Business and IT Governance Alignment. Simulation Essay on a Business Process and IT Service Model

Transcription

1 Business and I Governance Alignment Simulation ssay on a Business Process and I Service Model nrique Silva, PhD Student; Yves Chaix, Consultant on e-government esilva@cablenetcomni; ychaix@ibwcomni Industrial Information and Control Systems Royal Institute of echnology (KH) S Sweden Abstract One of the main concerns of I governance is I s delivery of value to the business, which is driven by strategic business and I alignment (SBIA) How to operationally assess the SBIA remains a great challenge for the CIO his paper treats this problem, taking as a reference, the Henderson and Venkatraman strategic alignment model and expanding from it, a new process perspective of the business and I governance alignment here are two main contributions presented in this paper: first, a proposal of a business process and I service model for assessing the business and I governance alignment; and second, an illustrative simulation essay on a business process and I service model for identifying and measuring the level of alignment between the business and I governance, by using the simulation tool called Adoit 1 Introduction Studies have shown that misalignment, or a lack of alignment, between business and I strategies is one of the main reasons why enterprises fail to exploit the full potential of their I investments Some organizations that have accomplished a high degree of alignment are often associated with better business efficiency and I Service effectiveness performance See Figure 1 As a consequence, strategic business and I alignment (SBIA) has consistently been one of the top concerns of the CIO and CO for many years For academics and I practitioners, the key question - how to accomplish strategic alignment between business and I in the complex and dynamic environment of the real world - remains a great unanswered challenge for the CIO and CO [2] [18] [21] he problem of operationally identify, measure, improve and maintain the alignment level between business and I governance has become increasingly important for the CIO and CO Nevertheless, the topic still lacks good decision-making support at the top-management level (ie CIO and CO level) [2] [18] For effective assessment of business and I governance alignment, enterprises need to assess how well they are currently performing and be able to identify where and how improvements can be made his applies to the performance of both the business processes and I processes (I Services) 1 he interactions of I processes, business processes and I resources over time can result in a large number of scenarios and outcomes that the author proposes to evaluate by running a process simulation (PS) essay on business process and I service model For instance, one of the elements for implementing effective I governance is performance drivers which provide indicators on how I governance is achieving: system downtime, throughput and response time, cost-efficiency of I processes or services (costs vs deliverables), utilization of I infrastructure, staff productivity, availability of I services, service level agreements, documents, etc [17] [18] his paper presents the importance of applying the process simulation for assessing business and I governance alignment (BIGA) as a sub-topic of SBIA and taking the Henderson and Venkatraman strategic alignment model (SAM) as a base It is introduced a new business process and I service model perspective of the business and I governance alignment [6] Another contribution of this paper is the application of the process simulation, as a cost-effective method, for identifying and measuring the level of alignment between the business and I governance, by formulating an illustrative example of a business process and I service model It is used Adoit 2, as the simulation tool 1 A Service is a logical grouping of functionality that is made available through the combination and specific configuration of hardware and software 2 A model based management tool for I Services and Architectures BOC Information System GmbH wwwboc-eucom /08 $ I 1

2 Although I business value and SBIA are often analyzed as separate CIO concerns, it is argued that organizations (public or private) must have a service level agreement (SLA) between business processes and I services, as an important mean for assessing alignment and, as a decision-making tool, for improving management of the business and I governance alignment [24] topics or properties presented by the relevant information sources reviewed See Figure 2 In this framework, it is introduced a new business and I service process perspective, in order to operationally assess the level of alignment between business and I governance Business and I Strategic Alignment Strategic Fit 2947% 7053% Functional Integration Strategic Business and I Alignment Figure 1: Iterative Relationship between SBIA, I Business Value and Business and I Key Performance Indicators (adapted from allon, 1998) 2 Outline feedback Assessment of I Business Value feedback he next section presents the paper research background defining SBIA, business and I governance alignment (BIGA), and business process and I service alignment view Section 4 explains the importance of applying the process simulation for assessing BIGA, and presents an illustrative example of a business process and I service model he summary section 5 presents the paper s relevant results and contributions he main references are presented in section 6 3 Paper Research Background Business and I Key Performance Indicators 31 Strategic Business and I Alignment For anyone interested in managing the strategic alignment problem in an organization, it is of utmost importance to have a clear picture of what alignment is and how it can be concretely defined and assessed In general, it is conceived that SBIA has to do with the degree of congruence or harmony between the I strategy and I infrastructure and the business strategy and organizational infrastructure [6] Despite the fact that alignment is an issue of utmost importance, no consensus among academics and practitioners can be found on what alignment is, how it should be defined or measured in the organization, or what measures should be taken to maintain and improve it [2] [18] he author had proposed a theory diagram for SBIA (D-SBIA) in order to categorize and define the topic of alignment more stringently given its current knowledge base he prioritized D-SBIA thus shows in percentage form the level of importance of different key alignment 1289% 1658% 3005% 4048% Strategic Business Fit Strategic I Fit Strategic Integration Operational Integration Figure 2: xample of a Prioritized heory Diagram Based on SAM (adapted from Silva, 2006) 32 Business and I Governance Alignment Model As an analogue model to the SAM, this paper proposes a strategy and operational integration alignment model with the main purpose of evaluating the level of alignment between the business and I governance See Figure 3 According to the authors, the most appropriate definitions of I governance (IG), taking into account the purposes of this paper, are the following: 1) I governance is the organizational capacity exercised by the board, executive management and I management to control the formulation and implementation of I strategy and in this way ensure the fusion of business and I [3] 2) I governance is a board or senior management responsibility in relation to I to ensure that: I is aligned with the business strategy: ie, delivers the functionality and services hese I-related services and functionality are delivered at the maximum economical value or in the most efficient manner In other words, resources are used responsibly IGI 3 [23] IG faces the dual demand of 1) contributing to present business operations and performance, and 2) transforming and positioning I for meeting future business challenges IG is both, internally and externally oriented, spanning both present and future time frames herefore, one of the key challenges of IG is how to simultaneously perform and transform I in order to meet the present and future demands of the business and the business customers in a satisfying manner [22] 3 I Governance Institute,

3 he model in Figure 3 presents one of the perspectives or viewpoints for identifying and measuring the alignment level between the Business and I governance by means of a more operationalized Business and I Process Model, including the key performance indicators (KPI) 4 for each type of process One of the advantages of the presented perspective is that it could be developed in a top-down or bottom-up way, depending on the needed level of details or availability of information in the enterprise If it is possible to find and estimate the level of alignment in the process level, then it is also possible to say something important and reliable about the level of alignment at the strategic level operationalize the BIGA First, processes are likely to yield greater insights into where the organization is misaligned or aligned, helping to identify and mitigate bottlenecks in a dynamic relationship between I and business processes When BIGA is evaluated at the top level in an organization, the CIO and CO might simply know that their organization has certain level of alignment, but would not have enough granularity of information to find the causes and effects of the alignment level Second, if a process model is developed, the strategic level could be operationalized and represented as a set of business and I processes (I services), which at the same time are composed of a set of inputs, activities and sub-processes Finally, the identification of a set of key performance indicators, resources, cycle time, etc for each of the core business and I processes (I services) facilitates a more detailed evaluation of the level of alignment over time Process models have another advantage over other type of models because processes work over time and produce some type of output It is possible to measure the cycle times, costs, outputs, efficiency, effectiveness, quality and customer satisfaction associated with processes by using a process simulation technique In process modeling, a process object allows several sub-processes and activities to be represented in multiple levels of detail For a process model, an analyst will initially focus on what activities are performed in the process (functional perspective), such as receiving an I service order, forwarding it to the maintenance area and so on he next step may be to investigate the sequence that these activities follow and how they are performed, and then develop a graphic picture of the process (behavioral perspective) Finally, the analyst may study where these activities take place and which resources (human, tools, electronic, etc) are used [19] [25] Figure 3: Conceptual Model for Assessing the BIGA A number of benefits are associated with business and I process alignment model when the objective is to 4 KPI (key performance indicator) is a vital and measurable result to track the efficiency, effectiveness, and/or predictability of a process For example, purchasing or product development can be modeled as hierarchical processes, with the actual process behaviors defined at lower levels For instance, the process model allows an analyst to: determine any bottlenecks or wasted effort, devise revisions to the process to correct performance or security problems, select process designs that give the best results, provide cost justification to planned alternatives and establish performance targets in the new process implementation In the presented process model, the analyst should select a list of business processes and I services with their respective groups of key performance indicators, which could be, for example, time, costs and resources he described procedure is an indicative and flexible one, 3

4 which could be used by the CIO or CO depending on their concrete situation, priorities, information availability and level of process documentation he next step in this analysis procedure is the establishment of the desired reference values of the KPI (those considered good values for the company or selected from the credible literature) at the possible level of details for such selected business processes and I services o assure a good level of credibility in this selection procedure, the list of I services and their corresponding KPI (IS-KPI) can be selected from the COBI 5 or IIL 6 frameworks and the list of business processes and their corresponding KPI (B-KPI) are selected from the well known and specific business literature in accordance with the specific organization or business case he foundation of the BP-IS view is the IIL standard of I service quality that customers should demand and providers should seek to supply he IIL has achieved increasing sophistication around the delivery of I services within the organization I governance actively supports I services delivery as a critical set of I processes and a component of the technology foundation for business he value derived from I today is based on the assurance that business efficiency and effectiveness performance improves continuously, is measurable and can be delivered at acceptable levels [24] he I Service is defined as a logical grouping of functionality that is made available through the combination and specific configuration of hardware and software An I service has three main components or elements: people, I and processes See Figure 4 he total number of B-KPI and IS-KPI and the multiple possible combinations of them, could be very high and the relationship analysis extremely complex to be managed by the CIO or CO without using an appropriate assessment method his situation justifies the use of the process simulation as a scenario-based technique which allows the representation of KPI, business processes, I services, people, and technology in a dynamic alignment model By applying simulation will be possible to answer the what if questions and it will facilitate the decisionmaking process at any level of details in the BIGA model See Figure 3 he simulation essays at KPI level allow the analyst to find the proper measures for estimating a partial or a total level of alignment between business and I process governance, going from the bottom to the top level in the analysis procedure By doing performance measurement, the analyst can identify potential areas of improvement hrough a collaborative approach, I managers and staff can see why change is needed and some of the areas for change hese map the systems into the processes as well as business factors hey can assist the analyst in determining which I services are causing the most negative/positive impacts on the business processes Additionally, they can aid in determining the technology gaps and holes as well as technology issues See Figure 3 33 Business Process and I Service Alignment View (BP-IS) his paper introduces the business process and I service alignment view as an operational strategy for identifying and measuring the level of alignment between the business and I governance 5 COBI (control objectives for I) wwwisacaorg 6 IIL (I infrastructure library) wwwtsocouk Figure 4: I Infrastructure Library (IIL) [24] he service model consists of a combination of those I services the customers need and are willing to pay for (direct services), along with those needed by the organization to provide direct services to the customers (indirect services) ach of the service models should have associated a tree diagram to systematically map out increasing levels of detail for related goals, tasks, and I services, a resource and a cost model [20] he service model provides a framework for the development of metrics, against which the business processes are rated his documents a clear understanding for both the customer and supplier of expectation levels in key business areas When the service model is taken to the next step, a tier support level document is developed that shows not only what services are provided by the 4

5 organization, but also outlines all the services required by the customers and shows the service provider for each service Business manager as a customer of I services wants the most cost-effective solution that best meets his requirements regardless of who delivers them I provider of services wants to maximize customer satisfaction by optimizing the level of service and optimizing cost As a result, there is an ever increasing need for applications and associated infrastructure to be up and available when the customer requires them, and to keep the critical supply of information flowing It is for this reason that the business needs to have the delivery of its I services organized and resourced to meet the current business requirements, and at the same time be flexible enough to be able to change with the same frequency and velocity that business does his is the operational perspective the author is proposing in the business and I service alignment view Since services do not exist in a static state, the logical flow of the services is the model that must be addressed if the BP-IS view is to be successfully executed Linking all enterprise activities, especially services, to a single or complex business process provides a very powerful synergistic effect he logical linkage of services and business processes takes the form of a flow of processes that begins with the request for service and is fulfilled in a complete cycle of service delivery, validation of completion, completeness, quality, and an examination for service improvement opportunities his very simplified process flow represents a logical sequence of events that occur when a service is requested and is delivered to the business process he ability to link the activities that comprise services to the business enterprise horizontally, vertically, and logically, will directly affect the value the enterprise will derive from their investment in I he value of the services I provides is derived from the user s perception and may not have a clear relationship with cost he bottom line on the subject of value is that building credibility by delivering quality services repeatedly will ensure the I organization is creating enterprise level value he BP-IS view proposes the relationship between business processes and I services described above must be formalized by means of a service level agreement (SLA), which is part of the IIL standard See Figure 4 In constructing the service model, an understanding of what the customer expects to be delivered will be negotiated, agreed to, and ultimately documented in a SLA A key element of the SLA is defining the measures that will determine satisfaction of the agreement s terms In fact, there may be layer of metrics that are not visible to the user, but support an overall measure of success he metrics must not only be constructed to measure the success relative to a specific service and system s SLA, it must also be supportive of the overall business need that the I service is supporting/enabling An initial step in establishing a set of metrics to measure and actually ensure success is to determine the level of service that must be provided by the functional service offering ach service offering should have some method of being measured Once the level of services for the system to be supported has been determined, a specific set of metrics can be established for the functional service to be offered Service level agreements (SLAs) are the most effective way to identify and measure the level of alignment between business and I governance, ie what expectations are and what will be delivered to meet those expectations An SLA should be in place before a business application is run in the production data center It will detail the administrative services, supporting configurations (hardware and software), and supporting practices necessary to meet the application s business requirements Achieving success should not be a one-time or periodic milestone to be checked off the proverbial todo list, but a dynamic, ongoing effort In constructing an alignment model CIO and CO must realize that the target is always moving and adjustments must be made accordingly Regular reviews of SLA, internal processes, staff skills, expertise, and leverageable technology will be required See Figure 4 [20] According to Harris Kern, et al, [20] the objective of the SLA is to define a framework for managing the quality and quantity of delivered services, in the face of changing business needs and user requirements, at a price the business is able to afford Specifically, this document intends to: Synchronize I services with the business needs of the customers Set the correct level of services expectations and responsibilities for both I and the customer nable I to be an effective and flexible partner to the business unit, aiding rapid response to the changing business environment nable I to plan for the delivery of required services at the lowest cost to the customer nable I to maintain quality and visibility of the services that they can provide, and thus demonstrate value for money 5

6 As it was described above, the SLA is a mean, among others, that can be used in order to formalize the relationship between the business processes and I services aking the generated metrics as a quantitative and qualitative source of information, then it is possible to develop a bottom up assessment of the business and I governance alignment, going from the bottom to the top As another tool for assessing the relationship between business processes and I services, the author has proposed in a previous paper, the balance scorecard for business and for I See Figure 3 and 4 4 he Process Simulation ssay 41 he Importance of Applying Process Simulation for Assessing Business and I Governance Alignment Simulation is a means for experimenting with a detailed process model of business and I governance alignment, to determine how the organization will respond to changes in its structure, environment, technology or any other strategic decision Process Simulation allows for experimenting with a process model of BIGA to better understand business and I processes (I services, operations, functions, resource use, costs, cycle time, etc) to improve performance, solve bottlenecks, minimize risk, evaluate performance, increase productivity and quality of services Process simulation, by definition, allows for experimenting with a model of the system to better understand processes, with the goal of improving performance he strength of simulation is that it allows the following aspects to be evaluated, redesigned and measured: a) customer satisfaction with the new process or system; b) resource utilization in the new process or system; c) processes, in order to streamline them; d) time, in order to minimize it [5] One of the main objectives of process modeling and simulation in the field of alignment is to bridge the communication gap between the CO and CIO by using shared process models, I service model, and methods as a means for understanding and aligning business and I governance Process Simulation allows representation of business processes, I services, people and technology in a dynamic model and consists mainly of four steps: building a model, running the model, analyzing the performance measurements, and evaluating cost-effective alternative scenarios It mimics the operations of the enterprise and can accurately account for the realities of modern I and business processes such as variability, uncertainty and resources interdependencies [17] [18] It has already been shown in previews sections of this paper that information technology can have a large impact on business processes, and that predicting what effects changes to the information technology infrastructure will have on the organization as a whole can be difficult I should be viewed as more than an automating or mechanizing force, rather as an enabler of fundamental changes in the way business is done Process Simulation would appear to be the ideal tool to assist with this kind of problem Such a broad perspective has a profound effect on the approach presented in this paper in relation to the BIGA For instance, the interactions of resources with processes, business KPI and KPI for I services over time result in a large number of scenarios and outcomes that it is impossible to comprehend and evaluate without the simulation technique By using Process Simulation, statistical reports about the Activities, ntities, Cycle ime, Costs, and Resources of an organization can be generated hese statistics can be used to determine where any of the defined processes need to be improved and what changes are necessary for evaluating different management policies and each set of alternatives For example, in the case of business and I governance alignment, PS allows the evaluation of the governance maturity level in an organization [17] 42 he Business and I Service Model xample his paper presents one of the operational business process and I service alignment view he ultimate goal of this approach is to identify and measure the level of alignment between the business and I governance by using process simulation technique One of the advantages of the presented approach is that it could be developed in a top down or bottom-up way, depending on the needed level of details or availability of information and data in the organization he illustrative example of a conceptual business and I service model is presented in Figure 3, and the practical model is presented in Figure 5 he selected I process from COBI framework is: manage problems and incidents (sub-processes of the key process called change management in the IIL framework) he KPI for this process could be: time, cost of services and resource utilization percentage For the presented example in figure 5 there were defined the following KPI: time interval for detection, time interval for answer, time interval to repair, time interval for recovery and time in good condition [3] [24] 6

7 he selected key business process from the business literature is: sale process he KPI for this process are: inventory verification time and invoice elaboration time he similar KPI could be defined for costs and resource utilization percentage See Figure 5 Let s assume that there is a signed SLA between CO and CIO, as well as a reference numerical value for each of the defined I and business KPI in the presented example After that, it is possible to generate different types of scenarios by correlating the B-KPI and IS-KPI In this example, it is assumed that the KPI of I processes are playing the role of the independent variable and the KPI of business processes are the dependent variables he correlation analysis between many different I-KPI and B-KPI could generate multiple types of correlation (cause and effect) and alignment scenarios Some of the possible scenarios are: what if it is decreased cycle time or cost of an I service? What if it is increased resource utilization in an I service? What if it is introduced a new I service? What if I service stop working? Another example of how to generate scenarios consists of selecting a key I service process, as the change management, which is kind of link between service delivery and service support management according to IIL framework See Figure 4 and 6 [24] Change management ensures that the I organization uses standard methods and procedures for handling all production environment changes in order to minimize the impact of change-related problems on service quality his process logs all significant changes to the enterprise environment, coordinates change-related work orders, prioritizes change requests, authorizes production changes, schedules resources, and assesses the risk and impact of all changes to the I environment Given the scope of this process, it is easy to see why it interacts with every other process in the IIL framework As processes are performed, they inevitably impact the I environment Change management is the single I process that regulates these changes and, as a result, plays a vital role in reducing infrastructure instability See Figure 4 and 6 I M B W N I N C I D N S IS: Managment Problems and Incidents BP: Sale process Key Performance Indicators (ime =, Money= $, Resource = R) IM INRVAL FOR DCION IM INRVAL FOR ANSWR IM INRVAL O RPAIR IM INRVAL FOR RCOVRY Incident Detection Diagnostic Repair Recovery Restoration Incident,$,R IM OU OF SRVIC IM IN GOOD CONDIION INVNORY VRIFICAION IM INVOIC LABORAION IM,$,R Products Request Inventory verified Invoices verified Merchandise deleveried I M B W N R Q U S S he following activities are part of change management: Request for Change (RFC) processing Impact assessment Change approval Scheduling and coordinating changes Coordinating recovery from change failures Managing urgent change xperiments are designed to determine the effects of changing the input configuration on one or more output statistics A scenario is a specification of the input configuration, ie the input values used for a single simulation run Scenarios can be created one at a time or en masse Sometimes the objective of an experiment is to find the best system configuration from a number of configurations Figure 5: An illustrative example of correlation between business processes and I services with their respective KPI After calculating the level of correlations between the different perspectives, it is possible to calculate the level of alignment between the KPI, I and business processes and I and business governance he procedure presented is repeated for the rest of the perspectives and after that it is necessary to calculate the total level of alignment between the I and business processes or between I and business governance his is only an indicative and illustrative calculation procedure because the presented approach is not considering a standard recipe for doing these calculations A very important aspect of the process simulation approach is Scenario Analysis his is what allows the assessment of What-If scenarios Adoit provides functionality for comparing metrics from multiple scenarios in a statistically sound way Scenario analysis is a statistical analysis of model output for a given performance measure under different sets of input data A simple dynamic process model contains a very large number of possible situations when it is executed xperiments are designed to determine the effects of changing the input configuration on one or more output statistics A scenario is a specification of the input configuration, ie the input values used for a single simulation run Scenarios can be created one at a time or en masse 7

8 Scenario analysis is a technique that has proved consistently effective for dealing with strategic uncertainty in numerous companies in diverse industries Rather than determining a single correct view of the future and the implicit strategic response, scenario planning embraces uncertainty and devises a range of views of an uncertain future Preparing for each scenario in a timely, cost-effective manner and developing the appropriate strategy, procedures and infrastructure provide the necessary link between scenario planning, business reengineering, and Information Systems Investment valuation [5] Scenario A: How to determine the total cost of an I service: Identifying, allocating, and charging for services are a critical element in the overall communication package Other factors, such as hours of operation (24x7x365) and help desk and system response time (level of service) must be taken into consideration when developing the correlation Once the number of hours required is determined for each service, a standard loaded cost-per resource type can be applied to determine the staffing cost Staffing costs can then be added to infrastructure costs such as hardware, software, network, maintenance, and facilities to arrive at a total cost of services [20] Scenario B: Users must understand how to receive the services they desire and what level of responsiveness should be expected A central source to initiate request for services is necessary to ensure that all requests are recorded, responded to by the appropriate service provider, and tracked to completion (call center) he service menu described earlier should describe the availability of the service, whether it is available on a 7x24x365 basis, or only during business hours five days a week, and how to expect it to be delivered [20] Based on the analysis, for example, of the cycle-time and resource-utilization reports, it is possible to determine the bottleneck activities, the capacity of the resources, costs, etc So, changing parameters in the model to see how it affects performance for measuring efficiency can test a what-if scenario It is very simple to change the number of resources or costs hen the simulation can be run again, the new model saved, reports generated, and statistics compared hen it is possible to compare results and see the potential process improvements and the costs associated with the what-if scenario For example, adding one more resource could imply reducing cycle time by 10% and reducing waiting time by 15% Scenario C: Many I organizations focus their I service model initiative on improving change management because they are struggling with, for example, serious production problems caused by unplanned changes In many cases, these organizations do not have a fully realized change management process, or personnel may not be following a process that is in place A high percentage of reported incidents can sometimes be tracked to a few unscheduled or improperly executed changes Without a solid change management process, the I environment cannot be stabilized, and I cannot make any serious commitments to service levels See Figure 6 Some of the key reports that could be generated by process simulation are: a) ntity-count and Cycle-ime Reports: From this type of statistical report it is possible to obtain, for example, the following numerical results: 527 entities were generated over the 48-hour simulation period Of that total, 500 were processed and shipped; 27 were still in process at the end of the simulation period he cycle-time statistics are reported in terms of hours For example, on average, it took about 5922 minutes to process an entity, even though the average cycle-time was approximately one hour; b) Resource-Utilization Reports: he resource state reports indicate the percentage of the time that staff was busy o illustrate by a numerical example, it is possible to obtain the following statistics: resource #1 was busy 9243% of the time his means that entity A waited in queue for service Resources #2 and #3 were used 7577% and 8091% of the time, respectively his means that staffing of these positions was adequate he utilization of resource #4 was 50%, meaning that this resource is available to perform administrative tasks he same analysis could be developed on the basis of Activity, ntity, and Resource Cost Reports: capacity-based costing and absorptionbased costing calculation, and resource and activity cost evaluation 5 Summary Strategic business and I alignment is an essential piece in the effective exploitation of I investments in an enterprise It implies the need for both a clearer conceptual definition and operational implementation of the alignment theories By using process simulation, the evaluation of business and I governance alignment can be either qualitative or quantitative However, the best evaluations employ a combination of both qualitative and quantitative information that compare and contrast converging and possibly conflicting evidence he most effective evaluations occur when goals and objectives are explicitly stated, are measurable and are agreed to by all parties involved valuation should be considered an integral part of the project development process and be considered in 8

9 each phase: strategy formulation, detailed planning, system design, system implementation, data collection, data analysis and reporting of results he process simulation introduces a new way of thinking, merging business and information technology into a single activity Instead of managers posing problems for technologists to solve by creating new applications, the two groups work together to create business process descriptions of the organization he presented process perspective for evaluating BIGA provides a solid yet flexible structure for which alternative governance solutions can be proposed and evaluated he process simulation can be used to guide the business and I governance alignment evaluation as a decision-making tool by identifying which organizational capabilities to be supported by the technology are more crucial to the firm s performance in a particular competitive environment By utilizing the process simulation, it is possible to view current business or I activities and procedures, and describe the activities and procedures involved and the information flows in and out Once the business and I processes are visualized, it is possible to explore alternatives ( what if scenarios) that may improve performance measures for those processes he process simulation and the SLA document could be essential tools for the CIO and CO to make the best decisions; to visualize how business and I services might behave, to measure its performance and to test what if scenarios in a computer model As a general conclusion, it was confirmed that the use of the process modeling and simulation approach could offers some advantages to the CIO and CO in making decisions related to evaluating performance measures, defining an I investment strategy, and selecting the optimal scenario for business and I governance alignment An illustrative numerical example is presented, showing a possible way to implement the proposed approach It is of crucial importance to develop all possible perspectives for evaluating the level of alignment between business and I governance in order to have a complete picture about the total level of alignment between them, and to assure the credibility of measuring results 6 References [1] Bidgoli Hossein, Handbook of Management Information Systems: A Managerial Perspective, School of business and public administration, CA University, Academic press, 1999 [2] kstedt, M et al (2004) Consistent nterprise Software System Architecture for the CIO: A Utility-Cost Based Approach, Conference Proceedings, HICSS-37 conference, Hawaii, USA [3] Grembergen W Van, he balanced scorecard and I governance, Information Systems Control Journal (previously IS Audit & Control Journal), Volume 2, pp 40-41, 2000 [4] Grembergen W V, R Saull, S De Haes; Linking the I Balanced Scorecard to the Business Objectives at a Major Canadian Financial Group, forthcoming in the Journal of Information echnology Cases and Applications (JICA), 2003 [5] Harrington, H and umay, K (2000) Simulation Modeling Methods, New York, USA: McGraw Hill [6] Henderson J, and N Venkatraman, Strategic alignment: Leveraging information technology for transforming organizations, IBM Systems Journal, 1993 [7] Information Systems Audit and Control Foundation (ISACF) and the I Governance Institute (IGI), COBI 3rd dition Framework, 2000 [8] Kaplan R, D Norton he Balanced Scorecard ranslating Strategy into Action, Harvard Business School Press, 1996, pp 322 [9] Luftman J, R Papp, & Brier, (1999) nablers and inhibitors of business-i alignment Communications of the Association for Information Systems, 1, Retrieved November 16, 2002, from [10] Luftman J Managing the Information echnology Resource Leadership in the Information Age, PHH, 2004 [11] Maes R, D Rijsenbrij, O uuijens, & H Goedvolk Redefining business-i alignment through a unified framework Primavera Working Paper Series , Universiteit van Amsterdam, 2000 [12] Mahmood Mo Adam, dgard J Szewczak Measuring Information echnology Investment Payoff: A Contemporary Approach, Idea group publishing, 1999 [13] Nils-Göran, J Roy, and M Wetter, Performance Drivers, [A practical Guide to using he Balanced Scorecard], Fourth dition, 1999 [14] Office Governance Commerce, Service Support, Series IIL, 2000 [15] Office Governance Commerce, Service Delivery, Series IIL, 2000 [16] Saull R, he I Balanced Scorecard - A roadmap to effective governance of a shared services I organization, Information Systems Control Journal (previously IS Audit and Control Journal), Volume 2, pp 32-38, 2000 [17] Silva Molina, valuating I Investments : A Business Process Simulation Approach, Licentiate hesis, Stockholm, May 2003 [18] Silva, and Plazaola, L (2006) Strategic Business and I Alignment, A Prioritized heory Diagram, to be published in proceedings of PICM06, Istambul, urkey [19] Scholz-Reiter, B et al (1999) Process Modeling, Berlin: Springer Verlag Heidelberg [20] ardugno A, I Services: Cost, Metrics, Benchmarking and Marketing, Harris Kern s nterprise Computing Institute, PHH, 2000 [21] allon, P et al (1998) A Process-oriented Assessment of the Alignment of Information Systems and Business Strategy: Implications for I Business Value, Conference Proceedings, he Association for Information Systems Americas Conference, Baltimore, Maryland, USA [22] Van der Zee J, Alignment is not enough: integrating business and I management with the balanced scorecard, Proceedings of the 1 st Conference on the I Balanced Scorecard, Antewerp, pp 1-21, 1999 [23] [24] [25] Weill, P and Ross, J (2004) I Governance, How op Performers Manage I Decisions Rights for Superior Results, Boston, Massachusetts, USA: HBS Press 9

10 Figure 6: I Service Process (Change Process) Part A 10

11 Figure 6: I Service Process (Change Process) Part B 11