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    <journal-meta />
    <article-meta>
      <title-group>
        <article-title>A Value-Based Maturity Model for IT Alignment in Networked Businesses</article-title>
      </title-group>
      <contrib-group>
        <contrib contrib-type="author">
          <string-name>Roberto Santana Tapia ?</string-name>
          <email>r.santanatapia@utwente.nl</email>
          <xref ref-type="aff" rid="aff0">0</xref>
        </contrib>
        <aff id="aff0">
          <label>0</label>
          <institution>Department of Computer Science, University of Twente</institution>
          ,
          <addr-line>P.O. Box 217, 7500 AE Enschede</addr-line>
          ,
          <country country="NL">The Netherlands</country>
        </aff>
      </contrib-group>
      <fpage>1201</fpage>
      <lpage>1208</lpage>
      <abstract>
        <p>Business-IT alignment can be achieved at various levels of maturity. Supposing that an organization has tried to achieve business-IT alignment, a question to face is: how is that organization going to know the level of maturity of its alignment situation in order to plan future ways of action? That organization will need a guide for determining the maturity of its business-IT alignment, and for evolving toward a culture of process improvement excellence. There have been some proposals for architecture alignment maturity models but these are oriented to single enterprises and do not incorporate the value viewpoint. In this research, we will study architecture processes in networked businesses and develop a maturity model for this that incorporates the value viewpoint.</p>
      </abstract>
    </article-meta>
  </front>
  <body>
    <sec id="sec-1">
      <title>Introduction</title>
      <p>
        Business-IT alignment is the problem of matching services offered by IT with the
requirements of the business. In businesses of any significant size, business-IT
alignment is a hard problem that commonly is not completely solved. In [
        <xref ref-type="bibr" rid="ref7">08</xref>
        ],
Hoque establishes that the so-called strategic application of technology projects
are, with rare exceptions, little more than large experiments which demonstrate
a disconnect between business and technology instead of help to increase their
alignment.
      </p>
      <p>
        With the advent of networked businesses, the problem gets a new dimension.
In a network, there is not a single decision point regarding IT. “Networks
exist when different businesses decide to cooperate by means of IT networks, but
they also exist in large corporations, which often consist of nearly independent
business units” [
        <xref ref-type="bibr" rid="ref23">24</xref>
        ], p. 1. For us, a networked business is a web of
profit-andloss-responsible business units, or independent companies, connected by IT that
work together for a unifying purpose for a specific period of time.
      </p>
      <p>
        “Technology is not R&amp;D. It is an integral part of how companies create value.
It needs to be understood and managed this way” [
        <xref ref-type="bibr" rid="ref7">08</xref>
        ], p. 1. In VITAL [
        <xref ref-type="bibr" rid="ref22">23</xref>
        ], we
will investigate an economic value-based approach to align business and IT in
networked businesses. The value perspective in VITAL is based on e3-value [06],
? Supported by the Netherlands Organization for Scientific Research (NWO) under
contract number 638.003.407 (Value-Based Business-IT Alignment).
a method developed in earlier research by one of the VITAL researchers. In
e3-value, a business network is modeled as a constellation of economically
independent actors who exchange objects of value. This represents the principle of
economic reciprocity.
      </p>
      <p>The VITAL project consists of three projects which will investigate:
– techniques to describe IT services as economic value objects from a consumer
(i.e., business) perspective, and ways to match these services in a
valueoriented way with IT services described from a supplier (i.e., IT) perspective.
– techniques to design a networked IT architecture that supports services
required by the business, taking the value offered by those services, and the
costs incurred by the architecture, into account.
– models of decision processes about IT services and their architecture, to
develop a maturity model for that.</p>
      <p>This last line of research is the topic of the Maturity Model (MM) subproject
of VITAL. Whereas subproject 1 (value oriented requirements engineering) will
investigate value-based IT services specification and subproject 2 (business-IT
architecture design) their realization by networked business processes and
business systems, this subproject will investigate the process architectures of entities
at each of the services provision layers defined in the GRAAL project1, by which
these specifications and design activities can be realized, to develop a maturity
model for that. These processes are not inevitably carried out in one
organization. For this reason, next to the value viewpoint, we need to take into account
the networked business viewpoint.
2</p>
    </sec>
    <sec id="sec-2">
      <title>The Problem</title>
      <p>
        Business-IT alignment can be achieved at various levels of maturity. Nowadays,
there is no maturity model to assess business-IT alignment in a networked
business environment, and from a value perspective [
        <xref ref-type="bibr" rid="ref22">23</xref>
        ]. Supposing that a networked
business has tried to achieve business-IT alignment, such a business will need
a guide for determining the maturity of its alignment, planning future ways of
action, and evolving toward a culture of process improvement excellence.
      </p>
      <p>Maturity models have been around for some time. The basic idea of a MM
is to assess a specific area of an organization against a ‘norm’ to identify fields
of possible improvements that must connect to business benefits [01].</p>
      <sec id="sec-2-1">
        <title>Research Questions</title>
        <p>
          To discuss our research questions, we use the distinction between what we call
world problems and knowledge problems [
          <xref ref-type="bibr" rid="ref18">19</xref>
          ]. A world problem relates to a
situation where some change needs to be enacted according to the way we think the
world should be. In contrast, a knowledge problem consists of lack of knowledge
1 For more information, please refer to http://is.cs.utwente.nl/GRAAL
about an aspect of the world. To solve knowledge problems, we need to study
the world to obtain knowledge related to the particular aspect.
        </p>
        <p>The objective of this research is to make possible assessing business-IT
alignment in networked business organizations by developing a maturity model for
this that incorporates the value viewpoint. This goal is a world problem and to
solve it, we should gather knowledge. We can see the mutual recursion of world
problems and knowledge problems of this research in Fig. 1.</p>
        <p>world problems
Develop a MM to assess business-IT
alignment in networked businesses
Investigate current Maturity Models
Inquire about IT/business processes in
both single enterprises and networked
businesses.</p>
        <p>Investigate IT architectures within a
networked business context
(distributed architectures)
Determine the use of value-based
specification in those processes</p>
        <p>Define the maturity levels for
business-IT alignment
knowledge problems
Need to know about:
• current MMs
• IT/business processes
in networked business
• IT architectures
• value models
Learn about relationships between
known MMs and IT/business processes
Learn about IT/business processes
when allocating services execution to a
distributed IT architecture</p>
        <p>The problems identified in Fig. 1 led us to formulate our research questions.
We know that a maturity model has two dimensions2: the maturity levels and the
areas to which these levels are applied. For maturity of business-IT alignment,
the first dimension leads to the following research question:
– How can maturity levels for business-IT alignment be defined? What areas
are needed at each level of the maturity model?</p>
        <p>Starting from the assumption that investment decisions are based on the
value all participating parties of a networked business are going to obtain, we
can also define research questions from the second dimension perspective:
– Which decision processes take place in networked businesses when allocating
services execution to a distributed IT architecture?
2 Take for example CMMI [04]. In CMMI the first dimension consists of five levels:
initial, managed, defined, quantitatively managed, and optimizing; and the second
dimension distinguishes four aspects: process management, project management,
engineering, and support.
– How can we use value-based specification and allocation techniques in these
processes?</p>
        <p>Beside these questions, we also want to identify:
– What is the relationship between those processes and known maturity models
such as CMM, CMMI and IT Service CMM?</p>
        <p>Next, our last research question is related to the validation of the maturity
model we will develop. This question is:
– How can we judge the fit of a maturity model in real-life cross-organizational
settings? How do we know that the model we propose is valid?</p>
        <p>These research questions will help us answer things we have not been able
to look at before and will possibly lead into more questions during the research
process.
3</p>
      </sec>
    </sec>
    <sec id="sec-3">
      <title>Problem Justification</title>
      <p>To show why the problem identified in Sect. 2 is indeed a problem, we discuss
what an organization would be able to do with such a maturity model.</p>
      <p>First, a maturity model will make it easier for organizations to establish goals
for process improvement and identify opportunities for optimization. The
maturity model will describe essential attributes that are expected to characterize
business-IT alignment in a networked business at a particular maturity level.
By comparing an organization’s characteristics and attributes with the maturity
model, an organization will identify which level of business-IT alignment it has
in order to increase its process capability: first, establishing goals for the
improvement of processes and then, taking action to achieve them.</p>
      <p>A maturity model will also:
– allow an organization to benchmark itself with other internal or external
organizations for the purpose of improving its own processes.
– offer an improvement path to the firm so that it can set priorities for process
improvement actions. These improvement actions will permit an organization
to achieve a higher level of maturity increasing its possibility of predicting. If
an organization’s maturity increases, then the definition of results becomes
more accurate [05].
– allow a possible interested party to have certainty on the potential of the
organization. Depending on the level of maturity that an organization has,
an external party (another organization, a stakeholder, a client, or a supplier)
can have a clear idea about the organization’s capabilities, in order to decide
to have economic dealings with such an organization.</p>
      <p>Given all these things, it is indeed important to have a maturity model. It
should, however, provide support for these three points.
4</p>
    </sec>
    <sec id="sec-4">
      <title>Theoretical Context</title>
      <p>This research is related to some subject areas which will help us to understand
more terms and concepts associated with the research problem. Such subject
areas can indicate what knowledge can help us to come near to our solution.</p>
      <sec id="sec-4-1">
        <title>The GRAAL Project</title>
        <p>
          Van Eck et al. [
          <xref ref-type="bibr" rid="ref21">22</xref>
          ], in research preceeding the VITAL project, studied
businessIT alignment in a number of large transaction-processing organizations in The
Netherlands. Their analysis framework (which they called the GRAAL
framework) will be our starting point in this research. They also provide interesting
insights in relation between IT architecture decisions and the structure and
organization of the IT process.
        </p>
      </sec>
      <sec id="sec-4-2">
        <title>Alignment MMs</title>
        <p>
          Another important topic for our research is “Alignment Maturity Models”. There
have been some proposals for architecture alignment maturity models but these
are oriented to single businesses and do not incorporate the value viewpoint [
          <xref ref-type="bibr" rid="ref22">23</xref>
          ].
A good example of alignment maturity models is developed by Luftman [
          <xref ref-type="bibr" rid="ref9">10</xref>
          ].
Luftman’s strategic alignment assessment presents an approach for determining
a firm’s business-IT alignment based on six variables, namely skills,
technology scope, partnership, governance, competency/value measurements, as well as
communications.
        </p>
        <p>
          An additional model is the model proposed by Laagland, et al. in [
          <xref ref-type="bibr" rid="ref8">09</xref>
          ]. They
establish that business architecture and IT architecture need to be integrated in
order to gain effective total results in the organizations.
        </p>
      </sec>
      <sec id="sec-4-3">
        <title>Other Literature</title>
        <p>
          Further theory with which we are going to start the research is:
– IT Processes: ITIL [
          <xref ref-type="bibr" rid="ref20">21</xref>
          ], ASL [
          <xref ref-type="bibr" rid="ref14">15</xref>
          ], BiSL [
          <xref ref-type="bibr" rid="ref15">16</xref>
          ]
– IT Governance: CobiT (see www.isaca.org/cobit/)
– MMs: CMM [
          <xref ref-type="bibr" rid="ref13">14</xref>
          ], CMMI [04], IT Service CMM [
          <xref ref-type="bibr" rid="ref12">13</xref>
          ]
– Networked business literature (e.g., [
          <xref ref-type="bibr" rid="ref10 ref19">07, 11, 20</xref>
          ])
– Transaction cost theory (e.g., [
          <xref ref-type="bibr" rid="ref24">02, 03, 25</xref>
          ])
5
        </p>
      </sec>
    </sec>
    <sec id="sec-5">
      <title>Research Approach and Methods</title>
      <p>
        This research is conceptual, qualitative and interdisciplinary. It is a
formulative investigation [
        <xref ref-type="bibr" rid="ref11 ref16">12, 17</xref>
        ] that is going to involve synthesizing and integrating
information in order to develop a final model, i.e., a maturity model to assess
business-IT alignment in networked businesses from a value perspective.
      </p>
      <p>Except for the questions how to use value-based decision techniques and how
to define the maturity levels, these questions are empirical, not normative, and
we will investigate them by means of case studies research that are going to take
place in networked businesses.</p>
      <p>We will start with a review of literature in order to learn about current
maturity models, and to identify common IT/business process architectures from
two perspectives: the single enterprise and networked businesses. Next, we will
try to recognize what the relation is between such maturity models and the
IT/business processes investigated by conducting case studies. At this point,
we will have recognized what IT/business processes take place in organizations
having an idea concerning how such processes are managed in real-life settings.</p>
      <p>Another reason to choose for case studies is to identify IT architectures in
established networked businesses. Such knowledge will lead us to recognize which
decision processes take place in networked businesses when allocating services
execution to a distributed IT architecture.</p>
      <p>Investigation of value models and specifications will be needed in order to
identify how the value perspective could be included in the maturity model we
will develop.</p>
      <p>Having (i) the results of the case studies, (ii) some results of the other
subprojects of VITAL, and (iii) the knowledge obtained from the review of literature
as basis, we will determine the maturity levels for business/IT alignment in a
networked business environment trying to design a complete maturity model.
The next table shows the research methods that we intend to use for each
research question:</p>
      <p>Research question Research method
How can maturity levels for business-IT align- Synthesis/integration
ment be defined? What areas are needed at each of information 3
level of the maturity model?
Which decision processes take place in net- Case study and
worked businesses when allocating services exe- Literature review
cution to a distributed IT architecture?
How can we use value-based specification and Literature review
allocation techniques in these processes?
What is the relationship between these pro- Case study and
cesses and known maturity models such as Literature review
CMM, CMMI and IT Service CMM?
How can we judge the fit of a maturity model in Simulation
real-life cross-organizational settings? How do Field experiment
we know that the model we propose is valid?</p>
      <p>We assume the solution can be validated with simulated case studies and
field experiments exploring what the use of the developed maturity model would
3 This information will be obtained from the case studies and the literature review.
be in the case studies, i.e., by showing how the developed model could be used
in the case studies.
6</p>
    </sec>
    <sec id="sec-6">
      <title>Current State of Affairs</title>
      <p>
        Currently, the research is in the initial phase. We already surveyed IT process
architectures for single enterprises development from a maturity model
perspective [
        <xref ref-type="bibr" rid="ref17">18</xref>
        ]. We are collecting some worthwhile literature over networked business
to continue our research in this direction.
      </p>
      <p>In terms of the future of this research, we now have a pressing need to define
the areas that are going to be included in the MM.
7</p>
    </sec>
    <sec id="sec-7">
      <title>Conclusion</title>
      <p>In this paper, we showed the problem justification, the theoretical context, and
the research approach of the Maturity Model subproject of VITAL.</p>
      <p>
        As specified in the VITAL research proposal [
        <xref ref-type="bibr" rid="ref22">23</xref>
        ], in this research we are
going (i) to make an inventory of relevant maturity models, and (ii) to analyze
process architectures of organizations in order to propose maturity levels for
the business-IT alignment. Because VITAL is about business-IT alignment for
networked businesses and is not limited to alignment in a single enterprise, we
will take a network point of view and produce, with the information obtained in
the case studies and literature review, a maturity model that incorporates both
the business viewpoint as well as a value viewpoint.
      </p>
    </sec>
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