Strategy Map (SM) is one of the widely used methods to create business aligned IT strategy map providing valuable insights to business executives. However, problem with strategy map method is that it is not easy to use which can lend itself to various interpretations. This is because linkages between the strategic objectives in the four strategy map perspectives are not explicit which makes SM ambiguous. Goal modelling approaches from Requirements Engineering (RE) have proven rigorous in elicitation and representation of information system requirements. In an attempt to make explicit the causal relationships of SM linkages meaningful this research proposes the use of goal modelling approach i*.
Business aligned IT strategy has been the top ranking concern of business executives
in the last two decades [
Strategy map which evolved from balanced scorecard has been regarded as the
most widely used alignment method and more than 300 organisations have used to
create maps for their business aligned IT strategies [
However, researchers found that the SM method is not easy to use and the created
strategy map lends itself to various interpretations [
Goal modelling approaches from RE have been considered rigorous and structured
in elicitation and representation of requirements [
Thus, we set a research question to address the problem of strategy map: How can we use i* to make strategy map more structured and unambiguous for business executives?
In this regard we use Consumer Bank exemplar (a case study conducted by [
Before we develop SMi* model we need to evaluate whether the constructs offered by
i* are suitable and adequate to conceptualise and represent SM constructs. In this
regard, we carefully analyse textual description of the exemplar and SM method used
to create strategy map from [
Perspective refers to a firm’s strategic view in terms of conceptual elements (e.g. goals and resources) pertinent to a particular domain of concern. Strategy map consisting of four perspectives describes value creating strategy in terms of objectives which provides basis for executives to discuss the directions and priorities of their enterprise.
Contents of financial perspective present i*constructs i* does not offer any suitable construct to represent the concept of perspective of SM. i* offers graphical notation Goal to how an enterprise intends to create sustainable growth in shareholder value. Primarily in the financial perspective Firm’s financial targets are established which are precise in nature.
Integrated Goal
offerings
Credibility of Soft goal
service
Help in Soft goal
planning &
implementing
financial plans
Contents of internal perspective comprise of
three value creating core process types
(operations, customer and innovation
management core processes). A firm typically
defines the critical few (clusters of) strategic
processes known as strategic themes that
have the greatest impact on delivering the
espoused CVPs. A core process comprise of
many sub-processes. These sub-processes are
executed to achieve CVPs. A strategic theme
has clear performance targets (aligned with
the CVPs) which must be supported by
learning & growth perspective.
represent objectives/targets which are
precise in nature. According to a
definition goal is a condition or a state
of affairs to be achieved [
CVPs can be classified into
precise/hard and qualitative/soft
objectives. Goal construct is suitable to
represent precise CVPs however we use
soft goal construct to represent
qualitative targets. Soft goal means it
does not have clear-cut satisfaction
criteria [
Therefore goal construct qualifies to
represent strategic themes. To represent
sub-processes we use Task construct.
According to a definition task is a
course of action that is carried out in a
particular way typically to achieve
Contents of learning & growth perspective
comprise of three capitals: (1) human capital,
(2) Information Capital (IC) and (3)
organisational capital (known as intangible
assets) each defined with precise objectives
and performance targets to support the
strategic themes. Human capital refers to
specialist roles required to execute activities
in internal perspective, organisational capital
refers to interaction among stakeholders and
IC refers to value creating computer
technologies necessary to support activities in
the strategic theme of internal perspective.
Technology infrastructure used to support
activities has been regarded as asset/resource
in the MIS literature [
Fundamentally i* is an approach that is
used to express complex social and
organisational relationships through
dependency relationships among actor
[
According to [
Cause-and-effect relationships are
established among four perspectives by
showing that IT supports internal processes
which supports customer perspective and
which supports financial perspective (for
example, see Figure 1). Establishing
relationships among perspectives mean to
facilitate discussion among executives in
terms of linkages between objectives.
Relationship strengths, objectives in each
perspective which drive to achieve strategic
intent have various types of relationships and
these relationships have various degrees of
strengths. For example, the exemplar at many
stages in [
To make distinction between the variety of objectives and their strategic intents i* uses the concept of a boundary as shown below. This construct defines boundary of objectives in terms of goals, tasks and resources. i* describes it as workability analysis which fits well to represent that how wellintegrated objectives support achieving strategic intents which are represented out side the boundary. Responsible actor to achieve strategic intent through targets inside the boundary appears an equivalent concept to SM concept on strategic intent and associated objectives.
Strategic Dependency (SD) relationship concept allows representing cause-andeffect relationships of SM through actor dependency relationship as the construct is shown below. With SR model SM will be able to represent explicit relationships among objectives as well as actors and dependency relationships among them for strategic intents for all four perspectives.
AND/OR construct is used to indicate that satisfying a goal can be accomplished by satisfying all its subgoals.
we use Plus contribution link. used where strength is not sure.
DECOMPOSITION construct represents decomposition of a task into more than one sub-tasks. 2.1 Extension to i*
i* approach appears to be suitable representing most of the SM constructs
however, it lacks representing the concept of four different types of perspectives and
three types of clusters of core processes for internal perspective. Therefore we
propose new constructs presented in Table 2. We do not present theoretical
background of these new constructs in this article due to the space constraint however
in selecting appropriate visual constructs we take insights from [
Visual constructs are more effective in understanding and solving problems than their
contents [
clusters of core processes. Red colour to represent operations, green colour to represent customer and yellow colour to represent innovation clusters.
$$ Suitability analysis of i* constructs (Table 1) and extension to i* constructs (Table 2) for representing SM constructs led us to believe that we can faithfully capture all the “structural constructs” of SM in a fully integrated SMi* model which unambiguously shows the inter-relationships of “structural constructs”.
In the development of SMi* model we use two-step approach of i*. First we develop Strategic Dependency (SD) model in the context of Consumer Bank exemplar. SD model helps us to capture dependency relationships among stakeholders for strategic intents in the four perspectives of SM. Strategic intents can be captured in the form of goals to be achieved, tasks to be performed and resources to be furnished. Second based on detailed level of knowledge provided in the exemplar we identify rationale behind those strategic intents in the form of goals, tasks and resources that each stakeholder facilitate to achieve strategic intents. This is called Strategic Rationale (SR) model which basically expands on SD model by showing internal arrangement of an actor to achieve strategic intents. So, we term it as SMi* model comprises of SD and SR models.
This section presents detailed information about Consumer Bank exemplar for four SM perspectives and how this information is used to develop SMi* model. We ensure that the development of SMi* model is entirely based on the knowledge provided in the exemplar.
Financial perspective, Exemplar describes that the overarching shareholder objective for Consumer Bank was to dramatically increase earning per share. This statement presents two stakeholders1 – shareholder and Consumer Bank and one strategic objective – increase earning per share. By using i* approach we can conceptualise stakeholders and the objective by saying that shareholder depends on Consumer Bank which we consider from now on as Financial Service Provider (FSP) to increase earning per share. We use i* construct actor to represent these stakeholders and the goal to represent the quantitative strategic objective of earning per share be increased. Exemplar also describes that the target be achievable for increase in earning per share which we consider a qualitative aspect of the target of earning per share be increased. So, we use soft goal construct to represent target be achievable for shareholder. The following information provided in the exemplar is used as rationale to achieve shareholder objective.
FSP sets a stretched target of net income - $100 million on which the strategic intent depends. Net income is a precise objective and is represented by using goal construct as shown in Figure 2. This stretched target can help to calculate earning per share for shareholders precisely that’s why we represented strategic intent with goal construct.
FSP sets two sub-objectives – increase productivity and profitable revenue growth.
FSP considers them as two high level and main objectives to achieve $100 million net
income target (p.374) [
According to the textual description of the exemplar FSP defines two growth related sub-objectives – increase revenue per customer from $200 to $300 and increase the number of high value customers from 200,000 to 600,000. These are two quantitative sub-objectives to achieve a precise growth objective. Once again we use goal construct to represent these objectives and AND decomposition link to show that the achievement of both sub-objectives means achievement of growth objective.
FSP defines one productivity related sub-objective reduce annual customer cost
from $100 to $75 [
Customer perspective, FSP pursues relationship based customer strategy instead of
old transaction based customers strategy (p.377) [
To deliver these strategic intents, FSP hires a financial advisor2 who is specialist in this domain. So, FSP depends on financial advisor for these four strategic intents. Rationale behind these four strategic intents is described below.
With respect to the rationale, exemplar describes that strategic intent – trusted financial advice depends on the goal of helping customers develop and implement financial plans. Trusted financial advice is a resource and it is based on product knowledge which we represent with resource construct, however, helping customers 2 We acknowledge that there can be other customer interfaces such as customer service agents, bank tellers however Consumer Bank created new strategic role to shift customers from transaction based to relationship based customers. Therefore we used financial advisor as responsible role to deliver four strategic intents for customer perspective.
Shareholder Target be achievable
Earning per share be increased Productivity be increased Cost per customer be reduced
Increase in net income be set Revenue per customer be increased
Growth be achieved High-value customers be added and retained Relationships with cust. be developed
One stop shopping
Trusted financial advice Integrated offerings Fig 2. SMi* model of Consumer Bank
Cross-sel product line Joint Venture mnger
Develop new products Seek partner
s Telemark eter Project mgmt system Customer profitability system
Webarchitecture
Telemarketing campaign Calculate new product revenue
CRM
Shift to appropriate channel
Consumer marketer Costeffective approach Acquire prospect list Manage lead & order
Customer feedback system
Understand customer segments Clarify CVP Direct mail support program Calculate customer profit
Serve customers Segment market
Communicate Customer survey to develop and implement their financial plans is a qualitative goal as it can not be clearly measured. In addition, One stop shopping which means to provide all financial solutions under one roof depends on helping customer in developing their products.
Strategic intent relationship based customer supports financial target revenue per customer be increased, according to the exemplar it depends on integrated offering. Integrated offering is a quantitative goal as financial advisor can easily figure out how many products/services a customer has been using.
Strategic intent – products and services that helps to achieve cost per customer be reduced depends on CVP Services be credible and effective. Textual description presents price and quality of products and services as key CVPs to support products/services to be credible and effective and hence helps to reduce cost per customer for productivity objective, so we use positive contribution link showing that the CVPs price and quality positively support the soft goal of products/services to be credible and effective as shown in Figure 2.
As price (value for money) is a known value it is represented with goal construct. Firms use Service Level Agreement (SLA) to achieve quantitative goals in term of quality of their services, so quality level can be identified precisely and is represented with goal construct3. So, we can show through linkages that how strategic intents depend on CVPs to support financial targets. One of the advantages of using i* is that it helps to differentiate strategic intents from supporting objectives.
Internal perspective, Exemplar describes six critical processes in three clusters – operation, customer and innovation that must be executed to achieve four strategic intents of customer perspective. Six core processes – minimize problems, provide rapid response, cross-sell product line, develop new products, shift to appropriate channels and understand customer segment are described as six themes. Exemplar identifies six specialist roles to achieve targets set for six strategic themes. Therefore by using i*, we capture dependency relationships between financial advisor and six specialist roles for six strategic themes (along with some soft targets perceived from the textual description) as shown in Figure 2. We introduce six strategic themes in the context of three clusters below:
The exemplar describes two operation management related themes which are important to satisfy existing customers and delivering desired productivity objective.
(1) Minimize problems is a strategic theme in which quality manager is given the target of 0.1% reduction in incidents and cost of errors to achieve low price CVP. Reducing the number of incidents and the cost of errors is the task that quality manager performs to achieve 0.1% target and achieve it effectively. In i* terms financial advisor depends on quality manager to achieve this strategic theme and to achieve the strategic theme quality manager performs the task of reducing the number of incidents and cost of errors.
(2) Provide rapid response, means 24/7 service with fulfilment time. The exemplar describes call centre representatives as responsible people to achieve this service objective and task for them is to fulfil request. The response must be useful for 3 In some cases quality could include the level of customer experience in using the services offered by Consumer Bank. In these cases, quality is not measureable entity and will be represented as a soft goal. customers. Same i* principle is used here and onward to represent relationship between financial advisor and roles associated to rest of the four strategic themes.
The exemplar described four more strategic themes in customer management & innovation clusters which can help to achieve revenue growth and increase in high value customers objectives. Based on the textual description we find that two themes cross-sell the product line and develop new products are more supportive to achieve relationship based customers and hence increase in revenue per customer. However, two other core processes – shift to appropriate channel and understand customer segment are more supportive to achieve increase in high value customers. (1) Cross-sell the product
For this strategic theme, financial planner is considered an ideal role who is given the target of 2.5 products per customer to be achieved. To achieve this target financial planner is responsible to perform the task of providing broader range of products and service.
(2) Develop new products
In this theme, joint venture manager is given the target of increase in revenue per customer by 50%. To achieve this target joint venture manager performs the task of seeking more partners in order to create additional products and services. (3) Shift to appropriate channel
This theme requires telemarketing program in which 40% shift in channel mix is the target for telemarketers. To achieve this target, three types of tasks are suggested in the exemplar – (1) telemarketing campaign, (2) the acquisition of prospect list and (3) direct mail support program which are associated with the task through decomposition link.
(4) Understand customer segment
Consumer marketer is the responsible person to achieve the target of 30% segment share for this theme. To achieve this target responsible person has the major task of serving customer which is divided into three sub-tasks - clarification of CVP, segmenting the market and communicating the message with potential customers. Achievement of the targets for these six themes through value creating tasks means achievement of overarching net income target of $100 million.
IT (L&G perspective). This perspective focuses on three aspects – human,
organisational and IT. As we have described in Table 1 that i* inherently supports
expressing organisational and human aspects of information systems through
dependency relationships among actors for goals to be achieved, tasks to performed
and resources to be furnished [
For information capital, exemplar presents that the IT organisation is responsible
of installing and maintaining several of the applications and integrate these
applications to the bank’s overall web infrastructure. Sub-processes supporting six
strategic themes encompass IT domain of L&G perspective. Six specialist roles
depend on the IT organization (actor) for the support of sub-processes associated to
their domains. Exemplar describes eight sub-processes that an IT organisation needs
to support in order to realise six strategic themes. IT organisation as an actor for IC
capital furnish applications and infrastructures which are considered as resources [
To achieve strategic theme minimize problems IT organisation installs problem tracking system who’s main purpose is to perform service quality analysis in which it helps to reduce operational errors. Thus according to i* quality manager responsible to achieve strategic theme minimize problems depends on IT organisation to perform the task of service quality analysis for which IT organisation furnish resource – problem tracking system. Similarly five other roles responsible of strategic themes depend on IT organisation to furnish resources for particular tasks which are described below.
To support the process of provide rapid response, IT organisation install customer self help system. This system provides efficient and 24/7 services through websystems. For cross-sell theme IT organisation installs two applications – customer portfolio self management system and customer profitability system. Former system helps customers to develop their financial plans and this system is supported by webarchitecture providing customers 24/7 services. Later system provides facility for financial planners to calculate profitability of customers. Strategic theme develop new product requires project management system which helps project manager to product based revenue.
Shift to appropriate channel is another vital theme for which a complete suite of Customer Relation Management system (CRM) including lead management system, order management system and sales forces automation is used. CRM supports tasks related to this strategic theme effectively. Customer profitability is partly useful for the understand customer segments theme. Customer feedback system is also needed to understand customer needs and it helps to segment customers. Customer feedback system is supported (to some degree) by web-architecture providing the bank a cost effective and efficient way of conducting surveys.
With i*, relationships among objectives across four perspectives are explicit and in one example (see Figure 2) we have shown traceability for a strategic theme – minimize problems upwards for CVPs and financial objectives and downward support from sub-processes and hence IT resources.
1. Development of goal structure using AND alternatives. i* has effectively shown clarity in relationships among different types of objectives for four SM perspectives. Linkages present relationship types among objectives. Representation of different types of objectives with different types of i* constructs such as goals, tasks and resources can also be observed in SMi* model. It is also observed that the explicit representation of elements and their relationships has enhanced readability of SM and thus executives should be able to view SMi* model as an explicit model of relationships. 2. i* has facilitated more than just enhancing clarity in linkages. i* has captured roles/actors related to each perspective (contrary to conventional SM in which roles are identified only in L&G perspective for strategic themes) and provided a network of dependency relationships among actors. Through this dependency approach i* actually addresses issues related to organisational and human capitals which are highlighted in L&G perspective for conventional SM. Therefore, only IT is captured for L&G perspective in SMi* model. SMi* is ideal to communicate with executives explicitly showing them strategic intent and their responsible roles and what measures these roles take to achieve their strategic intents. 3. We do not represent clusters of core processes into groups as shown in conventional SMs. The major reason is the representation of explicit relationships making difficult to group the core processes. So, in SMi* model we use three distinct colours (red for operations, green for customer and yellow for innovation processes) to represent three groups of core processes. In this way we maintain clarity in relationships among objectives. 4. Regulatory and social processes is the fourth cluster of core processes, required for regulatory and environmental sustainability compliance purposes, which is not being represented in this SMi* model for two reasons: (1) we do not find sufficient information on this cluster in consumer bank exemplar and (2) representation of this core process is debatable as the MIS literature mainly discusses three core processes to achieve customer and financial targets which we have represented in SMi* model. 5. SMi* model shows the complete linkages explicitly across the four perspectives of SM. SMi* model, in one example clearly shows that the core process minimize problems helps to achieve CVP low price and hence achieve productivity target while having support from problem tracking system from IT organisation. 6. SM identifies aspects of strategic alignment in term of four perspectives. In this regard new constructs are identified in Table 2. These constructs help to reduce complexity of alignment process and enhances readability of SM. 7. In i* context, SMi* model is dependency heavy. The basic reason is that the exemplar provides limited knowledge for four perspectives of SM process and it is particularly visible for internal perspective. However, we have provided a model – SMi* model which is further explore-able. Provision of such integrated model of explicit linkages was our study objective which we have achieved through this exercise.
Application of i* has introduced structuredness and explicit traceability to SM that was weak in the conventional SM. i* approach has provided meaningful visual constructs to represent different types of targets and relationships among them for four SM perspectives. Integrated network of relationships provides excellent traceability across four perspectives. It is our conjecture that this kind of structuredness and traceability can make SM easy to use as we have not yet validated this in the field the SMi* model produced and the method used to develop it. Given that the researchers from MIS have identified ambiguity in relationships among SM objectives is the problem we believe that with the use of i* constructs relationships among SM objectives now become explicit. Development of SMi* model is the first step in this line of research. In the next step we intend to conduct interviews with IT strategists to evaluate whether SMi* model has better structure and traceability than conventional strategy map. In the final step we will evaluate the method used to develop SMi* model through a field case study.