer. - W – Weltanschauung (world view): the belief that makes the system meaningful. Analyze it first; it shapes the other five. - O – Owner: who can make key decisions about the system, including stopping it. Name a person, not a group. - E – Environment: constraints outside the owner’s control. PESTLE is a good source.

Combine the six elements into one sentence: the root definition.

Several views can all be valid#

The BCS book uses Wittgenstein’s duck-rabbit drawing, which you can see as a duck or a rabbit but not both at once. A salesperson sees the company as “selling”; a finance manager sees it as “producing”. Each is a legitimate world view. Spot conflicts between them before they escalate.

When views differ in emphasis rather than substance, build a consensus model through global consensus (a neutral model valid for any organization of this type), full agreement (everyone accepts an activity is needed), or compromise.

The business activity model (BAM)#

A BAM shows the activities a perspective logically requires: not what happens today, and not who does it or where. Build one per perspective. It has five types of activity: 1. Planning — set targets and decide which resources are needed. 2. Enabling — obtain and deploy those resources. 3. Doing — carry out the transformation. 4. Monitoring — measure performance against the targets. 5. Control — act on deviations, influencing any other activity.

Arrows show logical dependency (“B needs A to have happened”). Control activities get a single lightning-bolt arrow instead of many lines. Name activities verb–noun.

Business events trigger activities: external (a customer order, a supplier failure), internal decisions (management approves a discount) or points in time (a daily export). Business rules govern them: constraints (laws, fixed policy) and operational guidance (how to perform the activity). Critical success factors suggest planning, enabling and doing activities; KPIs suggest monitoring activities.

How to apply it#

  1. Interview stakeholders and draw a rich picture.
  2. For each important perspective, write CATWOE, starting with W, and turn it into a root definition.
  3. Build the BAM in this order: doing → enabling → planning → monitoring → control → activities for environmental factors → dependency arrows → control arrows.
  4. Check the model against Checkland’s criteria, as summarized in the BCS book: - [ ] The purpose is explicit. - [ ] All activities are connected; otherwise you have two systems. - [ ] Performance measures and targets are defined. - [ ] Control can change other activities and influence decisions. - [ ] The boundary, and communication across it, are clear. - [ ] Resources are obtained, allocated, replenished and accounted for. - [ ] Each activity falls under exactly one control mechanism, so the model can be decomposed.
  5. Compare each activity with reality. It is present and satisfactory (leave it), present but unsatisfactory (an opportunity: process, people, organization or IT), or missing (an opportunity). This gap list feeds needs analysis.

Example#

At The Workshop, a fictional chain of bike-repair workshops, two stakeholders describe the business differently. The front-desk lead sees a system to repair bikes quickly and keep customers informed. The owner sees a system to keep mechanics fully utilized and margins healthy. Both views are valid.

CATWOE for the front-desk view: C = customers with broken bikes; A = front desk, mechanics, parts supplier; T = broken bike → repaired bike, customer informed throughout; W = fast, predictable repairs keep customers loyal; O = the owner; E = parts lead times and consumer law.

Root definition: a system, owned by the owner, in which front-desk staff, mechanics and the parts supplier turn customers’ broken bikes into repaired ones and keep customers informed, because fast and predictable repairs keep them loyal, within the limits of parts lead times and consumer law.

BAM sketch: doing (diagnose bike, repair bike, return bike); enabling (obtain spare parts, schedule mechanics); planning (set turnaround targets); monitoring (measure turnaround time); control (reprioritize jobs). The gap analysis shows “measure turnaround time” is missing, and “obtain spare parts” exists but is unsatisfactory.

Pitfalls#

  • Picking one “correct” view → model several and build a consensus.
  • Modeling the current process instead of what the perspective requires → keep the BAM conceptual.
  • Skipping W → analyze the world view first.

Sources and further reading#

  • D. Paul, D. Yeates, J. Cadle (eds.). Business Analysis, 2nd ed. BCS, The Chartered Institute for IT, 2010, ch. 7 “Modelling Business Systems” (SSM, CATWOE, business activity models) and ch. 9 (the duck-rabbit view of perspectives).
  • P. Checkland, the originator of Soft Systems Methodology, whose work the BCS chapter presents.