Redesigning business networks: reference process, network and service map

ABSTRACT

Driven by factors like globalization, increased competition, and declining customer loyalty, the financial industry is facing a structural transformation. Operating in a changing market, the (re)design of business models and thus also the business network is a mayor challenge for financial institutions. One way of succeeding in this endeavor is to focus on core competencies. Banks therefore adjust their business models in order to reduce their degree of vertical integration by outsourcing complementary activities. This business redesign requires an integrated approach to align the future business model with the involved processes and information systems while also taking the surrounding conditions of the company and its market into account. Present approaches show a restricted usability as they focus either on strategic aspects or process-efficiency only. Moreover, these procedures often lack methodological support so that they are rarely applicable in practice.

This paper introduces an integrated approach of business network redesign for the financial industry that covers the layers strategy, process and systems. The methodology considers the necessity for a common understanding of the underlying processes when reshaping the business model / network. Since research is still in progress, this paper concentrates on the basic instruments which are used to describe a distinct business environment: a reference network and a reference service map both derived from a reference process. As the research focuses on the financial services sector, the paper exemplifies these reference models for the investment process from a bank's point of view. Finally, the instruments are applied to a case study to verify their content and examine their applicability.

REFERENCES

• 1: Accenture: Industrialization: The pathway to high performance banking, Accenture, Frankfurt (2006).
• 2: Alt, R.: Business Network Redesign -- Overview of Methodologies and Example of Process Portals. In Business Process Transformation (Markus, L. M., Grover, V., Series: Advances in Management Information Systems, M. E. Sharpe) (2006).
• 3: David E. Avison , Francis Lau , Michael D. Myers , Peter Axel Nielsen, Action research, Communications of the ACM, v.42 n.1, p.94-97, Jan. 1999 [doi>10.1145/291469.291479]
• 4: Baskerville, R. et al.: Extensible Architectures: The Strategic Value of Service-Oriented Architecture in Banking, In: ECIS'05: Proceedings of the 13th European Conference on Information Systems, Regensburg, (2005) pp. 761--772.
• 5: Champy, J. X-Engineering the Corporation. Reinventing Your Business in the Digital Age. New York: Warner Books, 2002.
• 6: Theodore H. Clark , Donna B. Stoddard, Interorganizational business process redesign: merging technological and process innovation, Journal of Management Information Systems, v.13 n.2, p.9-28, September 1996
• 7: Ferguson, T.: Banks ignore tech at their peril, silicon.com Financial Services, http://www.silicon.com/financialservices/0,3800010322,39162817,00.htm, (02.03.2007) (2006).
• 8: D. F. Ferguson , M. L. Stockton, Service-oriented architecture: programming model and product architecture, IBM Systems Journal, v.44 n.4, p.753-780, 2005
• 9: Ferstl, O. K.; Sinz, E. J.: Modeling of Business Systems Using the Semantic Object Model (SOM), Bamberger Beiträge zur Wirtschaftsinformatik, 43 (1997).
• 10: U. Frank, Multi-perspective Enterprise Modeling (MEMO) - Conceptual Framework and Modeling Languages, Proceedings of the 35th Annual Hawaii International Conference on System Sciences (HICSS'02)-Volume 3, p.72, January 07-10, 2002
• 11: Geiger, H.: The future of Switzerland as a banking centre, realtime. The international news magazine of Telekurs Financial, 3, Zuerich (2004).
• 12: Geiger, H., Hürzeler, H.: The Transformation of the Swiss Private Banking Sector, Journal of Financial Transformation, 9, (2003) pp. 93--103.
• 13: Hagel III, J., Singer, M.: Unbundling the Corporation. HBR, 77 (2), (1999) pp. 133--141.
• 14: Hevner, A., March, S., Park, J., Ram, S.: Design Science in Information System Research. MIS Quarterly, 28 (1), (2004) pp. 75--105.
• 15: Hirschheim, R., Dibbern, J.: Information Systems Outsourcing in the New Economy. In Information Systems Out-sourcing: Enduring Themes, Emergent Patterns and Future Directions (Hirschheim, R., Heinzl, A., Dibbern, J. Ed.). Springer, Berlin, (2002) pp. 3--23.
• 16: Ulrich Homann , Michael Rill , Andreas Wimmer, Flexible value structures in banking, Communications of the ACM, v.47 n.5, May 2004 [doi>10.1145/986213.986234]
• 17: Janssen, W.; Steen, M. W. A.; Franken, H.: Business Process Engineering versus E-Business Engineering, In: HICSS'03: Proceedings of the 36th Hawaii International Conference on System Sciences, (2002) pp. 135c.
• 18: Ajit Kambil , James E. Short, Electronic integration and business network redesign: a roles-linkage perspective, Journal of Management Information Systems, v.10 n.4, p.59-83, March 1994
• 19: Klose, K., Knackstedt, R., Beverungen, D.: Identification of Services - A Stakeholder-based Approach to SOA Development and its Application in the Area of Production Planning, In: ECIS'07, (2007) pp. 1802--1814.
• 20: Kohlmann, F.; Alt, R.: Business-Driven Service Modeling - A Methodological Approach from the Finance Industry, to appear in: BPSC '07: Proceedings of the 1st International Working Conference on Business Process and Services Computing, Leipzig (2007).
• 21: Lamberti, H.-J., Poehler, P.: Die Industrialisierung des Backoffice am Beispiel der etb, in: Management von Transaktionsbanken (Lamberti, H.-J., Marlière, A., Poehler, P. Ed.). Springer, Berlin (2004).
• 22: Lammers, M., Loehndorf, N., Weitzel, T.: Strategic Sourcing in Banking - A Framework. Proceedings 12th European Conference on Information Systems, Turku (2004).
• 23: Thomas W. Malone , Joanne Yates , Robert I. Benjamin, Electronic markets and electronic hierarchies, Communications of the ACM, v.30 n.6, p.484-497, June 1987 [doi>10.1145/214762.214766]
• 24: Middendorf, J., Goettlicher, C.: Visionen für den Transaction Banking-Markt, BearingPoint, Frankfurt (2004).
• 25: Miles, R. E., Coleman, H. J., Snow, C. C.: Organizational Dynamics, 20 (3), (1992).
• 26: Nadham, E. G.: Seven Steps To a Service-Oriented Evolution, In: Business Integration Journal, (2004) pp. 41--44.
• 27: Oesterle, H.: Business in the Information Age. Berlin etc.: Springer, (1995) pp. 13--18.
• 28: Oesterle, H.: Enterprise in the Information Age. In Oesterle H.; E. Fleisch, R. Alt (Eds.), Business Networking: Shaping Collaboration Between Companies. Berlin etc.: Springer, (2001) pp. 17--53.
• 29: Papazoglou, M. P.; Georgakopoulos, D.: Service-oriented Computing, In: Communications of the ACM, 46 (10), (2003) pp. 25--28.
• 30: Scheer, A.-W.: ARIS -- Vom Geschäftsprozess zum Anwendungssystem. 4th Edition, Springer, Heidelberg (2002).
• 31: Schrauth, K.-D.: Die Erwartungen einer Landesbank an die TxB. In: Management von Transaktionsbanken (Lamberti, H.-J., Marlière, A., Poehler, P. Ed.), Springer, Berlin (2004).
• 32: Venkatraman, N.: IT-Enabled Business Transformation: From Automation to Business Scope Redefinition, MIT Sloan Management Review, Vol. 35, No. 2, pp. 73--87 (1994).

INDEX TERMS

Primary Classification:
  K. Computing Milieux
  K.4 COMPUTERS AND SOCIETY
      K.4.3 Organizational Impacts
          Subjects: Reengineering

Additional Classification:
  J. Computer Applications
  J.1 ADMINISTRATIVE DATA PROCESSING

  K. Computing Milieux
  K.4 COMPUTERS AND SOCIETY
      K.4.3 Organizational Impacts
          Subjects: Computer-supported collaborative work
      K.4.4 Electronic Commerce
  K.6 MANAGEMENT OF COMPUTING AND INFORMATION SYSTEMS
      K.6.1 Project and People Management

General Terms:
Design, Management, Theory

Keywords:
business network redesign, financial industry, investment process, reference network, reference process, service map