Laleh Rafati

Introducing Service-oriented Organizational Structure for Capability Sourcing

At the strategic management level in an organization, participants in the decision making process need to share a common language to facilitate discussions and enhance related decision making. The context of this position paper is about strategic sourcing decision making and the goal is to facilitate it through a well-defined language. Companies need to acquire the right capabilities from the right source, and the right shore, at the right cost to improve their competitive position. In this position paper, capability sourcing is introduced as an organizing process to gain access to best-in-class capabilities for all activities in a company’s value chain to ensure long-term competitive advantage. Furthermore, capability sourcing takes place in the service-oriented organizational structure that is introduced as a flexible structure to allocate the resources that shape the firm’s competitive advantages. Therefore, the conceptualization of service system is proposed as a well-defined language for modeling, formalizing, representing and visualizing the concepts, constructs, and models in the capability sourcing process to facilitate strategic sourcing decision making.

Capability Sourcing Modeling

Companies need to acquire the right capabilities from the right source, and the right shore, at the right cost to improve their competitive position. Capability sourcing is an organizing process to gain access to best-in-class capabilities for all activities in a firm’s value chain to ensure long-term competitive advantage. In this paper, capability sourcing modeling is introduced as a technique to create sourcing alternative solutions to facilitate strategic sourcing decision making. Our approach is applying conceptual models as intermediate artifacts which are schematic descriptions of sourcing alternatives based on organization’s capabilities. Therefore, a high-level conceptualization based on Service-Dominant Logic (S-D Logic) is proposed as a language to create capability sourcing conceptual models.

Service-Dominant Strategic Sourcing: Value Creation Versus Cost Saving

The concept of strategic sourcing recognizes that procurement is not just a cost function, but supports the firm’s effort to achieve its long-term objectives. Organizations more and more expect from their chief procurement officer (CPO) to develop long-term and short-term plans in procurement. Typically, however, procurement is driven by a tactical spend management sourcing process aimed at cost saving targets, which is not able to support organizations in achieving strategic objectives like innovation, value creation, sustainable competitive advantage and long-term partnerships. A paradigm shift from a tactical way of thinking about sourcing to a more strategic way of thinking is needed by focusing on value-driven targets. To help realize the new paradigm of value-driven management in sourcing, we designed a systemic view on strategic sourcing based on Service-Dominant Logic and (service) systems thinking. We used this systemic view to develop the conceptual basis of a new modeling and analysis language that helps organizations in exploring sourcing alternatives according to value-driven management.

Towards Model-Based Strategic Sourcing

Strategic sourcing recognizes that procurement is not just a cost function, but supports the firm’s effort to achieve its long-term objectives. 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, capability sourcing, supplier selection and evaluation, contract management and relationship management. Many companies face challenges in obtaining the benefits associated with effective strategic sourcing. From an organizational perspective, procurement data management is a core organizational challenge for chief procurement officers (CPOs) for fact-based strategic sourcing decision-making. To address this challenge, we define research objectives to design a holistic view on strategic sourcing orientations and to develop a conceptual basis for enabling centralization of procurement data and enabling the systemic exploration of sourcing alternatives. From a service ecosystem perspective as a holistic view on strategic sourcing, we define a model driven approach to explore sourcing alternatives based on a common language (C.A.R.S) that enables companies to achieve procurement data management and analytics competencies for fact-based decision-making.

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

Strategicsourcing,asacriticalareaofstrategicmanagement,iscenteredondecision-makingtowards achievingvalue-driventargets.Manycompaniesfacechallengesinobtainingthebenefitsassociated witheffectivestrategicsourcingdecision-making.Enterprisemodelingcancontributetostrategic sourcingdecision-makingbyhelpingintheconceptualization,designandexplorationofmultiple strategicoptionsforbetterdecision-making.Inthisarticle,theauthorsexploreasolutionapproach thatrefinestheexistingEnterpriseEngineering(EE)modelingdisciplineintoaService-oriented EnterpriseEngineering(SoEE)modelingdiscipline,byfoundingitonthenovelapplicationofthe ViableSystemsApproach(vSa)towardsstrategic(sourcing)decision-making.Theproposedmodeling disciplineprovides(1)thesystemicviewpointstointerpretcomplexsourcingphenomena;and(2)the outside-boxmodelstospecifythevalue-driveninteractionsofanenterprise(asasystem)withother actors.Finally,tooperationalizethemodelingdisciplinetheauthorsintroducetheconceptualbasis (C.A.R.S)ofamodelinglanguagetoapplytheSoEEviewpointsanddeveloptherelatedmodelsfor supportingstrategicsourcingdecision-making.Thepaperelaboratesonpreliminaryideaspresented attheSoEA4EE2013workshop. KEywORDS Service-Dominant Logic, Service-Oriented Enterprise Engineering, Strategic Sourcing Decision-Making, ValueDriven Strategic Sourcing, Viable Systems Approach

A Domain-specific Modeling Technique for Value-driven Strategic Sourcing

Strategic sourcing recognizes that procurement should support a firm’s effort to achieve its long-term objectives. In particular, procurement needs to be a cross-functional end-to-end process inside the organization that is oriented towards value creation within the company and between the company and its partners in the value chain. The main challenge to the implementation of value-driven strategic sourcing is the lack of instruments that are characterized by analytical rigor and robustness in the identification of strategic sourcing options to achieve strategic goals. Therefore, this research aims to develop a domain-specific modeling technique founded on the Service-Dominant Logic which focuses on the systemic exploration of sourcing alternatives and emphasizes the delivery of value to achieve desired outcomes. This paper reports on a first cycle of Design Science Research which includes the demonstration and the evaluation of the value and utility of the modeling artefacts by means of a case study about IT outsourcing in the healthcare industry.

Service Oriented Enterprise Engineering: Applying Viable System Approach (vSa) in Enterprise Engineering for Sourcing Decision Making

Componentization and service orientation are two key firms behavioral orientations to transform the traditional (rigid) enterprise model into a flexible (dynamic) one in order to support making successful sourcing decisions like sharing services, in-outsourcing, centralization-decentralization and globalization. According to these enablers, a subjective and dynamic view is needed to study the dynamic nature of enterprises and to interpret the complex emerging phenomena of componentization and service orientation such as dynamic configuration of resources (dynamic capabilities), internal and external interaction between components, service exchange and value creation. In this paper, our solution is applying viable system approach (vSa) in Enterprise Engineering, 1) as an interpretive approach to qualify the concepts of the complex emerging phenomena of componentization and service orientation, 2) as a governance approach to investigate the implications of the complex emerging phenomena for sourcing decision making like sharing, in-outsourcing, centralization-decentralization and globalization.