1. Business-IT alignment from a value-based perspective
Value-based business-IT ALignment 2 1 3
VITAL/services
VITAL/design
VITAL/maturity
VITAL
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
Oct. 12, 2006
SIREN 2006

3. Business-IT alignment: definition
Allocation of IT budgets such that business functions are supported in an optimal way
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
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4. Business-IT alignment
internal
external
Prod./market
Make-or-buy
HRM
Services
Make-or-buy
HRM
functional integration
strategic alignment
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):
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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:
Eck, P. van, Blanken, H. and Wieringa, R. (2004). Project GRAAL. Towards Operational Architecture Alignment. Int. J. of Coop. Inf. Sys. 13(3):
Oct. 12, 2006
SIREN 2006

6. In practice: Manage IT! BiSL ASL ITIL Demand Side Supply side
Functional
management
Application
Technical
User organization
ASL
ITIL
BiSL
Users
Management
Suppliers
maintaining and managing of the technical infrastructure
resources to store, process and provide information
producing, maintaining and adapting application programs and the databases
software house
maintaining and leading information of the organization, supporting the organization by means of the management of the information.
IT Management Frameworks
ICT service organization
Demand Side Supply side
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.
Title stolen from Thiadens, Th. (2005).
Manage IT! Springer Verlag.

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
Oct. 12, 2006
SIREN 2006

8. Jump to relevant publications
Contents
Case study introduction
Economic value viewpoint
Design guidelines
Process viewpoint
Reflection on the case study
Conclusion (of this part)
Jump to relevant publications
Oct. 12, 2006
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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
But that doesn’t matter
Idea was never implemented
Oct. 12, 2006
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10. 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
In this presentation
Oct. 12, 2006
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11. Contents Case study introduction Economic value viewpoint
Design guidelines
Process viewpoint
Reflection on the case study
Conclusion (of this part)
Value object hierarchy
Value network
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12. 1. Value object hierarchy
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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
Oct. 12, 2006
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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
Oct. 12, 2006
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15. Introduction to e3value 2/2
Dependency paths indicate causal relations between value exchanges
A dependency path is not a business process!!
Oct. 12, 2006
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16. Based on economic reciprocity
Costs are associated with each value activity
Economic validity can be assessed
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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
Oct. 12, 2006
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18. Contents Case study introduction Economic value viewpoint
Design guidelines
Process viewpoint
Reflection on the case study
Conclusion (of this part)
Oct. 12, 2006
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19. Process viewpoint construction
Interpret each transaction as service provisioning from provider to customer
Develop service delivery process for each transaction
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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
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21. Establish service delivery relation Transaction “Article online”
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22. Deliver service Transaction “Article online”
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23. Establish service delivery relation Transaction “IP Access”
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24. Contents Case study introduction Economic value viewpoint
Design guidelines
Process viewpoint
Reflection on the case study
Conclusion (of this part)
Oct. 12, 2006
SIREN 2006

25. Back to the value model!
Horizontal split-up
Oct. 12, 2006
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26. Oct. 12, 2006
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27. Contents Case study introduction Economic value viewpoint
Design guidelines
Process viewpoint
Reflection on the case study
Conclusion (of this part)
Oct. 12, 2006
SIREN 2006

28. This is only the beginning …
Coordination Process Correctness and Trust Assumptions
COOP
VALUE MODEL
COORDINATION PROCESS
CROSS-ORGANIZATIONAL SETTINGS
Vrije Universiteit
Jaap Gordijn
Vincent Pijpers
University of Twente
Roel Wieringa
Lianne Bodenstaff
Oct. 12, 2006
SIREN 2006

29. 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

30. IT alignment & service provisioning
Oct. 12, 2006
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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
Oct. 12, 2006
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32. Participating companies
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
Oct. 12, 2006
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33. CROSS-ORGANIZATIONAL SETTINGS
My research landscape
Jacquard (NWO, STW)
NWO open competition 2 1 3
VITAL/services
VITAL/design
VITAL
COOP
VALUE MODEL
COORDINATION PROCESS
CROSS-ORGANIZATIONAL SETTINGS
Sentinels (STW, NWO)
Bsik (MinEZ) a
project
Oct. 12, 2006
SIREN 2006

34. Thanks! VITAL Pascal van Eck – p.vaneck@utwente.nl
Value-based business-IT ALignment 2 1 3
VITAL/services
VITAL/design
VITAL/maturity
VITAL
Thanks!
Pascal van Eck –
Dept. of Computer Science
University of Twente
P.O. Box 217
7500 AE Enschede, The Netherlands

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 IEEE Press. ISBN
Eck, P. van, Gordijn, J., Wieringa, R. (2004). Risk-Driven Conceptual Modeling of Outsourcing Decisions. In: Paolo Atzeni et al., Conceptual Modeling - ER Proceedings of the 23rd International Conference on Conceptual Modeling, Shanghai, China. LNCS 3288, Springer-Verlag, pp
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 , 2004, Riga, Latvia.
Oct. 12, 2006
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