Integrated Methodology for Linking Business and Process Models with Risk Mitigation

1. Integrated Methodology for Linking Business and Process Models with Risk Mitigation Maria Bergholtz1, Bertrand Gregoire2, Paul Johannesson1, Michael Schmidt2, Petia Wohed1 and Jelena Zdravkovic1 1Royal Institute of Technology (KTH), Sweden 2Centre de Recherche Public ’Henri Tudor’, Luxemburg

2. Agenda • Introduction • Ground Work • Methodology • Example • Conclusion

3. Introduction • Process models need to fit to more strategic business models. • The business model describes entities like values, value propositions, agents and resource exchanges, while the process model focuses on procedural aspects like control flow. • Risks and risk management are important aspects in business-to-process modeling. • In this work, we outline a systematic procedure how to move from business to process models, while mitigating risks.

4. Ground Work • Two views on business models – • BMO (Pigneur, Osterwalder): • The model depicts the perspective of a single enterprise, highliting its environment and concerns for facing a particlular customer demand.

5. Ground Work • Two views on business models – • Value web model (Gordijn): • The model focuses on the value constallations, as the set of value exhanges between all the actors involved. The model thus encomapsses a whole network of partners that realize a business.

6. Ground Work • Binding business and process models – • Johannesson et al complement the value web by a so called activity dependency model. • The activity dependency model identifies, classifies and relates activities needed for executing and coodinating value exchanges. Activites are directly derived from the value web model. • By imposing dependencies on activities, the succession order of value exchanges is constrained. Types of dependencies: duality, flow, trust and trigger. • The activity dependency model is used to (partially) derive a process model from a value web model.

7. Ground Work • Risk Management – • Schmitt and Gregoire define risks and risk managment as important force for process design. • Risks are identified on flows of value objects. • Risk mitigation instruments may result in a change/extension of the business or the process model.

8. Integrated Methodology • The methodology we are applying consists of three steps: • Construction of business model (BMO) • Partial derivation of a value web model from the business model • Partial derivation of a process model from the value web model, using identified activity dependencies.

9. Integrated Methodology • Comprehesive ontology: • Partnerships to value exchanges between actors • Resources, compensations to value objects • Partnerships might describe soft goals.

10. Integrated Methodology • The following method for including risk mitigation instruments into the business to process modelling is suggested: • Start by constructing a business model. • For each value proposition, identify all risks that may occur. • Determine what risk mitigation instruments to use. • Determine whether the instrument may be applied in the business model. • Derive a partial baseline value web from the business model. • For each value exchange, identify all risks that may occur (and that are not already handled in the business model). • Determine what risk mitigation instrument to use. • Determine whether the instrument may be applied in the value web model. • Construct a process model that is compatible with the extended value web, extended to handle each risk mitigation instrument that was not handled in the business model or the value web, applying, process patterns for handling particular risks.

11. Example • Sale of goods: • Business model • Value web model • Process model

12. Example • Sale of goods – managing the non-payment risk • Business model • Value web model Process model

13. Conclusion/Discussion • We have introduced a systematic approach for deriving process models from strategic business models while mitigatin the risks. • There is an outgoing work on completing derivation of process models.