Advertisement

Proposing the Relationship between IT Business Alignment and the Business Value of Service-Oriented Architectures in Financial Firms

  • Daniel Beimborn
  • Nils Joachim
Conference paper
  • 437 Downloads
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 23)

Abstract

What is the business value of Service-Oriented Architectures (SOA) and how can we achieve it? This paper represents a conceptual piece of research which focuses on the impact of IT Business Alignment (ITBA) on the successful implementation of SOA, in terms of its business value. The contribution of this model is predominant in proposing a threefold effect of ITBA on achieving a successful implementation of SOA through the specific strategic needs defined by a particular firm in a specific industry, i.e., the banking industry. As a result, we show that the business strategy moderates the impact of SOA’s general potentials on its actual business value and claim that this relationship is further moderated by ITBA, which must be thoroughly considered by practitioners deciding on introducing SOA in their firm.

Keywords

SOA Service-Oriented Architecture Business Value IT Business Alignment IT Value Alignment ITBA 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Henderson, J., Venkatraman, N.: Strategic alignment: a model for organizational transformation through information technology. In: Kochan, T., Unseem, M. (eds.) Transforming organizations, pp. 97–117. Oxford University Press, New York (1992)Google Scholar
  2. 2.
    Kumar, S.: Impact of Service-Oriented Architecture Adoption on Electronic Supply Chain Performance. In: Americas Conference on Information Systems 2007, Keystone, Colorado, USA (2007)Google Scholar
  3. 3.
    Kumar, S., Dakshinamoorthy, V., Krishnan, M.S.: Does SOA Improve the Supply Chain? An Empirical Analysis of the Impact of SOA Adoption on Electronic Supply Chain Performance. In: Proceedings of the 40th Annual Hawaii International Conference on System Sciences, pp. 1530–1605. IEEE Computer Society Press, Los Alamitos (2007)Google Scholar
  4. 4.
    Kumar, S., Dakshinamoorthy, V., Krishnan, M.S.: SOA and Information Sharing in Supply Chain: “How” Information is Shared Matters. In: Twenty Eighth International Conference on Information Systems, Montreal, Canada (2007)Google Scholar
  5. 5.
    Yoon, T., Carter, P.E.: Investigating the Antecedents and Benefits of SOA Implementation: A Multi-Case Study Approach. In: Americas Conference on Information Systems 2007, Keystone, Colorado, USA, pp. 1–11 (2007)Google Scholar
  6. 6.
    Oh, L.-B., Leong, Y.-X., Teo, H.-H., Ravichandran, T.: Service-oriented Architecture and Organizational Integration: An Empirical Study of IT-enabled Sustained Competitive Advantage. In: 28th International Conference on Information Systems (ICIS), Montreal (2007)Google Scholar
  7. 7.
    Tews, R.: Beyond IT: The business value of SOA. In: AIIM E-DOC (21), p. 5 (2007)Google Scholar
  8. 8.
    Merrifield, R., Calhoun, J., Stevens, D.: The Next Revolution in Productivity. Harvard Business Review 86(6), 72–80 (2008)Google Scholar
  9. 9.
    Schulte, S., Repp, N., Berbner, R., Steinmetz, R., Schaarschmidt, R.: Service-Oriented Architecture Paradigm: Major Trend or Hype for the German Banking Industry? In: Americas Conference on Information Systems 2007, Keystone, Colorado, USA (2007)Google Scholar
  10. 10.
    Papazoglou, M.P., Heuvel, W.-J.: Service oriented architectures: approaches, technologies and research issues. The VLDB Journal 16(3), 389–415 (2007)CrossRefGoogle Scholar
  11. 11.
    Brandl, D.: SOA explained. Control Engineering 54(8), 22–22 (2007)Google Scholar
  12. 12.
    Laurent, W.: The Importance of SOA Governance. DM Review 17(8), 38–38 (2007)Google Scholar
  13. 13.
    Keen, M., Acharya, A., Bishop, S., Hopkins, A., Milinski, S., Nott, C., Robinson, R., Adams, J., Verschueren, P.: Patterns: Implementing an SOA Using an Enterprise Service Bus. IBM Redbooks (2004)Google Scholar
  14. 14.
    OASIS: Reference Model for Service Oriented Architecture 1.0 (2006) (cited 06/15/2008), http://docs.oasis-open.org/soa-rm/v1.0/soa-rm.pdf
  15. 15.
    Papazoglou, M.P., Georgakopoulos, D.: Service-Oriented Computing. Communications of the ACM 46(10), 25–28 (2003)CrossRefGoogle Scholar
  16. 16.
    Baskerville, R., Cavallari, M., Hjort-Madsen, K., Pries-Heje, J., Sorrentino, M., Virili, F.: Extensible Architectures: The Strategic Value of Service-Oriented Architecture in Banking. In: 13th European Conference on Information Systems, Regensburg, Germany (2005)Google Scholar
  17. 17.
    Müller, B., Viering, G., Ahlemann, F., Riempp, G.: Towards Understanding the Sources of the Economic Potential of Service-Oriented Architecture: Findings from the Automotive and Banking Industry. In: 15th European Conference on Information Systems, St. Gallen (2007)Google Scholar
  18. 18.
    Patrick, P.: Impact of SOA on enterprise information architectures. In: Proceedings of the 2005 ACM SIGMOD international conference on Management of data, Baltimore, Maryland, pp. 844–848. ACM Press, New York (2005)CrossRefGoogle Scholar
  19. 19.
    Vasilescu, E., Mun, S.K.: Service Oriented Architecture (SOA) Implications for Large Scale Distributed Health Care Enterprises. In: Proceedings of the 1st Distributed Diagnosis and Home Healthcare (D2H2) Conference, Arlington, Virginia, USA, pp. 91–94 (2006)Google Scholar
  20. 20.
    Henningsson, S., Svensson, C., Vallen, L.: Mastering the Integration Chaos Following Frequent M&As: IS Integration with SOA Technology. In: Proceedings of the 40th Annual Hawaii International Conference on System Sciences. IEEE Computer Society Press, Big Island (2007)Google Scholar
  21. 21.
    Oh, L.-B., Leong, Y.-X., Teo, H.-H., Ravichandran, T.: Service-oriented Architecture and Organizational Integration: An Empirical Study of IT-Enabled Sustained Competitive Advantage. In: Twenty Eighth International Conference on Information Systems, Montreal, ON, Canada (2007)Google Scholar
  22. 22.
    Vitharana, P., Bhaskaran, K., Jain, H., Wang, H.J., Zhao, J.L.: Service-Oriented Enterprises and Architectures: State of the Art and Research Opportunities. In: Americas Conference on Information Systems 2007, Keystone, Colorado, USA (2007)Google Scholar
  23. 23.
    Ciganek, A.P., Haines, M.N., Haseman, W.D.: Challenges of Adopting Web Services: Experiences from the Financial Industry. In: Proceedings of the 38th Annual Hawaii International Conference on System Sciences (HICSS 2005). IEEE Computer Society Press, Big Island (2005)Google Scholar
  24. 24.
    Ciganek, A.P., Haines, M.N., Haseman, W.D.: Horizontal and Vertical Factors Influencing the Adoption of Web Services. In: Proceedings of the 39th Annual Hawaii International Conference on System Sciences. IEEE Computer Society, Kauai (2006)Google Scholar
  25. 25.
    Fricko, A.: SOAs Require Culture Change And Service Reuse. Business Communications Review 36(5), 58–64 (2006)Google Scholar
  26. 26.
    Zhao, J.L., Goul, M., Purao, S., Vitharana, P., Wang, H.J.: Impact of Service-Centric Computing on Business and Education. Communications of the Association for Information Systems 22 (2008)Google Scholar
  27. 27.
    Zhu, K., Kraemer, K.L., Gurbaxani, V., Xin Xu, S.: Migration to Open-Standard Interorganizational Systems: Network Effects, Switching Costs, and Path Dependency. MIS Quarterly 30(Special Issue August 2006), 515–539 (2006)Google Scholar
  28. 28.
    Wong-Bushby, I., Egan, R., Isaacson, C.: A Case Study in SOA and Re-Architecture at Company ABC. In: 39th Hawaii International Conference on System Sciences, Kauai, HI, USA, pp. 1–8 (2006)Google Scholar
  29. 29.
    Bose, S., Walker, L., Lynch, A.: Impact of Service-Oriented Architecture on Enterprise Systems, Organizational Structures, and Individuals. IBM Systems Journal 44(4), 691–708 (2005)CrossRefGoogle Scholar
  30. 30.
    Sambamurthy, V., Bharadwaj, A., Grover, V.: Shaping Agility Through Digital Options: Reconceptualizing the Role of Information Technology in Contemporary Firms. MIS Quarterly 27(2), 237–263 (2003)Google Scholar
  31. 31.
    Bieberstein, N., Bose, S., Walker, L., Lynch, A.: Impact of Service-Oriented Architecture on Enterprise Systems, Organizational Structures, and Individuals. IBM Systems Journal 44(4), 691–708 (2005)CrossRefGoogle Scholar
  32. 32.
    Zhang, Y., Tanniru, M.: Business Flexibility and Operational Efficiency – Making Trade-Offs in Service Oriented Architecture. In: 11th Americas Conference on Information Systems, Omaha, Nebraska, USA, pp. 2265–2270 (2005)Google Scholar
  33. 33.
    Booth, D., Haas, H., McCabe, F., Newcomer, E., Champion, M., Ferris, C., Orchard, D.: Web Services Architecture (2004) (cited 06/15/2008), http://www.w3.org/TR/2004/NOTE-ws-arch-20040211/
  34. 34.
    Stiemerling, O.: Web-Services als Basis für evolvierbare Softwaresysteme. Wirtschaftsinformatik 44(5), 435–445 (2002)CrossRefGoogle Scholar
  35. 35.
    Beimborn, D., Joachim, N., Weitzel, T.: Proposing an Instrument for Evaluating the Business Value of Service-Oriented Architectures. In: 3rd International Workshop on Enterprise Applications and Services in the Finance Industry (FinanceCom 2007), Montreal, ON, Canada (2007)Google Scholar
  36. 36.
    Sanchez, R.: Creating modular platforms for strategic flexibility. Design Management Review 15(1), 58–67 (2004)CrossRefGoogle Scholar
  37. 37.
    Channabasavaiah, K., Holley, K., Tuggle, E.M.: Migrating to a Service-Oriented Architecture. IBM DeveloperWorks (2004)Google Scholar
  38. 38.
    Lyytinen, K.J., Ren, M.: Building Enterprise Architecture Agility and Sustenance with SOA. Communications of the Association for Information Systems 22, 75–86 (2008)Google Scholar
  39. 39.
    Krill, P.: Tibco Turns to Virtualization for SOA. InfoWorld 28(49), 12–13 (2006)Google Scholar
  40. 40.
    Brodkin, J.: IBM merges virtualization and SOA to ease rollout. Network World 24(11), 18 (2007)Google Scholar
  41. 41.
    Taft, D.K.: Experts See Link Between Virtualization and SOA, Baseline, p. 10 (2007)Google Scholar
  42. 42.
    Winter, R.: Unternehmensarchitektur und Integrationsmanagement. In: Sokolovsky, Z., Löschenkohl, S. (eds.) Industrialisierung der Finanzwirtschaft: Strategien, Management und Methoden für die Bank der Zukunft, Gabler, Wiesbaden, pp. 575–599 (2007)Google Scholar
  43. 43.
    Dombret, A.R., Kern, H.J.: European retail banks - An endangered species? Monitor Group, Rothschild. John Wiley & Sons, Chichester (2003)Google Scholar
  44. 44.
    Hamoir, O., McCamish, C., Nierderkorn, M., Thiersch, C.: Europe’s banks: verging on merging. McKinsey Quarterly, pp. 116–125 (2002)Google Scholar
  45. 45.
    Porter, M.E.: Competitive advantage. In: Creating and sustaining superior performance. Free Press, New York (1985)Google Scholar
  46. 46.
    Miles, R.E., Snow, C.C.: Organizational Strategy, Structure, and Process. MacGraw-Hill, New York (1978)Google Scholar
  47. 47.
    Engstler, M., Vocke, C.: Bank&Zukunft 2004-2005. Fraunhofer Institut für Arbeitswirtschaft und Organisation, Frankfurt am Main, Stuttgart, Germany (2004)Google Scholar
  48. 48.
    Lamberti, H.-J., Pöhler, A.: Die Industrialisierung des Backoffice am Beispiel der Etb. In: Lamberti, H.-J., Marlière, A., Pöhler, A. (eds.) Management Von Transaktionsbanken, pp. 3–38. Springer, Heidelberg (2004)CrossRefGoogle Scholar
  49. 49.
    Lammers, M., Löhndorf, N., Weitzel, T.: Strategic Sourcing in Banking - a Framework. In: 12th European Conference on Information Systems (ECIS), Turku, Finland (2004)Google Scholar
  50. 50.
    Schierenbeck, H.: Zukunft der Banken – Banken der Zukunft? Industrialisierung der Finanzwirtschaft: Strategien. In: Sokolovsky, Z., Löschenkohl, S. (eds.) Management und Methoden für die Bank der Zukunft, pp. 785–807. Gabler-Verlag, Wiesbaden (2007)Google Scholar
  51. 51.
    Berger, A.N., Demsetz, R.S., Strahan, P.E.: The consolidation of the financial services industry: causes, consequences, and implications for the future. Journal of Banking and Finance 23(2-3), 637–653 (1999)Google Scholar
  52. 52.
    Gewald, H., Franke, J.: The Risks of Business Process Outsourcing: A Two-Fold Assessment in the German Banking Industry. International Journal of Eletronic Finance 1(4), 420–441 (2007)CrossRefGoogle Scholar
  53. 53.
    Focke, H., Kremlicka, R., Freudenstein, G., Gröflin, J., Pratz, A., Röckemann, C., West, A.: Tendenz steigend: Transaction Banking auf dem Weg zu Service und Innovation. A.T. Kearney Transaction-Banking-Studie, A.T. Kearney, Frankfurt, Munich (2004)Google Scholar
  54. 54.
    Beimborn, D.: Cooperative Sourcing - Simulation Studies and Empirical Data on Outsourcing Coalitions in the Banking Industry. Gabler, Wiesbaden (2008)Google Scholar
  55. 55.
    Henderson, B.D., Venkatraman, N.: Strategic Alignment: Leveraging Information Technology for Transforming Organizations. IBM Systems Journal 32(1), 4–16 (1993)CrossRefGoogle Scholar
  56. 56.
    Reich, B.H., Benbasat, I.: Factors that influence the social dimension of alignment between business and information technology objectives. MIS Quarterly 24(1), 81–113 (2000)CrossRefGoogle Scholar
  57. 57.
    Franke, J., Wagner, H.-T., Weitzel, T.: The role of IT business alignment for value creation: a multiple case study among German banks. In: 26th International Conference on Information Systems (ICIS). Las Vegas, NV (2005)Google Scholar
  58. 58.
    Wagner, H.-T., Beimborn, D., Franke, J., Weitzel, T.: IT business alignment and IT usage in operational processes: a retail banking case. In: 39th Hawaii International Conference on System Sciences (HICSS), Koloa, Kauai, HI (2006)Google Scholar
  59. 59.
    Tiwana, A., Bharadwaj, A., Sambamurthy, V.: The antecedents of information systems development capability in firms: a knowledge integration perspective. In: 24th International Conference on Information Systems (ICIS), Seattle (WA), USA, pp. 246–258 (2003)Google Scholar
  60. 60.
    Reich, B.H., Benbasat, I.: Measuring the Linkage between Business and Information Technology Objectives. MIS Quarterly 20(1), 55–81 (1996)CrossRefGoogle Scholar
  61. 61.
    Chan, Y.E., Reich, B.H.: It Alignment: What Have We Learned? Journal of Information Technology 22, 297–315 (2007)CrossRefGoogle Scholar
  62. 62.
    Lawler, J., Anderson, D., Howell-Barber, H., Hill, J., Javed, N., Li, Z.: A Study of Web Services Strategy in the Financial Services Industry. Information Systems Education Journal 3(3) (2005)Google Scholar
  63. 63.
    Beimborn, D., Franke, J., Wagner, H.-T., Weitzel, T.: The Impact of Operational Alignment on It Flexibility - Empirical Evidence from a Survey in the German Banking Industry. In: 13th Americas Conference on Information Systems (AMCIS), Keystone (CO), USA (2007)Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  • Daniel Beimborn
    • 1
  • Nils Joachim
    • 1
  1. 1.Chair for Information Systems and ServicesUniversity of BambergBambergGermany

Personalised recommendations