Modeling Business StrategyFor Business-IT AlignmentPresented by: Constantinos GiannoulisSupervised by: Paul Johannesson an...
Overview● Business-IT Alignment● Problem, Goal● Research Methodology● Contribution● Conclusions & Future Work02/12/2011   ...
Business-IT Alignment02/12/2011   © Giannoulis
Business-IT Alignment● Integration of business and IT● Business strategy & IT strategy● Fit between business needs and IT ...
“Great people want tofeel like impact players.Put simply, greatpeople want to feellike theyre part ofsomething greaterthan...
Business-IT Alignment●   Early definitions call for IT Strategy              (Henderson & Venkatraman, 1989 & 1993)●   Mor...
Business-IT Alignment                     …”the linkage between the goals                   of the business and the goals ...
Problem & Goal02/12/2011   © Giannoulis
Problem Space      Business              IT02/12/2011   © Giannoulis
Problem Space   Business                 Alignment   IT02/12/2011   © Giannoulis
Problem Space   Business                 Alignment                 IT                             GQM+Strategies   Enterpr...
Problem Space●   Shortcomings of existing alignment methods     – Most are rooted in IT and not Strategic Management     –...
Research ProblemBusiness strategy● remains unknown to IT—an understanding gap● changes are not traceable to IT      – thus...
Research ProblemAddressing the understanding gap relies on a *..*      relationship between business strategy and      ent...
Research Problem   Business                  Alignment            IT                                         Enterprise Mo...
Research Problem● From *..* to 1..*      – A common business strategy formulation interface         towards multiple enter...
Research Problem & Research GoalResearch question: How can business strategy formulations be formalized?      – Users? IT ...
Research Methodology02/12/2011   © Giannoulis
Research Paradigm● Business-IT Alignment lies within IS● Within IS research:    Behavioral science vs Design science      ...
Research Process: Awareness of ProblemResearch question:    How can business strategy formulations be formalized?      – U...
Research Process: Awareness of Problem●   Why Meta-models?                                 ●   Why Ontology?      –      M...
Research Process: Awareness of ProblemInput relevance and coverage                                  Selection based on:Bus...
Research Process: Suggestion● Requirements for the research goal’s achievement are              based on theoretical analy...
Research Process: Development & EvaluationSMBSC                          Value Configuration● Literature (Formulation &   ...
Research Process: Development & EvaluationSMBSCStrategy Maps                          Balanced Scorecards     – Four organ...
Research Process: Development                                SMBSC02/12/2011   © Giannoulis
Research Process:Development                       The SMBSC Meta-model                            ●   Includes all elemen...
Research Process: Development & Evaluation                                   SMBSC in OWL02/12/2011   © Giannoulis
Research Process: Development & Evaluation                                SMSBC in OWL                                (ABB...
Research Process: Development & Evaluation                               SMBSC in Telos02/12/2011   © Giannoulis
Research Process: Development & Evaluation                               SMSBC in Telos                              (ABB ...
Research Process: EvaluationBased on the artifact requirements:●   For utility and fidelity, the descriptive evaluation me...
Research Process: ConclusionThe results of the iterative development and evaluation       phases of the research process w...
Contribution02/12/2011   © Giannoulis
ContributionNovelty in the process and the product●   Formalizing SMBSC and Value Configuration (the process)      – raise...
Contribution levels in Design Science●   Level 1—Specific artifact instantiations      – Instantiations of the SMBSC and V...
Conclusions & Future Work02/12/2011   © Giannoulis
ConclusionsResearch question: How can business strategy formulations be formalized?Research goal: To build both the meta-m...
ConclusionsFormalization of:                  ●   Consistency between sources and                                         ...
Future work● Formalize and integrate more business strategy             formulations● Unify business strategy formulations...
Research Problem● Analogy in basketball      – 1 coach: strategist, overall decision maker      – 5 players: different rol...
Research Problem & Research Goal     Coach                   Basketball                                                  P...
Questions02/12/2011   © Giannoulis
Modeling Business Strategy for Business-IT Alignment
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Modeling Business Strategy for Business-IT Alignment

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Public defense presentation for the degree of Licentiate of Philosophy at the Department of Computer and Systems Sciences (DSV) at Stockholm University

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Modeling Business Strategy for Business-IT Alignment

  1. 1. Modeling Business StrategyFor Business-IT AlignmentPresented by: Constantinos GiannoulisSupervised by: Paul Johannesson and Jelena ZdravkovicStockholm University, Department of Computer and System Sciences (DSV)02/12/2011 © Giannoulis
  2. 2. Overview● Business-IT Alignment● Problem, Goal● Research Methodology● Contribution● Conclusions & Future Work02/12/2011 © Giannoulis
  3. 3. Business-IT Alignment02/12/2011 © Giannoulis
  4. 4. Business-IT Alignment● Integration of business and IT● Business strategy & IT strategy● Fit between business needs and IT priorities● Long time commitment & planning with impact on IT planning● Focused use of IT: improved performance Communication of strategy is linked to successful implementation02/12/2011 © Giannoulis
  5. 5. “Great people want tofeel like impact players.Put simply, greatpeople want to feellike theyre part ofsomething greaterthan themselves” —they want to become, touse a favorite Jobsphrase, "insanely great.“
  6. 6. Business-IT Alignment● Early definitions call for IT Strategy (Henderson & Venkatraman, 1989 & 1993)● More recently, definitions call for IT in general; no IT Strategy expected (Luftman et al, 1999)● Lately, goals were introduced; ● ”business and IT working together to reach a common goal” (Campbell, 2005) ● Business goals and IT goals (Abraham, 2006)(Singh & Woo, 2009)02/12/2011 © Giannoulis
  7. 7. Business-IT Alignment …”the linkage between the goals of the business and the goals of IT.” (Abraham, 2006)• No IT strategy formulation required• Goals focus on the Whys and the Hows02/12/2011 © Giannoulis
  8. 8. Problem & Goal02/12/2011 © Giannoulis
  9. 9. Problem Space Business IT02/12/2011 © Giannoulis
  10. 10. Problem Space Business Alignment IT02/12/2011 © Giannoulis
  11. 11. Problem Space Business Alignment IT GQM+Strategies Enterprise Models • Process Models • Requirements Models INSTAL • ... B-SCP ... ...02/12/2011 © Giannoulis
  12. 12. Problem Space● Shortcomings of existing alignment methods – Most are rooted in IT and not Strategic Management – Criticized of being unrealistic and mechanistic; dynamic business vs. static IT – Business insights not properly disseminated to IT and business strategy formulations liberally used● In specific domains, like Requirements Engineering – Focus on a particular IT aspect missing business considerations – Focus on managerial concerns not dealing with low level requirements – Only a few semi-formal 1..1 mappings exist● Different communication means and formalisms used – Business: natural language-based, schematic representations – IT: clearly defined models with precise descriptions Alignment is still an open problem02/12/2011 © Giannoulis
  13. 13. Research ProblemBusiness strategy● remains unknown to IT—an understanding gap● changes are not traceable to IT – thus alignment of business goals against IT actions and results cannot be evaluated● needs to provide insights to IT and relate to enterprise models to trace decisions, actions, and artifacts02/12/2011 © Giannoulis
  14. 14. Research ProblemAddressing the understanding gap relies on a *..* relationship between business strategy and enterprise models – How is business strategy formulated? – Which alignment method is chosen pointing to distinct enterprise models?02/12/2011 © Giannoulis
  15. 15. Research Problem Business Alignment IT Enterprise Models Strategy Maps GQM • Process Models • Requirements Models Value Chain INSTAL • ... Blue Ocean Strategy B-SCP ... ... ...02/12/2011 © Giannoulis
  16. 16. Research Problem● From *..* to 1..* – A common business strategy formulation interface towards multiple enterprise models● The understanding gap remains as different communication means and formalisms used – Business strategy: natural language-based, schematic representations, lack precise descriptions, not appropriate for mappings that enable for automatic or semi-automatic traceability – IT: clearly defined models with precise descriptions in the forms of conceptual models, meta-models, ontology, etc.● Business strategy formulations need to be described in a form similar to enterprise models.02/12/2011 © Giannoulis
  17. 17. Research Problem & Research GoalResearch question: How can business strategy formulations be formalized? – Users? IT – Purpose of use? Manual, semi-automatic, & automaticResearch goal: To build both the meta-models of prevalent business strategy formulations as well as their ontologies.02/12/2011 © Giannoulis
  18. 18. Research Methodology02/12/2011 © Giannoulis
  19. 19. Research Paradigm● Business-IT Alignment lies within IS● Within IS research: Behavioral science vs Design science (justified theory vs effective artifacts)● Why Design Science? – Problem Solving No formalization of prevalent business strategy formulations exist – Building artifacts Meta-models and reference ontology – Artifacts include both formalizing business strategy (the process) and the formalization itself (the design)● Process: Design Science Research Framework02/12/2011 © Giannoulis
  20. 20. Research Process: Awareness of ProblemResearch question: How can business strategy formulations be formalized? – Users? IT – Purpose of use? Manual, semi-automatic, & automaticResearch goal: To build both the meta-models of prevalent business strategy formulations as well as their ontologies. – Appropriate formalizations – Input relevance and coverage: prevalent business strategy formulations02/12/2011 © Giannoulis
  21. 21. Research Process: Awareness of Problem● Why Meta-models? ● Why Ontology? – Manual/semi-automated use – Allows fully-automated use – Exist for most enterprise models – Can be derived from a meta-model (mappings) also serving as a validation – Support model integration, mechanism – Can be tranformed into ontology, – Captures the business strategy – Well established within IS formulation as a domain (reference ontology)● Why UML? ● Why Telos? – Widely accepted for conceptualization – Simple and expressive syntax of models and meta-models – Tool support on model consistency checking ● Why OWL? – Tool support – More widely accepted – Standard tranformation rules from UML exist – Allows for advanced reasoning by checking for ontology satisfiability – Supports ontology integration02/12/2011 © Giannoulis
  22. 22. Research Process: Awareness of ProblemInput relevance and coverage Selection based on:Business Strategy formulations: ● Relevance to alignment ● Applicability● Miles & Snow Typology ● Strategic planning coverage● The Value Chain – Resource-based view – Industrial organization● The Value Shop – Schumpeterian● The Value Network ● Value Configuration● Blue Ocean Strategy – Relevant within alignment – Most influential work in● Strategy Maps business strategy● Balanced Scorecards ● SMBSC – Relevant within alignment – Covers strategic planning – Widely accepted 02/12/2011 © Giannoulis
  23. 23. Research Process: Suggestion● Requirements for the research goal’s achievement are based on theoretical analysis because – Artifacts are novel thus it is unclear how to use them in practice making empirical studies not feasible – It is not bounded by any single case or social context● Artifact requirements – Utility (if it works) – Fidelity with real world phenomena – Completeness (level of detail) – Robustness – Internal consistency02/12/2011 © Giannoulis
  24. 24. Research Process: Development & EvaluationSMBSC Value Configuration● Literature (Formulation & ● Literature (Formulation & Applications) Applications)● Meta-model in UML ● Meta-model in UML● Formalization in ● Formalization in Telos & OWL Telos & OWL● Evaluation using an ● Evaluation using an industrial case scenario industrial case scenario (ABB Printing Services) (Norwegian Police) 02/12/2011 © Giannoulis
  25. 25. Research Process: Development & EvaluationSMBSCStrategy Maps Balanced Scorecards – Four organizational – Objectives perspectives of Balanced Scorecards (BSC) – Measures • financial – Targets • customer – Actions • internal • learning and growth – Both external & internal (all business activities) – Structure: Cause-effect links/assumptions – Build top-down (causality is bottom-up) – Communicate direction and priorities 02/12/2011 © Giannoulis
  26. 26. Research Process: Development SMBSC02/12/2011 © Giannoulis
  27. 27. Research Process:Development The SMBSC Meta-model ● Includes all elements of SMBSC ● Generalizes some elements for applicability (Groups) ● Introduces explicitly user defined groups and perspectives ● Separates classes and instances (application) ● Includes constraints expressed in a structured manner02/12/2011 © Giannoulis
  28. 28. Research Process: Development & Evaluation SMBSC in OWL02/12/2011 © Giannoulis
  29. 29. Research Process: Development & Evaluation SMSBC in OWL (ABB Printing Services)02/12/2011 © Giannoulis
  30. 30. Research Process: Development & Evaluation SMBSC in Telos02/12/2011 © Giannoulis
  31. 31. Research Process: Development & Evaluation SMSBC in Telos (ABB Printing Services)02/12/2011 © Giannoulis
  32. 32. Research Process: EvaluationBased on the artifact requirements:● For utility and fidelity, the descriptive evaluation method of the ”informed argument” was used by demonstrating applicability through artifact instantiations using real published cases● For completeness, the artifacts’ level of detail were evaluated against the knowledgebase including the original authors’ specifications and additional published applications● For robustness and internal consistency, established transformation rules of UML to OWL were employed, similarly, clearly defined rules for Telos; also ontologies in OWL were checked for internal consistensy using reasoning tools02/12/2011 © Giannoulis
  33. 33. Research Process: ConclusionThe results of the iterative development and evaluation phases of the research process were disseminated in the following communities● 3rd Working Conference on the Practice of Enterprise Modeling (PoEM 2010)● 5th IEEE International Conference on Research Challenges in Information Science (RCIS 2011)● 6th International Workshop on BUSiness/IT Alignment and Interoperability (BUSITAL 2011)02/12/2011 © Giannoulis
  34. 34. Contribution02/12/2011 © Giannoulis
  35. 35. ContributionNovelty in the process and the product● Formalizing SMBSC and Value Configuration (the process) – raised questions not otherwised asked – discovery of constraints and properties for the meta-models● Build their meta-model in UML and their reference ontologies in Telos & OWL (the products) – Clear and unambiguous abstract syntax of the business strategy formulations was built – Expression and analysis of the formulations is supported by the tools that equip the languages used – Other operations usefull within the scope of the work can now be supported – Diffusion and reusability of the meta-models are enhanced02/12/2011 © Giannoulis
  36. 36. Contribution levels in Design Science● Level 1—Specific artifact instantiations – Instantiations of the SMBSC and Value Configuration meta- models, as well as instantiations of their reference ontologies● Level 2— Design principles (e.g. models and methods) – The process followed to formalize SMBSC and Value Configuration can be used as an example method to be followed for other business strategy formulations – The products (SMBSC and Value Configuration meta-models and their ontologies) allow for: • Mappings to enterprise models • Complementing existing alignment methods substituting the liberal use of business strategy or even enriching the ambiguous use of SMBSC and Value Configuration • The progressive unification of business strategy formulations02/12/2011 © Giannoulis
  37. 37. Conclusions & Future Work02/12/2011 © Giannoulis
  38. 38. ConclusionsResearch question: How can business strategy formulations be formalized?Research goal: To build both the meta-models of prevalent business strategy formulations as well as their ontologies.02/12/2011 © Giannoulis
  39. 39. ConclusionsFormalization of: ● Consistency between sources and artifacts● SMBSC ● Correct artifact instantiation – Into a meta-model in UML – Into reference ontology in ● Unseen questions were raised, OWL & Telos properties & constraints● Value Configuration were discovered – Into a meta-model in UML ● Clear & unambiguous artifact syntax – Into reference ontology in ● Additional operations (model OWL & Telos integration, mappings, etc.) ● Address the understanding gap ● Complement alignment methods02/12/2011 © Giannoulis
  40. 40. Future work● Formalize and integrate more business strategy formulations● Unify business strategy formulations (UBSMM) – Validate UBSMM with cases – Map and evaluate how UBSMM can support/complement alignment methods● Map to business process models, and other enterprise models – For RE, map and evaluate how goal modeling languages (i*, KAOS, BMM, etc.) can express business strategy using UBSMM02/12/2011 © Giannoulis
  41. 41. Research Problem● Analogy in basketball – 1 coach: strategist, overall decision maker – 5 players: different roles, concerns, perspectives, operational decision makers – Must speak the same ”basketball language” – Must be aligned – Understanding gap = failure!02/12/2011 © Giannoulis
  42. 42. Research Problem & Research Goal Coach Basketball Players (IT) (Business) Alignment Off-court offensive In-game offensive strategy Model driven systems Off-court defensive strategy In-game defensive Oral instructions Referee handling systems strategy ... ... ...02/12/2011 © Giannoulis
  43. 43. Questions02/12/2011 © Giannoulis

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