Management by contract

The process underlining adaptability is composed of four key steps: observe the events occurring in the enterprise, analyze them, take decisions and act accordingly.

To achieve adaptability, the enterprise needs to moves from reactive behaviours to responsive behaviours and must therefore focus on the analysis and decision steps of that process.

Because no rational decision-making can be made without a clear understanding of the consequences that the decision entails, we suggest that the ability of an enterprise to understand the consequences of its decisions in a business context is the gateway to efficient adaptive management.

Management by Contract (MbC) is our paradigm for Adaptive Management. It is based on the analysis of the consequences extracted from formal and informal relationships, modeled as contractual agreements, established between an enterprise and its environment.

Through MbC, an enterprise can make consequences of courses of action explicit, thus allowing for a better-informed decision-making process: both in reaching agreements, and in operating and interacting with other parties in the context of the existing agreements.

To exemplify, management platforms today allow users to define service level objectives (SLO) that must be met. However, they do not provide a mean of specifying and evaluating the consequences of not meeting them.

When an SLO is violated, the informed user of the management platform might be inclined to take the suggested repair actions. However, in some cases it might actually be advantageous to consciously decide not to meet the SLO and bear the cost of the associated sanctions.

Management by Contract allows a user to look at meeting or not meeting SLOs as alternative viable business options.

We define relationship models to capture formal or informal agreement between interacting parties. This enables us to make consequences of courses of action explicit, thus allowing for a better-informed decision-making process: both in reaching agreements, and in operating and interacting with other parties in the context of the existing agreements.

In that setting, we investigate the use of contractual abstractions as a common paradigm to represent these relationships.

Alongside the specification of the relationship models, we define an integrated framework that enables reasoning over the following models and their mutual dependencies:

SLA/Contract model: A model of a formal or informal agreement between parties defining the agreed rules of interaction and expressing the consequences of courses of action.

Utility model: Some form of model defining which outcomes are better than others for the enterprise. Note that this is not necessarily short-term financial value - it can include longer-term considerations such as the desire to keep regular customers happy.

Resource model: A model defining the nature and the availability of resources used to satisfy the various interactions the enterprise is involved in. Ideally it would provide the current availability, the expected future availability, and 'options' about how the expenditure of money or other actions can adjust future availability