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Business-IT alignment from a value-based perspective

2. VITAL/design. 3. VITAL. 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 University of Twente. Overview. What is business-IT alignment?.

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Business-IT alignment from a value-based perspective

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  1. 2 VITAL/design 3 VITAL 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 University of Twente

  2. 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 SIREN 2006

  3. outcome • “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” process from Maes et al., 2000 Business-IT alignment: definition • Allocation of IT budgets such that business functions are supported in an optimal way SIREN 2006

  4. strategicalignment external internal functional integration Business-IT alignment • Prod./market • Make-or-buy • HRM • Services • Make-or-buy • HRM • Adm. infra. • Processes • Skills • Architecture • Processes • Skills IT demand IT supply Adapted from: Henderson, & Venkatraman, (1993). Strategic alignment: Leveraging information technology for transforming organisations. IBM Systems Journal, 32(1):472-484. SIREN 2006

  5. 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=IJCIS04 SIREN 2006

  6. Title stolen from Thiadens, Th. (2005). Manage IT! Springer Verlag. IT Management Frameworks ICT service organization User organization BiSL software house Application management ASL Users Functional management producing, maintaining and adapting application programs and the databases Management Figure by Roberto Santana Tapia, adapted from Van der Pols, R., Donatz, R., & Van Outvorst, F. (2005). BiSL. Een Framework voor Functioneel Beheer en Informatiemanagent. Van Haren Publishing. Suppliers ITIL Technical management maintaining and leading information oftheorganization,supportingthe organization by means of the management of the information. maintaining and managing of the technical infrastructure resources to store, process and provide information Demand Side Supply side In practice: Manage IT!

  7. 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 SIREN 2006

  8. 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 SIREN 2006

  9. 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 SIREN 2006

  10. In this presentation Case study modelling approach • Four viewpoints • Value viewpoint • Process viewpoint • Information systems viewpoint • Infrastructure viewpoint • Based on work by Jaap Gordijn • Applied in consultancy projects in ISPs, news, ads, energy, music, banking SIREN 2006

  11. Value object hierarchy • Value network Contents • Case study introduction • Economic value viewpoint • Design guidelines • Process viewpoint • Design guidelines • Reflection on the case study • Conclusion (of this part) SIREN 2006

  12. 1. Value object hierarchy SIREN 2006

  13. Design guidelines (example) Find fine-grained value object by deconstructing coarse-grained object • Called ‘split-ups’ (horizontal/vertical) • Consists-of and contributes-to relations SIREN 2006

  14. Introduction to e3value 1/2 • e3 value modeling concepts • Actor: economically independent entity • Value object: thing of value to the actors • Value transfer: economical activity • Value exchange: pair of value transfers e3value.com SIREN 2006

  15. Introduction to e3value 2/2 • Dependency paths indicate causal relations between value exchanges • A dependency path is not a business process!! SIREN 2006

  16. Based on economic reciprocity Costs are associated with each value activity Economic validity can be assessed SIREN 2006

  17. 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 SIREN 2006

  18. Contents • Case study introduction • Economic value viewpoint • Design guidelines • Process viewpoint • Design guidelines • Reflection on the case study • Conclusion (of this part) SIREN 2006

  19. Process viewpoint construction • Interpret each transaction as service provisioning from provider to customer • Develop service delivery process for each transaction SIREN 2006

  20. 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 SIREN 2006

  21. Establish service delivery relationTransaction “Article online” SIREN 2006

  22. Deliver serviceTransaction “Article online” SIREN 2006

  23. Establish service delivery relationTransaction “IP Access” SIREN 2006

  24. Contents • Case study introduction • Economic value viewpoint • Design guidelines • Process viewpoint • Design guidelines • Reflection on the case study • Conclusion (of this part) SIREN 2006

  25. Horizontal split-up Back to the value model! SIREN 2006

  26. SIREN 2006

  27. Contents • Case study introduction • Economic value viewpoint • Design guidelines • Process viewpoint • Design guidelines • Reflection on the case study • Conclusion (of this part) SIREN 2006

  28. Vrije Universiteit Jaap Gordijn Vincent Pijpers University of Twente Roel Wieringa Lianne Bodenstaff VALUE MODEL CROSS-ORGANIZATIONAL SETTINGS COOP COORDINATION PROCESS Coordination Process Correctness and Trust Assumptions http://www.vital-project.org/coop This is only the beginning … SIREN 2006

  29. VITAL: Value-Based ITALignment • Three parts: • VITAL/services: focus on service specification • VITAL/design: focus on architecture • VITAL/maturity: focus on implementation Economic value-based approach to alignment in networked businesses “IT investment decisions just like any other investment decision” SIREN 2006

  30. IT alignment & service provisioning SIREN 2006

  31. 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 SIREN 2006

  32. ABN AMRO Atos Origin Belastingdienst C/ICT BiZZdesign Cap Gemini CIBIT/SERC Cisco Systems Deloitte Gartner GetronicsPinkRoccade HP ICTU KLM KPN Labyrint OrangeWing Consulting Ordina Sogeti Twynstra Work Innovation Unisys Participating companies SIREN 2006

  33. 2 VITAL/design 3 VITAL VITAL 1 VITAL/services VALUE MODEL CROSS-ORGANIZATIONAL SETTINGS COOP COORDINATION PROCESS a project My research landscape Jacquard (NWO, STW) NWO open competition Sentinels (STW, NWO) Bsik (MinEZ) SIREN 2006

  34. 2 VITAL/design 3 VITAL 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

  35. 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 23rd 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 CAiSE Forum, CAiSE, June 7 - 11, 2004, Riga, Latvia. SIREN 2006

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