why is aligning economic- and it services so difficult (iess 2014)

Why is Aligning Economic- and IT Services so!Difficult?

Maryam Razavian

VU University Amsterdam

2

20 years of Business-IT Alignment

0018-8670/99/$5.00 © 1999 IBM IBM SYSTEMS JOURNAL, VOL38, NOS 2&3, 1999 HENDERSON AND VENKATRAMAN

REPRINTED FROM IBM SYSTEMS JOURNAL, VOL32, NO 1, 1993; © 1993, 1999

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Service Orientation and Alignment

Service Orientation has promised seamless alignment between business and IT Practitioners still report the problem of alignment is far from being solved

The focus of this work

Why is alignment so difficult? What needs to be aligned? What are the main concerns?

It all depends on your perspective

6

What is Business, anyway?

Economic

What is a service?!Economic perspective

•  “Services are deeds, processes and performances” (Zeithaml and Bittner, Service Marketing, New York McGraw‐Hill, 1996, p.5.)

•  “… economic activities … bringing about a desired change” (Service Marketing, People, Technology, Strategy, 4th edition. Prentice Hall, Englewood Cliffs, NJ,2001)

•  “... any act of performance that one party can offer to another that is essentially intangible” (P. Kotler. Marketing Management: Analysis, Planning, Implementation and Control, 6th edition. Prentice Hall, Englewood Cliffs, NJ, 1988)

•  A service system is a value-coproduction configuration of people, technology, other internal and external service systems, and shared information” (Jim Spohrer, Paul Maglio, John Bailey, and Daniel, Computer, January 2007, p. 72)

What is a Service?!IT Perspective

• Web Service: a software system designed to support interoperable machine-to-machine interaction over a network

•  SOA: a logical representation of a repeatable activity that has a specified outcome

•  Software services represent the functionality that the underlying pieces of software offer [OASIS]

•  A Service is a mechanism to enable access to one or more capabilities, where the access is provided using a prescribed interface [Gridipedia]

Two perspectives on services design

Services

Economic Perspective

Technical Perspective

Services for whose provisioning someone has to pay!

Logical representation of a functionality with a public interface.

Two perspectives on services design

Services

Economic Perspective

Technical Perspective

Different Concepts Different Objectives Incompatibilities

What Alignment Implies

• Alignment: process perspective

• Linking

• Balancing

• Alignment: outcome

• Harmony

• Making a Coherent Whole

Our Approach

Q) What are the core elements that need to be aligned?

Q) What are the concerns hindering the alignment?

Economic Perspective

IT Perspective

Alignment

A

B

C

Our Approach

Modeling Notations

Economic Perspective

IT Perspective

Baggage Handling System

Shared Elements Between Perspectives

ACTOR Legal entity participant

SERVICE commercial services logically grouped operations that can

be invoked

INTERACTION economic value transfers

message exchanges

CONTRACT pricing and service quality

valued by the customer

interface specification SLA

Economic Perspective

IT Perspective

16

Airport

Baggage Handling Services

Ground Handler

Airline Airline

Security Provider

Baggage Handling Services-Economic Perspective

[MONEY]

[Handled bagage]

[MONEY]

[Bagage transportation]

[Bagage Management] [MONEY]

[Screening]

[MONEY]

[MONEY]

[Label]

Legend

Value

Transfer

Value

port

Value

interface

Consumer

need

Connect.

element

Actor

Boundary

element

OR

element

AND

element

ActivityMarket

segment

Value

object

[...]

Explosion

element

e3value

1.  Actors 2.  Services 3.  Contracts 4. Interactions

Baggage Handling Services-IT Perspective

SoaML (Service Architecture)

1.  Actors 2.  Services

Baggage Handling Services-IT Perspective

SoaML (Service Contract)

Contracts

Baggage Handling Services-IT Perspective

SoaML (Service Choreography)

Interactions

Alignment

Corresponding elements should be linked where needed

[Bagage management]

[MONEY]

Link

Link

Economic and IT Perspective

Discrepancies

Concerns for Aligning

Economic Perspective 1.  Profitability 2.  Economic Reciprocity

IT Perspective 1.  Flexibility 2.  Adaptability 3.  Reusability

Incompatible

General concerns that cross-cut the two perspectives

On Actors (1)

• Actors instances (e.g., Schiphol Airport)

•  Why? because it represents a business model: how each actor would make profit or increase utility

• Actor type

•  Why? Because actors should be able to come and go on the fly.

Concern 1. How to align actors in such a way that their profitability and openness are ensured simultaneously?

Possible Alignment Solution: Market Segments

Economic Perspective

IT Perspective

On Actors (2) Economic Perspective

IT Perspective

•  Why? because it is not the entity that exchanges value in the marketplace

•  Why? because it is the consumer of the services offered by `Ground Handler System' and `Security Provider’

Concern 2. how to relate non-legal entities to legal entities?

Possible Alignment Solution: Expense Carrier

On Services Economic Perspective

IT Perspective

•  Why? because it focuses on value activities that an actor is willing to pay for

Concern 3. how to design services in such a way that their profitability and reusability are ensured simultaneously?

•  Why? because it is a repeatable and reusable capability

Profitability Reusability

Possible Alignment Solution: Capability in the economic perspective

On Contracts

•  Contract is value interface (What determines the economic value of a service) àProfitability

•  Contract is a service interface (An agreement on how the service is provided or consumed) àInteroperability

[Bagage management]

[MONEY]

Concern 4. How to align contracts in such a way that the contract is value-determinable while it supports interoperability?

Economic Perspective

IT Perspective

Possible Alignment Solution: Analysis models for transforming value interfaces to operations

On Interactions

[Bagage management]

[MONEY]

Economic Perspective

IT Perspective

Economic Reciprocity (Transactionality) Openness

Concern 5. How to align interactions in such a way that openness and transactionality are supported simultaneously?

Possible Alignment Solution: models that frames and highlights how using

independent message transfers a transaction is realized.

Alignment: an architectural problem

Alignment as an architecting

problem

Alignment Concerns

S

W E

N

Guide Architects Reasoning

What about using architecting techniques?

Use architecting techniques to guide

one’s reasoning

Frame the concerns

Treat concerns as first class elements

Framing Alignment Concern

CP

openness profitability

Airport Schiphol+

Compensation Alignment

A viewpoint for aligning actors

Stakeholders and their concerns Q) Who are the stakeholders and what are their concerns?

profit

Capital preservation

Technical debt

An then?

Solve the Old Alignment Problem