How To Develop A Business Strategy Model

Transcription

1 REPORT SERIES/DSV Model-driven Alignment: Linking Business Strategy with Information Systems DSV Report Series No

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3 Model-driven Alignment Linking Business Strategy with Information Systems Constantinos Giannoulis

4 c Constantinos Giannoulis, Kista, Stockholm 2014 ISBN ISBN Printed in Sweden by US-AB, May 2014 Distributor: Department of Computer & Systems Sciences, Stockholm University

5 dedicated to my parents, Georgios and Maria to my sister, Stella to my brother, Dimitrios αφιερωμένο στους γονείς μου, Γιώργο και Μαρία στην αδερφή μου, Στέλλα στον αδερφό μου, Δημήτρη

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7 Abstract Information technology (IT) is more pervasive than ever before, constituting a significant factor for performance and survival in the business arena. It is essential that IT within organizations understands what the Business needs in order to provide the necessary support and bring value, which is also true when IT is also the main value creator. Therefore, alignment between the Business and IT within organizations is an issue of great concern and it is still open for solvency both for business and IT executives and practitioners. This work is scoped to the alignment linkage between business strategy and information systems (IS), where business strategy typically constitutes the primary exponent of the Business and IS typically encapsulates the elements of IT sustaining an organization. Current approaches are either focused on detailed aspects of IS and treat business strategy abstractly or use distinct business strategy formulations (e.g. Value Chain) but deal with IS only partially. This is problematic because the abstract use of business strategy hinders traceability of strategic intentions and initiatives towards features/aspects of IS, which are aimed to actualize and support such intentions. Because approaches using distinct business strategy formulations are not relevant to all organizations and are limited only to the IS aspects addressed. Introducing a model-driven approach for the alignment linkage is aimed at addressing the outlined shortcomings. Following a design science research paradigm, the main artifact developed is the Unified Business Strategy Meta- Model (UBSMM), which is based on conceptualizing established business strategy formulations (e.g. Value Chain) and integrating them. UBSMM supports mappings to IS models used in organizations, such as IS requirements, enterprise models and enterprise architecture, and provides unambiguous utilization of business strategy for the alignment linkage. Contributions of this thesis are grounded both on the process of building UBSMM and mapping to IS models, as well as the artifact itself. Conceptualizing and integrating business strategy formulations provides a less ambiguous and unified view of strategic concepts. This limits variations in interpretation and reinforces mappings to IS models, which are defined based on inter-schema properties across models. Therefore, UBSMM can link business strategy to IS models enhancing their communication in a traceable manner, ergo, support alignment.

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9 Περίληψη Η Τεχνολογία Πληροφοριών κι Επικοινωνίας (ΤΠΕ) είναι πιο διαδεδομένη από ποτέ άλλοτε, αποτελώντας σημαντικό παράγοντα παραγωγικότητας και επιχειρηματικής επιβίωσης. Είναι σημαντικό μέσα σε οργανισμούς ο τομέας ΤΠΕ να κατανοεί τι χρειάζεται η επιχείρηση προκειμένου να παράσχει την απαραίτητη υποστήριξη και να προσδώσει αξία. Αυτό ισχύει επίσης όταν η ΤΠΕ είναι ο κύριος δημιουργός αξίας της ίδιας της επιχείρησης. Ως εκ τούτου, η ευθυγράμμιση και ο συγχρονισμός μεταξύ του επιχειρησιακού τομέα και του τομέα ΤΠΕ στο εσωτερικό ενός οργανισμού είναι ένα ζήτημα μεγάλης ανησυχίας και εξακολουθεί να είναι ανοικτό για στελέχη επιχειρήσεων, στελέχη πληροφορικής καθώς και επαγγελματίες στον τομέα τεχνολογίας πληροφοριών. Το πεδἰο έρευνας αυτής της διατριβής ορίζεται στο συντονισμό της επιχειρηματικής στρατηγικής και των πληροφοριακών συστημάτων, καθώς αφενός η επιχειρηματική στρατηγική είθισται να αποτελεί τον κύριο εκφραστή του σκοπού μιας επιχείρησης και του τρόπου επίτευξης του, ενώ αφετέρου τα πληροφοριακά συστήματα ενσωματώνουν τα στοιχεία της ΤΠΕ που απαρτίζουν και υποστηρίζουν τις λειτουργίες ενός οργανισμού. Οι υπάρχουσες προσεγγίσεις είτε επικεντρώνονται σε συγκεκριμένες πτυχές των πληροφοριακών συστημάτων και πραγματεύονται έννοιες επιχειρηματικής στρατηγικής αφηρημένα ή χρησιμοποιούν συγκεκριμένους σχηματισμούς επιχειρηματικής στρατηγικής (π.χ. Αλυσίδα Αξίας) αλλά πραγματεύονται τα πληροφοριακά συστήματα μερικώς ή επιδερμικά. Αυτή η αντιμετώπιση όμως είναι προβληματική γιατί η αφηρημένη χρήση εννοιών επιχειρηματικής στρατηγικής εμποδίζει την ανίχνευση στρατηγικών προθέσεων και πρωτοβουλιών σε συγκεκριμένες πτυχές και χαρακτηριστικά των πληροφοριακών συστημάτων, τα οποία έχουν ως στόχο να πραγματώσουν και να υποστηρίξούν τέτοιες προθέσεις. Οι υπάρχουσες προσεγγίσεις που χρησιμοποιούν συγκεκριμένους σχηματισμούς επιχειρηματικής στρατηγικής δεν μπορούν να συσχετιστούν με κάθε είδους οργανισμό και περιορίζονται στις πτυχές των πληροφοριακών συστημάτων των συγκεκριμένων οργανισμών που έχουν σχεδιαστεί να απευθύνουν. Η εισαγωγή της εν λόγω, βασισμένης στην έννοια των μοντέλων, προσέγγισης για τη σύνδεση συντονισμού της επιχειρηματικής στρατηγικής και

10 πληροφοριακών συστημάτων αποσκοπεί στην αντιμετώπιση των ελλείψεων που προαναφέρθηκαν. Ακολουθώντας το ερευνητικό παράδειγμα Επιστήμης Σχεδιασμού, το κύριο προϊόν που αναπτύχθηκε είναι ένα Ενοποιημένο Μετα- Μοντέλο Επιχειρηματικής Στρατη-γικής (ΕΜΜΕΣ) που βασίζεται στη θεώρηση καθιερωμένων σχηματισμών επιχει-ρηματικής στρατηγικής (π.χ. Αλυσίδα Αξίας) και την ενοποίηση τους. Το ΕΜΜΕΣ υποστηρίζει αντιστοιχίσεις με μοντέλα πληροφοριακών συστημάτων που χρησιμοποιούνται σε οργανισμούς, όπως είναι μοντέλα προαπαιτούμενων, επιχειρησιακά μοντέλα και μοντέλα επιχειρησιακής αρχιτεκτονικής, και παρέχει μη αφηρημένη χρησιμοποίηση εννοιών επιχειρηματικής στρατηγικής για τη σύνδεση συντονισμού της επιχειρηματικής στρατηγικής και των πληροφοριακών συστημάτων. Η συνεισφορά της παρούσας διατριβής είναι βασισμένη στη διαδικασία της δημιουργίας του ΕΜΜΕΣ και την αντιστοίχιση του με μοντέλα πληροφοριακών συστημάτων, καθώς και στο ίδιο το μετα-μοντέλο. Η θεώρηση και η ενσωμάτωση σχηματισμών επιχειρηματικής στρατηγικής παρέχουν μια λιγότερο αμφίσημη και ενοποιημένη εικόνα στρατηγικών εννοιών. Αυτό περιορίζει τις όποιες παρερμηνείες στη χρήση στρατηγικών εννοιών κι ενισχύει αντιστοιχίσεις προς τρίτα μοντέλα πληροφοριακών συστημάτων, τα οποία ορίζονται με βάση τις διασχηματικές ιδιότητες μεταξύ των μοντέλων. Ως εκ τούτου, το ΕΜΜΕΣ είναι σε θέση να συνδέσει την επιχειρηματική στρατηγική με μοντέλα πληροφοριακών συστημάτων ενισχύοντας την επικοινωνία τους με επαληθεύσιμο τρόπο με συνέπεια να υποστηρίζει την ευθυγράμμιση τους.

11 Sammanfattning Informationsteknik (IT) är mer genomgripande än någonsin tidigare och utgör en viktig faktor för prestanda och överlevnad i affärsvärlden. För att kunna ge det stöd som behövs för att skapa värde är det viktigt att IT inom organisationer förstår vad affärsverksamheten kräver, vilket också är fallet när IT är den huvudsakliga värdeskaparen. Därför är anpassningen mellan affärsverksamheten och IT inom organisationer en viktig och alltjämt öppen fråga för både affärsoch IT-chefer samt för utövare operativt ansvarig. Det här arbetets omfattning avgränsas till integrationskopplingen (Alignment Linkage) mellan affärsstrategi och informationssystem (IS), där affärsstrategin vanligtvis utgör den främsta exponenten av affärsverksamheten och IS normalt omfattar de delar av IT som upprätthåller organisationen. Nuvarande metoder är antingen inriktade på detaljerade aspekter av IS och behandlar affärsstrategin enbart på ett abstrakt sätt, eller på att använda specifika affärsstrategiformuleringar (t.ex. Värdekedjan), men behandlar då IS enbart delvis. Detta är problematiskt eftersom den abstrakta användningen av affärsstrategin hindrar spårbarheten av strategiska avsikter och initiativ för särdrag/aspekter av IS, vilka är ämnade att aktualisera och stödja sådana intentioner. Detta beror på att tillvägagångssätt med olika affärsstrategiformuleringar inte är relevanta för alla organisationer och är begränsade enbart till de IS-aspekter som behandlas. Införandet av en modelldriven strategi för integrationskopplingen syftar till att åtgärda de beskrivna bristerna. Den huvudsakliga artefakten, som har utvecklats enligt den designvetenskapliga forskningsparadigmen, är Unified Business Strategy Meta-Model (UBSMM), som bygger på en konceptualisering och integrering av etablerade affärsstrategiformuleringar (t.ex. Värdekedjan). UBSMM stödjer mappningar till IS-modeller som används inom organisationer, såsom IS-krav, företagsmodeller och företagsarkitekturer, samt möjliggör ett otvetydigt utnyttjande av affärsstrategier för integrationskopplingen. Bidrag från denna avhandling är baserade både på utvecklingsarbetet med UBSMM och mappningen till IS-modeller, samt på själva artefakten. Konceptualisering och integrering av affärsstrategiformuleringar erbjuder en mindre tvetydig och enhetlig bild av strategiska koncept. Detta begränsar tolkningsvariationer och förstärker mappningar till IS-modeller, vilka definieras utifrån inter-schemaegenskaper mellan modellerna. UBSMM kan därför knyta affärs-

12 strategin till IS-modeller och därmed förbättra deras kommunikation på ett spårbart sätt, följaktligen, stödja integrationskopplingen.

13 List of Publications The following published articles are included in this thesis and are referred to in the text by their Roman numerals (e.g. in-text references to Article 1 are placed as Article I ). I: Giannoulis, C., Petit, M., Zdravkovic, J. (2010) Towards a Unified Business Strategy Language: A Meta-model of Strategy Maps. In: 3rd Working Conference on the Practice of Enterprise Modeling (PoEM 2010), Springer, LNBIP, 68, p II: Giannoulis, C., Petit, M., Zdravkovic, J. (2011) Modeling Business Strategy: A Meta-model of Strategy Maps and Balanced Scorecards. In: 5th IEEE International Conference on Research Challenges in Information Science (RCIS 2011), IEEE, p.1-6. III: Giannoulis, C., Petit, M., Zdravkovic, J. (2011) Modeling Competition-Driven Business Strategy for Business IT Alignment. In: 6th International workshop on Business/IT Alignment and Interoperability (BUSITAL 2011), part of Advanced Information Systems Engineering Workshops (CAiSE 2011), Springer, LNBIP, 83, p IV: Giannoulis, C., Zdravkovic, J., Petit, M. (2012) Model-Driven Strategic Awareness: From a Unified Business Strategy Meta-Model (UBSMM) to Enterprise Architecture. In: 17th International conference on Exploring Modelling Methods for Systems Analysis and Design (EMMSAD 2012), Springer, LNBIP, 113, p V: Giannoulis, C., Zdravkovic, J. (2012) Linking Strategic Innovation to Requirements: a look into Blue Ocean Strategy. In: 5th Working Conference on the Practice of Enterprise Modeling (PoEM 2012), CEUR, 933, p VI: Giannoulis, C., Zdravkovic, J. (2011) Modeling Strategy Maps and Balanced Scorecards using istar. In: 5th International i* workshop (istar 2011), CEUR, 766, p

14 VII: Giannoulis, C., Svee, E., Zdravkovic, J. (2013) Capturing Consumer Preference in System Requirements Through Business Strategy. In: International Journal of Information System Modeling and Design (IJISMD), IGI, 4, 4, p VIII: Giannoulis, C., Zikra, I., Bergholtz, M., Zdravkovic, J., Stirna, J., Johannesson, P. (2013) A Comparative Analysis of Enterprise Modeling Approaches for Modeling Business Strategy. In: 6th Working Conference on the Practice of Enterprise Modeling (PoEM 2013), CEUR, 1023, p IX: Giannoulis, C., Zdravkovic, J., Petit, M. (2013) Model-Centric Strategy-IT Alignment: An Empirical Study in Progress. In: 8th International workshop on Business/IT Alignment and Interoperability (BUSITAL 2013), part of Advanced Information Systems Engineering Workshops (CAiSE 2013), Springer, LNBIP, 148, p X: Giannoulis, C., Zdravkovic, J. (2014) Model-centric Strategy2IS Linkage: An Empirical Study. In: 16th IEEE Conference on Business Informatics (CBI 2014), Submitted. XI: Giannoulis, C., Zdravkovic, J. (2014) A Design Science Perspective on Business Strategy Modeling. In: 19th International conference on Exploring Modelling Methods for Systems Analysis and Design (EMMSAD 2014), Springer, LNBIP, 175, Accepted, to appear.

15 Publications not included This section includes a list of the author s publications that have not been part of this thesis. They are grouped into publications of research work, which is related to the topic of this thesis and publications of project work the author has undertaken on Goal-driven Verification, Validation and Accreditation (VV&A) to support the acceptance of model, simulations and data. Publications related to the research work of this thesis: 1. Zdravkovic, J., Svee., E., Giannoulis, C. (2013) Capturing Consumer Preferences as Requirements for Software Product Lines. In: Requirements Engineering (RE) Journal, Springer London, p Zdravkovic, J., Giannoulis, C., Svee., E. (2013) Using i* to Capture Consumer Preferences as Requirements for Software Product Lines. In: 6th International i* workshop (istar 2013), CEUR, 978: p Svee., E., Giannoulis, C., Zdravkovic, J. (2012) Towards Consumer Preference-Aware Requirements. In: 7th International workshop on Business/IT Alignment and Interoperability (BUSI- TAL 2012), part of Advanced Information Systems Engineering Workshops (CAiSE 2012), Springer, LNBIP, 112: p Svee., E., Zdravkovic, J., Giannoulis, C. (2012) Consumer Value-aware Enterprise Architecture. In: 3rd International conference on Software Business (ICSOB 2012), Springer, LNBIP, 114: p Svee., E., Giannoulis, C., Zdravkovic, J. (2011) Modeling Business Strategy: A Consumer Value Perspective. In: 4th Working Conference on the Practice of Enterprise Modeling (PoEM 2011), Springer, LNBIP, 92: p Shahzad, K. Giannoulis, C. (2011) Towards a Goal-Driven Approach for Business Process Improvement Using Process-Oriented Data Warehouse. In: 14th International conference on Business Information Systems (BIS 2011), Springer, LNBIP, 87: p

16 7. Giannoulis, C., Zdravkovic, J. (2010) Exploring Risk-Awareness in i* models. In: 4th International i* workshop (istar 2010), CEUR, 586: p Publications related to project work of the author on Goal-driven Verification, Validation and Accreditation (VV&A) inlcude: 1. Jonsson, F., Giannoulis, C., Roza, M., Adelantado, M., Igarza, J.L. (2014) GM-VV - An International Recommended Practice for Verification and Validation of Models, Simulations and Data. In the Modeling & Simulation Journal by the US Department of Defense (DoD) Modeling and Simulation Coordination Office (MSCO), Submitted 2. Giannoulis, C. (Drafting Group Assistant Editor) (2013) Guide for Generic Methodology for Verification and Validation (GM- VV) to Support Acceptance of Models, Simulations, and Data. GM-VV Volume 3: Reference Manual. Published reference product (SISO-REF ) by the Simulation Interoperability Standards Organization (SISO) 3. Giannoulis, C. (Drafting Group Assistant Editor) (2013) Guide for Generic Methodology for Verification and Validation (GM- VV) to Support Acceptance of Models, Simulations, and Data. GM- VV Volume 2: Implementation Guide. Balloted and published guidance product (SISO-GUIDE ) by the Simulation Interoperability Standards Organization (SISO) 4. Giannoulis, C., Snygg, J., Strömback, P., Hellmans, R., Heden, H. (2013) Exercising GM-VV: Verification and Validation of a Missile Model. In: Fall Simulation Interoperability Workshop (2013 Fall SIW), SISO web library 5. Giannoulis, C. (Drafting Group Assistant Editor) (2012) Guide for Generic Methodology for Verification and Validation (GM- VV) to Support Acceptance of Models, Simulations, and Data. GM-VV Volume 1: Introduction and Overview. Balloted and published guidance product (SISO-GUIDE ) by the Simulation Interoperability Standards Organization (SISO) 6. Giannoulis, C., Kamrani, F., Tegner, J. (2012) Förstudie införande av GM-VV i Försvarsmakten och stödmyndigheter.

17 Metod och teknikutveckling VV&A Technical Report for the Information Systems Department of the Swedish Defence Research Agency (FOI), FOI-R-3431-SE. 7. Roza, M., Voogd, J., Giannoulis, C. (2011) The GM-VV: Its Relationship to the VV&A Overlay for the FEDEP. In: Fall Simulation Interoperability Workshop (2011 Fall SIW), SISO web library 8. Masys, A., Roza, M., Giannoulis, C., Jaquart, R. (2008) Verification, Validation and Accreditation (VV&A): The GM-VV Contribution and Roadmap. In: NATO RTO Modelling and Simulation Group Conference, NATO MSG Roza, M., Voogd, J., Giannoulis, C. (2008) Towards a Generic Data Information Model for VV&A. In: Spring Simulation Interoperability Workshop (2008 Spring SIW), SISO web library 10. Giannoulis, C., Kabilan, V., Roza, M. (2008) Verification, Validation and Accreditation of legacy simulations using Business Process Modeling Notation. In: Spring Simulation Interoperability Workshop (2008 Spring SIW), SISO web library 11. Giannoulis, C., Kabilan, V., Nillson, S.Å., Svan, P. (2007) A Method for VVA Tailoring: The REVVA Generic Process Tailoring. In: Fall Simulation Interoperability Workshop (2007 Fall SIW), SISO web library

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19 Acknowledgements First and foremost I must express my gratitude and deep appreciation to my supervisor, Jelena Zdravkovic, for guidance, support, and motivation over these years. I am also grateful to my co-supervisor Paul Johannesson whose wise advice and support have been key to my progress. I am thankful to all my co-authors for the discussions, the debates, the critiques, and writing efforts: Thank you Michaël Petit at the University of Namur, Eric-Oluf Svee, Iyad Zikra, Maria Bergholtz, Janis Stirna, and Khurram Shahzad at the Department of Computer and Systems Sciences (DSV). I am also grateful to the many colleagues, students, and teachers at DSV for the long talks, the support, the experiences exchanged, and the advice offered. I am particularly grateful to Sumithra Velupillai for the support offered to each other during our parallel studies, and for together reviving the moribund PhD Student Board at DSV, which is active today and has a promising future. I must acknowledge my master s students who have worked hard to develop the tool implementations included in this thesis: Thank you David Liljegren, Julien Silverio, and Roozbeh Maadani. My thanks must also go to Fredrik Jonsson and Håkan Lagerström at the Swedish Defense Materiel Administration for their trust, and for our long and fruitful collaboration. I will be eternally thankful to Sten-Åke Nilsson who offered me the opportunity to embark upon this journey at the Swedish Defense Research Agency. My thanks to Dimitris Karagiannis and his entire research group at the University of Vienna for the opportunity to work with them, as well as for their hospitality, during my research visit there. I am thankful to all the people in my life, especially my Eva and my friends Georgios, Giorgos, Giannis, Mohammed, Nicolas, Stefano, and Themistocles whose friendship, patience, knowledge, care, and wisdom have supported, enlightened, and entertained me over the years. They have consistently helped me maintain perspective on what is important in life and have shown me how to deal with reality. Finally, I want to thank my parents, my sister, and my brother whose unconditional support and care has always been an important constant in my life. Thank you all from the bottom of my heart!

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21 List of Abbreviations BMO BOS BOS-MM BSC DSM DSR EA EKD EM GORE IS IT MDD RE SAM SMBSC SMBSC-MM SWOT UBSMM UML VC VC-MM Business Model Ontology Blue Ocean Strategy Blue Ocean Strategy Meta-model Balanced Scorecards Design Science Method Design Science Research Enterprise Architecture Enterprise Knowledge Development Enterprise Modeling Goal-oriented Requirements Engineering Information Systems Information Technology Model-driven Development Requirements Engineering Strategic Alignment Model Strategy Maps & Balanced Scorecards Strategy Maps & Balanced Scorecards meta-model Strengths, Weaknesses, Opportunities, Threats Unified Business Strategy Meta-model Unified Modeling Language Value Configuration Value Configuration Meta-model

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23 Contents Abstract Περίληψη Sammanfattning List of Publications Acknowledgements List of Abbreviations List of Figures List of Tables vii ix xi xiii xix xxi xxvii xxix 1 Introduction Research Problem Research Question Research Goals Key Concepts Disposition Extended Background Business Strategy Business Strategy Formulations The Value Chain The Value Shop and The Value Network Strategy Maps and Balanced Scorecards Blue Ocean Strategy Alignment IS Models

24 3 Research Methodology Research Paradigm Philosophical Assumptions A Pluralistic Research Paradigm Research Process using the Design Science Method Methodological Choices Explicate Problem Outline Artifact and Define Requirements Design and Develop Artifact Demonstrate Artifact Evaluate Artifact Problem Explication and Artifact Requirements Explicate the Problem Artifact Requirements Artifact Outline Requirements Artifact Design and Development Artifact Design Development Process UBSMM: Classes & Constraints UBSMM Specializations UBSMM.SMBSC UBSMM.VC UBSMM.BOS Artifact Demonstration & Evaluation Demonstration Evaluation Design Science Research General Criteria Discussion Construction Function Usability Effects

25 8 Concluding Remarks Concluding Summary Methodological Rigor & Contribution Rigor Contribution Limitations Directions for Future Research Bibliography 87 Appendix 97 A UBSMM Implementation in ADOxx B UBSMM Mobile Implementation Articles 115 Article I Article II Article III Article IV Article V Article VI Article VII Article VIII Article IX Article X Article XI

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27 List of Figures 1.1 Linkage for alignment between strategy and IS Commonly used SWOT analysis adapted from [6] The Value Configuration The Strategy Map template (taken from [78]) The Strategy Canvas capturing a Blue Ocean Strategy (taken from [84]) The Strategic Alignment Model (SAM) taken from [61] The Design Science Method (taken from [72]) Screenshots from the online questionnaire where the upper part introduces the study s objectives and the lower part asks about the use of business strategy formulations (Articles IX and X) Screenshots from the online questionnaire where the upper part asks about model types used and the lower part includes a Likert scale on the use of models for alignment (Articles IX and X) The Unified Business Strategy Meta-Model (UBSMM) An overview of UBSMM as a class aggregation of business strategy formulations A screenshot from the ADOxx meta-modeling environment for SMBSC A.1 UBSMM class hierarchy implemented in ADOxx A.2 UBSMM.SMBSC Perspectives implemented in ADOxx A.3 UBSMM constraints sample implemented in ADOxx A.4 Simplified Strategy Map and Balanced Scorecards of a regional airline (taken from 0/PDF/Regional_Airline.pdf)

28 A.5 The Strategy Map and Balanced Scorecards of a regional airline (Figure A.4) modeled in i* based on the mappings of Table A.1 using the Modeling Toolkit of ADOxx A.6 The Value Chain of IKEA (Table A.4) modeled in i* based on the mappings of Table A.2 using the Modeling Toolkit of ADOxx A.7 The Strategy Canvas for Red One (taken from: innovationmanagement.se/2013/10/04/red-one-a-blue-ocean-inthe-cinematographic-camera-industry) A.8 The Strategy Canvas for Red One (Figure A.7) modeled in i* based on the mappings of Table A.3 using the Modeling Toolkit of ADOxx B.1 Code snippet showing part of the generic intentional element specification B.2 Code snippet showing part of the rules engine that includes the mean-ends and parts of the decomposition rules B.3 The Financial and Customer perspectives of the Strategy Map and Balanced Scorecards of a regional airline (based on Figure A.4) modeled in i* based on the mappings of Table A.1 using the mobile application running on an ipad B.4 The Internal and Learning & Growth perspectives of the Strategy Map and Balanced Scorecards of a regional airline (based on Figure A.4) modeled in i* based on the mappings of Table A.1 using the mobile application running on an ipad

29 List of Tables 3.1 Philosophical assumptions for Design Science Research in this thesis Research activities per DSM activity Artifact requirements for UBSMM A.1 Mappings between SMBSC and i* A.2 Mappings between VC and i* A.3 Mappings between BOS and i* A.4 Sample from the Value Chain of IKEA (adapted from: 105

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31 1. Introduction Organizations typically strive to attain some long-term goal (vision) with a defined purpose (mission) following a general plan, which is commonly expressed through strategy. Strategy or business strategy is defined as the determination of long-term goals and courses of action using resources to achieve them, thus enabling organizations to enact it [37]. Attaining a long-term business vision and all related objectives makes strategy prone to a changing environment, varying due to external opportunities and threats as well as internal strengths and weaknesses. Information technology (IT) pervades all sectors of today s organizations, regardless whether they are consuming IT means, developing IT means or both. The continuous emergence of technological advancements constitutes IT increasingly significant for the business of any organization, which makes the utilization of novel IT means necessary. Therefore, IT constitutes an impact factor for the success of strategy. Alignment between the business and IT has been long-time discussed and acknowledged to impact the success of the business. As early as in 1961, organizational performance has been attributed to coherence between factors like strategy, structure, and technology, aiming at aligning an organization with its environment and internal resources to support this alignment [28]. Since then alignment between business strategy and IT has been acknowledged as a critical factor. Particularly, strategy influences IT planning, which leads to focused use of IT, and thus improves organizational performance [36]. Consequently, strategy dissemination across an organization is enhanced, which ensures that IT means are defined, designed and utilized in accordance to strategic needs. Organizations aligning their business strategy to IT outperform those that do not [34; 83; 94] and increase their performance and profits [40; 139]. Stakeholders from each domain involved have acknowledged alignment as an open issue: top management from the Strategic Management domain [99]; IT executives from IT [154]. It is a multifaceted and complex issue with several dimensions and levels [36], which consequently can be addressed holistically or partially in different ways and from various perspectives [35]. In one direction, business strategy encapsulates a general undetailed plan of action. It encompasses a certain and typically long period of time to achieve some vision. Therefore, for an enterprise to define the means required for 1

32 its successful execution, also making clear for IT what business stakeholders need, business strategy should be understood and communicated. This is expressed through business strategy formulations (e.g. the value chain [133]) that combine natural-language and often diagrammatic representations to shape and communicate business strategy. From the other direction, IT comprise the essential information needed to build the information systems (IS) that execute, support and facilitate business operations intended at delivering offerings to customers. Therefore, alignment spans across business strategy, expressing the business, and IS, expressing IT while supporting and adding value to the business. The linkage between business strategy and IS aims to coordinate strategic initiatives and plans with IS, to setup the infrastructure, design the processes and define the capabilities required to support business operations and thus, realize strategic initiatives [139]. These are typically represented through various models used in IS (e.g. process models, goal models, requirements models, value models, etc.), which altogether can be referred to as IS models. 1.1 Research Problem Many approaches exist for shaping and defining business strategy, as well as various IS models (Figure 1.1). This creates a many-to-many relationship between business strategy formulations employed and IS models used. While this linkage has not been put forward widely as a distinctive perspective of alignment [35], substantial work has been done on linking business strategy with IS models. However, current proposals addressing this linkage are either focusing on IS models and consider strategy abstractly or they are considering a particular business strategy formulation and are thus, bounded to the specificities of the business strategy formulation used. Proposals that focus on IS models, such as enterprise modeling (EM) and enterprise architecture (EA), deal with strategy in an abstract way and do not consider particular business strategy formulations. Examples include, but are not limited to, the following: the works of [120] putting forward a map-driven process modeling approach based on intentions and strategies capable of abstracting organizational goals and their achievement from detailed business processes; the 3g framework for business-it alignment proposed by Singh and Woo [146], which is based on multidisciplinary goal concepts and focuses on linking task goals to strategic business goals; GQM+Strategies [18], which extends the original GQM method for validation of system properties through goal-driven metrics [17]; the Enterprise modeling approach [33], CREWS- L Ecritoire [138]; the model-supported IS alignment of IS architecture [122]; 2

33 the GRAAL framework for architecture alignment [167], the e 3 value to i* approach [51]; the INSTAL method [73]. Figure 1.1: Linkage for alignment between strategy and IS. Moreover, while EA proposals include some business elements or layers that affect IS, there exists no linkage to distinct business strategy formulations [92]. Examples of such EA proposals include, but are not limited to, the following: TOGAF [56]; the Zachman Framework[170]; ARIS [141]; GERAM [20]; as well as the ISO/IEC/IEEE on Architecture Description[70]. Proposals that consider a particular business strategy formulation are limited because their linkage to IS remains relevant only to the business strategy formulation employed. In this way, other business strategy formulations are not applicable and relationships to other enterprise models that provide additional perspectives for IS are also not applicable. Such proposals typically combine business strategy formulations from strategic management (e.g. the value chain [133], balanced scorecards [74], strategy maps [81]) with various IS models typically used for system requirements, where these models aim at making clear to practitioners (i.e. developers, system engineers, etc.) what users need with respect to a system. More specifically, approaches within goaloriented requirements engineering (GORE) [162], such as i* [168], GRL [96], 3

34 Tropos [23], the Business Motivation Model (BMM) [24], etc. aim at linking stakeholders objectives with IS. Examples include, but are not limited to, the following: the work of [11] with direct informal mappings of i*[168] to strategy maps[81]; the proposal of [21] relating principles for competition and effective business performance with the goal-oriented requirements language (GRL)[96]; the combination of goal analysis with the balanced scorecards[74] proposed by [145]; and the combination of enterprise modeling through EKD [26; 97] with balanced scorecards [74] proposed by [117]. For the first group of proposals, the problem is that business strategy is considered abstractly overlooking concrete strategic notions that can be found in formulations such as the value chain [133], balanced scorecards [74] and strategy maps [81]. This hinders tracing IS requirements to strategic notions and consequently hinders their alignment, which in turn hinders the evaluation of IS requirements with respect to strategy. The second group of proposals overcomes the aforementioned problem as strategy is not addressed abstractly. However, they are only relevant to the strategy formulation and the IS models employed. Should there be any change in any of the two sides of the linkage, alignment would be compromised. 1.2 Research Question From a strategic perspective, alignment is a core concern and top issue for executives [98]. From an IS perspective, alignment is also a core concern and top issue [154] with strategy dissemination and understanding within organizations often proclaimed to be problematic even unknown to practitioners [29], and even if strategy is clear enough it often results in solutions implemented on different technologies for every strategic initiative [139]. Therefore, there is a need to address the linkage between strategy and IS independently of business strategy formulations employed and IS models used. This requires a solution that can be widely applicable, and thus, frames the research question of this thesis to address the aforementioned problem: How can business strategy formulations be conceptualized to establish a modelbased linkage between strategy and IS in organizations? The purpose for addressing this question can be found in the practical benefits of stakeholders for both domains: IS practitioners as well as both IT and business executives. For IS practitioners, answering the question would provide a way to introduce and integrate strategic intent (objectives, initiatives, etc.) in their work, and consequently frame and scope IS development. This means that IS will become more associated to strategy giving purpose and ways to 4

35 assess contribution and performance with respect to strategic intent. For business executives, answering the question would allow for improved utilization of IS making more explicit the purpose it serves, the impact it has on strategic planning, and the value it brings to the business. Additionally, the research question is particularly scoped to the linkage between business strategy and IS. In the greater context of alignment, addressing this problem would complement efforts entailing this linkage. An example of such approach is the Strategic Alignment Model (SAM) that includes a linkage between Business Strategy and I/S Infrastructure & Processes [61; 63]. Moreover, addrssing this problem would also complement proposals focusing on other IS models than IS requirements as well as on other alignment perspectives. 1.3 Research Goals Addressing the research question involves two domains: Strategic Management and Information Systems. This suggests relating approaches and methods across domains and constitutes the solution scope of the research question that can be achieved with the following goals: Goal 1. Build a unified business strategy meta-model to link business strategy with IS. Goal 2. Link business strategy formulations to IS through mappings of the Unified Business Strategy Meta-Model to IS models. The solution is aimed at addressing the aforementioned shortcomings of existing proposals: abstract use of business strategy in IS, EM and EA, and limited direct informal mappings. It entails the introduction and implementation of modeling principles in the context of the linkage between business strategy and IS. Particularly the development of a unified business strategy meta-model integrating prevalent business strategy formulations that can be linked to IS (Goal 1). Such a meta-model can then be related to IS models through mappings (Goal 2) establishing the alignment linkage between business strategy and IS, and consequently reinforcing traceability and assessment of IS with respect to strategic intent and initiatives. The proposal leverages characteristics from Model-driven Development [8] such as traceability and automation. Traceability across notions in strategy models and notions in IS models allows for strategic intent and initiatives to be linked with related IS aspects. For example, particular IS features can be traced onto a particular strategic goal influencing its achievement. This allows 5

36 for propagation and assessment of features and/or changes from business strategy such as strategic goals, targets, and objectives, which makes changes less likely to creating problems. Additionally, traceability makes IS adaptable and maintainable to strategy because any modifications due to business/strategic decisions can be directly associated to relevant aspects of IS and thus making their impact assessable (e.g. system disruptions and conflicts). Based on traceability, the proposal also enables different levels of automation. The conceptual mappings between strategic notions and IS models can be implemented into tools to operationalize the proposal either through manual, semi-automatic or automatic operations. Practitioners benefit from traceability and automation because these MDD characteristics enhance the IS synchronicity with business strategy and response to strategic changes. 1.4 Key Concepts Business Strategy Strategic planning refers to the determination of typically long term-goals and courses of actions using resources required to achieve them, which consequently sets up the organizational structure to enact it [37]. In Strategic Management literature the term corporate strategy is used for the overarching strategy of organizations with different business units, and business strategy refers to the strategy of such business units [6; 7]. Moreover, different types of strategy may also exist in different areas of focus within an organization; e.g. financial strategy to govern fiscal policy, customer strategy to govern how customers are handled, etc. In this thesis, business strategy defines the way for an organization to actualize their goal (vision) and fulfill their purpose (mission), and therefore, encompasses strategy for an organization regardless of units and areas of focus. Business Strategy Formulation A concretization of the way for an organization to actualize their goal (vision) and fulfill their purpose (mission) is required for the operationalization of business strategy, which allows for business strategy to be conveyed as an executable plan across an organization and successfully implemented [150]. A business strategy formualtion is the outcome of concretizing business strategy into an executable plan. Approaches and methods guiding this concretization of business strategy include, but are not limited to, the following: the Five Forces of Michael Porter [132], the universal strategy formulation model [156], etc. which all provide a guiding template for strategy. The outcome of these 6

37 is business strategy formulations that represent and operationalize the business strategy of an organization. In this thesis, business strategy formulation refers to established diagrammatic and natural language-based representations of approaches within the discipline of strategic management used to formulate business strategy. Information Systems (IS) The study of information technology (IT) deployment in organizations [64] is concerned with both the technological and social systems together, as well as by phenomena emerging upon their interaction [93]. With respect to general systems definition [9], IS encompasses the interaction of technological elements and people use to collect, filter, process, create, and distribute data. Models, Meta-Models, and IS Models A model is an abstraction of reality; a meta-model is an abstraction of a model capturing notions and rules about the model itself [159]. Within a particular domain of interest, a meta-model captures the design foundations and constitutes an explicit model of the concepts and rules required to build models [8; 160]. More generally, a meta-model defines the conceptual elements of a language as well as their possible interrelations [58], and therefore, it is an explicit model of the concepts and rules required to build models. The Unified Business Strategy Meta-Model (UBSMM) constitutes the unification of business strategy concepts based upon which conceptualizations of business strategy formulations can be created and thereafter instantiated (relevant to Goal 1 of the thesis). In accordance to both the OMG modeling infrastructure as discussed in [8] and the modeling hierarchy in [82] UBSMM constitutes an explicit model of the conceptual elements, their relationships, and constraints required to build the conceptualization of a business strategy formulation. It provides the building blocks needed to model a business strategy formulation allowing to be used within the scope of work of this thesis, either manually or in a semi-automatically. Conceptualizations built in the scope of this thesis, are represented in the form of UML conceptual models, because UML is widely accepted as a standard approach for developing conceptual models[148]. An IS model denotes a model describing some aspect of IS (relevant to Goal 1 of the thesis). Examples include process models, goal models, data models, requirements models, business models, etc. Additionally, this also includes enterprise modeling (EM), which models organization design [57; 97], as well as enterprise architecture (EA), which includes architecture models of an organization [92]. 7

38 Linkage Linkage has been used as a synonym of alignment [61], similarly to fit, harmony and integration [10]. In this thesis, linkage refers to the connection between business strategy and IS, where one affects the other, and is the context of the problem addressed: the shortcomings of existing proposals linking business strategy with IS. Moreover, the term linkage is used in the same manner as in the SAM [61; 63], which is the most cited work in alignment and constitutes an essential point of reference (more than 2800 citations on Google scholar on ). In the SAM, the linkage indicates a cross-domain link that captures the bidirectional connection between Business Strategy and I/S infrastructure & processes. This entails the implications of a business strategy in terms of organizational and management processes as well as the impact on requirements for IS. Additionally, this linkage reinforces the utilization of IS in the execution of business strategy, and also through IS requirements provides assessment of I/S infrastructure & processes, implications on IT strategic choices as well as their impact on business strategy [61]. Also, it is through this linkage that how IS impacts business strategy becomes clear; by specifying processes, roles, architectures, and all other IS aspects required. Therefore, establishing this linkage requires business strategy to be analyzed and decomposed to become compatible with IS. 1.5 Disposition The remainder of this thesis is structured with Chapter 2 presenting an extended background on business strategy and elaborating on alignment as well as on IS models. Chapter 3 discusses research methodology and presents the research process followed. Chapters 4, 5, and 6 are respectively presenting the research process followed from problem explication and requirements set, to design and development, as well as to demonstration and evaluation. Chapter 7 holds a discussion around UBSMM. Chapter 8 presents concluding remarks and sets directions for further research. The Appendix presents prototype tool implementations related to UBSMM. An implementation of UBSMM in a desktop modeling and development environment generating business strategy models, and an early version of implementation for UBSMM in a mobile tool. Finally, the Articles Section includes the complete articles accompanying this thesis. 8

39 2. Extended Background Addressing particular business strategy formulations and motivating comprehensive coverage for the purpose of building UBSMM requires an exploration of the notion of business strategy from the discipline of Strategic Management, from which it stems. Therefore, background on strategy is presented to provide justification for the selection of the business strategy formulations used for UBSMM. This chapter, also includes a section discussing alignment to position this work, as well as a section elaborating on IS models and how they are used in the context of the alignment linkage and UBSMM. 2.1 Business Strategy Strategic planning is the process during which a strategy is defined by analyzing the current status of the enterprise and the competitive environment in which it resides. Business strategy is the determination of typically long termgoals and courses of actions using resources required to achieve them, which consequently sets up the organizational structure to enact it [37]. Business strategy defines the way for an organization to actualize their goal (vision) and fulfill their purpose (mission). Attaining long-term goals makes business strategy prone to change, thus, formulating strategy entails providing ways to change strategic thrusts and change strategic capabilities accordingly [7]. Particularly, it is the changing environment that affects strategy formulation and consequently implementation due to internal or external developments[6]. The former refers to leveraging internal strengths and avoiding internal weaknesses, while the latter refers to leveraging external opportunities and foreseeing external threats. Upon this idea the SWOT analysis has been introduced (Figure 2.1), a method still widely used today and whose origins has been attributed to many [6; 126]. From a different standpoint, Henry Mintzberg defined strategy in five complementary ways: as a plan, as a plot, as a pattern, as a position, and as a perspective (the Five Ps)[112], He too agreed on the importance of communicating and coordinating strategy across the organization. What he referred to as strategy programming and entails three steps [110]; (i) codifying, clarifying and expressing strategy sufficiently clear to render it formally operational, 9

40 Figure 2.1: Commonly used SWOT analysis adapted from [6]. (ii) elaboration, breaking down strategy into sub-strategies and action plans to realize them, and (iii) conversion, considering the effect of changes in the organization s operations, thus restating objectives, reworking budgets, etc. Barney [15] identified three types of strategy-shaping logic upon the concept of competition in microeconomics. He suggested that the following three types are complementary to each other [15], and thus, strategy that considers all of them increases the likelihood of sustainability and prosperity: The Industrial organization type, based on [12; 13; 104], suggests that the competitive advantage is a result of a firm s clear positioning with respect to its environment, which is described by the structure of the industrial setting. This entails entry barriers to the industry, like the number of competitors and their size, the degree of product or service differentiation among them, and the demand for the industry. The Chamberlinian" or "resource-based type, based on [32; 166], suggests that the competitive advantage of a firm depends mainly on the firm s unique capabilities provided by its resources and know how allowing a firm to exploit its individuality and uniqueness. The Schumpeterian" type, based on [143; 144], suggests that unanticipated and radical innovations are capable of disrupting the industrial environment in which a firm operates, thereby giving opportunities to take an advantage over companies whose capability to innovate is lower. An example of the complementary nature of strategy-shaping logic can be identified in the Dynamic Capabilities [155] approach to strategy, which suggests a combination of the resource-based and the Schumpeterian views. A 10

41 firm s competitive advantage is based on its capability to establish and maintain such flexible competencies and structures both internally and externally that will allow rapid response to product innovations by transforming and reconfiguring itself. Similarly to the definitional variation of strategy, more groupings of strategyshaping logic exist, such as Mintzberg s Ten School of Thought [111], synthesized by defining strategy with the five Ps and using other base disciplines (i.e. psychology, political sociology, anthropology, etc.). 2.2 Business Strategy Formulations Adopting a certain logic for shaping business strategy is a crucial step. However, successful business strategy implementation relies on communication across an organization to provide visibility, understanding, and purpose of the strategic intent as well as both the vision and the mission [110; 150]. Therefore, formulating strategy to address such changes becomes more complex. Moreover, communicating strategy entails linking those defining it (strategy), such as decision makers and executives, with those upon whom its (strategy s) execution relies, such as practitioners and employees. Along with people, communication of business strategy requires linking, products and services with processes, activities, and tasks allocated to them [80]. This paints a rather complex picture for business strategy formulations as they need to be expressed in a concise way that reflects the logic shaping business strategy while simultaneously enhancing its dissemination across an organization. The selection of candidate business strategy formulations for UBSMM is based on Barney s three complementary types [15]. Claiming complete coverage would suggest that all existing formulations for each type are used, which is not practical and almost impossible. Therefore, for comprehensive coverage of strategy notions, a single strategy formulation from each type is selected. As strategic management evolves, new formulations may emerge that could challenge any claim of coverage. Additionally, exclusiveness should also be stressed, which suggests that the formulations selected are not excluding others from being used. Another aspect of the selection entails the alignment proposals discussed in Chapter 1, with business strategy formulations used in these proposals being natural candidates for UBSMM. This will allow these proposals to leverage UBSMM. The business strategy formulations included in alignment proposals discussed in Chapter 1 are Strategy Maps and Balanced Scorecards [81] used in [11], and the Value Chain [133] used in [21]. The former belongs to the "resource-based" type and the latter is the most exemplary of the "industrial organization" type. Moreover, results from an empirical study reported in this 11

42 thesis indicate that both the Value Chain, and Strategy Maps and Balanced Scorecards are business strategy formulations widely used (articles IX and X). Respondents identified these formulations in their company s strategy by 52.2% 26.1% and 30.4% respectively (Strategy Maps and Balanced Scorecards have been presented separately as they have been developed separately[74; 81]). For the "Schumpeterian" type, no alignment effort is identified using a business strategy formulation of such strategy-shaping logic. Blue Ocean Strategy [84] has been selected as a candidate formulation for this type of strategy logic. The core contention of Blue Ocean Strategy is value innovation: provide a new offering beyond the structure and boundaries of existing industries making current markets and competitors irrelevant and obsolete. Blue Ocean s strategy-shaping logic is aligned with the "Schumpeterian" type of unanticipated innovations that displace competitors from an industry. Blue Ocean Strategy has been attracting a great deal of attention recently, and in the aforementioned study it was identified by 8.7% of respondents in their company s strategy (articles IX and X). These business strategy formulations are further elaborated in the remainder of this chapter as they are used for building UBSMM along with the addition of the Value Shop and the Value Network, which constitute evolutionary additions on the Value Chain that altogether constitute the Value Configuration. The formulations selected for UBSMM are accompanied with tools and methods beyond the SWOT analysis and other generic ones i.e. the 5 Forces framework [132] for the Value Chain, and the Four-Action Framework [84] for Blue Ocean Strategy. However, focus is put on capturing the strategic notions of the business strategy formulations to be integrated into UBSMM. Examples of more candidate formulations include, but are not limited to, the following: the Miles & Snow Typology [45; 107], Six Sigma [59; 127], and the Delta model [60] The Value Chain Michael Porter s work is focused on competition, arguing there are two options for success in a competitive environment: differentiation and low cost [133]. Accompanied by a company s desired targeted market segment they result in three generic strategies: cost leadership; differentiation; and focus. Porter s value chain highlights a company s strategy and strategy implementation depending on how the activities are carried out (Figure 2.2a). It consists of value activities and margin. Value activities are all the activities a company performs to create value for its buyers, divided into primary and support, while margin is the difference between the total value and the total 12

43 cost of performing the value activities. From a competitive advantage perspective and across primary and support activities, activities are further grouped into three types: direct (activities that create value), indirect (activities that allow the direct one to be performed), and quality assurance, (ensuring the quality of direct and indirect activities). (a) The Value Chain (taken from [133]). (b) The Value Shop (taken from [151]). (c) The Value Network (taken from [151]). Figure 2.2: The Value Configuration. Each activity is classified based on its contribution to a firm s competitive advantage, primarily from an economic view: those that have high impact of differentiation and those that have a considerable proportion of cost. Value activities interact with each other within the value chain via linkages, which are relationships between the way a value activity is performed and the cost of another (e.g. the dotted lines in Figure 2.2a). They support optimization and coordination among value activities thus competitive advantage and may exist between multiple value chains. Porter identifies ten generic drivers for cost and value, which shape the competitive position of the firm: scale, capacity, utilization, linkages, interrelationships, vertical integration, location timing, learning, policy decisions, and government regulations. Value chains 13

44 are linked sequentially (suppliers, producers, and distributors) by adding value to what the preceding activity has produced, whereas the value creation logic is focused on cost, towards a desirable margin The Value Shop and The Value Network Stabell and Fjeldstad [151] introduced the idea of a Value Configuration (VC) extending the Value Chain by introducing the Value Shop (Figure 2.2b) and the Value Network (Figure 2.2c). In the former, the value creation logic focuses on value: it is created by using resources and activities to resolve a customer problem and is structured spirally, interchanging problem-solving and implementation activities. In the latter, the value creation logic focuses on balancing cost and value: value is created by facilitating relationships among a network of enterprises and their customers via a mediating technology, and is structured by simultaneously and in parallel forming horizontally interconnected activities Strategy Maps and Balanced Scorecards Strategy maps and balanced scorecards (SMBSC) have been proposed by Kaplan and Norton to represent, communicate and monitor business strategy as well as strategic objectives. A strategy map serves as a mediator between the mission, core values, the vision, and the strategy of an enterprise to the work performed. Kaplan and Norton have proposed a template for strategy maps (Figure 2.3) representing how an organization can create value [78; 81] that places the framework as one of the few providing means for visual representation of strategy. The recommended way to build a strategy map is to follow a top-down manner beginning from a mission statement and core values to develop a strategic vision, which should project the organization s overall goal [77]. Scorecards consist of strategic objectives and related measures, which include concrete targets and initiatives towards their achievement [74]. Scorecards are structured with cause-effect links/assumptions and their monitoring and assessment is essential for identifying interdependencies across an organization. Balanced scorecards (BSC) present an organization s business activities through a number of measures typically from four organizational perspectives financial, customer, internal, learning and growth and provides a language to communicate priorities within an enterprise [121]. A scorecard is considered balanced (BSC) due to the four perspectives that provide coverage of business processes, while the time aspect is addressed indirectly via short-term targets set and also via the bottom up view of the four perspectives. 14

45 Figure 2.3: The Strategy Map template (taken from [78]). Additionally a scorecard is also considered balanced because it covers both the internal as well as the external aspects of an enterprise. A strategy map is a general representation of the four organizational perspectives of the BSC [74] in a cause-effect manner and facilitates the communication of direction and priorities across the enterprise and according to [78; 81]. It is based on five principles: Strategy balances long-term financial commitments aiming at profitable revenue growth and short-term financial commitments aiming at cost reductions and productivity improvements (financial perspective). Strategy is based on differentiated and clearly articulated customer value proposition (customer perspective). Value is created through focused, effective and aligned internal business processes in four groups: operations management; customer management; innovation; and regulatory and social (internal perspective). Strategic alignment determines the value and role of intangible assets: humans, information, and organization (learning and growth perspective). Strategy consists of simultaneous, complementary themes highlighting the most critical processes supporting the customer value proposition. 15

46 2.2.4 Blue Ocean Strategy The Blue Ocean Strategy approach [84; 85] focuses on unknown market space and thus aims at competing where there are no competitors. Industry s structural conditions are not considered fixed and therefore, the objective is neither differentiation nor low cost. The goal is to break existing rules and create new ones as illustrated through the strategy canvas (Figure 2.4). Figure 2.4: from [84]). The Strategy Canvas capturing a Blue Ocean Strategy (taken The strategy canvas offers a graphical representation of the current state in known markets by identifying the range of factors an industry competes on and invests in (horizontal axis in Figure 2.4) along with the offering level to buyers for each factor (vertical axis in Figure 2.4). A basic component of the strategy canvas is the value curve capturing a company s relative performance across the aforementioned competition factors of any given market. Blue Ocean Strategy is equipped with a set of tools/techniques to analyze and assess an industry s market space, focusing on value innovation and thereafter to derive the strategy canvas. A core tool/technique is the Four-Action Framework, which challenges current strategic logic and drives change. Eliminating and reducing focuses on dropping the current cost structure, whereas, creating and rising strive for how-to in terms of lifting buyer value and creating new demand. With the assistance of the eliminate-reduce-raise-create grid, the Four-Action Framework goes beyond analysis by pushing for action and thus creates a new value curve. 16

47 2.3 Alignment Alignment scopes the context of this thesis and the research problem is positioned in this linkage between business strategy and IS. As pointed out in [10], alignment has carried different aliases: it has been termed as linkage or fit in Henderson and [62], fit in [134], as harmony in [101]. However, alignment has been consistently defined as the integration of business strategy and IT, where early definitions call for IT strategy [63], and more recent ones refer to IT in general [100]. McKeen and Smith suggest that alignment exists when goals and actions of the business are in harmony with the IS supporting them [106]. Abraham [1] defined alignment as the linkage between the goals of the business, which quantify the progress of the strategy implementation, and the goals of each of the key contributors, such as IT. Alignment allows for strategy to utilize the capabilities of IT to enhance a decision maker s perception of business performance [140]. The Strategic Alignment Model (SAM) [61; 63] summarizes alignment with domains, fundamental dimensions and relationships (represented as boxes and bi-directional arrows respectively Figure 2.5) and is one of the most cited works in alignment constituting an essential point of reference (more than 2800 citations on Google scholar on ). Figure 2.5: The Strategic Alignment Model (SAM) taken from [61]. The SAM portrays a generic map for alignment in an organization with two fundamental dimensions. Strategic integration refers to the fit between external and internal domains strategy and infrastructure respectively for both business and IT indicated through the perpendicular bi-directional arrows; business strategy should be aligned with internal structures and business functions, and similarly, IT structures and operations should be aligned with 17

48 the IT strategy they are meant to facilitate. Functional integration refers to the fit between business and IT both for strategy as well as internal structure, which is indicated by the horizontal bi-directional arrows. Business strategy should be aligned with IT strategy for realizing value from IT investments. Similarly, internal structures and business operations should be aligned with IS structures and operations. Two additional types of relationships can be identified in the SAM, which are together referred to as cross-domain alignment, and are presented through the diagonal bi-directional arrows. Linkage refers to analyzing business strategy to define requirements for IS structures and processes, while Automation refers to the potential of IT to shape or change the internal structure and business operations. The research problem addressed in this thesis is positioned in the center of the Strategic Alignment Model (SAM) [61; 63] and particularly at the linkage between Business Strategy and I/S Infrastructure and Processes (Figure 2.5). Cross-domain alignment such as the one denoted by this linkage requires the specification of IS components and structures such as inputs, processes, outputs, actors, and rules to relate how IS impacts business strategy [61]. Therefore, business strategy needs to be understood and analyzed for requirements on IS to be defined, which can be achieved by establishing a model-based linkage between business strategy and IS. Establishing such a model-based linkage entails IS models laying on one side while the UBSMM lays on the other with mappings between them. This approach is based on ideas developed in the Unified Enterprise Modeling Language (UEML) whose objective has been to create a framework for interoperability of enterprise modeling languages by defining a core language for enterprise and IS modeling [4]. The UEML approach analyzed a number of existing modeling languages by mapping their constructs onto a common and well-defined ontological base. By doing so, the understanding of concepts of existing languages was improved and it was possible to progressively grow a larger ontology containing well connected concepts by extending the ontological base. A similar approach is applied for UBSMM with the aim to define a core meta-model for business strategy modeling by analyzing business strategy formulations and mapping them onto model types used in IS, aka establishing a model-based linkage between business strategy and IS. 2.4 IS Models Models have always been fundamental when it comes to IS development, describing the domain, data and data operations [27]. Systems modeling entails the use of models to conceptualize and build IS. The term "IS models" is used to distinguish the use of the term "model" from other disciplines such as man- 18

49 agement, psychology, etc. IS models are used to describe an IS or some aspect of it, components and structures such as inputs, processes, outputs, actors, and rules. This interpretation of IS models encompasses all that is included in the I/S Infrastructure and Processes of the strategic alignment model (Figure 2.5). The terms "IS model" and "IS modeling" has also been used in [4] in a similar way, however, it has been distinguished from enterprise model and enterprise modeling respectively, though the distinction is rather implicit. IS models share characteristics based on the languages used for their development; they are diagrammatic with set vocabulary, they utilize abstraction mechanisms, have formal syntax, and are meant to have general applicability across problem domains [88]. There exist different ways to categorize IS models depending on the purpose served. For example IS models can be used for (but not limited to): making sense of a current situation, communication between people, analysis of the current state against a future desired state, quality assurance with respect to some policy, recommendation or standard, deployment of a future desired state into an IS currently in operation, providing guidance in development [89]. Additionally, a plethora of modeling perspectives exists depending on the IS aspects meant to be described. Recently, an overview classification has been synthesized in [89] which consists of eight perspectives: behavioral, functional, structural, goal and rule, object, communication, actor and role, and topological. While this classification constitutes a synthesis encompassing dominant existing modeling perspectives such as [25; 42; 147; 164], it is acknowledged by the authors in [89] that there is still an overlap of specific modeling approaches across these perspectives, which is considered unavoidable. This suggests that establishing commonly accepted, clear-cut criteria to distinguish between modeling perspectives, and therefore types of IS models, is not relevant. Therefore, types of IS models used in this thesis have been identified based on the scope of work. Considering the context being the alignment linkage any IS model becomes relevant as it corresponds to the I/S Infrastructure and Processes of the Strategic Alignment Model (SAM), as indicated above. However, the research problem has been scoped to the shortcomings of existing proposals in Requirements Engineering (RE), Enterprise Modeling (EM) and Enterprise Architecture (EA), which constitute particular perspectives for IS modeling. Therefore, "IS models" refers to models used in RE, EM, and EA. IS models used in RE describe requirements for system development and examples include data-flow models, entity relationship models, information and object models [149], goal models [25; 43; 116; 161], and conceptual models [69; 91; 128]. EM is focused on the organizational design of an enterprise, holistically 19

50 and/or partially, by describing aspects such as structure, processes, rules, information, resources, people, behavior, goals, and constraints [57; 97]. Depending on the approach followed, various models may describe different organizational perspectives such as process models, value models, requirements models, resource models, information models, goal models, business models, which altogether constitute information and knowledge about the enterprise required for its operations [26; 46]. Finally, EA is focused on the enterprise by describing the organizational structure, business processes, information systems and infrastructure through principles, methods, and models [92]. An enterprise is described as a system structurally layered with different viewpoints (also named layers; e.g. business layer, operational layer, and information layer), where each view addresses concerns of particular stakeholders. These views are typically described through models whose type depends on the viewpoint addressed (e.g. processes, information, resources, goals) [70]. 20

51 3. Research Methodology Methodology is a Greek word, "μεθοδολογία" that consists of the words method ("μέθοδος") and logos ("λόγος"). Method is generally defined as a set of appropriate principles, rules and a series of coordinated tactics followed for the conclusion of a certain intent, and logos means ground and reason. Consequently, methodology is logos of methods: talking of methods, or better reason of methods. Research methodology refers to a systematic and rational analysis of the body of research methods and principles governing scientific investigation within a particular area of study. Research within IT revolves around three related fields: Computer Science, which entails computer programming and code, Software Engineering, which is focused on production and operationalization of software, and Information Systems (IS), which concerns on deployment of IT in organizations [64]. The context of this thesis is the fit between strategy and IS models, which positions the research problem as an IS research problem. IS research is concerned by both the technological and social systems together, as well as by phenomena emerging upon their interaction [93]. Vaishnavi and Kuechler name IS a multi-paradigmatic community [157]; different sets of practice define IS as a scientific discipline and researchers can take different stands following different paths when investigating IS research problems. These differences influence a series of research concerns. For example: what should be observed; what kind of questions should be asked around problems, how these questions should be structured, what methods should be selected and how should they be applied, what kind of results should be expected, how should these be analyzed and how should these be interpreted. Addressing such concerns is also influenced by beliefs and assumptions about the problem, which altogether constitute a researcher s perspective on how to do research on the problem faced and thus, which research strategies and methods to choose. Typically, a research community shares a common set of beliefs and assumptions about concerns such as the aforementioned, which affects the choice of research methods employed. This is called a research paradigm and shapes how the members of a research community perceive their discipline and consequently, how research methods are chosen [72; 90]. The objective of this chapter is to discuss the research paradigm followed in this thesis, present the research process undertaken and reason over the 21

52 methodological choices made to achieve the research goals set in Chapter Research Paradigm The scope of this thesis is the alignment linkage between business strategy and IS. Two goals have been set: build a unified business strategy meta-model and then link it with IS models through mappings. Achieving these goals entails building such a meta-model (the process), the meta-model itself (the artifact), and anything emerging from its use [103] (e.g. mapping to IS requirements models), what is referred in IS as design [163]: "Design science is the scientific study and creation of artefacts as they are developed and used by people with the goal of solving practical problems of general interest" [72]. Design Science aims at solving a distinct problem of practical nature by providing innovative artifacts through a design process that adheres to a build and evaluate design cycle, thus seeking for utility in effective artifacts [66]. Paradigm derives from the Greek verb "παραδείκνυμι", which means to exhibit, represent. A research paradigm refers to a typical example, pattern or model of a research perspective within a field of study and influences the choices made on research methods based on its philosophical assumptions: "..universally recognized scientific achievements that, for a time, provide model problems and solutions for a community of researchers" [90] Philosophical Assumptions A research paradigm is characterized by philosophical assumptions expressed as concerns about reality (ontological), knowledge (epistemological), ways to examine reality for knowledge (methodological), and values (axiological) that altogether shape the selection of research methods. Within a discipline, it positions a researcher s belief system and view of the world with respect to the research problem being addressed, while it also provides rationale for the methods chosen to actualize the research process. Ontological concerns focus on reality and the researcher s stance towards the nature of reality: what exists, what is derived [72; 158]. Epistemological concerns focus on knowledge: how can people gain knowledge about the world, what does it depend on, how can one be sure of what they know [72; 158]. Methodological concerns focus on the appropriateness of the ways and procedures used to examine reality as well as the validity of the knowledge produced from them [72; 158]. Axiological concerns focus on people s values, collectively valuing what researchers hope to achieve and find, which makes a shared value system 22

53 within a research community [158]. Dominant research paradigms within the multi-paradigmatic IS discipline are Positivism and Interpretivism [38; 72; 124; 158]. Other research paradigms include Social Constructivism, Pragmatism, and Critical Realism [41; 124]. All of them are discussed in terms of their philosophical assumptions. Positivism suggests that there exists a single reality regardless of people and their experiences (ontology). Epistemologically, phenomena observed in the world can be explained through cause-effect relationships and are expected to embed explanation, prediction, and control. Scientific knowledge allows for verification or falsification and the strive for generalizable results. Methodologically, the positivist view entails quantitative approaches aimed at providing objective and bias-free knowledge. Axiological concerns entail striving for a universal truth supporting prediction of phenomena [38; 72; 124; 158]. Interpretivism, argues that reality is constructed by people and their (inter)actions. Thus phenomena observed are dependent on their context along with people s subjectivity and through social interaction (ontology). Epistemologically, truth is subjective with knowledge emerging from the active participation of the researcher in the phenomena investigated (social interaction). Methodologically qualitative approaches reinforce a participatory investigation of phenomena by engaging researchers in the social environment examined. The axiological view of interpretivism entails striving for understanding and describing including subjectivity acknowledgments affecting validity of results [38; 72; 124; 158]. Social constructivism suggests that reality lies within the world in which people live and work, where subjective meanings of their experiences are developed (ontology). Epistemologically, meanings are formed through interactions between people based on as many observers /participants views as possible of a situation examined, as well as through pre-existing norms and views. Methodologically, the social constructivism paradigm entails participatory approaches to construct the meaning of a situation examined through social interaction, Focus is put on specific contexts where people operate to understand their historical and cultural settings. Axiological concerns focus on making sense of meanings others have on a situation examined along with the researcher s own interpretation due to their background and experiences [41]. Pragmatism suggests that truth is not bounded by any particular worldview or philosophy, but rather what works for the situation examined (ontology). Epistemologically, knowledge is gained based on examining the "what" and "how" with respect to the intended effects. The methodological view of pragmatism entails freedom of choice for multiple and mixed methods and techniques rather than subscribing to one, based on the needs of a situation 23

54 examined. The axiological concerns suggest making sense of what works at the time and what is the truth [41]. Critical realism [30; 87; 109] suggests that the real world exists independently of our knowledge, beliefs, thoughts, perceptions etc. whether observable or not (ontology). Epistemologically, knowledge is considered social and historical, where not all viewpoints must be equally valid, and exists in different types: physical, social, and conceptual. Methodological concerns entail a range of different research methods due to the different knowledge types and supports a mixed-method approach for research. Axiologically, knowledge of reality is a result of social conditioning and, thus, cannot be understood independently of the social actors involved in the knowledge derivation process A Pluralistic Research Paradigm The emergence of design science as a scientific study within IS has also emerged with an idea of design science being a research paradigm [66; 158], though not widely accepted to cause a paradigm shift [90]. Nevertheless, for design science, IS research paradigms can be combined in the same design science project, for example positivism and interpretivism [72]. This diverse utilization of research paradigms within design science is closer to the idea of a multi-methodological approach to IS research [119] or what is commonly refereed to as pluralism. Pluralism suggests that mixed method research designs are preferable to encompass real settings, social situations and research context [108]. Therefore, research paradigms with different philosophical assumptions can be utilized during each step of the research process influencing the selection of research methods employed [72; 158]. Particularly, ontological and epistemological concerns and views shift as a design science project progresses [158]. Consequently, research methods can vary accordingly due to the different research perspectives they are rooted on [64]. In the scope of this thesis, during the early steps of the research process the social constructivist perspective is relevant as it provides multiple reality experiences from multiple organization settings for the alignment linkage between business strategy and IS influencing both the practical implications of the problem as well as requirements put on the unified business strategy meta-model to be build. Moreover during the later steps of the process the positivist perspective becomes relevant as the Unified Business Strategy Meta-Model becomes more stable and thus it is through observation that predictions can be made on the satisfaction of the requirements put on the artifact, which may lead to additional iterations of the design cycle. The pluralistic research paradigm followed in this thesis in the context of the alignment linkage between business strategy and IS, can be summarized in Table 3.1 with respect to the philosoph- 24

55 ical grounding of design science research [158] also influenced by [67]. Ontologically, design science research suggests that the state of reality is altered through the introduction of artifacts. However, there exists one single, stable underlying physical world whose laws constraint the various altered reality states during the artifacts development. Epistemologically, knowledge is produced through the process of constructing and employing artifacts. Information on the artifact, its components and their interactions, is considered true when artifacts behave as expected. Therefore, meanings are the utility provided and the functionality enabled with respect to the problem being addressed. Methodological concerns entail incremental artifact development and assessment with respect to the setting investigated. Axiologically, apart from the truth, researchers value control and creative adjustment of the setting investigated, for the end result contributes to the body of knowledge with practical solutions to wicked problems or even partial and incomplete theories paving the way for further investigations. Table 3.1: Philosophical assumptions for Design Science Research in this thesis. Basic Belief Design Research from [158] Assumptions in this thesis Ontology Multiple, contextually situated alternative world-states. Reality evolves as the alignment linkage is dependent on multiple Socio-technologically enabled alternative organizational with multiple IT settings as each organization is applications [67]. unique. Epistemology Knowing through making: Knowing through making objectively constrained construction via iterative applications of within a context. the model-driven proposal Iterative circumscription reveals meaning. revealing findings, which consequently lead into fine tuning of the proposal itself. Methodology Developmental. Measure artifact impact on the composite system. Reasoning through the design cycle actualizes the model-driven proposal for the alignment linkage in the development of a unified business strategy meta-model, whose impacts are assessed. 25

56 Axiology Control; creation progress (i.e. improvement); understanding. Conceiving, incrementally creating and understanding the applicability of the unified business strategy meta-model in the context of the alignment linkage along with any sociotechnological implications identified, constitutes valuable contribution. 3.2 Research Process using the Design Science Method The scientific study and creation of artifacts in design science evolves iteratively and incrementally into a practical solution, through a generic design cycle [153] with respect to guidelines proposed by Hevner [66]. Proposals for design science research outline activities that constitute a design science project as in [64; 130; 157]. Essential activities across these proposals include: explicating the problem: outlining the artifact and defining requirement; designing and developing the artifact; demonstrating; evaluating; and communicating, which are typically structured as a process model [130] or similarly to a generic design cycle [64; 157]. This thesis adopts the Design Science Method (DSM) [72], which is a holistic problem solving approach through artifact development (Figure 3.1). The DSM consists of a similar activity flow as the aforementioned design science proposals, however, it is explicitly enriched with the research methods and the knowledge based used for each activity. The DSM is presented in Figure 3.1 using IDEF0, a technique for describing systems as interrelated activities [118], where four different channels (arrows) are defined for each activity (boxes); inputs (left-to-right arrows) are transformed by the activity into outputs, controls (top-down arrows) govern an activity to provide the right outputs, resources (bottom-up arrows) support the activity execution, while outputs (right-to-left arrows) are the outcomes of the activity execution. The upper part of Figure 3.1 depicts the research methods employed in the activities and governs how the right outputs are provided by each activity. Different research methods can be used for different activities, represented as one box related to activities through controls (top-down arrows). The lower part in Figure 3.1 consists of the entire knowledge base required as resource for all activities. Similarly, different activities can use different knowledge bases, represented as one box related to activities through resources (bottom-up arrows). Therefore, for each activity, there exists some input which is transformed 26

57 Figure 3.1: The Design Science Method (taken from [72]). into some output using the knowledge base with respect to research methods. Similarly to the activities of the design research process [130] and the generic design cycle [64; 157], the activity flow of DSM is not temporal; rather it is based on input/output relationships between activities [72]). 3.3 Methodological Choices Activities of DSM entail a mix of research methods selected, which are presented per activity in the remainder of this section and Table 3.2, which provides a summary view. Application of these choices along with results are detailed in chapters 4, 5, and 6. Article XI scopes the research methodology, research process and methodological choices for business strategy modeling Explicate Problem The problem has been explicated through literature studies as presented in Chapter 1, as well as in Articles I, II, III and in [48]. Resources included literature addressing the overall problem of alignment, proposals addressing the alignment linkage and literature on IS models types used. In addition, an empirical study in the form of a self-administered online 27

58 questionnaire targeting both business and IS practitioners has also been used to strengthen the problem identified and with an empirical basis Outline Artifact and Define Requirements The artifact (design artifact type: model) is a unified business strategy metamodel (UBSMM) that integrates conceptualizations of business strategy formulations that can be mapped to IS models. It has been outlined based on literature studies on business strategy formulations from the area of strategic management. Using theoretical analysis of usage scenarios for UBSMM, conceptual modeling and model quality literature, requirements for the artifact have been scoped through the two goals defined in Chapter 1: "Build a unified business strategy meta-model to link business strategy with IS" and "Link business strategy formulations to IS through mappings of the unified business strategy metamodel to IS models". Additionally, the aforementioned empirical study has also contributed in outlining the artifact as a model-oriented solution, as well as defined requirements for comprehensive coverage of business strategy formulations Design and Develop Artifact Designing the artifact has been based on literature studies on the business strategy formulations while outlining the artifact. Practical industrial applications of these formulations have also been considered. This work has resulted in the selection of business strategy formulations for UBSMM where each formulation corresponds to one of the three complementary types of business strategyshaping logic [14]: the resource-based type, the industrial organization type, and the Schumpeterian type. The business strategy formulations selected are: Strategy Maps and Balanced Scorecards (SMBSC) [81], Value Configuration (VC) [133; 151], and Blue Ocean Strategy (BOS) [84]. Moreover, literature in conceptual modeling and schemata integration has been used to define a development process for the artifact. The conceptualization of business strategy formulations entailed in the development of UBSMM has also been based on existing conceptual modeling practices relevant to the utilized schemata integration literature Demonstrate Artifact Each business strategy formulation integrated to UBSMM has been demonstrated through experimentation. This has been achieved by instantiating the 28

59 conceptualization of each business strategy formulation using published realworld cases. Additionally, through experimentation, mappings to IS models used for system requirements have also been demonstrated for the conceptualizations of Strategy Maps and Balanced Scorecards (SMBSC) [81] and Blue Ocean Strategy (BOS) [84] Evaluate Artifact The artifact has been evaluated both before being used (ex ante) but also along with its use (ex post) [72; 137]. The former was carried out iteratively with development and demonstration of UBSMM (or parts of it) through informed arguments that were based on construction, reasoning for function and environment. For the latter, demonstration and application of UBSMM in published cases and real-world applications was used to argue primarily for internal properties with respect to business strategy but also for the linkage to IS models through mappings. Additionally, the aforementioned empirical study has also contributed towards evaluating the artifact suitable and relevant as a model-oriented solution. Table 3.2: Research activities per DSM activity. DSM activity Explicate Problem Outline Artifact & Define Requirements Design & Develop Artifact Demonstrate Artifact Evaluate Artifact Methodological choices Literature studies, Empirical studies Literature studies, Theoretical analysis, Empirical studies Literature Studies Experimentation Informed Arguments, Demonstration and Application, Empirical Studies 29

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61 4. Problem Explication and Artifact Requirements This chapter presents how the activities of the design science method (DSM) have been carried out to explicate the problem and to then establish requirements for UBSMM (the artifact) with respect to the knowledge base and the methodological choices made. 4.1 Explicate the Problem The research problem of this thesis has been motivated through literature studies in Chapter 1, in Articles I, II, III of this thesis, as well as in [48]. The research problem affects alignment and consequently impacts business executives such as C-levels decision makers and all those involved in strategy shaping strategy, IT executives such as CIOs and IS practitioners such as requirement engineers, business analysts, and systems developers. The former are hindered from effectively disseminating their initiatives towards IT, while the latter are hurdled, scoping and framing their work with respect to business stakeholders needs and intentions as typically expressed through strategy. Therefore, the research problem has been scoped to the alignment linkage between business strategy and IS. The knowledge base used includes literature with proposals on the alignment linkage between business strategy and IS. Approaches proposed are falling short when it comes to disseminating business strategy towards IS: they make use of business strategy notions in a abstract way, which hinders unambiguous alignment of IS to strategic initiatives/objectives. The use of explicit business strategy notions related through informal mappings to particular RE, EM and EA approaches bounds their applicability. Additionally, the research problem has been further motivated through an empirical study that has been carried out and is reported in Articles IX and X. The study was in the form of a self-administered online questionnaire aiming to capture whether the linkage between business strategy and IS is an issue of concern. It also endeavored to discover for whom and why, while also capturing gaps between business strategy and IS that hinder alignment with respect 31

62 32 Figure 4.1: Screenshots from the online questionnaire where the upper part introduces the study s objectives and the lower part asks about the use of business strategy formulations (Articles IX and X).

63 Figure 4.2: Screenshots from the online questionnaire where the upper part asks about model types used and the lower part includes a Likert scale on the use of models for alignment (Articles IX and X). 33

64 to the linkage between business strategy and IS (indicative examples in Figures 4.1 and 4.2). Setting up the empirical study was based on qualitative research principles such as being carried out at the respondents natural setting, and utilized a mix of open-ended and closed-ended questions [41]. The questionnaire has been designed with respect to well-cited methodological guidance such as Oppenheim s framework [123] and has been tested through a pilot study to assess its validity and understandability [41; 123]. A group of four academic experts on business-it alignment assessed the questionnaire primarily for construct and content validity, while a convenience sample of professionals assessed for functionality such as language, structure and layout (Article IX). Participation in the empirical study included 45 respondents from seven large companies with more than 50 people employed in each. Results acknowledged the relevance and importance of the research problem and have indicated that business strategy is insufficiently clear for IS. Also, results stressed communication and understandability being major hindrances to alignment linkage. the alignment linkage. Moreover, the results have confirmed the reasoning for the research goals of this thesis: The business strategy to IS linkage is an open issue with respect to alignment, where gaps and shortcomings of existing proposals can be addressed with a model-driven approach such as the use of UBSMM with mappings towards IS models. This has led to formulating the research question: How can business strategy formulations be conceptualized to establish a model-based linkage between strategy and IS in organizations? 4.2 Artifact Requirements How the artifact aims to address the explicated problem is outlined by the two goals of this thesis. It is a unified business strategy meta-model (UBSMM) that integrates business strategy formulations to a conceptualization which can be linked through mappings to IS models such as the ones used for RE and EM. This allows overcoming communication and understandability barriers posed by differences on abstraction levels between business stakeholders, where formalisms used are typically more abstract and ambiguous, and IT stakeholders, where formalisms are typically less ambiguous (i.e. models). The scope of the artifact has been also motivated through the aforementioned empirical study. The knowledge base used includes primarily strategic management literature as it is the core foundation of the artifact, and consists of original publication of business strategy formulations, along with published applications both in academic or popular media (i.e. practitioners reports, anecdotal blogs, etc.). Additionally, conceptual modeling literature was also required for conceptualizing business strategy formulations and integrating them into UBSMM. Fi- 34

65 nally, with respect to current alignment proposals (Chapter 1), RE, EM and EA literature has been examined for methods and techniques used for IS models that can be conceptually mapped to UBSMM Artifact Outline The artifact is outlined with respect to the research goals set in Chapter 1. UB- SMM is a conceptualization expressed using UML, a formalism widely used in IS [148]. Also, UML class diagrams are used for the conceptualizations of business strategy formulations integrated into UBSMM. Apart from model quality requirements, business strategy coverage has also been also considered to pose requirements for selection of business strategy formulations coming from strategic management, their conceptualization as well as for the integration process followed. This construction choice also reinforced addressing the second goal, the linkage of UBSMM to IS models. UBSMM entails deriving conceptualizations of the business strategy formulations included, which allows the instantiation of the actual business strategy of an organization. In this way, business strategy, as expressed by business stakeholders, can be captured by UBSMM through conceptualizations of each business strategy formulation. Moreover, UBSMM is linked towards IS models used in RE, EM, and EA through model-level mappings. This brings notions of business strategy into formalisms that IS stakeholders understand and use. Such mappings and conceptual relationships establish a traceable link between strategy notions and IS notions as expressed for RE, EM or EA. For this thesis, example formalisms for IS models include i* [168] for RE, EKD [26; 97; 171], e 3 value [50; 131] and BMO [125] for EM and the ISO/IEC/IEEE : Systems and Software Engineering Architecture Description [70] for EA. Considering the goal orientation of business strategy (vision and mission), linking UBSMM to models used in RE through goal models is a natural candidate for establishing mappings. It is commonplace within RE to use goal models as the starting point for the elicitation of IS requirements [116; 161]. i* has been chosen as a goal modeling technique known to be able to capture enterprise business goals during the early phases of RE [169]. Moreover, i* focuses on the social aspects of IS by capturing the intentionality and rationale of actors within an organizational setting. IS requirements are derived from i* using proposals such as [3; 5; 31; 51], to name a few. This derivation maintains traceability between the intentions captured by i* models and IS requirements. For EM, the approaches selected cover different areas of IS and thus use different types of IS models. EKD includes a set of different models, as it is a complete EM approach. e 3 value focuses on value modeling and BMO focuses on business modeling. 35

66 For EA, the ISO/IEC/IEEE the architecture standard has been used because it includes all commonly accepted essentials of EA. Moreover, some of the EA approaches are heavily aligned with the standard, such as TOGAF [56], and therefore, linking UBSMM to the standard constitutes them relevant and applicable as well Requirements Artifact requirements for UBSMM are presented in Table 4.1 and have been derived using theoretical analysis of literature studies for business strategy formulations and their practical industrial applications, which are included in Articles I, II, III, IV, V, VI, VIII, X, and XI, as well as in [48]. Usage scenarios of UBSMM are discussed in Articles I and IV. Additionally, an empirical study reporting on the use and acceptance of particular business strategy formulations as well as on the wide acceptance of different IS model by practitioners is included in Articles IX and X. Regarding model quality criteria, there exist varying perspectives (i.e. theorybased, experience-based, observation-based, consensus-based, and synthetical) resulting in many approaches, although no standard or consensus seems to exist as summarized in [113]. Nevertheless, for the scope of this thesis the selection of quality criteria has been based on the essential requirements of model correctness and model completeness, as empirical evidence exists to suggest that suggesting they are the most influential factors of model quality for practitioners [114]. Additionally, literature studies have also been used (Article IV) for schemata integration (i.e. [19; 22]). Table 4.1: Artifact requirements for UBSMM. Req. 1 The business strategy formulations chosen to build UBSMM shall enable comprehensive coverage of business strategy with respect to Barney s types of strategy logic [15]; this will allow UBSMM to be linked with IS offering a comprehensive view on business strategy (Goal 1). Req. 2 The integration of business strategy formulations shall follow a systematic process; this will allow for further enrichment and evolution of UB- SMM to integrate emergent business strategy formulations in the future (Goal 1). Req. 3 UBSMM shall be complete; this corresponds to model completeness with respect to the conceptualizations of business strategy formulations [22; 95; 114; 142], understandability [22; 114] and language adequacy [142]. Req. 4 UBSMM shall be correct; this corresponds to model correctness [22; 114], model validity [95], and model construction adequacy [142]. 36

67 Req. 5 Req. 6 Each of the business strategy formulations integrated shall be derivable from UBSMM, which shall result into a conceptualization for each business strategy formulation in the form of a conceptual model, this allows for specializing UBSMM to conceptualizations for each business strategy formulation integrated, which consequently will allow instantiating the conceptualization into the business strategy of an organization (Goal 1). Conceptualizations derived from UBSMM shall be mappable to IS models (i.e. RE, EM, and EA approaches); this will link business strategy formulations to IS allowing traceability of business strategy notions (objectives, intentions, etc.) to IS (Goal 2). 37

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69 5. Artifact Design and Development This chapter presents how activities of the DSM have been carried out to design and develop UBSMM, both the process as well as the artifact itself, with respect to the requirements set in Chapter 4 and the research goals stated in Chapter Artifact Design UBSMM integrates Strategy Maps and Balanced Scorecards (SMBSC) [81], Value Configuration (VC) [133; 151], and Blue Ocean Strategy (BOS) [84]. Each formulation corresponds to one of the three complementary types of business strategy [15]: the resource-based type, the industrial organization type, and the Shumpeterian type. This allows for UBSMM to capture a comprehensive view of business strategy through business strategy formulations that are widely established and applied in strategic management. This property of UBSMM addresses Req. 1 and is discussed in Articles I, IV and VIII, but also a detailed discussion can be found in Chapter 2. Conceptualizations for each business strategy formulation have been build using UML class diagrams because of the notation s wide use [148] and tool support. This property of UBSMM contributes towards addressing Req. 1 and is discussed in more detail in Articles I and IV. The conceptualizations of business strategy formulations have been integrated into UBSMM following an established and systematic schemata integration process to unify notions [22] and allow for more business strategy formulations becoming part of UBSMM in the future. This property of UBSMM addresses Req. 2 and is discussed in Article IV. UBSMM includes three sets of constraints allowing the derivation of conceptualizations for the business strategy formulations integrated: SMBSC, VC or BOS. Consequently these conceptualizations can be instantiated for the business strategy of particular organizations. These constraints are presented as derivation rules for SMBSC, VC and BOS in Sections 5.4.1, 5.4.2, respectively. This property of UBSMM addresses Req. 5 (Article X). 39

70 The alignment linkage between UBSMM and IS models (Req. 6) includes mappings of SMBSC and BOS conceptualizations integrated and derived from UBSMM with i* are presented in Articles V, VI, and VIII. Furthermore, the capabilities of EM (EKD[26; 97; 171], e 3 value [50; 131] and BMO [125]) have been explored as to be conceptually related with SMBSC (derived from UBSMM) by capturing business strategy notions. This is reported in Article VIII. Similarly, for EA, conceptual mappings between of UBSMM and ISO/IEC/IEEE :Systems and Software Engineering Architecture Description [70]) have been established and reported in Article IV. 5.2 Development Process The development process of UBSMM entailed distinct phases that included selecting business strategy formulations and building their conceptualizations to their integration into UBSMM. Based on the foundational work of [19] and [22] the four phases adopted are: 1. Pre-Integration; schemata to be integrated are selected and an integration strategy is decided. 2. Schemata Comparison; schemata are analyzed and compared for correspondences, conflicts and inter-schema properties. 3. Schemata Conformance; resolutions for conflicts are defined and modeling decisions are made upon correspondences and inter-schema-properties. 4. Schemata Merging and Restructuring; conflict resolutions are applied along with restructuring resulting into one schema. During pre-integration, business strategy formulation schemata from Strategy Maps & Balanced Scorecards (SMBSC), the Value Configuration (VC), and Blue Ocean Strategy (BOS), were selected as discussed in Chapter 2. Their conceptualizations were built as UML class diagrams accompanied with constraints (see Articles II, III, V, VII and [152]). Following a binary strategy for the integration process, which allowed for progressive and gradual unification of business strategy formulations [19; 22], UBSMM was built in two steps. The first step included integration of metamodels for SMBSC and VC, where all successive phases of the integration process were carried out resulting in a first version of UBSMM as presented in Article IV. In a similar manner, the second step included integration of the derived first UBSMM version and the BOS meta-model, also following the succeeding phases of the integration process as discussed in Article VIII. This order of preference was based on literature indicating SMBSC and VC are 40

71 the well-established [48] but also on results of the empirical study reported in Article X indicating their wide applicability. For both steps, schemata were analyzed and compared to identify correspondences between concepts across business strategy formulations, naming conflicts and structural conflicts, as well as inter-schema properties [19; 22]. During schemata conformance, semantic relationships between concepts were identified with respect to conflicts, correspondence and inter-schema properties and resolutions were decided (i.e identical, equivalent, compatible and incompatible [19]). Finally, during the last phase, the conformed schemata were merged (during both steps) and restructuring occurred to accommodate conformance resolutions into one schema. This two-step implementation of all phases is presented in Article IV for SMBSC and VC resulting into a first version of UBSMM and in Article VIII for that first version of UBSMM and BOS, which resulted in a complete UB- SMM. The following section describes the artifact in complete detail. 5.3 UBSMM: Classes & Constraints This section presents all concepts and constraints of UBSMM and is accompanied with three set of specializations to derive SMBSC, VC, and BOS from UBSMM. The conceptual model of UBSMM is presented in Figure 5.1 StrategyPlan This class captures the overall strategy of an actor and carries a Type attribute, which indicates the business strategy formulation modeled as a list: StrategyMap, ValueConfiguration, StrategyCanvas. Constraints: A strategy map includes (exactly) one copy of all four predefined perspectives of the strategy map template. A strategy map includes at least one goal in each perspective. A strategy refers to a unique value proposition (1..1) and needs to be reflected in a distinctive value chain (1..1). Strategy is linked 1..1 to Value Configuration and Value Proposition because a strategy must enable it to deliver a value proposition (compete delivering unique value). A strategy needs to be reflected in a distinctive value configuration, which must be configured to conduct its activities differently tailored to its unique value proposition. Additionally, the 1-1 relations also are in line with the idea of value systems. For example, an instance of StrategyPlan of Type:SMBSC is an instance of SMBSC. 41

72 42 Figure 5.1: The Unified Business Strategy Meta-Model (UBSMM).

73 StrategicTheme This class captures a grouping of particular interest within a StrategyPlan focusing usually of areas of critical importance for executives. For SMBSC, a StrategicTheme consists of a set of interrelated Goals, which may span across perspectives, and for example may identify a set of critical processes within the internal perspective, which are important for differentiating the UniqueValueProposition. More than one StrategicTheme could be identified within the same strategy map and more than one perspective may be included. For VC, a StrategicTheme consists of a set of value activities rooted in the UniqueValueProposition. Among the essential value activities included in a value configuration, depending on the value proposition, are particular value activities more critical than others. For BOS, a StrategicTheme denotes a NewValueCurve consisting of a set of Objectives, Measures, and Targets related to a resource offered by the Actor. Actor This class captures either the organization/unit/individual defining some strategy or the organization/unit/individual performing some value activity. Those could be the same, but not necessarily (e.g. the actor relevant to the strategy is not the same as the one performing an activity, as it can be an outsourced to some other actor). The class carries the Boolean attribute Main: which if true refers to the actor for whom strategy is modeled, whereas if false the actor is different than the actor for whom strategy is modeled and performs at least one value activity. Constraints: An actor with 0 strategy is not the main actor (Main:FALSE) and is instantiated as part of another actor s value configuration for representing value activities not performed by the actor for whom the strategy/value proposition/value configuration is modeled (e.g. outsourced value activity) thus constituting the value configuration modeled part of a value system. An actor with strategy more than 1 is the main actor (Main:TRUE) and it is their strategies/value propositions/value configurations being modeled. For SMBSC, instances of Actor Perform ValueActivity and Actor Defines StrategyPlan are optional. There must be at least one instance of Actor of Main:True. 43

74 StrategicGoal This class captures the goals set either across the four perspectives for SMBSC or the overarching strategy goal set in VC (usually: superior long-term return on investment). The causality relationships between StrategicGoals are captured through the self-association Influences, IsInfluencedBy. Constraints: Every goal included in a theme is also included in the strategy map for which the theme is defined. For goals in the Financial perspective no initiatives are launched because targets capture the results of initiatives from the other perspectives. A goal belonging to either the Customer Perspective or the Internal Perspective may influence another goal, which belongs either on the same perspective or the one above (Top-down: Financial,Customer, Internal, Learning & Growth). Whereas a goal belonging to the Learning & Growth Perspective can only be influenced by another goal belonging into the same perspective (no perspective exists below) and similarly, a goal belonging to the financial perspective can only influence a goal belonging in the same perspective (there exists no perspective above). Every goal must influence another goal, except in the financial perspective where a top-goal may exist. A goal classified in a group must belong to the same strategy map in which this group belongs to. A goal belonging to a theme must belong to the same strategy map in which this theme belongs to. Objective This class captures measurable goals used for building BSCs or BOS, which suggests that for SMBSC not all goals are necessarily used to build a BSC. Group This class captures all groupings included in a StrategicPlan. Sub-groups can be introduced into groups, thereby structuring the nesting of groups inside other groups into a grouping hierarchy. This is captured through the self-association (IsSubGroupOf, HasSubGroup). An example coming from SMBSC refers to the grouping of processes within the internal perspective. There exist groups of operations management processes, customer management processes, innovation processes and regulatory and social processes classes. Constraints: Groups and sub-groups form a pure tree in each perspective: 44

75 Perspectives are not a sub-group of any other group. Perspectives constitute the highest level of grouping; If a group is not a perspective, then it is included in exactly one higherlevel group; A group is not a sub-group of itself (directly or indirectly); A group of a certain type may only be included in the appropriate type of higher level group (according to the SM template): Allowed sub-groups of the internal perspective are: Operations management, Customer management, Innovation, Regulatory and Social; Allowed sub-groups of the customer perspective are: Product/service attributes, Relationship, Image; Allowed sub-groups of the learning and growth perspective: Human Capital, Information Capital, Organization Capital; Perspective This class captures a particular grouping which BelongsTo a StrategicPlan of Type: SMBSC, and refers to the four perspectives of the Strategy Map (financial, customer, internal, learning and growth). It carries a Type attribute with a list of values: Financial, Customer, Internal, LearningAndGrowth. Constraints: For SMBSC it is the highest level of grouping within a strategy map and is related to the group class through generalization. Every strategy map includes the four perspectives, and that means includes a group of the type corresponding to each predefined perspective (financial, customer, internal, learning and growth). And all of them can only have sub-groups. These sub-groupings are accompanied by a refined set of constraints. For example an instance of CustomerValueProposition can only be a subgroup of Perspective:Customer, while an instance of the Processes can only be a sub-group of Perspective:Internal, etc. UniqueValueProposition This class captures how the actor delivers unique value in a particular set of uses or for a particular set of customers in particular price range as expressed by four generic value propositions of SMBSC (low total cost, product leadership, complete customer solution, and system lock-in). UniqueValueProposition captures a particular grouping which BelongsTo a StrategicPlan of Type: SMBS, which IsSubGroupOf a Perspective of Type: Internal which is a Group 45

76 that refers to the groups of processes within the internal perspective of a strategy map. IsSubGroupOf Perspective of Type: Customer which is a Group and carries a Type attribute with a list of values: LowTotalCost, ProductLeadership, CompleteCustomerSolution and SystemLock-In. Additionally, Unique- ValueProposition Corresponds to exactly 1 StrategicPlan. Constraints: The Customer Value Proposition class is constrained through the IsSub- Group association of the Group class to be a sub-group of a group which is a Perspective and particularly of the type Customer, therefore, an instance of CustomerValueProposition can only be a sub-group of Perspective:Customer. The group CustomerValueProposition, through the IsSubGroup association, is a sub-group of the group Perspective which is of type Customer. The Customer Value Proposition class is constrained through the IsSub- Group association of the Group class to be sub-group of a group which is a Perspective and particularly of the type Customer: CustomerType NeedType PriceRange CustomerType This class captures customer related information (e.g. types of customers to be served? channels to be used to reach these customers? etc.) NeedType This class captures need related information (e.g. what particular varieties of service should be provided? etc.) PriceRange This class captures price relevant information (e.g. should the provision of services be charged? how should costs be recovered? etc.) Processes This class captures a particular grouping which BelongsTo a StrategicPlan of Type: SMBS, which IsSubGroupOf a Perspective of Type: Internal which is a Group and it refers to the groups of processes within the internal perspective of a strategy map. It IsSubGroupOf Perspective of Type: Internal which is a Group and carries a Type attribute with a list of values: OperationsManagement, CustomerManagement, Innovation, and RegulatoryAndSocial. 46

77 Constraints: An instance of Processes can only be a sub-group of Perspective:Internal. Capital This class captures a particular grouping within a StrategicPlan of Type: SMBS, which IsSubGroupOf a Perspective of Type: LearningAndGrowth which is a Group carries a Type attribute with a list of values: Human, Information, and Organization. Capital refers to the groups of capital within the learning and growth perspective of a strategy map. Constraints: An instance of Capital can only be a sub-group of Perspective: LearningAnd- Growth. ValueChainPrimary This class captures the grouping of primary activities of a value chain: Inbound Logistics, Operations, Service, Marketing & Sales, and Outbound Logistics. ValueChainPrimary is a Group and carries a Type attribute with a list of values: InboundLogistics, Operations, Service, MarketingAndSales, and OutboundLogistics. ValueChainPrimary BelongsTo a StrategicPlan of Type: VC, and Includes ValueActivity which BelongsTo ValueConfiguration of Type:Chain. ValueShopPrimary This class captures the grouping of primary activities of a value shop: problem solving, choice, execution, problem finding & acquisition, control & evaluation. ValueShopPrimary is a Group and carries a Type attribute with a list of values: Problem Solving, Choice, Execution, ProblemFindingAndAcquisition, and ControlAndEvaluation. ValueShopPrimary BelongsTo a StrategicPlan of Type: VC, and Includes ValueActivity which BelongsTo ValueConfiguration of Type:Shop. ValueNetworkPrimary This class captures the grouping of primary activities of a value network: infrastructure operation, service provisioning, and network promotion & contract management. ValueNetworkPrimary is a Group and carries a Type attribute with a list of values: InfrastructureOperation, ServiceProvisioning, and NetworkPromotionAndContractManagement. ValueNetworkPrimary BelongsTo a StrategicPlan of Type: VC, and Includes ValueActivity which BelongsTo ValueConfiguration of Type:Network. 47

78 Support This class captures the grouping of activities of any value configuration: infrastructure management, human resource management, procurement, technology development. Support is a Group and carries a Type attribute with a list of values: InfrastructureManagement, HumanResourceManagement, Procurement, TechnologyDevelopment. Support BelongsTo a StrategicPlan of Type: VC, and Includes ValueActivity which BelongsTo ValueConfiguration of Type: Chain, Shop, and Network. IndustryValueCurve This class captures the grouping of strategic goals of Actor.Main:FALSE. Measure This class captures the means to evaluate the achievement of an Objective. For BOS is captures the value offering scale (Offering Level) Constraints: A measure can have several milestones but among these has one target. Measures that belong to financial perspective objectives have no initiatives. Milestone This class captures any short-term or intermediate targets needed prior to the final target and carries two attributes: Deadline and Threshold: these indicate the desired value for the milestone to be completed. Target This class captures a final, usually long-term, Milestone included for each measure determining whether the objective has been achieved. For BOS it captures the value of desired level of offering (Low, Medium Low, Medium, Medium High, High) Resource This class captures the enterprise s offering to buyers, Service This class captures a service offered to buyers. 48

79 Product This class captures a product offered to buyers. ValueActivity This class captures an activity performed and carries a Resources attribute which captures both time and money for the activity. For SMBSC, it encompasses all actions/activities identified as required towards the achievement of an objective. For VC, it captures the activities that constitute a value configuration BelongsTo Group ValueChainPrimary, ValueShopPrimary, ValueNetworkPrimary depending on the Type of ValueConfiguration it BelongsTo and BelongsTo Group Support if it refers to a support activity for any Type of ValueConfiguration it BelongsTo. Group ValueActivityStrategicCompliance: captures compliance characteristics of a value activity carrying two attributes: Value, an explanation of how the activity brings value, and FitToStrategy, a boolean assessment whether the value activity fits the strategy (NOTE relevant for first order fit of the value configuration). ValueConfiguration This class captures the value configuration that implements the strategy, based on the value creation logic: a value chain, transforming inputs into products (e.g. manufacturing, etc.), a value shop, resolving customer problems (e.g. health, education, etc.), a value network, networking customers (e.g. insurance, banks, etc.), and carries three attributes: Margin, Type: ValueChain, ValueShop, ValueNetwork, and Fit: Order1, Order2, Order3. Margin captures the difference between total value, which is the amount buyers are willing to pay for what a firm provides them, and the collective cost of performing value activities [134]. Fit captures how value activities within a value configuration are combined, and the attribute can have the following values: Order1, first order fit, where there is simple consistency between the each value activity of the value configuration and the strategy (focusing on the value proposition [136]); Order 2, second order fit, where activities are reinforcing; Order 3, third order of fit, where there is optimization of effort (eliminate redundancy and minimize the wasted effort). 49

80 Constraints: All value configurations include at least one instance of each type of support activity. Primary activities included in a value configuration of a particular type must be of the appropriate type (e.g. primary activities in a Value Network all belong to the class of value network primary activities). A value configuration of a particular type includes at least one primary activity of each relevant type (e.g. a value network includes at least one activity of network promotion, one activity of service provisioning, and one of infrastructure operation. A value configuration includes at least one instance of each type of support activity: Infrastructure Management, Human Resources Management, Procurement, Technology Development. Primary activities included in a value configuration of a particular type must be of the appropriate value activity type. For Value Chain, there needs to be at least one instance of each of the following: Inbound Logistics, Operations, Outbound Logistics, Service, Marketing & Sales. For Value Shop, there needs to be at least an instance of each of the following: Problem Solving, Choice, Execution, Problem Finding & Acquisition, Control & Evaluation. For Value Network, there needs to be at least an instance of each of the following: Infrastructure Operation, Service Provisioning, Network Promotion & Contract Management. A value configuration of a particular type includes at least one primary activity of each relevant type (e.g. a value network includes at least one activity of network promotion, one activity of service provisioning and one of infrastructure operation). Driver This class captures all parameters influencing resources and value in a value configuration thus influencing margin and fit. There are 10 specializations: Scale, Capacity, Utilization, Linkages, Interrelationships, Vertical Integration, Location Timing, Learning, Policy Decisions and Government Regulations. Due to space limitations only Linkages is shown as they are of significant importance to represent the links between value activities within a ValueConfiguration. Linkages This class captures relationships between the way one value activity is performed and the cost or performance of the other, which justifies the double association. 50

81 Constraints: Each SupportActivity is the origin of at least one Linkage. Each PrimaryActivity is the destination of at least one Linkage whose origin is a SupportActivity. A Linkage links two different instances of value activities. BlueOceanStrategy This class captures the strategy and carries three attributes as its main characteristics. Tagline, Focus, and Divergence. The class adheres to the following constraint: Focus must be true and Divergence must be true when comparing NewValueCurve to IndustryValueCurve. Tagline This class captures the strategy s clear message/slogan that has great commercial potential. Focus This class captures whether the strategy is focused using a boolean variable. Divergence This class captures whether a new value curve is different than the existing one(s), also captured by a boolean variable. 51

82 5.4 UBSMM Specializations This section presents the specializations of UBSMM for each particular business strategy formulation that has been integrated: SMBSC, VC and BOS. Classes are presented in the form Class.Attribute(TypeList):(ListValue), (Type- List and ListValue are used for classes whose attributes include lists) UBSMM.SMBSC StrategyPlan.Type:StrategyMap This class captures a strategy map. Constraints: A StrategyPlan.Type:StrategyMap includes (exactly) one instance of all four predefined perspectives of the strategy map template. A StrategyPlan.Type:StrategyMap includes at least one strategic goal in each perspective. A StrategyPlan.Type:StrategyMap concerns a unique value proposition (1..1), which corresponds to all strategic goals that belong to Perspective.Type: Customer. A StrategyPlan.Type:StrategyMap Concerns exactly 1 UniqueValueProposition, which can be of type: LowTotalCost, ProductLeadership, CompleteCustomerSolution and SystemLock-In. A StrategyPlan.Type:StrategyMap IsBasedOn 0 BlueOceanStrategy A StrategyPlan.Type:StrategyMap IsBasedOn 0 ValueConfiguration StrategicTheme This class captures a grouping of particular interest within a strategy map focusing usually on areas of critical importance for executives. It typically consists of a set of interrelated goals, which may span across perspectives, and for example may identify a set of critical processes within the internal perspective acknowledged to be important. More than one strategic theme could be identified within the same strategy map and more than one perspective may be included. Actor This class captures the organization/unit/individual for whom the strategy map is defined and also Performs all ValueActivities derived from Objectives Constraints: There exists 1 Actor.Main:True. There exists 0 Actor.Main:False. 52

83 Actor.Main:True Defines 0 StrategyPlan.Type:ValueConfiguration. Actor.Main:True Defines 0 StrategyPlan.Type:StrategyCanvas. Actor.Main:False Defines 0 StrategyPlan. StrategicGoal This class captures captures the goals set across the four perspectives for SMBSC. The causality relationships between StrategicGoals are captured through the self-association Influences, IsInfluencedBy Constraints: Every goal included in a StrategicTheme is also included in the strategy map for which the StrategicTheme is defined. For goals belonging to the financial perspective no ValueActivities are included because targets capture the results of ValueActivities from the other perspectives. A goal belonging to either the Customer Perspective or the Internal perspective may influence another goal, which belongs either on the same perspective or the one above (Top-down: financial, customer, internal, learning & growth). A goal belonging to the Learning & Growth perspective can only be influenced by another goal that belongs to the same perspective (there exists no perspective below). A goal belonging to the financial perspective can only influence a goal belonging in the same perspective (there exists no perspective above). Every goal must influence another goal, except in the financial perspective where a top-goal may exist. A goal belonging to a group must also belong to the same strategy map in which the group belongs to. Objective This class captures measurable goals that are used for building balanced scorecards, which suggests that not necessarily all goals are used to build a BSC Constraints: An Objective Specializes 0 Resources. Group This class captures all groupings included in a strategy map. Sub-groups can be introduced into groups thereby structuring the nesting of groups inside other groups into a grouping hierarchy. This is captured through the self-association (IsSubGroupOf, HasSubGroup). An example coming from SMBSC refers to the grouping of processes within the internal perspective. There exist groups 53

84 of operations management processes, customer management processes, innovation processes and regulatory & social processes classes Constraints: Groups and sub-groups form a pure tree in each perspective: A Group can be included in exactly one higher-level group. A group is not a sub-group of itself (directly or indirectly) A group includes 0 ValueActivity. A group includes at least 1 StrategicGoal Perspective This class captures a particular grouping which BelongsTo a StrategicPlan.Type: StrategyMap, and refers to the four perspectives of a strategy map (financial, customer, internal, learning and growth). It carries a Type attribute with a list of values: Financial, Customer, Internal, LearningAndGrowth. Constraints: This is the highest level of grouping within a strategy map. Perspectives are not a sub-group of any other group. Perspectives constitute the highest level of grouping. Every strategy map includes the four perspectives, that means includes a group of the type corresponding to each predefined perspective (financial, customer, internal, learning and growth). Perspective.Type:Customer HasSubGroup exactly 1 UniqueValueProposition Perspective.Type:Internal HasSubGroup exactly 4 Processes. Perspective.Type:Internal HasSubGroup exactly 1 Processes.Type: Operations Management. Perspective.Type:Internal HasSubGroup exactly 1 Processes.Type: CustomerManagement. Perspective.Type:Internal HasSubGroup exactly 1 Processes.Type: Innovation. Perspective.Type:Internal HasSubGroup exactly 1 Processes.Type: RegulatoryAndSocial. Perspective.Type:LearningAndGrowth HasSubGroup exactly 3 Capital. 54 Perspective.Type:LearningAndGrowth HasSubGroup exactly 1 Capital.Type: Human. Perspective.Type:LearningAndGrowth HasSubGroup exactly 1 Capital.Type: Information Perspective.Type:LearningAndGrowth HasSubGroup exactly 1 Capital.Type: Organization.

85 UniqueValueProposition This class captures how the actor delivers unique value as expressed by four generic value propositions of strategy maps (low total cost, product leadership, complete customer solution, and system lock-in). It refers to a particular grouping which BelongsTo a StrategicPlan.Type:StrategyMap and carries a Type attribute with a list of values: LowTotalCost, ProductLeadership, CompleteCustomerSolution and SystemLock-In. Constraints: UniqueValueProposition of type LowTotalCost, ProductLeadership, CompleteCustomerSolution and SystemLock-In CorrespondsTo exactly 1 StrategicPlan.Type:StrategyMap UniqueValueProposition IsSubGroupOf exactly 1 Perspective.Type:Customer. UniqueValueProposition HasSubGroup 0 Group. Processes This class captures a Group which BelongsTo a StrategicPlan.Type:StrategyMap, and it refers to the groups of processes within the internal perspective of a strategy map and carries a Type attribute with a list of values: OperationsManagement, CustomerManagement, Innovation, and RegulatoryAndSocial Constraints: Processes IsSubGroupOf exactly 1 Perspective.Type:Internal. Processes HasSubGroup 0 Group. Capital This class captures a Group which BelongsTo a StrategicPlan.Type:StrategyMap, and it refers to the groups of capital within the learning and growth perspective of a strategy map carries a Type attribute with a list of values: Human, Information, and Organization Constraints: Capital IsSubGroupOf exactly 1 Perspective.Type:LearningAndGrowth. Processes HasSubGroup 0 Group. Measure This class captures the means to evaluate the achievement of an Objective Constraints: A measure can have several milestones but has only one target. Measures belonging to objectives of the financial perspective have no value activities. 55

86 Milestone This class captures any short-term or intermediate target needed prior to the final target and carried two attributes: Deadline and Threshold: desired value for the milestone to be completed. Target This class captures a final milestone, usually long-term, included for each measure determining whether the objective has been achieved. ValueActivity This class captures an activity performed and carries a Resources attribute, which captures both time and money needed for an activity. It encompasses all actions/activities identified as required towards the achievement of an objective. Constraints: A ValueActivity IsPerformedBy Actor for whom StrategyPlan.Type: StrategyMap IsDefinedFor, A ValueActivity BelongsTo 0 Groups, A ValueActivity Characterizes 0 ValueActivityStrategicCompliance, A ValueActivity IsDestinationOf 0 Linkages, A ValueActivity IsOriginOf 0 Linkages, A ValueActivity BelongsTo 0 ValueConfiguration. 56

87 5.4.2 UBSMM.VC StrategyPlan.Type:ValueConfiguration This class captures a ValueConfiguration. Constraints: A StrategyPlan.Type:ValueConfiguration Concerns 1 UniqueValueProposition. A StrategyPlan.Type:ValueConfiguration IsBasedOn 1 ValueConfiguration. A StrategyPlan.Type:ValueConfiguration Includes at least 1 StrategicTheme. A StrategyPlan.Type: ValueConfiguration IsBasedOn 0 BlueOceanStrategy. A StrategyPlan.Type:ValueConfiguration Includes 1 StrategicGoal. StrategicTheme This class captures the set of value activities rooted in the UniqueValueProposition. Among the essential value activities included in a value configuration, depending on the value proposition, particular value activities are more critical than others. Actor This class captures either the organization/unit/individual defining some strategy or the organization/unit/individual performing some value activity. Those could be the same, but not necessarily (e.g. the actor relevant to the strategy is not the same as the one performing a value activity as it can be an outsourced to some other actor). The class carries the Boolean attribute Main: which if true refers to the actor for whom strategy is modeled, whereas if false the actor is different than the actor for whom strategy is modeled and performs at least one value activity. Constraints: There exists only one instance of Actor with Main: True. Actor.Main:True Defines at least 1 StrategyPlan.Type:ValueConfiguration Actor.Main:True Defines 0 StrategyPlan.Type:StrategyMap Actor.Main:True Defines 0 StrategyPlan.Type:StrategyCanvas Actor.Main:False Defines 0 StrategyPlan.Type:ValueConfiguration Actor.Main:False Performs at least 1 ValueActivity. StrategicGoal This class captures the overarching goal of a StrategyPlan.Type:ValueConfiguration (usually: superior long-term return on investment). Constraints: StrategicGoal BelongsTo 0 Group. 57

88 StrategicGoal IsInfluencedBy 0 StrategicGoal. StrategicGoal Influences 0 StrategicGoal. Group This class captures all groupings of ValueActivities included in a Strategy- Plan.Type:ValueConfiguration that IsDefinedFor Actor.Main:True. Constraints: A Group HasSubGroup of 0 Group. A Group IsSubGroup of 0 Group. A Group includes 0 StrategicGoal. UniqueValueProposition This class captures how the actor delivers unique value by aggregating the classes: CustomerType, NeedType, and PriceRange. CustomerType; captures customer related information (e.g. what types of customers should be served? what channels should be used to reach these customers? etc.). NeedType; captures need related information (e.g. what particular varieties of service should be provided? etc.). PriceRange; captures price relevant information (e.g. should the provision of services be charged? how should costs be recovered? etc.) Constraints: UniqueValueProposition.Type:VC CorrespondsTo exactly 1 StrategicPlan.Type: ValueConfiguration. UniqueValueProposition IsSubGroupOf 0 Group. UniqueValueProposition HasSubGroup 0 Group. ValueChainPrimary This class captures the grouping of primary activities of a value chain: Inbound Logistics, Operations, Service, Marketing & Sales, and Outbound Logistics. ValueChainPrimary is a Group and carries a Type attribute with a list of values: InboundLogistics, Operations, Service, MarketingAndSales, and OutboundLogistics. Constraints: ValueChainPrimary Belongs to StrategyPlan.Type:ValueConfiguration. ValueChainPrimary Includes at least 5 ValueActivity that BelongsTo 1 ValueConfiguration.Type:Chain. ValueChainPrimary.InboundLogisitcs Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Chain. ValueChainPrimary.Operations Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Chain. 58

89 ValueChainPrimary.OutboundLogistics Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Chain. ValueChainPrimary.MarketingAndSales Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Chain. ValueChainPrimary.Service Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Chain. ValueShopPrimary This class captures the grouping of primary activities of a value shop: problem solving, choice, execution, problem finding & acquisition, control & evaluation. ValueShopPrimary is a Group and carries a Type attribute with a list of values: ProblemSolving, Choice, Execution, ProblemFindingAndAcquisition, and ControlAndEvaluation. Constraints: ValueShopPrimary Belongs to StrategyPlan.Type:ValueConfiguration. ValueShopPrimary Includes at least 5 ValueActivity that BelongsTo 1 ValueConfiguration.Type:Shop. ValueShopPrimary.Type:ProblemFindingAndAcquisition Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type:Shop. ValueShopPrimary.Type:ProblemSolving Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Shop. ValueShopPrimary.Type:Choice Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Shop. ValueShopPrimary.Type:Execution Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Shop. ValueShopPrimary.Type:ControlAndEvaluation Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Shop. ValueNetworkPrimary This class captures the grouping of primary activities of a value network: infrastructure operation, service provisioning, and network promotion & contract management. ValueNetworkPrimary is a Group and carries a type attribute with a list of values: InfrastructureOperation, ServiceProvisioning, and NetworkPromotionAndContractManagement. Constraints: ValueNetworkPrimary Belongs to StrategyPlan.Type:ValueConfiguration. ValueNetworkPrimary Includes at least 3 ValueActivity that BelongsTo 1 ValueConfiguration.Type:Network. 59

90 ValueNetworkPrimary.Type:NetworkPromotionAndContractManagement Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Network. ValueNetworkPrimary.Type:ServiceProvisioning Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Network. ValueNetworkPrimary.Type:InfrastructureOperation Includes at least 1 ValueActivity that BelongsTo ValueConfiguration.Type: Network. Support This class captures the grouping of support activities of any value configuration: infrastructure management, human resource management, procurement, and technology development. Support is a Group and carries a Type attribute with a list of values: Infrastructure, HumanResourceManagement, TechnologyDevelopment, and Procurement. Constraints: Support Belongs to StrategyPlan.Type:ValueConfiguration. Support Includes at least 4 ValueActivity that BelongsTo 1 ValueConfiguration. Support.Infrastructure Includes at least 1 ValueActivity. Support.HumanResourceManagement Includes at least 1 ValueActivity. Support.TechnologyDevelopment Includes at least 1 ValueActivity. Support. Procurement Includes at least 1 ValueActivity. ValueActivity This class captures the activities that constitute a value configuration and carries a Resources attribute, which captures both time and money for an activity. Constraints: ValueActivity BelongsTo 1 ValueConfiguration that Implements Strategy- Plan.Type:ValueConfiguration. ValueActivity BelongsTo 1 Group (depending on the value configuration type if it is primary or support) ValueActivity Belongs to 1 ValueChainPrimary OR ValueShopPrimary OR ValueNetworkPrimary OR Support. ValueActivity Characterizes 1 ValueActivityStrategicCompliance. ValueActivity Supports 0 Milestone. ValueActivity Supports 0 Target. ValueActivity that BelongsTo Support IsOriginOf at least 1 Linkage. 60

91 ValueActivity that BelongsTo ValueChainPrimary OR ValueShopPrimary OR ValueNetworkPrimary IsDestinationOf at least 1 Linkage that HasOrigin a ValueActivity that BelongsTo Support. A ValueActivity cannot IsOriginOf and IsDestinationOf the same Linkage. ValueActivityStrategicCompliance This class captures compliance characteristics of a value activity carrying two attributes: Value, an explanation of how the activity brings value, and Fit- ToStrategy, a Boolean assessment whether the value activity fits the strategy (NOTE relevant for first order fit of the value configuration). ValueConfiguration This class captures the value configuration that implements the strategy, based on the value creation logic: a value chain, transforming inputs into products (e.g. manufacturing, etc.), a value shop, resolving customer problems (e.g. health, education, etc.), a value network, networking customers (e.g. insurance, banks, etc.), and carries three attributes: Margin, capturing the difference between total value, which is the amount buyers are willing to pay for what a firm provides them, and the collective cost of performing value activities (Porter 1998). Type, capturing ValueChain, ValueShop, ValueNetwork, and, Fit, capturing how value activities within a value configuration are combined, the attribute can have the following values: 1. FirstOrder, where there is simple consistency between the each value activity of the value configuration and the strategy (focusing on the value proposition [porter2008, p50 caption of Figure 2.4]), 2. SecondOrder; where activities are reinforcing, 3. ThirdOrder; where there is optimization of effort (eliminate redundancy and minimize the wasted effort). Constraints: A value configuration of a particular type includes at least one primary activity for each relevant type: A ValueConfiguration.Type:Chain Includes at least 5 ValueActivity that BelongsTo ValueChainPrimary: at least 1 ValueActivity that BelongsTo ValueChainPrimary.Type: InboundLogistics. at least 1 ValueActivity that BelongsTo ValueChainPrimary.Type: Operations. at least 1 ValueActivity that BelongsTo ValueChainPrimary.Type: OutboundLogistics. 61

92 at least 1 ValueActivity that BelongsTo ValueChainPrimary.Type: MarketingAndSales. at least 1 ValueActivity that BelongsTo ValueChainPrimary.Type: Service. A ValueConfiguration.Type:Shop Includes at least 5 ValueActivity that BelongsTo ValueShopPrimary: at least 1 ValueActivity that BelongsTo ValueShopPrimary.Type: ProblemFindingAndAcquisition. at least 1 ValueActivity that BelongsTo ValueShopPrimary.Type: ProblemSolving. at least 1 ValueActivity that BelongsTo ValueShopPrimary.Type: Choice. at least 1 ValueActivity that BelongsTo ValueShopPrimary.Type: Execution. at least 1 ValueActivity that BelongsTo ValueShopPrimary.Type: ControlAndEvaluation. A ValueConfiguration.Type:Network Includes at least 3 ValueActivity that BelongsTo ValueNetworkPrimary: at least 1 ValueActivity that BelongsTo ValueNetworkPrimary.Type: NetworkPromotionAndContractManagement. at least 1 ValueActivity that BelongsTo ValueNetworkPrimary.Type: ServiceProvisioning. at least 1 ValueActivity that BelongsTo ValueNetworkPrimary.Type: InfrastructureOperation. A value configuration includes at least one instance for each type of support activity A StrategyPlan.Type:ValueConfiguration IsBasedOn ValueConfiguration Includes at least 4 ValueActivity that BelongsTo Support at least 1 ValueActivity that BelongsTo Support.Type: Infrastructure. at least 1 ValueActivity that BelongsTo Support.Type: HumanResourceManagement. at least 1 ValueActivity that BelongsTo Support.Type: TechnologyDevelopment. at least 1 ValueActivity that BelongsTo Support.Type: Procurement. Driver This class captures ten generic drivers for cost and value, which shape the competitive position of the firm (e.g. Cost advantage vs Differentiation) thus influencing margin and fit. These are: Linkages, Scale, Capacity Utilization, 62

93 Interrelationships (among business units), Vertical integration, Location (geographic), Timing, Learning, Policy decisions (cost or differentiation), Regulations (government, unions, taxes, etc.). Linkages This class captures the links between value activities within a value configuration. Linkages are of significant importance to represent relationships between the ways one value activity is performed and the cost or performance of the other, which justifies the double association. Constraints: A Linkage cannot HasOrigin and HasDestination on the same ValueActivity. 63

94 5.4.3 UBSMM.BOS StrategyPlan.Type:StrategyCanvas This class captures a Strategy Canvas of an actor based on the current state of play in a known market space, as well as the desired one. Constraints: A StrategyPlan.Type:StrategyCanvas IsBasedOn 1 BlueOceanStrategy. A StrategyPlan.Type:StrategyCanvas Includes at least 2 Group. A StrategyPlan.Type:StrategyCanvas Includes 1 StrategicTheme. A StrategyPlan.Type:StrategyCanvas at least 1 IndustryValueCurve. A StrategyPlan.Type:StrategyCanvas Includes at least 1 Objective that BelongsTo StrategicTheme. A StrategyPlan.Type:StrategyCanvas Includes at least 1 Objective that BelongsTo IndustryValueCurve. A StrategyPlan.Type:StrategyCanvas IsDefinedFor 1 Actor.Main:True. A StrategyPlan.Type:StrategyCanvas Concerns 0 UniqueValueProposition. A StrategyPlan.Type:StrategyCanvas IsBasedOn 0 ValueConfiguration. StrategicTheme This class captures the new value curve created by applying the four-action framework. Constraints: A StrategicTheme always Includes more instances of Objectives (along with relevant Measures and Targets related to a resource offered by the Actor whose strategy is modeled) than the ones that BelongTo instances of IndustryValueCurve due to the create action of the four action framework that introduces factors that existing market play does not capture. Actor This class captures the organization/unit/individual for which blue ocean strategy is modeled. Constraints: There exists only one instance of Actor with Main: True. Actor.Main:True Defines 1 StrategyPlan.Type:StrategyCanvas Actor Defines 0 StrategyPlan.Type:StrategyMap Actor Defines 0 StrategyPlan.Type:ValueConfiguration Actor Performs 0 ValueActivity. 64

95 StrategicGoal This class captures the value offering for each factor of the strategy canvas. Constraints: StrategicGoal BelongsTo 1 Group. StrategicGoal IsInfluencedBy 0 StrategicGoal. StrategicGoal Influences 0 StrategicGoal. Objective This class captures StrategicGoals used for building blue ocean strategy BelongTo the StrategicTheme and IndustryValueCurve of the StrategyCanvas. Constraints: An Objective Specializes at least 1 Resource. All Objectives that BelongTo the same StrategicTheme Specialize the same Resource. All Objectives that BelongTo the same IndustryValueCurve Specialize the same Resource. An Objective Includes 1 Measure. Group This class captures all groupings included in a StrategyCanvas: Strategic- Theme and IndustryValueCurve. Constraints: A Group HasSubGroup of 0 Group. A Group IsSubGroup of 0 Group. A Group includes at least 1 StrategicGoal. A Group includes 0 ValueActivity. IndustryValueCurve This class captures the value curve where the industry currently competes on as a group of objectives currently being offered; it s used to build the StrategicTheme and to confirm it constitutes a blue ocean strategy (evidence for comparison on focus and divergence). Measure This class captures the means to evaluate the achievement of an Objective. It is typically expressed as an offering level on the resource specialized by the objective it BelongsTo. Constraints: A Measures Includes exactly 1 Target. 65

96 Target This class captures the value of the offering level of Measure for the resource specialized by the objective the Measure BelongsTo. Constraints: A Target typically has a threshold value scaled into: low, medium low, medium, medium high, high. Resource This class captures an actor s offering to buyers. Product This class captures a product as an actor s resource offering to buyers. Service This class captures a service as an actor s resource offering to buyers. BlueOceanStrategy This class captures the blue ocean strategy that implements the StrategyCanvas and carries three attributes being its main characteristics: Tagline, Focus, and Divergence. 1. Tagline captures the strategy s clear message/slogan with great commercial potential, 2. Focus confirms whether the strategy is focused and is captured through a Boolean variable, 3. Divergence shows whether the new value curve is different than the existing one(s), also captured by a Boolean variable. IndustryValueCurve. Constraints: Focus must be true and Divergence must be true when comparing Strategic- Theme to IndustryValueCurve. 66

97 6. Artifact Demonstration & Evaluation This chapter presents how activities of the design science method (DSM) have been carried out to demonstrate and evaluate UBSMM with respect to the requirements set forth in Chapter 4 and the goals presented in Chapter 1, but also with respect to generic criteria in design science research. 6.1 Demonstration Once developed, artifacts are used in instances of the problem they have been built to address [130]. Each business strategy formulation integrated to UB- SMM has been demonstrated through experimentation. Experiments for demonstration included instantiating the conceptualizations built for each business strategy formulation using published, real world applications. Experiments can be distinguished between the two goals of this thesis. The experiments conducted for Goal 1 building UBSMM entailed using the meta-models built for each business strategy formulation and a strategy from published cases. More specifically: For SMBSC, the strategy map template has been used along with the original publications of the formulation [39; 74; 76 81; 121] and has been instantiated using the strategy map of a printing unit within ABB Industrie AG [2]. This work is presented in Article II. For VC, the original publications of the value chain, the value shop, and the value network have been used, along with additional publications [47; 132; 133; 135; 136; 151] and has been instantiated using the value shop for police investigation in Norway [52]. This work is presented in Article III. For BOS, the strategy canvas has been used along with the original publications of the formulation [84 86] and has been instantiated using the strategy canvas of Southwest Airlines [84]. This work is presented in Article V. 67

98 The experiments conducted for Goal 2 entailed mappings to IS models used for system requirements. Mappings have been demonstrated for the conceptualizations of SMBSC and BOS using the cases of ABB Industrie AG [2] and Southwest Airlines [84] respectively, where i* models of the strategies have been derived. This work is presented in Articles V and VI respectively. Experimentation with the aforementioned applications demonstrated that UBSMM met its goals reducing the risk of incorporating variances on the original versions of the business strategy formulations. 6.2 Evaluation UBSMM has been evaluated with respect to the requirements defined in Chapter 4. For Req. 1 and 5 theoretical analysis has been used to build informed arguments for their satisfaction. For Req. 3 and 4 experiments have been used to report on their satisfaction, whereas for Req. 2 and 6, both experimentation and theoretical analyses have been used. Req. 1 Business strategy literature from strategic management has been analyzed, and informed arguments have been built for SMBSC, VC, and BOS, those being prevalent, representative formulations offering a complete view on business strategy. The reasoning that supports the fulfillment of Req. 1 is based on the construction of the artifact [72]. UBSMM has been constructed on the conceptualizations of business strategy formulations that are representative of the three types of strategy-shaping logic suggested in [15]. Thus, providing comprehensive coverage of business strategy notions. These informed arguments are presented in Articles I, IV, VIII, X and Chapter 2. Req. 2 The schema integration process adopted is well-documented and allows the continuous and integral integration of more business strategy formulations to UBSMM. Articles IV and VIII demonstrate its systematic applicability in two ways. Req. 3 & 4 Experiments using real-world published cases have been conducted: ABB Industrie AG for SMBSC presented in Article II, the Norwegian police for VC presented in Article III and Southwest Airlines for BOS presented in Article 68

99 V. Additional experiments have been conducted for SMBSC involving the real strategy map of a Swedish higher education institute, which is presented in Article VII as well as the use of the SMBSC meta-model to capture consumer values for a shopping mall [152]. Concepts from the original business strategy formulations have been modeled and instantiated using the aforementioned cases. Moreover, for SMBSC and VC, the meta-models have also been implemented in Telos [115] and OWL [105] also creating relevant instances with respect to the cases modeled. Model constraints were formalized and model constructs were instantiated one by one (e.g. starting from the concept of strategy). When instantiations did not violate any constraint they were checked for correctness through the authors intuition based on literature understanding. If correct, more instances for the case were created. If incorrect, the model was refined, typically by adding missing constraints. When instantiations violated a constraint, they were also checked for correctness based on the authors intuition developed through experience and literature review. When correct, the model was completed with more instances required to avoid constraint violation and then was reassessed for correctness until all constructs of the case were instantiated. Additionally, some cases were tested by deliberately violating constraints to ascertain whether they were not accepted. If they were, constraints were adjusted accordingly. This evaluation indicated the model is consistent and applicable to reality. Req. 5 Constraints defined for UBSMM allowed to derive conceptualizations of each of the three integrated business strategy formulations in the form of a conceptual models. These have been discussed in Article VIII and are presented in detail in Sections 5.4.1, and Req. 6 Experiments were utilized for mappings to IS models used towards RE, while informed arguments have been built for mappings to IS models towards EA and EM. Experiments included deriving i* [168] models through mappings from SMBSC and BOS. The published case of ABB Industrie AG and the real strategy map of a Swedish higher education institute have been used for SMBSC (see Articles VI and VII respectively). The published case of Southwest Airlines has been used for BOS (see Article V). i* demonstrated the capability to sufficiently model business strategy based on mappings to SMBSC and BOS. 69

100 More particularly for the real application, consumer preferences were traceable from business strategy towards business goals for system requirements by employing the mappings from SMBSC to i*. The informed arguments are based on the construction of conceptual mappings from UBSMM towards EA and EM and RE approaches. For enterprise architecture, UBSMM has been linked to the ISO/IEC/IEEE 42010: Systems and Software Engineering Architecture Description [70]. Conceptual mappings between SMBSC and VC towards the Architecture standard were defined, and showed that business strategy can be traced to EA as an enterprise s holistic concern that frames system development. This is presented in Article IV. For enterprise modeling, SMBSC has been mapped to i* [168], e3value [49], EKD [26; 97], and BMO [125], which facilitated common understanding of strategic notions and reduced their ambiguity. While considerable overlap between the EM approaches has been observed, both with regard to strategy and also among themselves, differences have also been identified, most notably in terms of how core strategy notions like goals, means, etc. are represented. As expected, due to differences in scope, none of the EM approaches examined directly supports all strategy notions, while EM approaches were either indirectly or partially able to model strategic notions and thus maintain traceability from business strategy (see Article VIII). 6.3 Design Science Research General Criteria The evaluation of the artifact through experimentation and theoretical analysis, with respect to the requirements set, can also be analyzed against generic criteria suggested in design science research, such as validity, utility, quality and efficacy [54; 66]. In terms of validity, the experiments have shown that UBSMM functions as intended: it captures business strategy for each of the three business strategy formulations integrated and can be conceptually related to RE, EA, and EM approaches through mappings. The former has been demonstrated for the published cases that have been used to build the conceptualizations of business strategy formulations (Articles II, III, V), as well as for real world cases (Article VII and [152]). The latter has been shown with mappings to i* (Articles VI, VII), mappings to an international architecture standard for EA (Article IV) and with mappings to EM approaches (Article VIII). In terms of utility, the experimental application of UBSMM in Article VII and in [152] has shown how to establish a bidirectional linkage between business strategy and the derived system requirements model. Regarding align- 70

101 ment, this linkage leverages traceability between strategic initiatives and system requirements as supported by the model-driven approach of UBSMM. In terms of quality, UBSMM has fulfilled requirements on completeness and correctness (Req. 3 and 4), which are considered to be the most influential for practitioners [114]. However, additional conceptual modeling quality criteria, such as ease of understanding, semantic correctness, stability and conceptual focus suggested in [22], or particular types of quality such as physical, empirical, syntactic, semantic, pragmatic, social and deontic as suggested in SEQUAL [89], can be examined further. While evaluation of such criteria has not been in the scope of this work, some quality types of these frameworks have been addressed. For example, the experimental application of UBSMM along with the mappings towards RE presented in Article VII has shown that in terms of ease of understanding [22], the conceptualization used for deriving a requirements model from the business strategy of a higher education institute in Sweden has been clear for non-modelers, which is relevant to pragmatic quality in [89]. Furthermore, the model has been exposed to peer reviewing without receiving comments on clarity and undesirability. While this is not an evaluation towards stakeholders and users of the model, it is indicative of understandability and pragmatic quality of UBSMM. Though UBSMM has been demonstrated and used in actual applications, it has not been evaluated against a wide enough group of potential users to make generalizable claims for its efficacy, as suggested in [137]. However, the idea of introducing such a model-driven approach for the alignment linkage between strategy and IS has been put forward in the empirical study reported in Articles IX and X, where results have also been used for deriving requirements for the concrete UBSMM proposal. Particularly the use of models has been proposed to participants to establish and strengthen the alignment linkage and results have indicated the strongly positive reception of the idea, which is indicative of the approach s efficacy; e.g. 84% responded that modeling their strategy could improve the alignment linkage for their company (Articles IX and X). 71

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103 7. Discussion This chapter discusses UBSMM the outcome of the design science method (DSM) in terms of its construction, function, usability, and effects stemming from the results discussion of the design science canvas [72]. The Design Science Canvas is a concise synopsis of a design science project summarizing from the problem addressed, the practice related, the knowledge base and constructs used to the design science activities carried out and the discussion on the results produced [72]. 7.1 Construction UBSMM is constructed as a UML class diagram (Figure 5.1), with conceptualizations of business strategy formulations as its foundations. Three sets of constraints are accompanied with UBSMM: one set for each business strategy formulation integrated. Figure 7.1 shows an overview of UBSMM s construction base in the aggregation of SMBSC, VC, and BOS meta-models along with a generic Business Strategy Formulation meta-model to illustrate that any other business strategy formulation can be integrated by adhering to the same construction principles. An essential step for a business strategy formulation is to be conceptualized prior to integration with UBSMM. For SMBSC, VC, and BOS this entailed using the original publications of each formulation and their core formalisms: strategy maps, value chain/shop/network, and strategy canvas. Publications of the formulations applications have also been proven useful when strategic notions were unclear and and were helpful concepts with respect to context and in conjunction with other defined concepts. Unification was achieved through a schemata integration process when building blocks of UBSMM became available. This entailed steps ranging from choosing an integration strategy, to analyzing schemata within and across, and then merging them [19; 22]. Integrating the schemata into UBSMM resulted in conceptualizations having undergone further model checking, particularly consistency, and also improvements of original modeling decisions for simplicity and economy of expression. Additionally, defining constraints for UBSMM allowing the derivation of conceptualizations for each of the business 73

104 Figure 7.1: An overview of UBSMM as a class aggregation of business strategy formulations. strategy formulations integrated, resulted in more extensive model checking with respect to the originating conceptualizations and the modeling decisions taken during integration. 7.2 Function Functions served by UBSMM are discussed with respect to the goals of this thesis (Chapter 1). For Goal 1, UBSMM captures business strategy formulations (SMBSC, VC, and BOS) and integrates their notions into a meta-model from which conceptualizations for each business strategy formulation can be derived. Additionally, UBSMM can be extended to integrate more business strategy formulations following the same process. For Goal 2, conceptualizations derived from UBSMM are linked to IS models through mappings. This is exemplified with IS models used in RE, EM, and EA. Linkage towards RE Mappings to i* link strategic notions from UBSMM to the early phases of requirements engineering for IS development [169]. i* models can then be used to scope the derivation of IS requirements through existing proposals such as [3; 5; 31; 51]. Therefore, strategic notions such as initiatives, goals, objectives, and activities can be used to frame development of new systems or assess and 74

105 improve existing ones. Such linkages allow for the evaluation of IS either partially for particular features or holistically against strategic intentions. Additionally, they allow for the fine tuning of strategic initiatives based on the available IS capabilities. For example, i* supports Or decompositions, which can facilitate strategic goals and objectives from UBSMM with alternatives for initiatives. Similarly, contribution links provided by i* (textitenough, positive, not-enough, negative) can be used among goals and soft-goals derived from UBSMM allowing the identification of possible conflicts or synergies among the goals and objectives set, which is currently not present. In practice, such mappings allow for overcoming ambiguity of formalisms used in business strategy by disseminating strategic notions to IS practitioners through conceptual models which are unambiguous and commonly used within IS. Conversely, as i* has its own limitations and was not built originally for modeling business strategy, some concepts were mapped based on heuristics. For example, the notion of Measure, important for objectives in SMBSC, has been used implicitly when expressing i* goals originating from SMBSC milestones and targets. However, such issues can be addressed with the use of other similar i*-like goal modeling notations such as GRL[71] (a variant of i*) or the BIM [16], both of which include the construct of indicator for goals that can be mapped to the notion of measure in SMBSC. Such mappings are not limited to i* but they can be extended to other goal modeling techniques that can also support model-level mappings. Linkage towards EM Conceptualizations derived from UBSMM have been linked conceptually to various EM approaches, as exemplified with EKD, e 3 value, and BMO. These enrich the alignment linkage between business strategy and IS as they offer different views of business strategy with respect to the organizational aspects that EM is focused on (e.g. value exchanges, business process management, etc.). This mapping effort has shown that there is a considerable overlap between the EM approaches examined, both with regard to UBSMM and also among themselves. Overall, none of the EM approaches demonstrated the capability to directly support all strategic notions of UBSMM. This limitation was anticipated, as strategic notions are beyond the intended scope of EM, and a similar observation can be made for RE. Nevertheless, EM approaches showed that they are able to model strategic notions either indirectly or partially. In this way, practitioners can select the most appropriate EM approach for modeling strategic notions using UBSMM. For example, SMBSC and BOS are heavily goal-oriented, making i* or EKD strong candidates for such effort, whereas BMO and e 3 value are more relevant to VC. 75

106 Linkage towards EA UBSMM has been linked conceptually to EA, as exemplified with the ISO/IEC/IEEE :Systems and Software Engineering Architecture Description, which allows for the introduction of business strategy as an architectural perspective of EA, thus enriching the linkage between business strategy and IS. Apart from a strategic view on IS development within the scope of EA, this linkage reinforces: Simplified model mappings given the number of business strategies and EAs that may exist in a business context, 1-1 mappings between business strategy and enterprise architecture through UBSMM and a template EA model (i.e. ISO 42010) eliminates the need for establishing numerous pairs of mappings. Communication and understanding within a single enterprise can be enhanced using a single business strategy meta-model like UBSMM to better understand and relate differing EAs when business units follow individual strategies, when merging or when establishing partnerships. Alignment between Business Strategy and IS Within the scope of meeting both goals, UBSMM can be used to complement both groups of alignment efforts discussed in Chapter 1 and help address their shortcomings. For the efforts addressing business strategy abstractly without concrete notions, UBSMM can be used either directly or indirectly: directly by substituting the abstract notion of strategy with concrete strategic notions from SMBSC, VC, and BOS along with their mappings to i* where relevant, and indirectly by conceptualizing other business strategy formulations and undergoing a schema integration process to enrich UBSMM similarly to the existing ones and then use conceptualization as in the previous case. For efforts including a distinct business strategy formulation, current mappings can be enriched with strategic notions of UBSMM and they can extend beyond approaches already mapped. Also, using UBSMM allows for current mappings to transform from informal to semi-formal and formal. During the design science process, additional, unanticipated functions of UBSMM have emerged. UBSMM can be used: to synchronize or integrate business strategies across business units within the same organization. as a common integration point for EM and EA approaches practiced across various business units. 76

107 as a pivot model for organizations to assess their business strategy considering a different type of strategy-shaping logic (resource-based, competitionbased, innovation-based) but also explore potential strategic shifts considering both implications on IS, as well as the capability of IS to support or drive such strategic shifts. as a reference point for IT to integrate or interoperate when an organization is establishing partnerships, merging or integrating their business with another; share common strategic notions across IS, across EM, and EAs. 7.3 Usability Utilizing UBSMM through this model-driven approach for the alignment linkage entails manually building the conceptualizations of business strategy formulations as well as implementing mappings to IS models. Such manual operations would hinder the applicability of UBSMM as it is not practically useful unless implemented in a modeling environment. UBSMM along with its full specification allows for tool building based on the conceptualizations of business strategy formulations and the accompanying mappings. Two such prototype toll implementation making UBSMM usable for IS practitioners are presented in the Appendix. The first prototype implementation is based on ADOxx, a meta-modeling development platform, which is available from that allows specifying the syntax of a modeling language together with its graphical representation (Figure 7.2). Conceptualizations of SMBSC, VC, and BOS derived from UBSMM can be built and instantiated using i*, based on the mappings defined. The second prototype implementation is mobile and implements UBSMM for SMBSC into GRL models [71]. 7.4 Effects UBSMM can complement existing approaches influencing the linkage between business strategy and IS as well as other alignment approaches. For example, consider the SAM: it supports traceability between the strategic intentions expressed through SMBSC, VC, and BOS with IS. One such real application is demonstrated in Article VII), where consumer preferences were introduced into IS requirements through SMBSC. This application offers traceability between IS requirements towards particular consumer preferences but also towards strategic intentions expressed through strategic goals in SMBSC. However, apart from the positive effects of traceability brought about by UBSMM, side effects can also be anticipated. Bridging the alignment gap 77

108 Figure 7.2: A screenshot from the ADOxx meta-modeling environment for SMBSC. may raise new issues in terms of assessment and accountability of IS with respect to business strategy. Traceability between strategic objectives and IS development can be attributed to particular strategic intentions and thus make these intentions accountable for IS, consequently accountable for the actors introducing these intentions. At the same time, IS practitioners also become accountable in the light of strategic initiatives aimed at being to implemented, facilitated, supported, and providing value. Altogether, this view on accountability may have social consequences among those involved and should be considered for further investigation. Another aspect that may be affected with the introduction of UBSMM is strategic thinking. Along with traceability, comes a level of transparency among those involved. This also creates a sense of transparency across an organization, which may constitute critical aspects vulnerable to exposure. For example, considering Porter s view on the unique value proposition and his principles for successful strategy, deciding which value offering activities not to perform is more important than not deciding which to perform [136]. This critical aspect results in a unique setup of value offering activities that are supposed to be hard for competitors to imitate or that are not feasible for similar profit margins. Therefore, transparency may jeopardize a unique value offering setup and make it vulnerable to imitation. 78