The Digital Transformation (DT) refers to the ongoing process organizations go through in order to integrate digital technologies in all areas of the business, particularly the ones related to delivering high added value to the customer and stakeholders. As such, the DT can be apprehended in different ways. One can simply adopt new digital technologies on the fly when made available on the market or carefully study each new IT development at the light of a set-up of a carefully defined business, IT and/or DT strategy. Moreover, within the context of a structured approach of the DT, innovations can be adopted in a top-down fashion; nevertheless, leaving some space within development for co-creation involving the user/customer is also important to favor innovation leading to competitive advantages. The framework developed in this paper extends a previously built model-driven framework for supporting strategic agility (called StratAMoDrIGo) to allow the evaluation of the added value to the DT of functional elements contained in user stories written by or with the help of the end-user. These user stories depict concrete system behavior associated to more abstract Features themselves being part of strategic opportunities identified at governance level. The approach is thus part of a more comprehensive approach to reconcile operational developments with strategic concerns.
The Digital Transformation (DT) is an important present-day concern for many organizations especially within the context of the Covid-19 pandemic. On the one hand, the DT needs to be driven by strategic concerns meaning that the organization has to approach it in a top-down fashion to ensure a competitive position in the long run thanks to the acquisition of relevant digital technologies. On the other hand, the DT is essentially focused on delivering value to the customer and other stakeholders, therefore, value streams are often uncovered through an agile software (or digital technology) delivery approach which is bottom-up by nature. The problem can be approached then in terms of finding the adequate alignment between which functions to adopt for the delivered technology and the overall DT strategy. Likewise, organizations also deal with classic Business and IT strategies that IT acquisitions need to align to or comply with.
Tsilionis & Wautelet [
This paper starts by studying theoretically how we can link the user stories within StratAMoDrIGo and how these low-level functions typically capturing customer value can impact the business, IT and DT strategies. In this regard, the main research question of the paper is “How can we refine the StratAMoDrIGo framework to support the conjunct use of strategic and operational agility in a DT context?”. The main contribution to this question is the framework enhancing StratAMoDrIGo by incorporating user stories and the DT strategy directly within the ontology. The proposal is illustrated on a case study describing an Enterprise Resource Planning (ERP) system enhancement (upgrade of a formerly deployed SAP system to the SAP S/4HANA one) in the domain of medical device manufacturing and distribution.
The rest of the paper is structured as follows: Section 2 portrays how the StratAMoDrIGo’s strategic agility ontology has been enhanced to make the link with operational agility; it also demonstrates a path for the applicability of the approach via a process fragment. Section 3 depicts the application of the framework on a case for evaluation/validation. Section 4 presents some insights that rise from the applicability of the approach to the case study. Section 5 discusses some threats to validity while Section 6 compares the approach with other relevant contributions in the domain. Finally, Section 7 concludes the paper. 2
2.1
Our study follows the design science paradigm [
The framework developed in [
0..n 0..n 0..1 Strategic_Opportunity 0..n
Type impacts
Stakeholder_goal 0..n 0..1 n Stakeholder
User sustains sustains
1 1 0..n fulfills uses expresses
drives
sustains
delivers
Management_Task n n 1 n Feature n Epic_User_Story
0..n 0..n 0..n 0..n
refines Strategic_Objective 0..n 0..n
User_Value supports where the value is discussed and evaluated but does not cover the pure operational level where user desiderata and stakeholder’s wishes are captured. This nevertheless determines the to-be system behavior which refines the impact of the adopted features on the strategy/ies. In other words, the lowest functional level of the StratAMoDrIGo framework is the Feature concept but necessitates a finer-grained-based study which would lead to a more accurate evaluation of the strategic impact.
Conceptually, the Feature concept can be aligned with the one of an Epic User
Story. Features are the functional coarse-grained elements composing the Strategic
Opportunities allowing to support stakeholders (mostly end-users) into the realization of
their tasks or goals. Several definitions and understandings of the Epic User Story
notion can be found in literature and in practice (e.g., [
The implementation and the management of the implementation of User Stories
can be done on a custom fashion, i.e., using any agile development method based on
user stories. This is generally the responsibility of the Product Owner. For illustrative
purposes we have enriched the process fragment found in [
To reiterate, the StratAMoDrIGo framework has primarily been designed to support strategic agility and extended here to match operational agile development. It does not focus on supporting a DT path as a strategic concern even if implicitly, within strategic agility, the support of suitable digital technologies is essential. The meta-model of Figure 1 has been extended to incorporate specific DT objectives forming altogether a DT strategy. The latter is perceived within the meta-model as a collection of strategic objectives and should be envisaged independently of the classic business and IT strategies. It can also be found in Figure 2 under the scope of the Board of Directors Role under the Task Determine Digital Transformation Objectives that specific DT objectives need to be set-up. These will thus later be used for evaluating compliance of new user story-driven functions.
3.1
Our illustrative example has been recreated at a private medical device manufacturer operating in Europe. MedicalDev Europe & MedicalDev General1 are umbrella companies under the MedicalDev Group headquartered in Asia. To leverage shared IT in1 The names have been changed for confidentiality reasons. Board of Directors Deal with changing business context
Set-up Strategy Determine Strategic
Objectives Determine Business
Objectives
Determine IT
Objectives Determine Digital Transformation
Objectives Analyst
Determine
Stakeholder Value Represent stakeholder’s goals
and management tasks Stakeholder
Intentions Furnish Knowledge
Legend:
Actor
User Actor Boundary
Strategic Objectives NFR Strategic Decomposition
Graph
Determine Strategic
Value
Evaluate Impact of Strategic Opportunities on
Strategic Objectives i-star Strategic Rationale Diagram
Feature User Story
Set Provide
Feature Requirements
Strategic Opportunity’s Features
Rationale Tree
Evaluate Strategic
Opportunities Determine/overview
features Scrum Master Determine User
Value Define Epic User Stories
Epic User
Stories Product Owner
Structure Requirements Map Epic User Stories with
User Stories Ensure Quality Tag and Consistency (Characterize) in User Story Set User Story
Elements Remove redundant requirements
Find missing requirements
Build Rationale
Tree Goal
Task
Resource
Softgoal
Agent
Dependency Link
AND Means-End decomposition decomposition system in 2015, however, a next-level upgrade was proposed in 2019. The project has been planned in two phases; Phase 1 describes the Move stage, where the infrastructure is to be moved towards S/4HANA, an upgrade to the existing system. Phase 2 concerns the Transformation stage, where new services are to be embedded within the organization’s existing processes.
Overall, the upgrade of the existing ERP system is aimed at increasing compliance and enabling integration capabilities for several processes within the service areas of finance, logistics, and manufacturing. The upgrade decision has been documented at governance level and it is considered as an efficiency improvement project to better align with the current business context and user needs, rather than a full-scale development project. Since it goes further than a mere technical update and is aimed at leveraging on high added value streams, the use of agile methods has been proposed for its development, utilizing user stories for requirements elicitation. The IT department has already been executing small projects in agile fashion; however, the current ERP implementation was started in 2015 in a non-agile way. A next-level upgrade was proposed in 2019 but the Covid-19 pandemic gave a radical switch in the business context which resulted in an opportunity to redefine business processes more aggressively. Indeed, the new business context led governance members to profoundly rethink the financial processes 2
More information can be given at: https://www.sap.com/index.html in collaboration with end-users and focus on automation, integration and the delivery of performance indicators. Overall, the organization aims to become more agile-driven (one of its core business objectives) not only in its IT developments but also in the way it conducts its business and pursues its DT. Our proposed approach is destined to bring a support for reasoning and relevant knowledge on the alignment of the improved ERP developments with respect to the business strategy and general DT objectives. 3.2
Overall, we conducted semi-structured interviews to elicit the business strategy (it is depicted in Figure 3) and identify impending strategic opportunities within the company. Our sample source consisted of members of the executive board and department/business units’ directors. Likewise, the IT and DT strategy was elicited from members of the ICT governance committee as well as the collection of related documents (the DT strategy is depicted in Figure 4). We were more interested in the illustration of the company’s DT strategy and how the recognition of strategic opportunities aligns with it; for this reason and due to the lack of space, the IT strategy will not be depicted in this paper but a similar alignment evaluation process between the strategic opportunities and the IT strategy can be assumed following the paradigm of the business strategy.
The data gathered during the interviews identified specific finance and controlling activities linked to Record to Report (RTR) processes (SAP Credit Management FINFSCM-CR - SAP Help Portal, n.d.) as a significant strategic opportunity source within the upgrade of the new version of the ERP. The importance of adequate credit and cash management in terms of integrating/centralizing the company’s financial management for different departments/units/regions was listed as one of the CFO’s top priorities.
As we aim to apply our proposed framework to the aforementioned strategic
opportunity intending to focus mainly on linking strategic with operational agility, we do not
document the entire strategic opportunity’s top-down evaluation that led to the
identification of the Features and would be realized using i* [
The rest of this paper will exclusively be devoted on the study of the impact of the user stories falling under the scope of Feature 2 (so the system behavior that will be adopted for fulfilling the Feature at operational level). This particular Feature was found to be of primary strategic importance (i.e., the VP and CFO have both recognized the strategic value attributed by the ability of the new system to provide instantaneous cash/credit settlements) while the process owners and operations’ managers have emphasized on the need of the system to accommodate the automation of cash/credit transactions as a recurrent request of their employees/users (bottom-up specified functionality). 3.3
A set of requirements has been collected from users/stakeholders and the mapping game led to 5 main user stories under the scope of the Epic User Story corresponding to the second Feature. A rationale tree has thus been built to show the decomposition from the Strategic Opportunity to the Epic User Story and the (fine-grained) user stories. The alignment study has then been performed and validated by internal employees. Figure 3 shows the support of the individual user stories on the overall business strategy. The study gives a more in depth and accurate identification of the strategic value brought by the system in terms of effective behavior under the umbrella of the Feature. So this gives a slightly more in depth study and accurate results when compared to an immediate alignment study of the Feature with the business strategy earlier when the Feature remains for some parts a black box. Finer-grained and user-delivered sources of value are indeed identified. 3.4
To focus on the DT strategy, an alignment study has also been performed between the DT strategic objectives and the user stories under the scope of the Epic User Story corresponding to the second Feature. This alignment study also uses the rationale tree built previously. The alignment study has here been done on a generic set of DT objectives found in an informal source3. A custom set of DT objectives has also been built but for confidentiality reasons we do not want to publish them here and the alignment study to the generic set. The custom alignment study remains nevertheless very similar. Figure 4 shows the support of the individual user stories on the DT strategy. The study gives here an in depth complementary identification of the DT-related strategic value brought under the umbrella of the Feature. 4
The recent Covid-19 pandemic (new business context) has created momentum for rethinking the credit and cash management processes support leading to a (strategic) opportunity to change the operational tasks of employees through the digitalization of 3 https://ungoti.com/blog/objectives-of-digital-transformation/
Business Strategy Promote digitalization and business model transformation
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Strengthen and optimize global organization and oprational capabilitites
Demonstrate comprehensive strength and brand power Think and act in sustainable way
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Communicate and share the knowledge, continue to build One Organization
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StrategicObjective Decomposition Link StrategicOpportunity Contribution Link Epic User Story (FuncUtisoenraSlEtoleryment) Credit segmentation of customers
Credit exposure status of Auto validation rules in customers system supporting services in the case company. The main Features of the credit management service were conceptualized in a top-down fashion by the company’s executives. These have been mapped onto Epic User Stories so that users (and other stakeholders such as the department heads, process owners, and IT managers contributing to further providing insights on the necessary functions expected in the system) could be involved to define exactly required, expected or wished system behavior related to the fulfillment of the epic. The operational elements are expected to ensure that the users are effectively and efficiently managing their respective tasks. Their critical functions like auto-validation rules, reporting, customer status, etc., provide the necessary behavior when approving sales orders from customers. The functions help the realization of organization’s (strategic) business or DT objectives and provide the necessary agility to change the course of actions if and when required. In most cases, the management-level goals are demarcated in the user stories. However, softgoals were not mentioned as they were implicit for the stakeholders.
The study of the alignment of the (concrete, low-level) user stories with the strategic
business objectives and generic DT objectives provided evidence on an overall
satisfying alignment of the strategic opportunity’s Feature Payment Management through its
expected system behavior. The alignment goes further than the alignment study that
could be performed with MoDrIGo [
Digital Transformation Strategy ISmeprrvoicvee InCcroellaasbeoIrnatteiornnal POropctiemsiszees EInffcicrieeanscey MBoerecoAmgeile BusCirneeastse MNeowdels RCeodsutcse PeEIrmmfopprrlmooyaveneece DCaotmaSpleycwuritithy KeeApdCvoamntpaegteitive CoFmopCceuotsreenocnies Creditcsuesgtommenertastion of Credit ecxupsotosumreersstatus of Auto valsidyastteiomn rules in innovation during development. Alternative scenarios can also be considered when different user stories can support the fulfillment of the Feature. The different user stories can then be selected on the basis of the identified value yet fulfilling the Feature.
As with any other approach within the design science domain, a threat to the construct validity is derived from the risk of misappropriation of the modeling constructs of the framework by various stakeholders, which may lead to misaligned/inconclusive strategic insights. This issue was addressed by having the authors of the paper organize a joint meeting with various members of the company whose case study is depicted in Section 3 in order to review, discuss and elaborate on each modeling representation and individual element of the framework.
The internal validity concerns the question of objectivity of the views gathered by the subjects during the data acquisition process. Indeed, subjects may report on their personal view (as opposed to a collective consensus) when giving information on strategic-, tactical-, or operational-level aspects. This would lead to inconsistent modeling representations. This risk can be mitigated by the conduct of a considerable number of interviews and systematic comparison of the views of these actors for knowledge validation. In our case, the representations of the strategic-/operational-level configurations within the case study were determined based on a rigorous interview process and an overall cross-reference of the subjects’ individual opinions.
A threat to the external validity can come from the lack of knowledge and/or
experience with software modeling notations that act as prerequisites for the extended
usability of the framework by a diverse set of roles within the organizational sphere
(from C-level IT executives to domain analysts etc). Therefore, a lack of formation
in specific software modeling techniques may jeopardize the generalized use of the
framework by the corresponding information systems’ community (our population).
Until now, the framework has been applied by the authors of this paper, members of
the research group, and a few consultants all being familiar with conceptual modeling,
goal-based requirements engineering, and i*. Their experience certainly has an impact
on the ability to apply such a framework correctly so not many valuable insights could
be drawn in terms of its generalization. For this reason, the ability of novice modelers
to apply goal-based conceptual modeling has been tested in [
Tsilionis & Wautelet [
At this point, a comparison with other approaches offering strategic value
propositions to agile-operated development cycles –with Scaled Agile Framework (SAFe)
being the most prominent– is justified. SAFe 5.1 [
By linking long-term objectives with system behavioral aspects, this paper offers an informal and user-friendly ontology that acts as a mechanism allowing for switching gears from strategic to operational agility according to the interests of the stakeholders. This ontology supports a method that can be used top-down for the evaluation of the value added by the adoption of strategic opportunities. More precisely it can be aligned with the business, IT or DT strategic objectives at the level of the Feature composing this opportunity. Also, it can be used in a bottom-up fashion to evaluate the alignment of the low-level functions depicted in (classical) user stories with the business, IT or DT strategic objectives. The agile development team can thus use it within the context of a Scrum (or any other user stories-driven) cycle to chart/implement the operational aspects of the development, allowing simultaneously to envisage value outside of the traditional ’user-value-only’ perspective. This gives complementary strategic information useful notably for the planning game when the priority of user stories’ implementation needs to be determined.
At this stage, we can get back to the stated RQ (How can we refine the
StratAMoDrIGo framework to support the conjunct use of strategic and operational agility in a DT
context?). To answer this question, we have extended the StratAMoDrIGo framework in
three distinctive ways: first, we have proceed in a refinement of the StratAMoDrIGo
ontology to include a more detailed analysis for the evolution of individual user stories and
their attachment to larger pieces of declared functionality allowing for their fulfillment;
we also show the linkage between such user-driven elements to the overall DT Strategy
and how the evaluation of the alignment of these two should be done dynamically due
to the ever-changing nature of the latter. Second, we have gone through a refinement of
the StratAMoDrIGo process fragment to merge Strategic with Operational agility and
distinguished strategic elements related to the DT, i.e. the DT objectives; we have also
accentuated the roles and their corresponding functionalities/duties in this new layout
as a means to increase the applicability of our approach. Third, we have presented an
application on a specific case study for validation; we have depicted the overall business
strategy of an international organization, its DT strategy as a subset of the company’s
pool of strategic objectives and how the creation of a new credit management system
could be mapped as a strategic opportunity. The latter is analyzed/evaluated when it
comes to its value-attributing characteristics and its overall contribution to the
organization’s business and DT strategy is studied. Finally, we have compared our approach
with other relevant contributions in the related work section. Even if our approach’s
expressiveness and details may suffer in the process, we aim to provide something as
simple as possible to organizations to ease the IT adoption on the largest possible scale
and how the latter can be evaluated with its evolving DT strategy. Accordingly, future
work also involves simplifying the framework so that models hold on a structured sheet
like for the Business Model Canvas [