Service-Oriented Enterprise Engineering: A Modeling Discipline Based on the Viable Systems Approach (vSa) for Strategic Sourcing Decision-Making

Service-Oriented Enterprise Engineering: A Modeling Discipline Based on the Viable Systems Approach (vSa) for Strategic Sourcing Decision-Making

Laleh Rafati (Department Business Informatics and Operations Management, Faculty of Economics and Business Administration, Ghent University, Ghent, Belgium) and Geert Poels (Department Business Informatics and Operations Management, Faculty of Economics and Business Administration, Ghent University, Ghent, Belgium)
Copyright: © 2018 |Pages: 21
DOI: 10.4018/IJISSS.2018070102

Abstract

Strategic sourcing, as a critical area of strategic management, is centered on decision-making towards achieving value-driven targets. Many companies face challenges in obtaining the benefits associated with effective strategic sourcing decision-making. Enterprise modeling can contribute to strategic sourcing decision-making by helping in the conceptualization, design and exploration of multiple strategic options for better decision-making. In this article, the authors explore a solution approach that refines the existing Enterprise Engineering (EE) modeling discipline into a Service-oriented Enterprise Engineering (SoEE) modeling discipline, by founding it on the novel application of the Viable Systems Approach (vSa) towards strategic (sourcing) decision-making. The proposed modeling discipline provides (1) the systemic viewpoints to interpret complex sourcing phenomena; and (2) the outside-box models to specify the value-driven interactions of an enterprise (as a system) with other actors. Finally, to operationalize the modeling discipline the authors introduce the conceptual basis (C.A.R.S) of a modeling language to apply the SoEE viewpoints and develop the related models for supporting strategic sourcing decision-making. The paper elaborates on preliminary ideas presented at the SoEA4EE 2013 workshop.
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Introduction

Strategic management as the art and science of formulating, designing and evaluating strategic options and alternatives enables an organization to achieve its long-term objectives. Strategic management deals with survival and competitiveness in the long-term. At the strategic management level, decision-makers deal with complex, non-routine problems. Strategic sourcing has become a critical area of strategic management that is centered on decision-making regarding an organization’s procurement activities such as spend analysis, choosing sourcing strategies, supplier selection and evaluation. Many companies face challenges in obtaining the benefits associated with effective strategic sourcing decision-making. A common language and a stable overarching view are needed to define and articulate concepts that facilitate the description and interpretation of objects of strategic interest and that improve the strategic discussions and enhance related decision-making (Lohse, Biolsi, Walker, & Rueter, 1994; Eppler & Ge, 2007; Lengler & Eppler, 2007; Clark & Brennan, 1991). From an Information System (IS) research perspective, enterprise modeling provides a unique opportunity to contribute to strategic management research by helping in the conceptualization, design and exploration of multiple strategic options, much in the way it has contributed to better decision-making with respect to information technology and information systems (Osterwalder & Pigneur, 2013). Here, our opportunity-driven research question is: how enterprise modeling can support decision-makers at the strategic management level for strategic sourcing?

In this research, we explore a solution approach that refines the existing Enterprise Engineering (EE) modeling discipline (Dietz, 2006) into a Service-oriented Enterprise Engineering (SoEE) modeling discipline, by founding it on the novel application of the Viable Systems Approach (vSa) (Barile & Saviano, 2011) towards strategic (sourcing) decision-making. We show that the vSa foundation of the proposed modeling discipline allows for (1) viewing an enterprise as a viable system that survives through value creation interactions internally and externally with other systems in an ecosystem; and (2) focusing on the ecosystem of the enterprise as a system of viable systems, particular considering value-driven interactions among its sub-systems and its supra-systems. The proposed SoEE modeling discipline founded on vSa provides (1) the appropriate viewpoints to interpret complex sourcing phenomena such as value creation, capability configuration, resource integration and actor interactions; and (2) the related models to specify the interaction of an enterprise (as a system) with other actors (as sub-systems and super-systems) for value creation to achieve strategic sourcing outcomes like sustainable competitive advantage, survivability and long-term partnership. Finally, to operationalize the modeling discipline we introduce the conceptual basis of what can become a simple graphical modeling language for strategic managers to apply the SoEE viewpoints and develop the related models for supporting strategic sourcing decision-making. The language, called Capability-Actor-Resource-Service (C.A.R.S) was developed using concepts from the well-known Service-Dominant Logic (S-D Logic) (Lusch & Vargo, 2006), which fits well with the introduced service ecosystem perspective on value-driven strategic sourcing. Example models are provided as part of an IT outsourcing case-study we conducted at a large university hospital.

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