HP Laboratories HPL Keyword(s): value creation, business-it alignment, value model, business value. Abstract:

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1 Vlue-bsed IT Decision Support - Towrds forml business vlue model for steering IT-business lignment Jose Augusto Oliveir, Anto Mour, Cludio Brtolini, Mrinne Hickey HP Lbortories HPL Keyword(s): vlue cretion, business-it lignment, vlue model, business vlue Abstrct: The problem: Vlue cretion nd delivery re recurrently mentioned in the literture s importnt drivers for effective business nd IT decision mking. However, the knowledge concerning vlue cretion is commonly offered in vgue, informl nd subjective terms nd, for tht reson, corporte executives nd IT stff depend mostly on personl expertise, bckground nd intuition to prctice wht theory recommends. Our proposed solution: We propose forml business vlue model, which ims to provide vlue-bsed decision support with less subjectivity. Vlidtion: An illustrtive exmple pplying the preliminry model is presented, followed by rel cse study where the model hs been pplied to support decisions in recent Brzilin municipl elections, in which n electronic voting system fully supported by IT services ws used. In the first, the model ws ble to express in numbers informtion originlly vilble only in subjective terms. In the lter, IT decision-mking ws guided towrds better IT-Business lignment. Externl Posting Dte: September 2, 09 [Fulltext] Approved for Externl Publiction Internl Posting Dte: September 2, 09 [Fulltext] Published nd presented t the 4th IFP/EEE Interntionl Workshop on Business-driven IT Mngement, New York, USA. June 09. Copyright The 4th IFP/EEE Interntionl Workshop on Business-driven IT Mngement, 09.

2 Vlue-bsed IT Decision Support Towrds forml business vlue model for steering IT-business lignment José Augusto Oliveir, Antão Mour Deprtment of Computing Systems Federl University of Cmpin Grnde Cmpin Grnde, Brzil {zedegug; Cludio Brtolini, Mrinne Hickey 2 HP Lbortories, Plo Alto, USA 2 HP Lbortories, Bristol, UK {cludio.brtolini, mrinne.hickey}@hp.com Abstrct The problem: Vlue cretion nd delivery re recurrently mentioned in the literture s importnt drivers for effective business nd IT decision mking. However, the knowledge concerning vlue cretion is commonly offered in vgue, informl nd subjective terms nd, for tht reson, corporte executives nd IT stff depend mostly on personl expertise, bckground nd intuition to prctice wht theory recommends. Our proposed solution: We propose forml business vlue model, which ims to provide vlue-bsed decision support with less subjectivity. Vlidtion: An illustrtive exmple pplying the preliminry model is presented, followed by rel cse study where the model hs been pplied to support decisions in recent Brzilin municipl elections, in which n electronic voting system fully supported by IT services ws used. In the first, the model ws ble to express in numbers informtion originlly vilble only in subjective terms. In the lter, IT decision-mking ws guided towrds better IT-Business lignment. Keywords: vlue cretion, business-it lignment, vlue model, business vlue.. INTRODUCTION Consider given compny Firm A tht provides Internet ccess s one of its communiction services. The ccess cn be contrcted to both home nd business customer ctegories, nd with different Qulity of Service prmeters, such us bndwidth, security nd vilbility. If the ccess is interrupted, the user must contct Firm A s technicl support through toll free phone numbers to centrlized service desk. This opertes in three level configurtion, where i) recurring problems re ddressed by templte solutions t the first level, ii) more complex issues re delt with by experts in the second level nd iii) criticl cses re pssed on to third level, where in-loco (t the customer s premises) support is provided. Occsionlly, during demnd pek periods, the number of first level ttendnts is inferior to the volume of incoming clls, nd clled customers will hve to wit on line to be ssisted on first-come-first-served bsis (FCFS policy). With this policy, customers to whom Internet ccess interruption my cuse lrger loss (be it in productivity or finncil terms) cn experience longer delys before being ssisted thn customers to whom service interruption will impct nothing beyond few instnt messges being lost, or socil networking site visits being postponed. Within the home ctegory, customers working from home offices my require more networking services thn non-criticl home Internet users. Therefore, displesing home office customers will hve greter impct on Firm A s imge. A similr impct will lso hppen when smll business gets ccess to support before lrger compnies. The shortcomings found in the first-come-first-served policy dopted by Firm A s Service Desk offers us the opportunity to bring some insights concerning vlue to the fore: Different customers present different expecttions nd demnds to the sme service; Vlue derived from the support service vries ccording to the customer profile; The more customer depends on the Internet ccess the higher the vlue he or she derives from the support service; Firm A wnts to mximize revenue from its customers; Other conditions being even, higher pying business customers hve more vlue thn home customers to the provider; Other conditions being even, customers requiring less frequent intervention hve more vlue to the provider; Within the business ctegory, some business customers - possibly pying the sme price for the service - re more vluble thn others to the provider (this my be the cse for compnies with well known brnds, for instnce); Within the home ctegory, home office customers hve more vlue thn ordinry home customers to the provider, becuse their stisfction impcts more on Firm A s imge; Customers with rech into the blogosphere or socil networks hve more vlue thn others becuse of the potentil dmge to the compny imge tht they might cuse when voicing their disstisfction. A few other insights cn be extrcted from the three-level support setting. When no templte solution fits, second level support opertor proceeds with long set of tests nd stndrd procedures trying to solve the problem. This my tke up to one hour of continuous interction between the service desk expert nd the customer. If ll the procedures fil, n on-site

3 support visit is then scheduled. Agin, customers with distinct profiles will hve distinct rections. Business customers do not tolerte one-hour phone cll, usully, nd re likely to prefer to hve the on-site support solution provided. Home customers, however, my prefer to hve the solution over the phone, rther thn hving to rrnge for house cll nd py some extr fee for tht service. Complementry insights include: Business customers my be willing to py extr fees for on-site support becuse, ccording to their perceptions, one hour of their time my be vlued more thn the extr fees; The sme service (on-site visit) cn be vluble to one customer nd nnoying to nother. These simple insights re, indeed, precious knowledge becuse tking them into ccount will enble Firm A to ccomplish its mjor gol: increse revenues by delivering vlue to the customers. The vlue delivery issue becomes more criticl s Firm A is not n exception. The sme vlue delivery concern pplies to ny business, of ny mgnitude, operting in ny mrket segment, becuse (despite delivering product or service) it is ctully driven by the vlue tht customers perceive while they mke decision to py for goods, or contrct service []. IT service providers be they internl or externl - re not the exception either. Delivering vlue to the business must be their ultimte gol. The problem is tht IT mngers nd ny mngers in other segments - usully hve to bse their decisions on insights, gret mount of intuition, subjectivity nd personl nlysis, which cn vry lot ccording to the mngers bckground. Unfortuntely, the literture on business vlue is lso informl, bstrct nd commonly consists of set of imprecise recommendtions nd guidelines. This pper ims to contribute more forml, lbeit preliminry, pproch to the vlue delivery issue, to reduce the subjectivity fced by decision mkers when they hve to decide on how to provide vlue to their customers. Specil emphsis is devoted to business-it lignment, lthough the initil results presented here my be pplicble to other business contexts s well. The reminder of the pper is orgnized s follows. In Sections 2 nd 3 we ddress two cnonic IT mngement references (ITIL [2] nd CObIT [3]) pointing out some of their shortcomings on the vlue concept. Section 4 presents relted work, where Michel Porter s vlue chin frmework [4] limittions re highlighted. In section 5 we present the proposed forml vlue model. Section 6 describes n illustrtive exmple tht pplies the model to evlute the service desk sitution described erlier, nd rel decisionsupport cse study pplying the model to procedures of the Brzilin Automted Electorl Process. In section 7 we offer conclusions nd suggestions for further work. 2. ANALYSIS OF VALUE IN ITIL V3 ITIL is self defined s non-prescriptive set of processes nd best prctices for IT mngement, presenting wht IT service mngers must be wre of, wht service providers must gurntee to the customers, nd generl guidelines to importnt service mngement processes. Little or no knowledge is provided by ITIL on how to implement the set of recommended prctices nd guidelines. For tht reson, there is gret mount of subjectivity involved when one tries to implement ITIL s recommendtions. Implementtion will strongly depend on subjective ssets, such s personl interprettions, consultnts, nd IT mngers bckgrounds. Where the vlue concept is concerned, the bstrction in which knowledge nd guidnce re provided reches more criticl stge, in conjunction with gret del of informlity nd imprecision. To illustrte the vgueness tht hs just been mentioned, we now present summry of ITIL s key sttements concerning vlue, extrcted word-for-word from its Service Strtegy publiction. After ech sentence, some comments re provided to shed some light on the imprecision involved in the sentences. A service is mens of delivering vlue to customers by fcilitting the outcomes customers wnt to obtin.... How to cpture, precisely, the outcomes customers wnt? How to keep tht informtion up-to-dte? If the IT industry is still scrmbling to cpture requirements (they re often ill-defined), will providers be cpble of understnding the customer s environment in terms of outcomes? How to be flexible enough to produce outcomes demnded by customers in different industries? Would it be possible to generlize in single nd short list the distinct nture of outcomes? How? Vlue consists of two primry elements: utility, or fitness for purpose nd wrrnty, or fitness for use. Which is more importnt? Utility or wrrnty? Could one be strong enough to compenste the wekness of the other one? How could this correltion (wrrnty-utility) be numericlly expressed? Is the list of wrrnty components (vilbility, continuity, cpcity nd security) exhustive? The vlue of service tkes on mny forms, nd customers hve preferences influenced by their perceptions. How mny forms exist? Which re they? How to cpture customers preferences? How exctly do perceptions influence preference? To wht proportion? Definition nd differentition of vlue is in the customer s mind. One single but chllenging question: How to fulfill or shorten the gp between n IT service nd the customer s mind? In ddition to the questions posed bove, ITIL does not provide ny guidnce on how to mesure the vlue provided by service, with n cceptble precision. We could not find ny redy-for-use method or pproch cpble of objectively quntifying or qulifying the vlue offered by service. In the next section, we pply similr nlysis to vlue concerns in the CObIT governnce frmework. Some of the

4 limittions found in ITIL re lso present in CObIT; we will point out dditionl drwbcks. 3. ANALYSIS OF VALUE IN COBIT Compred to ITIL, CObIT truly provides more systemtic nd explicit pproch to the vlue tht IT should deliver ginst the business strtegy. One could summrize CObIT s set of cuse-effect reltions designed with the primry intent of ssociting IT processes to business vlue delivery. However, the cuse-effect reltion tht ties business to IT is still loose, bstrct, nd informlly stted. These chrcteristics set the IT-business ssocition to imprecise nd subjective trends, which end up trnsferring to business nd IT mngers gret del of the tsk of mterilizing the reltion expressed by the outcome-gol-metric linkge. By being informl nd stted in common lnguge terms, CObIT s IT- Business ssocitions lck precision nd, therefore, depend on the interprettion or consulting support to be properly pplied. Bsed on rtifcts provided by the frmework, for instnce, mngers will not find nswers to some key mngement questions, such s: Wht is the exct sensitivity of given business gol to, sy, 5% vrition in specific IT metric? How the business-it cuse-effect reltion behves s time goes by (short, medium nd long-term)? How much vlue does n IT process deliver to the business? How to compre the efficiency of two processes in vlue delivery terms? In order to nswer these questions, mngers will hve to either develop complementry rtifcts nd tools, or depend on consultnts dvice. The lter my not be esily vilble to smller compnies. In the next section we discuss mjor relted work, with specil ttention to the vlue chin frmework. 4. RELATED WORK Michel Porter contributed gretly to vlue theory when he presented the frmework by which one cn mp nd nlyze the vlue cretion in n orgniztion [4]. Porter groups ctivities into two bsic ctegories: Primry Activities, focused on trnsforming incoming rw mteril into products nd post selling services; nd Support ctivities, responsible for enbling nd empowering the Primries (figure ). After frming the orgniztion in Porter s structure, one cn perform vlue nlysis, identifying how ctivities impct ech other in terms of vlue cretion (links), which re the vlue cretion strems, nd which ctivities or group of them contribute most to vlue cretion (vlue ctivities). This nlysis will enhnce the orgniztion s competitiveness, providing support to decisions such s where the orgniztion shll pursue excellence, which ctivities should be outsourced (non vlue ctivities) or which dependencies shll be more closely monitored. Figure. Porter s Vlue Chin Porter s Vlue Chin (nd its successive extensions, such s the Vlue Network), [4][5], enble importnt insights concerning vlue cretion nd how vlue flows in nd out of n orgniztion. Some limittions, however, re found in the Vlue Chin frmework. We briefly ddress now those considered most expressive. The first limittion concerns its heuristic nture. The frmework is descriptive, cpturing minly where or when vlue cretion occurs [6]. The Vlue Chin does not express for instnce, how vlue is creted, or why it is creted in prticulr set of ctivities nd not in the other. The second is the gret mount of subjectivity nd personl perceptions involved in the vlue nlysis. Distinct mngers will probbly present distinct nlyses on the sme business scenrio. Moreover, vlue nlyses re presented in plin text documents, to be red nd interpreted by mngers nd decision mkers. Agin, distinct reders will probbly come up with distinct decisions from the sme nlysis. Another limittion of Porter s chin is the bsence of methods or techniques to quntify the vlue flow identified. The chin cn express tht n ctivity dds vlue to the product, but there is no direction on how one cn compute numbers such s how much vlue ws dded in phse of production, how much vlue the product hd before the ctivity nd how much does it hve now. Vlue quntifiction is determinnt of turning vlue nlysis into more precise nd free of interprettion instrument. Finlly, how the vlue is creted, how it flows nd which re the dependencies mong ctivities in the production process is not difficult to identify in industry/mnufcturing businesses, which were predominnt in the economy when Vlue Chin ws proposed. But, two phenomen hve drmticlly chnged production since then: i) services becme the min focus, nd there is little physicl rw mteril trnsformtion in the services production chin; ii) in mny cses, knowledge nd intellectul cpitl hve becme more vluble thn tngible ssets of the compnies. In the present economic scenrio, where intngible ssets re combined nd pplied to produce intngible vlue (trust, imge, sympthy nd customer goodwill), vlue chins nd vlue nlyses bsed on Porter s frmework hve becme even hrder to produce nd fuzzy to interpret [7]. The theme business vlue is immensely populr in the business nd economy literture. From the clssicl thinkers, such s Krl Mrx nd Adm Smith, to some more recent uthors, like Michel Porter, discussed bove, the vlue issue

5 hs ttrcted ttention from prctitioners nd reserchers from different segments. Some IT vlue models hve lso been published, [8, 9,, ], nd present some guidnce on how IT delivers vlue to business. These however, depend on consulting dvice in order to be implemented nd lck formlity, relying on the sme imprecision trends s the frmeworks discussed in Sections 2 nd 3 rely on. In [2], n IT vlue model, with some level of formlity, is presented. The model, however, considers only economic vlues exchnged between orgniztions tht interct in n e- commerce setting. The model presented here will complement the work discussed in this section nd in sections 2 nd 3, in the sense tht it will llow for the quntittive estimtion of vlue in forml wy. 5. MODELING THE BUSINESS VALUE In the work presented in this document, set of requirements hs been defined to be ddressed by the business vlue model. The requirements correspond to miniml set of chrcteristics tht the model must exhibit in order to be trustworthy, useful, nd be explored by decision supporting tools. With the im of fulfilling the requirements, simple methodology (figure 2) hs been defined to direct the reserch efforts. An incrementl cycle is performed, strting from literture review combined with observtions in orgniztions from the service, industry nd commerce sectors. Bsed on the literture review, long with set of processes ctlogued in visits mde to the orgniztions, some elements re defined to comprise the forml business vlue model. Model Requirements Figure 2. Modeling Approch. 5.. The model should be forml The business vlue model (BVM) must be expressed through non-mbiguous lnguge. As consequence, bsed on the BVM, different people of different bckgrounds should rech equivlent conclusions if they crried out vlue nlysis on the sme scenrio. A vlue nlysis entils identifiction nd quntifiction of vlue cretions, s well s modifictions nd deliveries occurring in the observed context. In order to ccomplish this requirement, the lnguge used by the model must gurntee unique ssocition between form nd mening for ech of its components The model should provide n ssessment method The model must provide consistent method to clculte the totl vlue trnsferred in prticulr context. Bsed on this method, the BVM will permit one to quntittively/qulittively compre set of nlyzed contexts The model should entil prtil order reltionship over set of scenrios The ssessment method offered by the model must, t lest, llow for prtil ordering of set of nlyzed contexts, bsed on vlue. In forml terms, [3], let S={A, B, C} be set of scenrios under vlue nlysis. Let v( ) be the function tht clcultes the totl business vlue trnsferred within scenrio. The function v (ssessment method) defines prtil order on S if the following properties re present: If v(a) v(b) nd v(b) v(a), v(a) = v(b) (ntisymmetry) If v(a) v(b) nd v(b) v(c), v(a) v(c) (trnsitivity) The model should cpture vlue in different grins Assume tht n orgniztion executes processes, which in turn re composed of ctivities. The model must hve pplicbility t different level of detil. Some exmples of vlue trnsfers t distinct levels re listed below: Vlue trnsfer from n ctivity to nother, within the sme process; Vlue trnsfer from n ctivity to nother, cross different processes; Vlue trnsfer from process to nother, within the sme orgniztion; Vlue trnsfer from process to n ctivity, within the sme orgniztion (nd vice-vers); Vlue trnsfer from n orgniztion to customer; 5..4.The model should cpture vlue trnsfers in severl industries The model must be customizble in order to cpture prticulrities from different orgniztions, operting in different mrket segments The model should be simple The ppliction of the Business Vlue Model must be strightforwrd to both customiztion nd vlue ssessment execution The model should cover ll types of vlue Anything considered vluble in business context must be expressible by the Business Vlue Model Model Items In order to ddress the requirements presented in section 5., some items hve been conceived of to compose the proposed Business Vlue Model (BVM). This section presents, defines nd provides some detils of these BVM components A definition for Business Vlue (BV) Definition : Business vlue is ny benefit effectively deliverble to n ddressee nd ble to produce one of following outcomes: Stisfy need (the ddressee needs); Meet n expecttion, desire or wish (tht the ddressee wnts); Become n enhncement/dvntge (the ddressee will be thnkful, for the benefit ws neither needed nor expected).

6 The terms underlined in the definition hve prticulr menings, s follows: ny - tngibles (goods, money, stocks, etc) nd intngible (stisfction, ssurnce, hppiness, etc.); benefit - vlue is positive only; effectively delivered - received nd recognized. There will be no vlue trnsfer, unless the ddressee perceives it; ddressee - cn be customer, n orgniztion, customer or worker Vlue entities Business literture sources [3,4, 5] hve suggested nd set of rel processes which we hve nlyzed confirm - tht the Business Vlue (BV) defined bove covers well defined life cycle, strting t its cretion, pssing through set of trnsformtions nd trnsfers, until it finlly disppers. A series of entities interct nd contribute somehow to crete the conditions nd the events necessry for the life cycle to be fulfilled. Figure 3 cptures the entities involved in the BV pth from cretion up to disppernce. Some of the entities nd ssocitions most of them re nmed in the v-entitynme form re items of the vlue model presented in this work, nd will, therefore, be defined subsequently. No definition is provided for the remining entities (ctivity, process, ctor, worker, etc.), since they re well known concepts, properly covered by the clssicl business literture [4]. V-chnnel process trnsports V-nlysis V-element refers to V-scenrio connects ctivity executes provides ctor holds presents V-demnd V-behvior worker orgniztion customer Figure 3. Vlue entities. V-crete V-consume V-dd V-reduce V-deliver V-vlute V-trnsform V-store Vlue scenrio (v-scenrio) is the scope within which vlue nlysis is performed, nd is composed of set of ctors nd the v-chnnels tht connect them, through which ctors exchnge v-elements. Vlue nlysis (v-nlysis) is the identifiction nd quntifiction of vlue trnsfers tht tke plce within v- scenrio for limited time intervl. Actor is n entity cpble of creting, trnsforming, storing, consuming (mking dispper), nd delivering business vlue. An ctor my be customer, worker or n orgniztion. Vlue element (v-element) reifiction of the benefit received by n ctor through vlue delivery. Vlue chnnel (v-chnnel) connectivity reltionship between v-ctors cross which vlue is delivered; Vlue demnd (v-demnd) n expression of the needs of n ctor towrds meeting their gols in terms of vlue Vlue behvior (v behvior) - is the set of possible opertions performed on v-element by n ctor: crete: cretes new v-element; consume: destroys v-element; dd: increse the vlue of v-element; reduce: reduces the vlue of v-element deliver: delivers v-element to nother ctor ; vlute: quntifies v-element; trnsform: modifies v-element; store: dds v-element to the bg of v-objects offered by n ctor Formliztion We formlize the vlue concept bsed on n ctor s needs to ccomplish his or her gols (ctor s demnd). We sy tht ech ctor hs set of gols G nd set of demnds D. A demnd is ny element, tngible or intngible, ble to contribute to G ccomplishment. An ctor lso offers set of elements E. An element will be considered vluble, v- element (representing the vlue concept), when there exists t lest one other ctor demnding this sme element to ccomplish one of its gols (figure 4). If this coincidence is present, we sy tht there is vlue chnnel, v-chnnel, connecting the two ctors, nd vlue cn be delivered from one to nother, therefore. b G D E G, G 2,..., G n D, D 2,..., D n E, E 2,..., E n Vlue Chnnel E 2 = D b G b D b E b Figure 4. Vlue formliztion. G b, G 2b,..., G nb D b, D 2b,..., D nb E b, E 2b,..., E nb Let: be n ctor, which cn be worker, n orgniztion or customer. S be v-scenrio hosting set of ctors nd corresponding v- chnnels. E = {e,, e i,, e E } be set of existent elements (tngible or intngibles) E be the set of elements offered by the ctor. G ={ g,, g i,, g G } be the set of s gols. D gi = { e k e k Є E} be the set of elements demnded by to ccomplish the objective g. D = D gi, g i Є G be the set of ll elements demnded by to ccomplish ll of s objectives. Definition 2 (v-element): We sy tht n element e Є E is v-element iff Э b Є S e Є D b nd b

7 Definition 3 (v-chnnel): Let nd b be two ctors, where nd b Є S, nd b. We sy tht there is v = (,b) v-chnnel v, connecting to b iff E D b Ø Vlue behviors Vlue behviors comprise of set of tomic nd instntneous opertions performed by n ctor on v-element, or on v- element s ttributes (id, type, vlue). These opertions define the behvior of n ctor, nd re expressed by the nottion. opertion ([list of prmeters]). Let nd b be ctors; Let e be v-element, where: e.id stnds for the unique identifier for the element e; e.type stnds for the type of the element e; e.vlue stnds for the e s vlue - e.vlue Є R*. Primitive opertions: o.crete(e) if e does not exist, cretes the element e nd inserts it into E. o.consume(e) - removes the element e from E. Precondition: e Є E. o.dd(e) increses the vlue of e (e.vlue > e.vlue) Precondition: e Є E. o.reduce(e) decreses the vlue of e (e.vlue < e.vlue) Precondition: o Є E. o o o.store(e) dds o to E.vlute(e) ssigns numericl vlue to e.vlue. (e.vlue e.vlue) Precondition: e E..trnsform(e) modify e.type (e.type e.type). Precondition: e Є E Composed opertion: o Deliver.deliver(e, b) deliver the s element e to the ctor b.. b.vlute(e) 2..consume(e); 3. b.store(e); Preconditions: e Є E nd e Є D b Vluting n element contribution is clculted by mens of the ccomplishment function A( ), which mps the set/sub-set of KPIs, pplied to cpture the gol s chievement by numeric vlue within the [0, ] intervl - 0 corresponding to totl filure nd to totl success. A gol g my be decomposed (or not) into lower level gols. If so, gol tree structure is defined, hving lef gols lso ssocited to one or more KPIs. In this cse, the computtion is performed recursively through the tree of subgols. Ech gol g hs weight w, representing the gol s priority or importnce to the totl ctor stisfction (ccomplishment of gols). The sum of ll w must be for ny set of gols t the sme level. A rnge of expecttion is ssocited to ech gol g, corresponding to the level of ccomplishment expected by the ctor for tht gol (bsed on history or previous experiences, for instnce). When the ccomplishment for g is set within the expecttion rnge, collterl impct imp( ) is cused on the gols t the sme level. The impct will be positive if A( ) goes beyond expecttion, nd negtive if otherwise. Section 6 brings some numericl illustrtions tht will help clrify usge of the vlution process bove. Formliztion Let: - S be v-scenrio nlyzed during the time intervl t; - nd b be ctors present in S; - e be v-element delivered by b to during t; - G ={ g,, g i,, g G } be the set of s gols; - w i be the weight of s i th gol, where w i = - g i be s i th i= gol; - K i = {KPI,, KPI i,, KPI K } be the set of KPIs used to mesure g i chievement; - Ao(K i ) be the function tht mps K i or sub-set of K i into the rnge [0-], ccording to the contribution of element e to g i ccomplishment. Ao(K i ) = 0 if e D - imp(a i ) be the function tht cptures the collterl impct cused by g s ccomplishment upon objectives t the sme level. Let lso, v ei be the vlue delivered by v-element e to the ctor through the contribution of s i th gol ccomplishment. We hve: v ei = mx [imp(a i ) * A (K i ), ] Let finlly, V e be the totl vlue delivered by the v-element e to the ctor. G V e = w i * v ei i= Vlue Nottion In order to llow for esier composition nd clerer comprehension of vlue scenrios, visul nottion of the G Figure 5. Vlution method The process pplied to vlute v-element delivered by n ctor b to n ctor, during scenrio nlysis, quntifies the vlue of the v-element e s the sum of e s contribution to the ccomplishment of every one of s gols (figure 5). The A multi index nottion will be pplied in the presence of decomposed gols. For instnce: g 3 = 3 th sub-gol of s gol ; g 23 = th sub-gol of 3 th subgol of s gol 2;

8 vlue elements, defined in 5.2.2, will be presented next. The nottion is supposed to be pplied in the design of vlue delivery digrms (VDD). These digrms express the vlue deliveries occurring between the different types of ctors present in scenrio. The symbol set pplied (Tble ) hs been dpted from the Business Process Mngement Nottion (BPMN) [5], used to represent business-to-business nd business-to-consumer processes. The originl semntics of BPMN symbols hs been preserved s much s possible. This is intended to provide esier understnding of vlue scenrios when interpreted by BPMN-skilled reders. Symbol nme Mening Actor - Actors re represented by the BPMN pool symbol. Activity nd process preserve the sme BPMN nottion nd re restricted to business ctors. Thereby, customer will lwys be represented by n empty pool, duly lbeled. According to BPMN, the symbol indictes tht the process hs collpsed nd cn thus be expnded to finer grin view (ctivity). Since BPMN does not provide symbol for worker ctor, the UML ctor symbol will be pplied. V-Chnnel continuous line rrow denotes v-chnnels connecting Actors within the sme orgniztion, while v-chnnels, crossing n orgniztion boundry, re represented by dshed line rrows. V-Element - Vlue elements correspond to the lbels plced on the v-chnnels. Specific V-Scenrio the BPMN group symbol ( dshed rectngle) will be pplied to define prticulr scope of the v-scenrio to be nlyzed. This symbol should be used to put emphsis on vlue trnsfers tht hve occurred mong subset of ctors, enbling progressive comprehension of the scenrio. Tble. Vlue nottion symbols. APPLYING THE MODEL An illustrtive exmple Internet Access Service Desk Now we pply the vlue model in order to nlyze the support service provided by Firm A, s discussed in Section, in terms of vlue cretion nd deliveries Describing the scenrio Actors: Home customer Business customer Firm A Vlue elements considered in the nlysis: Voice technicl support On site technicl support Behvior of vlue elements: Voice technicl support o In the first level support ctivity vlue is delivered. Voice technicl support is the vlue element; o In the Second level support vlue is dded to Voice technicl support by the experts (workers); On site technicl support o In the on site support ctivity On site technicl support is delivered to the customers; The Vlue Delivery Digrm (VDD) First level support voice technicl support dt dt Second level support voice techincl support dt $$$ In site support In site techicl support Figure 6. Vlue delivery digrm for Internet Access service Desk Quntifying the vlue KPI A ia Imp( ) Indictor used to mesure the ccomplishment of n ctor s gol The stisfction of the ith gol of the ctor A, ccording to KPI vlues A(KPI) The impct cused by the stisfction of this gol to the other ctor s gols (if ny) The number in the shdowed column express the ctors expecttion for tht gol Home customer (h) Tble 2. Legend to vlution method. G h Get the service restored soon (w G : 7) KPI - : Time to restore the service t(h) ,5- A h Imp( ) imp( ) 40 - A ia( ) In order to guide the reder, we briefly interpret the first numbers concerning the Home customer ctor, presented bove. The sme pplies to the subsequent results. The home customer ctor (h) hs Get service restored soon s one of its gols. This gol hs weight 7 (w G : 7), mening tht if the gol is ccomplished the ctor h is 70% stisfied. Time to restore the service is the KPI used to estimte G ccomplishment. The clculus is mde by function A( ), tht mps KPI vlues to vlues within the 0- rnge. If this

9 ccomplishment is out of expecttion (shdowed mrk), ctor h s globl stisfction is impcted ccording to function Imp(). For instnce, if Imp( ) = (right of the expected vlue), the ctor s globl stisfction grows by %. If Imp( ) = - (left of the expected vlue) the ctor s globl stisfction flls by %. G h2 Be free of extr pyment for the service (w G : 3) KPI - : extr fee chrged for on site visit. US$ 0 5 > A 2h Imp( ) imp( ) Business customer (b) G b Get the service restored soon (w G : 8) KPI - : Time to restore the service t(h) 0,5<,5 2 2,5 3 3,5 4 4,5 5 >5 A b Imp( ) G b2 : Demnd support through brief phone cll (w G : 2) KPI - : Time on the phone. t(min) 5< >45 A 2A Imp( ) Simultion of support request clls We hve simulted flow of support request clls being nswered by different support rrngements. For this simultion, numbers set to A ia nd Imp() hve been rbitrrily defined. Then, the verge vlue delivered by ech configurtion is clculted. Simultion detils: Configurtion A Typicl three-tier support. The problem is pssed on to the next level when no solution is found in the current one; Configurtion B - second level is by-pssed. If level - A A( ) 0 imp( ) - A ia( ) 0 imp( ) - S ia( ) fils, on site support is requested. A CN A, with home nd business customers clling common support number; A DN - A, with home nd business customers clling distinct support numbers; B CN B, with home nd business customers clling common support number; B DN - B, with home nd business customers clling distinct support numbers; Customer/Support A CN A DN B CN B DN Home 7,8 8,4 6,5 7, Business 5,9 6,8 7 8,2 Tble 3: Averge vlue delivered by the technicl support The results presented in Tble 3 express in numbers some fcts intuitively discussed in the Introduction. Mnipulting vribles from this simple simultion scenrio, one cn decide how to configure the support service (numbers of ttendnts in ech level, for instnce) ccording to the impct on the vlue delivered to the customers A cse study Brzilin Automted Election Process Since 00, both voting nd result computtion in Brzilin elections hve been thoroughly supported by IT services. The min benefits provided by the Brzilin utomted election process re i) frud-free process, which gurntees vote inviolbility nd ccurte result computtion, nd ii) the prompt publiction of results (in less thn 3 hours for locl elections; nd in less thn 6 hours for ntionl elections). In the cse study presented below, IT mngers hd to choose between two options of IT services in order to fulfill the needs of the Electorl Judiciry uthorities for computing nd publishing election results: A centrlized service, which works in the justice offices 2, nd using pproprite communiction infrstructure (nd therefore presenting good performnce); A distributed service, which cn be operted loclly in very smll municiplities, wy from the centrl office. In such cses, the limited communiction cpcity vilble hs considerble impct on computtion nd publishing service performnce. The nlysis compres the outcomes of these two options in terms of IT-bsed metrics nd vlue delivery to the min stkeholders involved (cndidtes/prty nd judges) Describing the scenrio The vlue delivery digrm is shown in figure 7. Actors: Electorl justice; Workers who perform ctivities -3; Workers who execute the vote computing service; Judge in chrge of the whole process; Customers o Cndidte/Prty. Vlue elements considered in the nlysis: Results; Locl opertion. Behvior of the vlue elements: Results 2 Ech office is locted in the min city of the leglly defined Electorl Zone ( geogrphic re covering round inhbitnts).

10 o One site Result is creted t the ech Electronic Voting Mchine (EVM) (ctivity 2), shortly fter the bllot csting period ended; o The Results re delivered to ctivity 4; o In 5, the element is trnsformed into prtil/finl results, hving its vlue dded; o For few minutes, the vlue is stored by Electorl Justice 5, until it is delivered to ctivity 6/7; o In 6 nd 7 the element is delivered to the customer. Locl opertion o The vlue is creted when distributed computtion site is defined in ctivity ; o In ctivity 2 the vlue is dded nd the locl opertion is redy to be delivered; o In ctivity 4 the vlue is deliveredto the customer A( ) nd Imp ( ) results for G (run under fir conditions) re not shown becuse they were not impcted by the vote computtion service Vlue Results For simplifiction, we hve considered the vlue delivered by both locl opertion nd results publiction v-elements s single v-element, nmed locl results computtion nd publiction (lcp). The trditionl computtion policy will be referred to s centrlized results computtion nd publiction (ccp). Modlity Results computed nd published in the centrl office Cndidtes/Prties ccp.vlute = (imp(g ) imp(g 2 ) imp(g 3 ) imp(g 4 )) * (w A CP ( ) w 2 A 2CP ( ) w 3 A 3CP ( ) w 4 A 4CP ( )) ccp.vlute = (0,4* 0,3 * 6,2 0,2*5,2 0,*5,) ccp.vlute = 7,4 Judge ccp.vlute = (imp(g ) imp(g 2 ) imp(g 3 ) imp(g 4 )) * (w A J ( ) w 2 A 2J ( ) w 3 A 3J ( ) w 4 A 4J ( )) ccp.vlute = (0,4* 0,3 * 9 0,2*5 0,*5) ccp.vlute = 8,2 Figure 7. Vlue delivery digrm for the Brzilin utomted elections Actor: Judge (Legend: centrlized vote computtion computtion x ) G 2 Publish the results quickly (w G : 3) distributed vote imp( ) A A( ) G 4 - Coordinte the stff (w G 4 : ) imp( ) A ia( ) A( ) nd Imp ( ) results for G (ssure process inviolbility) nd G 3 (ssure order in voting sites) re not shown becuse they were not impcted by the vote computtion service Actor: Cndidtes/Prty G 2 - Free ccess to udit the process (w G 2 : 3) imp( ) ,25 2,5 3,75 5 A ia( ) G 3 - Fst nd esy ccess to the results (w G 3 :2) imp( ) S ia( ) G 4 - Fst nd esy ccess to the justice officers/uthorities (w G 4 : ) imp( ) S ia( ) Modlity 2 Results computed nd published loclly in ech smll municiplity Cndidtes lcp.vlute = mx[(imp(g ) imp(g 2 ) imp(g 3 )) * (w S A ( ) w 2 A 2A ( ) w 3 A 3A ( ) w 4 A 4A ( )), ] lcp.vlute = imp( 0,0375 0,3 0,52) * (*0,4 9*0,3 *0,2 *0,) lcp.vlute =,4875 * 9,7 lcp.vlute = mx[4,43, ] lcp.vlute = Judge lcp.vlute = (imp(g ) imp(g 2 ) imp(g 3 ) imp(g 4 )) * (w A J ( ) w 2 A 2J ( ) w 3 A 3J ( ) w 4 A 4J ( )) lcp.vlute = (,05 0,03) * (0,4* 0,3 * 9 0,2*5 0,*4,7) lcp.vlute = 8,33 Summry of results The results of our cse study on the Brzilin Automted Election Process re summrized in Tble 4. Results mtpo mtnr mtpnr cnd/ judge comp./pub. -sr prty Centrlized 7 sec 23 sec 46 sec 7,4 8,2 Distributed 28sec 73sec 330 sec 8,33 Tble 4: Results of Brzilin Automted Election Cse Study mtpo-sr: Men time to trnsfer one pckge of one-site results. mtnr: Men time to compute new results. mtpnr: Men time to publish new results.

11 judges: Vlue delivered to Judges. cnd/prty: Vlue delivered to cndidtes/prty Discussion The results extrcted from the cse study bove llowed for importnt insights nd decisions by the Electorl Justice IT mngers. Well-estblished positions hve been reviewed, nd new options hve been chosen due to the vlue delivery results presented. Mjor insights re listed below:. Cndidtes nd Prties (customers) do not mind poor softwre performnce, therefore it does not impct on their stisfction; 2. Hving ccess to results computtion loclly is prmount to cndidtes/prties; 3. Judges cn exert certin mount of control tht is not impired by the geogrphicl distribution of remote opertions; These three first insights hve mde Stte Electorl Judiciries fully reconsider the current logistics pplied to municipl elections. Distributed results computtion will be the defult configurtion in next elections (2). 4. Lowering the time to publish the finl result is not importnt to the customers, contrry to wht IT mngers hd originlly imgined. A gret mount of opertionl resources nd intellectul efforts used to be spent by Electorl Justice IT tems in order to reduce the time to publish finl results. Vlue nlysis hs shown tht customers do not vlue shorter time to get the results, since current wit times (2 to 3 hours, mximum) re lredy beyond their expecttion. Resources nd efforts pplied to lower the witing time for finl results cn be rellocted, to improve other KPIs of the democrcy process, such s popultion involvement nd politicl wreness. CONCLUSION AND FUTURE WORK We hve presented forml nd quntittive pproch to model vlue cretion nd delivery. The model my support business/it decision mking, thus helping steer the lignment of IT nd the business. We foresee the model, in more mture stge, serving s bse for Business-Driven IT Mngement (BDIM) business-it linkge models tht will use vlue delivery s the single metric, from the business point of view. The model is still under construction nd some restrictions must be ddressed to llow wider ppliction of its numeric results. The quntifiction method needs improvement, such s ssigning monetry correspondence to the vlue quntified, nd vluting set of combined elements insted of single one (the vlue of single shoe is not hlf tht of pir usully). Moreover, we will need to ddress scenrios where the vlue delivered to the customer is subjected to some restrictions on the firm s side profitbility, ROI, cost. However, even in its preliminry stte, the model ws shown to be useful, when it expressed in numbers wht hd previously been subjective-only knowledge relted to the utomted voting process in Brzil. As future work, we suggest improving the quntifiction method to ddress the bove mentioned restrictions. In order to ddress the composbility of v-elements to deliver vlue, we observe tht we might ssocite bundles of v-elements with meeting gols, similrly to wht is done in combintoril uction theory [6]. We might be ble to put to use some definitions nd hopefully results from tht domin. In ddition, one should further explore the Vlue Chin frmework, with the im of combining the finer-grin, forml nd quntittive vlue nlysis proposed here with the structurl view of n orgniztion, expressed by Porter s model. Vlidtion efforts re lso in need, pplying the model to new IT-Business scenrios. ACKNOWLEDGEMENT The Electorl Judiciry System of Príb Stte, Brzil, hs contributed to this work by providing dt nd ccess to uthorities nd IT mngers. This work ws developed in collbortion with HP Brzil R&D. 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