Adaptive technologies and business integration

Adaptive Technologies
and Business Integration:
Social, Managerial,
and Organizational
Dimensions

Maria Manuela Cunha
Polytechnic Institute of Cavado and Ave, Portugal
Bruno Conceição Cortes
Business Objects, Portugal
Goran D. Putnik
University of Minho, Portugal

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Library of Congress Cataloging-in-Publication Data
Adaptive technologies and business integration : social, managerial and organizational dimensions / Maria Manuela Cunha, Bruno

Conceicao Cortes and Goran D. Putnik, editors.
p. cm.
Summary: “This book provides inter-organizational aspects in business integration including managerial and organizational
integration, social integration, and technology integration, along with the resources to accomplish this competitive advantage”-Provided by publisher.
Includes bibliographical references and index.
ISBN 1-59904-048-4 (hardcover) -- ISBN 1-59904-050-6 (ebook)
1. Industrial organization. I. Cunha, Maria Manuela, 1964- II. Cortes, Bruno Conceicao, 1976- III. Putnik, Goran, 1954HD31.A296 2007
658.4’02--dc22
2006027729
British Cataloguing in Publication Data
A Cataloguing in Publication record for this book is available from the British Library.
All work contributed to this book set is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher.


Table of Contents

Detailed Table of Contents ................................................................................................................. vi
Preface ................................................................................................................................................. xii
Acknowledgments ...........................................................................................................................xviii
Section I
Business Requirements and Organizational Modeling
Chapter I
Enterprise Reconfiguration Dynamics and Business Alignment / Goran D. Putnik,
Maria Manuela Cunha, Bruno Conceição Cortes, and Paulo Silva Ávila ........................................ 1
Chapter II
Co-Engineering Business, Information Use, and Operations Systems for IT-Enabled
Adaptation / Jay Ramanathan and Rajiv Ramnath ............................................................................... 33
Chapter III
Dynamic Enterprise Modeling for Knowledge Worker Industries / Ian McKeachie and
Ljubo Vlacic ..................................................................................................................................... 59

Chapter IV
Enterprise Systems: Innovation, Development, and Advantages / Kevin E. Voges and
Manuel Fernando Duarte Romero ................................................................................................... 82
Section II
Integration Models and Architectures
Chapter V
Competence Management for Business Integration / Raymond Houe, Bernard Grabot,
and Laurent Geneste ...................................................................................................................... 104
Chapter VI
Business Integration in the Insurance Industry: The Intermediary Side of the Question /
Vitor Amorim and Silvina Santana................................................................................................. 118


Chapter VII
SCOntology: A Formal Approach Toward a Unified and Integrated View of the Supply Chain /
Silvio Gonnet, Marcela Vegetti, Horacio Leone, and Gabriela Henning ........................................... 137
Section III
Business Integration Management
Chapter VIII
Holistic Approach to Align ICT Capabilities with Business Integration / Marc Rabaey,
Herman Tromp, and Koenraad Vandenborre................................................................................. 160
Chapter IX
Managing Information Systems Integration in Corporate Mergers and Acquisitions /
Sven A. Carlsson and Stefan Henningsson .................................................................................... 174
Chapter X
The Impact of the Process Integration on Business Management: Case Studies using Six Sigma
Methodology / F. Aggogeri, E. Gentili, and M. Mazzola .................................................................... 189
Section IV
Knowledge Management for Business Integration
Chapter XI

New Business Requirements in the Knowledge-Based Society / Anca Draghici and
George Draghici ............................................................................................................................ 211
Chapter XII
Intelligent Organizations: Knowledge Computing Management / Gustavo Daniel Tripodi and
Roberto Gustavo Illescas ............................................................................................................... 244
Chapter XIII
Integration of Knowledge Resources in R&D Organizations: The Case of Mihajlo Pupin Institute /
Valentina Janev and Sanja Vraneš ................................................................................................. 263
Section V
Technologies and Infrastructures
Chapter XIV
Business Information Integration from XML and Relational Databases Sources /
Ana María Fermoso Garcia and Roberto Berjón Gallinas ........................................................... 282


Chapter XV
Ontology Mapping Techniques in Information Integration / Yi Zhao, Xia Wang, and
Wolfgang A. Halang ....................................................................................................................... 308
Chapter XVI
Integration Platform for De-Centralized Investment Projects Appraisal / Mladen Stanojević,
Violeta Tomašević, and Sanja Vraneš ............................................................................................ 329
About the Authors ............................................................................................................................ 350
Index ................................................................................................................................................... 359


Detailed Table of Contents

Preface ................................................................................................................................................. xii
Acknowledgments ...........................................................................................................................xviii
Section I

Business Requirements and Organizational Modeling
Chapter I
Enterprise Reconfiguration Dynamics and Business Alignment / Goran D. Putnik,
Maria Manuela Cunha, Bruno Conceição Cortes, and Paulo Silva Ávila ........................................ 1
Chapter I discusses the phenomenon of the enterprise organizational reconfiguration and its dynamics
as a business alignment enabler. By business alignment it is understood the enterprise’s actions undertaken to gain synergy between a market opportunity and the provision or delivery of the product claimed
by the market. The enterprise’s organization “fast reconfiguration,” either as a proactive or as a reactive action, is seen as the main enabler of business alignment and the main requirement for achieving
competitiveness. The need to keep a close alignment with dynamic market environment in permanent
change implies the high dynamics of the organizational structure—reconfiguration. The text presents
enterprise’s requirements for competitiveness and business alignment, discusses the phenomenon of the
enterprise reconfigurability and finally analyses some organizational and management approaches, from
the reconfigurability point of view.
Chapter II
Co-Engineering Business, Information Use, and Operations Systems for IT-Enabled
Adaptation / Jay Ramanathan and Rajiv Ramnath ............................................................................... 33
Chapter II introduces the Adaptive Complex Enterprise architecture, an enabler to deal with an externally-driven environment and with increasing complexity among entities. Adaptive Complex Enterprise
architecture is a holistic architecture based on complete dynamic performance traceability of interacting


entities as they produce value. The architecture is operationalized through the related Co-engineering
methodology, and traceability enables the business agents to accede the information for decision-making
and adaptation, using IT as needed.
Chapter III
Dynamic Enterprise Modeling for Knowledge Worker Industries / Ian McKeachie and
Ljubo Vlacic ..................................................................................................................................... 59
Chapter III presents a case study of the empirical development and implementation of a commercially
successful enterprise modeling framework and associated constructs. It follows a practical business
and management viewpoint and provides a guide for the implementation of the empirical framework
in real enterprises. It presents the successful integration of standard theoretical frameworks with empirical business and management models, including areas that have previously not been covered in an
integrated fashion.

Chapter IV
Enterprise Systems: Innovation, Development, and Advantages / Kevin E. Voges and
Manuel Fernando Duarte Romero ................................................................................................... 82
Information technology development has, in many cases, not been balanced by an enhancement of
information management competences within organizations. Chapter IV discusses the relevance of
information management capacity and its impact on organizations’ development and competitiveness.
The chapter discusses how to successfully exploiting opportunities, through the business philosophy of
Enterprise Systems which have helped streamline business processes and improve the overall performance of organizations, introduces and discusses the development of Enterprise Systems and its role
in creating competitive advantage.
Section II
Integration Models and Architectures
Chapter V
Competence Management for Business Integration / Raymond Houe, Bernard Grabot,
and Laurent Geneste ...................................................................................................................... 104
Business integration requires that each partner can guarantee not only the quality of its products, but
also the qualification and competence of its workforce. The usual models such as those included in the
Human Resource Management modules of ERP systems, are not sufficient in highly constrained domains
like aeronautics. Chapter V discusses how a generic competence management model was modified and


enlarged in order to satisfy such constraints, introducing a model based on a software application, which
may allow to guarantee that only competent people have been involved in the various steps of the manufacturing process and also may allow to improve the way operational competences are managed.
Chapter VI
Business Integration in the Insurance Industry: The Intermediary Side of the Question /
Vitor Amorim and Silvina Santana................................................................................................. 118
Chapter VI introduces the main concerns and constraints felt in the insurance industry and exposes the
problems faced by intermediaries and insurance companies in this industry all over the world, when
trying to integrate their business, and how they can be overcome. Information and Communication
Technologies and Information Systems can provide that connectivity, both intra- and inter-organizations, making it possible for the participants to come closer and dialog better, reducing response times
and costs, improving the service to their clients and, possibly, creating new business opportunities. It

also includes a case study about how an intermediary integrates with other entities, using an electronic
business platform.
Chapter VII
SCOntology: A Formal Approach Toward a Unified and Integrated View of the Supply Chain /
Silvio Gonnet, Marcela Vegetti, Horacio Leone, and Gabriela Henning ...................................... 137
Chapter VII identifies the various challenges associated to the Supply Chain Management, which involves
coordinating and integrating material and immaterial flows, both within and across several companies.
The integration of these flows is perceived in quite distinct ways by different communities, raising some
semantics related problems. The chapter introduces a new ontology, named SCOntology, to describe a
supply chain at various abstraction levels, by sharing a precise meaning of the information exchanged
during the communication among the many stakeholders involved. It also provides a foundation for
the specification of information logistics processes and sets the grounds for measuring and evaluating
a supply chain.
Section III
Business Integration Management
Chapter VIII
Holistic Approach to Align ICT Capabilities with Business Integration / Marc Rabaey,
Herman Tromp, and Koenraad Vandenborre................................................................................. 160
Chapter VIII proposes a holistic approach for the alignment of the business integration with the necessary
ICT capabilities. This holistic approach encompasses the set up of an Interdisciplinary Forum whose
task is to align the business strategy with the resource strategy. The chapter discusses the authors’ view


on Enterprise Architecture, integrating a business architecture, an information architecture, an application architecture and an infrastructure architecture, how it relates to the Interdisciplinary Forum, and
discusses the impact of business integration on Enterprise Architecture.
Chapter IX
Managing Information Systems Integration in Corporate Mergers and Acquisitions /
Sven A. Carlsson and Stefan Henningsson .................................................................................... 174
Chapter IX focuses the role of information systems integration in the context of corporate mergers and
acquisitions. The topic is addressed from a management perspective and targets especially the consequences that information systems integration has for the acquisition initiative. Based on a literature

review, the chapter presents a framework for describing, explaining, and managing information systems
integration in mergers and acquisitions. The usefulness and validity of this framework is shown by a
case study on acquisition and information systems integration.
Chapter X
The Impact of the Process Integration on Business Management: Case Studies using Six Sigma
Methodology / F. Aggogeri, E. Gentili, and M. Mazzola .................................................................... 189
Chapter X demonstrates the power of the process integration in increasing the performance level of
industrial systems using the Six Sigma methodology. Six Sigma methodology is the solution proposed
by the authors to manage processes in order to achieve customer satisfaction, focusing on an integrated
management of their functions. This methodology can be applied to every industrial field, anywhere
the need for a global, shared objective and for improvement is advised. Additionally, three case studies
are discussed, in order to better illustrate the opportunities and the advantages associated to the implementation of Six Sigma.
Section IV
Knowledge Management for Business Integration
Chapter XI
New Business Requirements in the Knowledge-Based Society / Anca Draghici and
George Draghici ............................................................................................................................ 211
Chapter XI explains the knowledge management’s role for competitive advantage as a means of new
business requirement in the knowledge based society. It argues that knowledge management, combined
with new Information Technologies, determinates new approaches of the business strategy, knowledge
leadership, culture, management content, organizational structure, technology and innovation, which are


key enablers for competitive advantage. In addition, these are discussed in the case of a virtual organisation (Network of Excellence) for building the knowledge sharing culture, based on the interaction of the
management functions and the stages of the knowledge creation process.
Chapter XII
Intelligent Organizations: Knowledge Computing Management / Gustavo Daniel Tripodi and
Roberto Gustavo Illescas ............................................................................................................... 244
Chapter XII is concerned with conceptualizing and getting results on topics that contribute to the understanding of the Knowledge Society, focusing the area of Computer Administration of Knowledge,
with the purpose of obtaining sustainable Intelligent Organizations. The chapter introduces an approach

for organizations to carry out methodologically a diagnostic and outline of solutions and for obtaining
of knowledge through tools of Business Intelligence and Technology Management. The purpose is to
facilitate the tools and concepts to recognize the strategic value of information, as an effective form
to achieve the prospective results, by an appropriate structure of Knowledge, Human Resources and
Technology, that crosses the Organization in an integral and integrated form.
Chapter XIII
Integration of Knowledge Resources in R&D Organizations: The Case of Mihajlo Pupin Institute /
Valentina Janev and Sanja Vraneš ................................................................................................. 263
Chapter XIII introduces a business integration framework suitable for knowledge management in R&D
organizations in the high technology sector, supported by a knowledge management platform. Two
main constituents of the proposed system are: the document warehouse layer, based on data warehousing methodology, and the semantic layer based on ontologies and Web Services. The initial results of
introducing such a platform in a R&D institute (the Mihajlo Pupin Institute) in accordance with ISO
9001 Quality Assurance standard are presented and discussed. Its utilization in the Institute will facilitate
reusability of knowledge items and enhance creativity and innovation.
Section V
Technologies and Infrastructures
Chapter XIV
Business Information Integration from XML and Relational Databases Sources /
Ana María Fermoso Garcia and Roberto Berjón Gallinas ........................................................... 282
Chapter XIV introduces different alternatives to store and manage jointly relational and XML data
sources. Database Management Systems continue to be one of the most used tools to manage large
amounts of information, and the most extended model is the relational one. On the other side, XML
has reached the de facto standard to present and exchange information between businesses in the web.


Therefore, it could be necessary to use tools as mediators to integrate these two different data to a common format like XML. The chapter makes a classification of the main tools and systems where this
problem is handled, presenting their advantages and disadvantages, and proposes a new system to solve
the integration business information problem.
Chapter XV
Ontology Mapping Techniques in Information Integration / Yi Zhao, Xia Wang, and

Wolfgang A. Halang ....................................................................................................................... 308
Chapter XV provides an overview of the approaches to information integration based on ontology mapping. It introduces the background and concepts of ontology mapping, and presents a comprehensive
and detailed treatment of different ontology mapping schemes and of closely related aspects, such as
mapping result description, similarity measures, and algorithm performance evaluation, etc. Ontologies
are means to conceptualize and structure knowledge; however, ontologies do not provide semantic interoperability since a single ontology can not be used to represent all kinds of domains and applications.
Ontology mapping is therefore introduced to achieve knowledge sharing and semantic integration in an
environment with different underlying ontologies.
Chapter XVI
Integration Platform for De-Centralized Investment Projects Appraisal / Mladen Stanojević,
Violeta Tomašević, and Sanja Vraneš ............................................................................................ 329
Chapter XVI discusses a few software architectures and platforms in relation with their ability to cope
with Business Integration problems in large and geographically dispersed companies. Of these architectures the three-tier architecture has reached the maturity and proved its usefulness in solving these
problems. For solving more complex Business Integration Problems, Service Oriented Architecture,
based on agent or Web services approach, is recommended. This chapter provides concise information
about architectures and platforms, and an insight into two complex applications based on them.
About the Authors ............................................................................................................................ 350
Index ................................................................................................................................................... 359


xii

Preface
About the subject
Business integration is an emerging need of every organization, with increased importance, as information and communication technologies (ICT) advance, efficiency and competitiveness are a must, and
collaboration becomes indispensable. Business integration is becoming more and more complex due to
the increased complexity of products and processes, increased incorporation of knowledge and skills,
fast technological change, globalization and competition. It is, thus, a main organizational challenge
gaining increased relevance during recent years. If in the past integration was associated mainly with
engineering (processes and operations) integration, today it pervades from the engineering level to the
whole organization and inter-organizational aspects.

Organizations integrate resources: people, equipment, software tools, knowledge, skills, technology,
opportunities, markets, suppliers, partners. Resources used by organizations, besides being heterogeneous,
are supposed to work together effectively and efficiently. The correct orchestration of their integration
determines the ability of producing the goods and services that dictate the organization’s competitiveness.
In this context, business integration is one of the most important, if not the most important, requirements
for making any business truly competitive. Business integration assures that all the resources propel
increased performance.
Integration between any sort of process, product or technology, means the ability of two or more
systems to work together. When thinking about business integration, it means also the management of
human, information and technology resources that together support the organization itself and its relation with partners, suppliers, supply chain … whatever organizational model by which the organization
is structured.
But integration is difficult, challenging and, many times, a failure! Adaptive technologies for information and application integration, like Webservices, SOAP, WML and so forth, appear as a robust solution
and readily available, but de per si do not solve current needs. Integration models and architectures,
technology management and knowledge management are also technologies that must be specially understood and managed to fully achieve business integration objectives.
During recent years we have assisted a huge development effort, addressing the need to share information between processes or within enterprise systems, the need to make information available through
the Web, the need to participate in electronic marketplaces, to integrate the supply chain and so forth.
The importance of these developments is widely known; however, their implementation is not immediate, as it requires an information technology strategic activity of planning and coordination involving
performance management, business processes management, business intelligence, knowledge management, database integrity, workflow, accountability and many other fields of knowledge.


xiii

orgAnizAtions fAce new trends, both At the intrA- And
inter-orgAnizAtionAl levels
This book addresses the development of adaptive strategies and technologies to enable business integration,
covering both intra- and inter-organizational integration levels, from three dimensions: managerial, social and
organizational. It presents a collection of different but complementary aspects, from business integration models
and architectures, knowledge management, socio-technical approaches, and standards and integration protocols,
all of these contributing to make intra- and inter-organizational integration possible.
In 16 chapters authored by 40 internationally renowned and experienced researchers and professionals of the

business integration world, this book collects the recent models and solutions advanced both by academe and
business. It addresses the following four dimensions (or perspectives) of business integration:
1.
2.
3.
4.

The organizational dimension, which includes ontological and organizational approaches—concepts, organizational models and business integration models.
The management dimension, which includes integration management, relationship management, process
integration, knowledge management, technology integration management and information integration.
The technological dimension, which includes application integration and integration technologies, technological infrastructure and standards.
The human resources dimension, which includes human resources management, human resources integration, competence management and so forth.

The mission of this book is to discuss the main issues, trends and opportunities related to business integration
from the above-mentioned dimensions, and to disseminate practical solutions.
This book is both for an academic audience (teachers, researchers and students, mainly of post-graduate
studies) and professionals (managers, organizational and system developers, and information technology (IT)
specialists in terms of explaining requirements and frameworks for the development of solutions).

orgAnizAtion of the book
The book contains 16 chapters written by a group of internationally renowned and experienced authors in the
business integration field, as well as a set of younger authors showing a high potential for research and development. Contributions came from the United States, Latin America, several countries of Eastern and Western
Europe, Australia, and New Zealand. At the same time, the book integrates contributions from academe, research
institutions and industry, representing a good and comprehensive representation of the state-of-the-art adaptive
technologies to address the several dimensions of this fast evolutionary problem of business integration.
The chapters are organized in five sections:
Section I, Business Requirements and Organizational Modeling, introduces current business requirements
and organizational models as requirements for business integration. Why integrate? What to integrate? Which
are the integration enablers? The first four chapters of the book contribute to answering to these questions.
Chapter I, Enterprise Reconfiguration Dynamics and Business Alignment, discusses the phenomenon of the

enterprise organizational reconfiguration and its dynamics as a business alignment enabler. By business alignment, it will be understood the enterprise’s actions undertaken to gain synergy between the business—that is,
the market opportunity and the provision of the required, or innovative, product—with the required, or designed,
specifications at the required, or proper, time with the lowest cost and best possible return (financial or other).
The enterprise’s organization “fast reconfiguration,” either as a proactive or reactive action, or “fast adaptation”
or “flexibility” (as a “reactive” action), is seen as the main enabler of business alignment and the main require-


xiv

ment for achieving competitiveness. The need to keep a close alignment with a dynamic market environment
in permanent change implies the high dynamics of the organizations’ organization, or organizational structure,
reconfiguration. The first part of the text presents an enterprise’s requirements for competitiveness and business
alignment, while the second part discusses the phenomenon of enterprise reconfigurability as the business alignment enabler. In the third part, an analysis of some organizational and management approaches is presented from
the reconfigurability point of view.
Chapter II, Co-Engineering the Business, Information Use, and Operations Systems for IT-Enabled Adaptation,
introduces the Adaptive Complex Enterprise architecture, an enabler to deal with an externally driven environment and increasing complexity among entities. This holistic Adaptive Complex Enterprise architecture is based
on complete dynamic performance traceability of interacting entities as they produce value. The architecture is
operationalized through the related co-engineering methodology introduced in this chapter. Traceability enables
business agents to accede the information for decision-making and adaptation, using IT as needed. The unified
business-IT architecture approach introduced is easier than applying a plethora of disconnected business, system
engineering and IT frameworks.
Chapter III, Dynamic Enterprise Modeling for Knowledge Worker Industries, presents a case study of the
empirical development and implementation of a commercially successful enterprise modeling framework and
associated constructs. The chapter discusses the objectives from a practical business and management viewpoint and provides a guide for the implementation of the empirical framework in real enterprises. It presents
the successful integration of standard theoretical frameworks with empirical business and management models,
including areas that previously have not been covered in an integrated fashion, such as strategic management
capability, the ability to integrate the framework with various management paradigms and partial automation
of model data capture.
Chapter IV, Enterprise Systems: Innovation, Development, and Advantages, discusses the relevance of information management capacity and its impact on organizations’ development and competitiveness. The current
increase in information management capacity generates new opportunities, making it critical for companies to

significantly increase information, intelligence and technology management competences to successfully exploit
these new opportunities. However, IT development has, in many cases, not been balanced by an enhancement of
information management competences within organizations. This chapter discusses how to successfully exploit
opportunities through the business philosophy of Enterprise Systems, which has helped streamline business
processes and improve the overall performance of organizations; and introduces and discusses the development
of Enterprise Systems and its role in creating competitive advantage.
Section II, Integration Models and Architectures, is composed of three chapters that contribute through addressing the specification and development of models and architectures to support business integration. These
chapters discuss the questions: How to efficiently and effectively integrate? and How can integration bring
competitive advantages?
Chapter V, Competence Management for Business Integration, discusses that business integration requires
that each partner can guarantee not only the quality of its products, but also the qualification and competence of
its workforce. The usual models, such as those included in the human resource management modules of Enterprise Resource Planning (ERP) systems, are not sufficient in highly constrained domains like aeronautics. The
chapter discusses how a generic competence management model needed to be modified and enlarged to satisfy
such constraints, introducing a model based on a software application, which may ensure that only competent
people have been involved in the various steps of the manufacturing process and also may improve the way
operational competences are managed in the company.
Chapter VI, Business Integration in the Insurance Industry: The Intermediary Side of the Question, introduces
the main concerns and constraints felt in the insurance industry, which is heavily based on data, information and
knowledge processing and requires a large connectivity and articulation between the entities in the business.


xv

ICT and information systems can provide that connectivity, both intra- and inter-organization, making it possible for participants to come closer and dialog better, reducing response times and costs, improving the service
to their clients and, possibly, creating new business opportunities. The chapter exposes the problems faced by
intermediaries and insurance companies in this industry all over the world when trying to integrate their business
and how they can be overcome. It also explains, by using a case study, how far the business of an intermediary
integrates with other entities, using an electronic business platform built on Internet technologies.
Chapter VII, SCOntology: A Formal Approach Toward a Unified and Integrated View of the Supply Chain,
points out the various challenges associated with supply chain management, which involves coordinating and

integrating material, information and money flows both within and across several companies. The integration
of these flows is perceived in quite distinct ways by different communities, raising some semantics-related
problems. The chapter introduces a new ontology, SCOntology, to describe a supply chain at various abstraction levels by sharing a precise meaning of the information exchanged during the communication among the
many stakeholders involved. Moreover, SCOntology provides a foundation for the specification of information
logistics processes and also sets the grounds for measuring and evaluating a supply chain by stating different
metrics and performance-related concepts.
Section III, Business Integration Management, addresses the organizational and managerial tools to enable
business integration implementation (or integration processes). The three chapters of this section present several
organizational and managerial solutions and contribute to the answer of these questions: How to enable business
integration? How to manage to fully exploit business integration opportunities and advantages?
Chapter VIII, Holistic Approach to Align ICT Capabilities with Business Integration, proposes a holistic
approach for the alignment of business integration with necessary ICT capabilities. This holistic approach encompasses the setup of an interdisciplinary forum, whose task is to align the business strategy with the resource
strategy. The chapter discusses the authors’ view on Enterprise Architecture (integrating a business architecture,
information architecture, application architecture and infrastructure architecture), how it relates to the interdisciplinary forum, and the impact of business integration on Enterprise Architecture.
Chapter IX, Managing Information Systems Integration in Corporate Mergers and Acquisition, focuses the role
of information systems integration in the context of corporate mergers and acquisitions. The topic is addressed
from a management perspective and especially targets the consequences that information systems integration
has for the acquisition initiative. Based on a literature review, the chapter presents a framework for describing,
explaining and managing information systems integration in mergers and acquisitions. The usefulness and validity of this framework is shown by a case study on acquisition and information systems integration.
Chapter X, The Impact of the Process Integration on Business Management: Case Studies using Six Sigma
Methodology, shows the power of the process integration in increasing the performance level of industrial
systems using the Six Sigma methodology. The chapter explains how successful theories about process integration can be implemented in different industrial fields by introducing a rigorous methodology. Starting from the
consideration that processes must be managed in order to achieve customer satisfaction, the companies need to
change their old paradigms and focus on an integrated management of their functions. Six Sigma methodology
is the solution proposed by the authors, which can be applied to every industrial field, anywhere there is a need
for a global, shared objective and improvement. Additionally, three case studies are discussed to better illustrate
the opportunities and advantages associated with implementation of Six Sigma.
Section IV, Knowledge Management for Business Integration, presents three contributions to this indispensable technology for business integration, covered by three chapters that discuss: What is the knowledge
management role? What is the impact of knowledge management? How can knowledge resources be integrated
in organizations?

xvi

Chapter XI, New Business Requirements in the Knowledge-Based Society, explains knowledge management’s
role for competitive advantage as a means of a new business requirement in the knowledge-based society. It
argues that knowledge management, combined with new IT, determines new approaches of the business strategy,
knowledge leadership, culture, management content, organizational structure, technology and innovation, which
are key enablers for competitive advantage. In addition, these are discussed in the case of a virtual organization
(Network of Excellence) for building the knowledge-sharing culture, based on the interaction of management
functions and stages of the knowledge creation process. To the authors, understanding the main issues and trends
of knowledge management, as an essential element of business integration, will assist in developing new approaches for attending efficiency in the new global virtual organizations.
Chapter XII, Intelligent Organizations: Knowledge Computing Management, is concerned with conceptualizing and getting results on topics that contribute to the understanding of the Knowledge Society we are going
through, focusing the area of computer administration of knowledge, with the purpose of obtaining sustainable
intelligent organizations. The chapter introduces an approach for organizations to carry out methodologically a
diagnostic and outline of solutions. The contents are related with the information and obtaining of knowledge
through tools of business intelligence of and technology management. The purpose is to facilitate the tools and
concepts to recognize the strategic value of information as an effective form to achieve the prospective results.
This purpose is achieved by an appropriate structure of knowledge, human resources and technology that crosses
the organization in an integral and integrated form.
Chapter XIII, Integration of Knowledge Resources in R&D Organizations: The Case of Mihajlo Pupin Institute,
introduces a business integration framework suitable for knowledge management in R&D organizations in the
high technology sector. The knowledge management platform design is based on the latest technological trends
and standards. Two main constituents of the proposed system are: the document warehouse layer, based on data
warehousing methodology, and the semantic layer, based on the latest semantic technologies of ontologies and
Web services. The initial results of introducing such a platform in an R&D institute (the Mihajlo Pupin Institute)
in accordance with ISO 9001 Quality Assurance standards, are presented and discussed. Its utilization at the
Mihajlo Pupin Institute will facilitate reusability of knowledge items and enhance creativity and innovation.
Section V, Technologies and Infrastructures, consists of three chapters describing and discussing the development of solutions for information and application integration. It helps answer the question: Which are the main
infrastructures enabling information and application integration?

Chapter XIV, Business Information Integration from XML and Relational Databases Sources, introduces
different alternatives to storing and managing jointly relational and XML data sources. Today, businesses are
transformed in e-business and have to manage large data volumes and from heterogeneous sources. To manage
large amounts of information, satabase management systems continue to be one of the most used tools, and the
most extended model is the relational one. On the other side, XML has reached the de facto standard to present
and exchange information between businesses on the Web. Therefore, it could be necessary to use tools as
mediators to integrate these two different data to a common format like XML, since it is the main data format
on the Web. The chapter makes a classification of the main tools and systems where this problem is handled,
presenting their advantages and disadvantages; and proposes a new system to solve the integration business
information problem.
Chapter XV, Ontology Mapping Techniques in Information Integration, provides an overview of the approaches to information integration developed by researchers in the community of ontology mapping. Besides
introducing the background and concepts of ontology mapping, it presents a comprehensive and detailed treatment
of different ontology mapping schemes. Closely related aspects of ontology mapping, such as mapping result
description, similarity measures, algorithm performance evaluation and so forth, are also addressed. Ontologies
are means to conceptualize and structure knowledge; however, ontologies themselves do not provide semantic
interoperability, since a single ontology cannot be used to represent all kinds of domains and applications. Ontology mapping, therefore, is introduced to achieve knowledge sharing and semantic integration in an environment


xvii

with different underlying ontologies. The emphasis of the chapter is to present an actualized snapshot of this
fast-growing technology.
Chapter XVI, Integration Platform for De-Centralized Investment Projects Appraisal, discusses a few
software architectures and platforms in relation with their ability to cope with business integration problems
in large and geographically dispersed companies. Of these architectures, the three-tier architecture has reached
maturity and proved its usefulness in solving these problems. For solving more complex business integration
problems, Service Oriented Architecture (SOA), based on an agent or Web services approach, is recommended.
This chapter provides concise information about architectures and platforms, and an insight into two complex
applications based on them, that will be useful in developing other complex applications that face similar business integration problems.

expectAtions
The book provides researchers, scholars and professionals with some of the most advanced research developments, solutions and implementations. It is expected to provide a better understanding of business integration
and its adaptive technologies from an organizational and technological perspective. We expect the book to be
read by academics (i.e., teachers, researchers and students), technology solutions developers and enterprise
managers (including top-level managers). The book is also expected to help and support teachers of graduate
and postgraduate courses from management to IT.
Maria Manuela Cunha
Bruno Conceição Cortes
Goran D. Putnik
Editors
Guimarães, March 2006


xviii

Acknowledgments
Editing a book is a hard, but compensating and enriching, task, as it involves an array of different activities, like contacts with authors and reviewers; exchanges of ideas and experiences; process management;
organization and integration of contents; and many others, with the permanent objective of creating a
book that meets public expectations. And this task cannot be accomplished without great help and support from many sources. The authors would like to acknowledge the help, support and confidence of all
who made this creation possible.
First of all, this book would not have been possible without the ongoing professional support of the
team of professionals of Idea Group Inc., whose contributions throughout the process of making this
book available all over the world was invaluable. We are most grateful to Mehdi Khosrow-Pour, senior
acquisitions editor, and Jan Travers, managing director, for the opportunity. A special word of gratitude
is due to Kristin Roth, development editor, for her guidance and friendly words of advice, encouragement and prompt help. Special thanks go also to Sara Reed and all the staff at Idea Group Inc., whose
contributions throughout the process of making this book available all over the world was invaluable.
We are grateful to all authors—who simultaneously served as referees for chapters written by other
authors—for their insights, valuable contributions, prompt collaboration and constructive comments.
The communication and exchange of views within this truly global group of recognized individuals
from the scientific domain and industry was an enriching and exciting experience for us, the editors.

We wish to thank all the authors for their insights and excellent contributions, which made this book
into the book we wanted.
We also are grateful to all who acceded to contribute to this book, some of them with high-quality
chapter proposals, but unfortunately, due to size limitations, could not see their work published.
The authors would like to acknowledge the support of the Network of Excellence I*PROMS—Innovative Production Machines and Systems (www.iproms.org/), an EU FP6 project, Nº NMP2-CT-2004500273, whose partner is University of Minho.
A special thanks goes to our institutions, the University of Minho and the Polytechnic Institute of
Cávado and Ave, in Portugal, for providing the material resources and all necessary logistics.
Thank you.
Maria Manuela Cunha
Bruno Conceição Cortes
Goran D. Putnik
Editors
Guimarães, March 2006


xix

Section I

Business Requirements and
Organizational Modeling


xx




Chapter I

Enterprise Reconfiguration
Dynamics and Business
Alignment
Goran D. Putnik
University of Minho, Portugal
Maria Manuela Cunha
Polytecnic Institute of Cávado and Ave, Portugal
Bruno Conceição Cortes
Business Objects, UK
Paulo Silva Ávila
Polytechnic Institute of Porto, Portugal

AbstrAct
The phenomenon of the enterprise organizational reconfiguration and its dynamics as a business alignment enabler is discussed. Business alignment means the enterprise’s actions undertaken to gain synergy
between the business; that is, the market opportunity and the provision of the required, or innovative,
product, with the required, or designed, specifications at the required, or proper, time, with the lowest cost
and best possible return (financial or other). The enterprise’s organization “fast reconfiguration,” either
as a proactive or as a reactive action, or “fast adaptation” or “flexibility” (as a “reactive” action), is
seen as the main enabler of business alignment and the main requirement for achieving competitiveness.
The need to keep a close alignment with the dynamic market environment in permanent change implies
the high dynamics of the organizations’ organization, or organizational structure, reconfiguration. The
first part of the text presents enterprise’s requirements for competitiveness and business alignment, while
the second part discusses the phenomenon of the enterprise reconfigurability as the business alignment
enabler. In the third part, an analysis of some organizational and management approaches, from the
reconfigurability point of view, is presented. The text ends with a conclusion and references.

Copyright © 2007, Idea Group Inc., distributing in print or electronic forms without written permission of IGI is prohibited.


Enterprise Reconfiguration Dynamics and Business Alignment

introduction
Global competition has dramatically increased
throughout the last two decades. A number of
factors made it happen. We refer two of these—if
not the most important, then surely among the
most important: (1) the great developments in
information and communication technologies
(ICT) that provide unprecedented easy-to-reach
immediacy and the ability to communicate in
real time at any point in the world (of course, we
think of the Internet), as well as unprecedented
efficiency in design, management, information
and decision making processes; and (2) the global
geopolitical changes—that is, the business, social,
and political environment changes that, from the
business point of view, provided a global free
market and a controversial process of “globalization.” The “globalization,” or business “global”
processes, experience has been known for a long
time; in the past few decades, however, the volume of international trade has risen dramatically.
Increasingly, managers in industries ranging
from telecommunications, pharmaceuticals and
apparel to retailing, copiers and automobiles are
looking abroad for resources and sales, even as
they daily face overseas businesses entering their
own markets (Prahalad & Doz, 1987). Today, the
number of worldwide products and services is
continuing to grow, together with the growing
number of global enterprises and global brands
(this happens for manufacturing as well as the

service sector). Major global manufacturers and
suppliers internationalize to give fast response
at the best price to the products required by the
market, or to explore the window of the market
opportunity. Most current products integrate
components originating from different parts in the
world, while manufacturers (Original Equipment
Manufacturers, or OEM) specialize in designing,
assembling and marketing, and manage a network
of suppliers.
From the other side, the customer has become
the third most important business driving force.



The driving force of today’s business is to fully
satisfy customers, each time more demanding,
each time more global, with products each time
more customized to their individual needs, at the
right time, at the right price and with the required
quality. At the same time, although the constant
stream of innovations in goods and services allows manufacturers and service providers to offer
higher quality products, it increases customers’
expectations, and thus requires higher levels of
competition.
In other words, the global competition has
strengthened the significance of a company’s
ability to introduce new products, whether while
responding to increasingly dynamic markets with
customers’ rapidly changing needs; handling

demands to shorten the time required to design,
develop and manufacture, as well as to reduce
cost and increase quality; or to act proactively to
explore the “window” of opportunity.
As mentioned in the Iacocca Institute report
“21st Century Manufacturing Enterprise Strategy” (Nagel & Dove, 1992), the main trends of
the actual economical context are: (1) meet the
rapidly changing needs of the marketplace; (2)
shift quickly between product models or between
product lines; in order to (3) respond in real time
to customer demands.
In this context, the enterprise’s actions undertaken to gain synergy between the business,
that is, the market opportunity and the provision
of the required, or innovative, product, with
the required, or designed, specifications at the
required, or proper, time, with the lowest cost
and best possible return (financial or other), are
called business alignment. To fulfil this objective,
additionally, the strategic alignment between
any business policy or strategy and any kind
of technology is essential. In their quest for an
“ideal” business alignment, in the dynamically
changing market where business and product
life cycles and time to market tend to shorten,
enterprises are implementing a wide variety of


Enterprise Reconfiguration Dynamics and Business Alignment

different techniques, management processes and

development strategies.
In this chapter, the phenomenon of the enterprise organizational reconfiguration and its
dynamics as a business alignment enabler is
discussed. Putnik (2001) presents “fast reconfiguration,” either as a proactive or reactive action, or
“fast adaptation” or “flexibility” (as a “reactive”
action), as the main enablers of business alignment and the main requirements for achieving
competitiveness. The need to keep a close alignment with the dynamic market environment in
permanent change implies the high dynamics of
the organizations’ structure reconfiguration.
In the first part of this chapter, a presentation
of requirements for competitiveness and business
alignment is given, while the second part discusses
the phenomenon of the enterprise reconfigurability as the business alignment enabler. Next, an
analysis of some organizational and management
approaches, from the reconfigurability point of
view, is presented. The chapter finishes with a
conclusion and references.
This next part of the chapter is based on the
text recently published in the book by Cunha and
Putnik (2006a).

reQuireMents for
coMpetitiveness And business
AlignMent
evolution of product life cycle and
competitiveness
Decreasing product development cycle time has
been an important issue for several years, according to research by Griffin (1993), based on a
number of citations of speed to market. Research
in this domain also found evidence that product

life cycles were shrinking, while product obsolescence occurs more quickly than in the past.
Companies are responding by bringing more
products to market more frequently and, as a

consequence, competition has intensified. To keep
up with competition and continue to grow in the
face of shorter product life cycles, companies are
driven to introduce more products to market faster
and to submit the product to changes (redesigns)
more frequently.
In the past, a product could exist without great
changes; faced with the challenges of today, besides the shorter duration of a product, it suffers
several redesigns to be competitive (i.e., aligned
with the market demands. See Figure 1).
Changes are usually measures undertaken to
improve either products or processes. Virtually,
the main factors that can lead to product changes
are:
•
•
•
•
•
•
•

customer requirements
supplier requirements
correction of detected errors
improvement of the production process

quality improvement
functionality improvement
cost reduction.

If the presence of an excessive number of
changes in a product can reveal that it is not of
good quality, a product without changes cannot offer credibility, as it reveals little attention
concerning its improvement. The evolution of a
product requires changes, so the changes must be
understood as essential to the production process
and production management, as the manufacturer
or producer must be responsive in answering to
the market. “Time-based competition” makes
companies try to be very fast in introducing
new products and to have very short production
lead times to manufacture and deliver products
to customers (Blackburn, 1991; Stalk Jr., 1988;
Stalk Jr. & Hout, 1990).
The driving force of business is to fully satisfy
customers—each time more demanding, each
time more global, with products each time more
customized to their individual needs, at the right
time, at the right price and with the required




Enterprise Reconfiguration Dynamics and Business Alignment

Figure 1. Evolution of product life cycle (Cunha & Putnik, 2002)

Product Life Cycle in the past
2nd version

1st version
Design

manufacture, exploitation, ...

1st version

manufacture, exploitation, ...

Redesign

2nd version 3rd version

nth vers.

Product Life Cycle today

quality. At the same time, although the constant
stream of innovations in goods and services allows manufacturers and service providers to offer
higher quality products, it increases customers’
expectations, and thus requires higher levels of
competition.
Competition is in the core of the success of failure
of firms. (Porter, 1985, p. 1)
Competition determines the appropriateness
of a firm’s activities that can contribute to its performance. In fact, the pressure on manufacturing
has always been dictated by the market (Yusuf,

Sarhadi, & Gunasekaran, 1999). Every period of
technological change is a period of opportunity.
Indeed, risk taking and entrepreneurial activity
feed on change, but also drive it.
Competitiveness is a main requisite of enterprises, nowadays requiring extremely high
performances, strongly time oriented while highly
focused on cost and quality.
The combination of the shorter life span of new
products, increasing product diversity over time,
rapid technological developments, increased technological complexity and market globalization, as
well as frequent changes in demand, increases the
need for different approaches, consisting of more
efficient enterprise (or manufacturing) systems to
keep competitiveness.
A number of requirements that a competitive
enterprise should satisfy is identified. Conse-



quently, a number of approaches (or strategies,
management models or organizational models)
has been developed to satisfy the corresponded
requirements and achieve the required performance, whether on a general/strategic level or
tactical level. Some of these requirements (ri)
and corresponded approaches are (Putnik, 1997,
adapted from Yoshikawa, 1984; Milacic; 1990;
Guimaraes, 1994):
•
•

•
•

•

•

•

Minimize the consumption of power, raw
materials and space; reduce costs
The Enterprises (or Manufacturing Systems,
MS) should perform highly complex tasks
with a high degree of reliability and quality,
and emphasize the value-added elements
The MS should be able to satisfy the level
of high creative personnel
The MS should be designed so that manpower is separated from machines in time
and space
The MS should be highly productive, with
the ability to respond quickly to market
demands
Time should be considered as a competitive
weapon; reduce production times; innovative
technology
Have an aggressive business plan; focus on
end results and objectives; redesign end-toend processes; operate across organizational
units