Tool Support for Value Modeling and Risk Analysis of e-Services?

Abstract

We demonstrate a set of tools to design and test business models for new IT. These models can be used to design business processes and specify use cases for IT systems.

Motivation

Today's IT infrastructure is inextricably intertwined with business models. Customer information is acquired online, marketing uses social networks, ordering and payment is performed using web-enabled applications, physical products are sorted and tracked by smart logistics systems, e-services such as music or books are delivered online, and helpdesks are integrated with online support functions. Production and shipping of physical goods is done in coordination with suppliers and partner companies whose IT infrastructures are connected through public or private networks. In such a context, IT requirements engineering is a continuous process that involves optimization of business models in order to take advantage of IT developments.

A business model is a description of how a business earns money, or more generally, how a pro t or nonpro t organization creates value [ 6 ]. An increasing number of organizations create value with IT, in a change process often referred to as the "digital transformation." In this process, the classical problem of business-IT alignment has evolved into the problem of business-IT integration. This means that requirements engineering for IT must be integrated with business modeling.

A popular business modeling method today is the Business Model Canvas (BMC) [ 6 ], which is a template to create a high-level overview of the core value proposition of a business, of what is needed to produce this value proposition, of the customers to which the proposition is sold, and of the cost structure and revenue of doing all of this. Such a high-level model helps to create a shared picture of how the organization will create value, but leaves open what the quantitative market assumptions are under which the business will be pro table, ? Copyright 2018 for this paper by its authors. Copying permitted for private and academic purposes. what the risks of nancial loss and online fraud are, and what business processes and IT infrastructure are needed to implement this business model. The e3value method is intended to ll this gap between abstract business model and concrete business processes and IT infrastructure [ 2, 1 ]. 2

e3value The techniques and tools of e3value allow one to model a network of organizations and customers who exchange items of value with each other, called value objects. Value objects may be products, services, experience (such as music), or money. Value exchanges are modeled as economic transactions, in which each of the transacting partners receives one or more value objects from the other.

A value model represents the network of business actors as a graph, and is taken to be valid for a contract period. It represents how these actors have agreed to exchange values during this contract period. A value model includes the representation of one or more consumer needs and shows which connected set of transactions among actors in the network takes place to satisfy this consumer need, and what the logic of this set of transaction is. The method is supported by tools for { the computation of pro tability for each of the actors in the model, given market assumptions about the price of products and services and the number of occurrences of consumer needs in the contract period.

It is possible to make a sequence of value models, for example for a startup phase, a growth phase, and a consolidation phase of a new business idea. e3value contains tools and techniques to { the discounted net present value for actors to participate in this network for this sequence of phases. e3value has been extended by tools and techniques to model and analyze nancial risks and online fraud [ 5, 4, 3 ]. Fraud is an activity in which one of the actors in the model takes unfair advantage of the others by, for example not paying, colluding with other actors, or performing secret transactions that are pro table for the fraudster but create a loss for other actors. In the rest of this paper, the name \e3value " refers to this extended method. The extended e3value method is supported by tools and techniques for { the analysis of sensitivity of pro tability to changes in market assumptions, { the generation of possible fraud scenarios, and for { the ranking of these scenarios on pro tability for the fraudster and loss for the victim.

Fraud scenarios cannot be modeled in the e3value notation, because they contain invalid constructs such as non-reciprocal transactions. We model them using a notation called e3fraud , and we call these models subideal, to distinguish them from valid e3value models, which represent the ideal state of a airs.

The e3value method Positioning the e3value approach as a way to manage the digital transformation of a company, we de ne the following method. 1. Envision the business potential of new information technology Make a map your business network and explore what new services or products you could deliver with new technology, and what this would mean for your relation with partners in your network 2. Design a peer-to-peer business model

Design a peer-to-peer business model, i.e. a value model, in which you specify who delivers what to whom and what they receive in return. 3. Make market assumptions

Quantify the value of services and products delivered, make assumptions about frequency of transactions, and estimate required investments. 4. Do quantitative simulations of pro tability and of vulnerability of fraud

Simulate di erent scenarios to compute pro tability and assess sensitivity to your market assumptions. Automatically generate vulnerabilities to fraud, and rank them on severity. Revise your business model accordingly. 5. Map to business processes and IT architecture

Once you are satis ed with your peer-to-peer business model, map this to your business processes and IT architecture.

The following cases illustrate steps 2, 3 and 4. 4

Cases

There are two tools available for e3value , freely available at https://www.e3value.com/software/. The following cases will be used in the tool demo.

{ Figure 1 shows a screenshot of an e3value model of community radio journalism in rural Mali, and gure 2 shows an estimate of pro tability for the actors in the model generated by the tool. { Sensitivity analysis of ideal and subideal models. This is illustrated by a case from copyright clearing where we are interested in quantifying the evolution of a risk based on several parameters ( gure 3). { Automated generation and ranking of subideal value models. This is illustrated by a case from telecom where we are interested in generating and ranking fraud scenarios for a given telecom service ( gure 4).

Fig. 2. A pro tability sheet for the model in gure 1 generated by the tool. Fig. 4. Screenshot of a fraud generated for a at-rate business model combined secretly by the fraudster with a revenue-sharing business model. The top pane in the middle shows possible frauds ranked on gain for the fraudster and loss for the victim. The highest ranked fraud is shown on the bottom left and the quantities of money gained or lost are shown on the bottom right

References

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3. Dan Ionita , Roel Wieringa, Jaap Gordijn, and Ahmed Yesuf . Quantitative, valuedriven risk analysis of e-services . Journal of Information Systems , 2018 . Under submission.

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5. Dan Ionita , Roel J Wieringa, Lars Wolos, Jaap Gordijn, and Wolter Pieters . Using value models for business risk analysis in e-service networks . In IFIP Working Conference on The Practice of Enterprise Modeling , pages 239 { 253 . Springer International Publishing, 2015 .

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