2 nd June 2006UPV1 Value-based requirements engineering in decentralized value networks Roel Wieringa University of Twente The Netherlands

2 nd June 2006UPV2 Contents 1.VITAL/COOP project description 2.Coordination and value modeling 3.Trust 4.Discussion

2 nd June 2006UPV3 1. Two projects Value-Based IT ALignment (VITAL) –Goal: Find techniques to align IT to networked business Network of profit-and-loss responsible partners Examples: RSI Monitoring, on-line selling, product development – Cooperation process correctness and trust assumptions (COOP) –Goal: Find techniques to check that coordination process is “correct’’ w.r.t. networked business model

2 nd June 2006UPV4 Project resources Total budget about € M1,5 Free university of Amsterdam & University of Twente 3 senior researchers 6 PhD students 10 companies in advisory board (growing)

2 nd June 2006UPV5 Project organization Subprojects –Value modeling –Coordination process design –IT architecture design –Process maturity Monthly researcher’s meetings Biannual board meeting Case study research at companies

2 nd June 2006UPV6 Problem structure When one model changes, the other usually do too Value model Who delivers what to whom Goods, services, money Manager’s view Net Present Value computations of cash flow Process model Coordination process Internal business processes IT model Coordination IT Internal IT

2 nd June 2006UPV7 Contents 1.VITAL/COOP project description 2.Coordination and value modeling 3.Trust 4.Discussion

2 nd June 2006UPV8 Coordination modeling Many coordination languages: BPEL4WS, WSCI, BPSS, BPMN,... Coordination language design is similar to design of business process languages Coordination process design is very different from business process design

2 nd June 2006UPV9 The problem The businesses being coordinated make their decisions independently –.... based on expected revenue do not want to support each other’s business processes do not want to reveal all their secrets to each other may behave differently as specified in the coordination process –(dis)trust assumptions

2 nd June 2006UPV10 Our solution Coordination proces design must be based on a value model The value model is a model of cash flow Businesses agree on value model that is expected to generate positive revenue for each of them Design coordination process that is “correct” w.r.t. this value model. Coordination process makes trust assumptions about business actors Risk analysis

2 nd June 2006UPV11 Example value model Exchanges of commercial value No data flows, no flow of goods, no behavior Instructions for a revenue computation Dependency path

2 nd June 2006UPV12 Meaning of value model Arrows present commercial services –Service provider does something that service consumer finds useful Service of A to B may even be realized as interaction between A and C! –E.g. buyer (consignee) provides security to seller by buying a letter of credit from a bank Value model is not a process model

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2 nd June 2006UPV14 Coordination process

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2 nd June 2006UPV16 Coordination process

2 nd June 2006UPV17 Correctness: First hypothesis For each value exchange, the value model designer must give an operational definition –Observable process Correct coordination process: –on succesful termination all value exchanges on a dependency path occurred –on unsuccessful termination none of them occurred

2 nd June 2006UPV18 Correctness: Second hypothesis Some values are only created by large numbers of process executions. –E.g. reputation, trust Improved definition: –The cash flow computations over a period of time must correspond with some set of coordination process executions over the same period of time This is where we are now... need to work this out

2 nd June 2006UPV19 Contents 1.VITAL/COOP project description 2.Coordination and value modeling 3.Trust 4.Discussion

2 nd June 2006UPV20 3. Trust Shipper does not want to ship before he is paid –Introduce a bank who buys the goods from the shipper –and sells them to the consignee –The bank is trusted by all –The bank takes the risk that the consignee will not pay for the goods –The bank is paid for that by the consignee

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2 nd June 2006UPV23 4. Discussion We are elaborating consistency definitions by means of examples taken from our business partners We test them by doing action research (free consultancy) Need to include cost/benefit estimates of alternative IT implementations Risk analysis Business goal modeling

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2 nd June 2006UPV25 NPV If you have $ now, you can invest it This is worth more than having $ over three years Even assuming there is no inflation This is the risk-free increase