VITAL/design 2 3 VITAL/maturity 1 VITAL/services Value-based business-IT ALignment http: //www. vital-project. org Business-IT alignment from a value-based perspective Pascal van Eck Oct. 12, 2006 University of Twente SIREN 2006
V I TAL Overview What is business. IT alignment? State of the art in research and practice The need for a more synthetic approach Value modeling as a tool for business-IT alignment An overview of the VITAL project, and its relation to other NWO/STW funded research Oct. 12, 2006 SIREN 2006 2
V I TAL Business-IT alignment: definition Allocation of IT budgets such that business functions are supported in an optimal way “the continuous process, …, of consciously and coherently interrelating all components of the business – IT relationship in order to contribute to the organisation’s performance over time” outcome process from Maes et al. , 2000 Oct. 12, 2006 SIREN 2006 3
V I TAL external • Prod. /market • Make-or-buy • HRM • Services • Make-or-buy • HRM internal Business-IT alignment • Adm. infra. • Processes • Skills • Architecture • Processes • Skills IT demand strategic alignment IT supply functional integration Adapted from: Henderson, & Venkatraman, (1993). Strategic alignment: Leveraging information technology for transforming organisations. IBM Systems Journal, 32(1): 472 -484. Oct. 12, 2006 SIREN 2006 4
V I TAL Alignment research in MIS Approach: observe and analyze strategic alignment by means of rigorous empirical methods Researchers include: • N. Venkatraman • P. Weill • J. Luftman • Y. Chan Journals include: • MIS Quarterly • IS Research • J. Strat. Inf. Sys. Qualitative validation: • Avison, D. , Jones, J. , Powell, P. , Wilson, D. (2004). Using and validating the strategic alignment model. J. Strat. Inf. Sys. 13: 223 -246. http: //dx. doi. org/10. 1016/j. jsis. 2004. 08. 002. • Eck, P. van, Blanken, H. and Wieringa, R. (2004). Project GRAAL. Towards Operational Architecture Alignment. Int. J. of Coop. Inf. Sys. 13(3): 235 -255. http: //www. cs. utwente. nl/~patveck/? page=IJCIS 04 Oct. 12, 2006 SIREN 2006 5
V I TAL In practice: Manage IT! User organization Bi. SL Users Management Figure by Roberto Santana Tapia, adapted from Van der Pols, R. , Donatz, R. , & Van Outvorst, F. (2005). Bi. SL. Een Framework voor Functioneel Beheer en Informatiemanagent. Van Haren Publishing. Title stolen from Thiadens, Th. (2005). Manage IT! Springer Verlag. IT Management Frameworks ICT service organization software house Application management ASL Functional management producing, maintaining and adapting application programs and the databases Suppliers maintaining and leading information of the organization, supporting the organization by means of the management of the information. Technical management ITIL maintaining and managing of the technical infrastructure resources to store, process and provide information Demand Side Supply side 6
V I TAL Problem, and solution elements Problem: guidance for engineering/planning/synthesizing the business-IT relationship is lacking Solution direction: economic value-based approach to alignment in networked businesses Oct. 12, 2006 SIREN 2006 7
V I TAL Contents • Case study introduction • Economic value viewpoint – Design guidelines • Process viewpoint – Design guidelines • Reflection on the case study • Conclusion (of this part) Jump to relevant publications Oct. 12, 2006 SIREN 2006 8
V I TAL Case study: “Amsterdam Times” • Business idea: newspaper offers readers on-line access to its contents • Subscribers have to use dialup-account provided by “Amsterdam Times” – “Amsterdam Times” causes many telephone connections – Telecom consortium pays for this Idea was never implemented But that doesn’t matter Oct. 12, 2006 SIREN 2006 9
V I TAL Case study modelling approach • Four viewpoints – Value viewpoint In this presentation – Process viewpoint – Information systems viewpoint – Infrastructure viewpoint • Based on work by Jaap Gordijn – Applied in consultancy projects in ISPs, news, ads, energy, music, banking Oct. 12, 2006 SIREN 2006 10
V I TAL Contents • Case study introduction • Economic value viewpoint – Design guidelines • Process viewpoint 1. Value object hierarchy 2. Value network – Design guidelines • Reflection on the case study • Conclusion (of this part) Oct. 12, 2006 SIREN 2006 11
V I TAL 1. Value object hierarchy Oct. 12, 2006 SIREN 2006 12
V I TAL Design guidelines (example) Find fine-grained value object by deconstructing coarse-grained object • Called ‘split-ups’ (horizontal/vertical) • Consists-of and contributes-to relations Oct. 12, 2006 SIREN 2006 13
V I TAL Introduction to e 3 value 1/2 • e 3 value modeling concepts e 3 value. com – Actor: economically independent entity – Value object: thing of value to the actors – Value transfer: economical activity – Value exchange: pair of value transfers Oct. 12, 2006 SIREN 2006 14
V I TAL Introduction to e 3 value 2/2 • Dependency paths indicate causal relations between value exchanges – A dependency path is not a business process!! Oct. 12, 2006 SIREN 2006 15
V I TAL Based on economic reciprocity Costs are associated with each value activity Economic validity can be assessed Oct. 12, 2006 SIREN 2006 16
V I TAL Design guidelines (examples) • Consist-of / contributes-to relations indicate value activities • Bundle objects if it is likely that they generate more profit in combination than separately – May generate more revenue – Client only considers combination of value Oct. 12, 2006 SIREN 2006 17
V I TAL Contents • Case study introduction • Economic value viewpoint – Design guidelines • Process viewpoint – Design guidelines • Reflection on the case study • Conclusion (of this part) Oct. 12, 2006 SIREN 2006 18
V I TAL Process viewpoint construction 1. Interpret each transaction as service provisioning from provider to customer 2. Develop service delivery process for each transaction Oct. 12, 2006 SIREN 2006 19
V I TAL Design guidelines • Determine steps needed to: – Establish service delivery relation (once) – Actual service delivery (many times) – Terminate service delivery relation (once) • Determine process steps for service quality and transaction atomicity • Service provider process steps may require consuming third-party services Oct. 12, 2006 SIREN 2006 20
V I TAL Establish service delivery relation Transaction “Article online” Oct. 12, 2006 SIREN 2006 21
V I TAL Deliver service Transaction “Article online” Oct. 12, 2006 SIREN 2006 22
V I TAL Establish service delivery relation Transaction “IP Access” Oct. 12, 2006 SIREN 2006 23
V I TAL Contents • Case study introduction • Economic value viewpoint – Design guidelines • Process viewpoint – Design guidelines • Reflection on the case study • Conclusion (of this part) Oct. 12, 2006 SIREN 2006 24
V I TAL Back to the value model! Horizontal split-up Oct. 12, 2006 SIREN 2006 25
V I TAL Oct. 12, 2006 SIREN 2006 26
V I TAL Contents • Case study introduction • Economic value viewpoint – Design guidelines • Process viewpoint – Design guidelines • Reflection on the case study • Conclusion (of this part) Oct. 12, 2006 SIREN 2006 27
V I TAL This is only the beginning … Coordination Process Correctness and Trust Assumptions http: //www. vital-project. org/coop Vrije Universiteit • Jaap Gordijn • Vincent Pijpers Oct. 12, 2006 University of Twente • Roel Wieringa • Lianne Bodenstaff SIREN 2006 28
V I TAL VITAL: Value-Based IT ALignment Economic value-based approach to alignment in networked businesses “IT investment decisions just like any other investment decision” • Three parts: – VITAL/services: focus on service specification – VITAL/design: focus on architecture – VITAL/maturity: focus on implementation Oct. 12, 2006 SIREN 2006 29
V I TAL IT alignment & service provisioning Oct. 12, 2006 SIREN 2006 30
V I TAL VITAL team • Pictured: Jaap Gordijn, Hans Akkermans, Roel Wieringa, Pascal van Eck • Here today: Roberto Santana Tapia, Novica Zarvic • And: Zsofia Derzsi, Sybren de Kinderen, Maya Daneva Oct. 12, 2006 SIREN 2006 31
V I TAL Participating companies • • • ABN AMRO Atos Origin Belastingdienst C/ICT Bi. ZZdesign Cap Gemini CIBIT/SERC Cisco Systems Deloitte Gartner Getronics. Pink. Roccade Oct. 12, 2006 • • • HP ICTU KLM KPN Labyrint Orange. Wing Consulting Ordina Sogeti Twynstra Work Innovation Unisys SIREN 2006 32
V I TAL My research landscape Jacquard (NWO, STW) NWO open competition 2 VITAL/design 3 VITAL 1 VITAL/services Sentinels (STW, NWO) Bsik (Min. EZ) a project Oct. 12, 2006 SIREN 2006 33
VITAL/design 2 3 VITAL/maturity 1 VITAL/services Value-based business-IT ALignment http: //www. vital-project. org Thanks! Pascal van Eck – p. vaneck@utwente. nl Dept. of Computer Science University of Twente P. O. Box 217 7500 AE Enschede, The Netherlands http: //www. cs. utwente. nl/~patveck Oct. 12, 2006 SIREN 2006
V I TAL Relevant publications & links • • • Eck, P. van, Gordijn, J. , Wieringa, R. (2004). Value-based Design of Collaboration Processes for e-Commerce. In: Soe-Tsyr Yuan and Jiming Liu (editors), Proceedings 2004 IEEE International Conference on e-Technology, e-Commerce and e-Service, EEE'04. pp. 349 -358. IEEE Press. ISBN 0 -7695 -2073 -1. Eck, P. van, Gordijn, J. , Wieringa, R. (2004). Risk-Driven Conceptual Modeling of Outsourcing Decisions. In: Paolo Atzeni et al. , Conceptual Modeling - ER 2004. Proceedings of the 23 rd International Conference on Conceptual Modeling, Shanghai, China. LNCS 3288, Springer-Verlag, pp. 709 -723. Wieringa, R. , Eck, P. van, Blanken, H. (2004). Architecture Alignment in a Large Government Organization. A Case Study. In: Proceedings of the CAi. SE Forum, CAi. SE, June 7 - 11, 2004, Riga, Latvia. Oct. 12, 2006 SIREN 2006 35
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